Propaganda from a liberal. whoda thunk?

"This is what happens when national writers become instant experts in state-benefit issues — expect a correction post soon. Sadly, the toothpaste might already be out of the tube."

Indeed. Just before coming to the corner this morning I read Morning Jolt. In it there was a link to a piece about AFL-CIO chief Richard Trumka. External Link  (I love how the Boss "blesses" Obama's handling--Does he look anything like Marlon Brando?) The 9th post included this gem:
"WI taxpayers pay ZERO into public pensions. ZERO! This from the WI budget office."

Typical progressive misinformation campaign. Attack with false claims making the conservatives play defense, then when proven wrong ignore and start shouting another falsehood.

At 9:48 on 2/27, Johnston said:

"3. Yes a defined benefit is guaranteed and a significant issue is whether the state board properly invested the money, but that is another issue. Properly funding pensions is not a mystery. Indeed, you can go into the market any day and buy an individual pension called an annuity."

A defined benefit is not guaranteed by the state in the way that the PBGC guarantees (insures) private sector pension funds. I defy Mr. Johnstone to identify any law that says so. In other words, there is no law that says that if the trust fund runs out of money the state has to make any contributions beyond the statutory percentages it is required to contribute. If that is not enough, then tough.

Johnstone has said "the plan itself is entirely funded by the workers". I tend to agree, from an economic perspective. The problem which Mr. Johnston has sort-of-but-not-quite admitted is that the fund that has accumulated is all that the workers have. They don't have a right to more than the statutorily required contributions. They have performed their services and earned what part of their benefit the fund can pay. When the money runs out, the checks bounce. The state does not have to put in more money. So before then, the plans should negotiate reduced benefits or increased contributions or some combination thereof. Or make provision for whose benefits get paid first before each year's contributions run out. There are people in a small town in Alabama who can explain how that works.

Looks like Johnston's nonsense is spreading through the Leftosphere. Some clown at U.S. News & World Report is running with it.
External Link 

Mr. Schneider said:

"Full-time state- and local-government employees are participants in the Wisconsin Retirement System, which uses taxpayer money to fund both the state (around 5 percent of salary) and employee (another 5 percent) contributions to their pensions."

Mr. Johnston replied

"But that the plan itself is entirely funded by the workers is indisputable unless you assert that they did not do the work and the money is a gift, in which case under Wisconsin law a crime was committed."

Mr. Johnston, how should the money that is contributed into the WRS be viewed? If participation is not optional and if you're unable to show that the money that goes into the WRS is not deferred compensation that the employee opted to have set aside, how else to view it any other way than it being a gift?
I guess we could call it something else, but a rose by any other name....

I'd really like you to show where Mr. Schneider has went wrong with his comment about %5 from the taxpayers to both the 'contribution' and the employers match.

But you haven't. You've kind of mocked the notion that you feel Mr. Schneider is implying it's a gift. Now while he hasn't said that it is a gift, the way I'm looking at it it is at least something tantamount to a gift.

And then after Shawn, flenser and MTR raised some really interesting points you took the opportunity to reply with a list of your accomplishments. Please don't get me wrong, they are certainly impressive. I could only dream to attain that level of notoriety (and I mean this as respectfully as possible). But you didn't address any of their points.

What Michael Battenfield provided in his rough example certainly doesn't leave feeling any better about the situation.

You're talking past some pretty big objections to your claims. And the others on here that support the teachers/unions are doing even less to squelch concerns that I have.

DCJ - ludicrous.

Your two paragraphs do not separate Gov. Walker from journalists' impressions. You can insert a bracket in a comment box after the fact. But nowhere in your original post do you attempt to save poor Gov. Walker from the ravages of the irresponsible press. In fact, you do the opposite. You link them. Gov. Walker's "assertions created the impression that somehow the workers are getting something extra, a gift from taxpayers." These are your assertions about what the Gov. meant. They are not his words. The entire premise of your post begins with this falsehood.

You don't just leave it there. Later you write: "The key problem is that journalists are assuming that statements by Gov. Scott Walker have basis in fact."

Throughout your article you chastise reporters for not questioning Gov. Walker. Now why in the world would they need to do that if what he's saying was, in your eyes, accurate?

Your entire post is an interpretation, which in the grand scheme of things is fine. You have a point of view that differs from Gov. Walker. But to claim your point of view is "fact" is the height of journalistic irresponsibility.

Thanks for the compliment, Tim. I feel comfortable suggesting, though, that Mr. Johnston didn't reply here to be "cool." He did so because, after made evident by that braggadocious recounting of his career, he's a megalomaniac. And he can't abide being questioned by anyone, much less his ideological inferiors.

I did pose the argument you reference as a question, and it's one I think would be very difficult to answer. A quick search turned up this page, External Link  , which explains the current trust fund is a conglomeration of 75 individual municipal pension plans from 1947 on. Did each and every original plan that was consolidated have their beneficiary workforce experience a drop in take-home pay? Finding out is more work than I'm willing to do for an argument with a condescending fool.

@ W.B. Travis and Shawn, what I wrote is not what Travis asserts, the antecedent being journalists (see bracket) and NOT the governor. My criticism was of journalists, starting with the headline:

Really Bad Reporting in Wisconsin

I wrote:

**** ****
Gov. Scott Walker says he wants state workers covered by collective bargaining agreements to "contribute more" to their pension and health insurance plans.

Accepting Gov. Walker' s assertions as fact, and failing to check, [journalists] created the impression that somehow the workers are getting
something extra, a gift from taxpayers.
***** ****

It's the journalists who did the accepting and impression creating.

2. I don't work for Forbes. My column runs at tax.com

3. Yes a defined benefit is guaranteed and a significant issue is whether the state board properly invested the money, but that is another issue. Properly funding pensions is not a mystery. Indeed, you can go into the market any day and buy an individual pension called an annuity.

Thanks for commenting here, Mr. Johnston.
I do think it's kind of cool that you took the time to reply here.

Do you agree that the WRS does use taxpayer money for both the state and employee contributions?

I'm trying to understand your issue with Gov. Walker's position, but if it is true that the WRS is not optional and the money comes from the tax payer to cover both the state's and the employee's portion doesn't it make sense why this would cause an issue?
I think Shawn makes a great point (if it is true): when the pension was instituted was their a decrease in the take home money the employee saw?

I'M A DIVISION MANAGER! I CAN DO A HUNDRED PUSHUPS IN 20 MINUTES!

SHAWN, WILL YOU PLEASE LET ME FINISH THE STORY?!?!?

:)

D.C. Johnston would be on solid ground if he were talking about either the private sector or defined-benefit retirement plans. Since Wisconsin's public employees are in neither, he is in a quagmire.

Ha! That is priceless and spot on, Colonel. (With a minor correction that it was a "Dodge Stratus.")

Everyone else here, please enjoy the startling similarity to Mr. Johnston. External Link 

@ David Cay Johnston

The only thing missing from your second comment is "AND I DRIVE A FORD TAURUS!" like Will Ferrell on SNL. Almost every time I read your writing you throw in half your résumé.

Your point of view is nothing more than that, but you're presenting it as if it were the gospel truth.

You claim to follow pure journalism yet say Gov. Walker is saying something he has never said. You insert your interpretation of what he's been saying, which has been consistent, then someone at Forbes runs with it and calls him and everyone who supports his point of view a liar.

No wonder you got a Pulitzer.

Mr. Johnson's argument is idle. First, let us all acknowledge that out of every dollar paid to Wisconsin teachers in any form, 100 cents--say it out loud, 100 cents--comes from the taxpayer.

Johnson/Schneider elect to characterize as "wages" taxpayer moneys that go to the two systems. He can do so if he chooses, but then he must acknowledge that the average Wisconsin teacher is paid $89,000 per "year" in such wages, all for nine months' work.

And of course his argument that these deferred payments could have been taken as wages is unproven and dubious. If it were true, they would be indifferent to the choice of the current system and an average wage of $89,000 with all health premiums and retirement contributions to be made by themselves out of those wages. I strongly suspect that they are not.

But what Johnson/Schneider do not address at all is the corrupt nature of the bargaining process itself, in which the unions "bargain" with people who have no skin in the game, and to whom they freely contribute money.

@ All

Well, I don't know about everyone else, but after that recitation of everything except lowering sea levels by "The Cayster" there, I say we all pitch in and send Mr. Awesomeness a big cookie! For his boundless humility, if nothing else.

Your jig here is up, sir. You insist on framing the issue in such a way as to cast aspersions on the Governor, and multiple posters have explained reasonably and competently how we disagree. It is all, ever cent, taxpayer money, and the taxpayer is TAPPED OUT! End of story.

I don't know about the others, but I for one am tired of splitting hairs with this pompous ass, who has yet to demonstrate there is anything fundamentally wrong with our position.

A common misperception is that Wisconsin has a surplus reflected in their balance sheet under the label "Reserves."

The obvious misunderstanding is that, like Social Security was supposed to do, "Reserves" are funds designated to cover future known claims. They are qualified and obligatory.

>"If you can find ANY error in my column it will be corrected forthrightly."

------------------------------------------------------------

What about this error?

"Gov. Scott Walker says he wants state workers covered by collective bargaining agreements to "contribute more" to their pension and health insurance plans."

"Accepting Gov. Walker' s assertions as fact, and failing to check, created the impression that somehow the workers are getting something extra, a gift from taxpayers."

That is an error. If I say that I want state workers to contribute more to their pension and health insurance plans, it means .... that I want state workers to contribute more to their pension and health insurance plans. Full stop. It DOES NOT mean that I am somehow claiming that those workers are getting a "gift".

This is basic English comprehension, Mr Johnston. I'd think that somebody who calls himself a journalist would have at least a minimal grasp of language.

The comments from Shawn are exactly right. Mr. Johnston is making a silly semantical argument and he should know better. What's his motivation? Perhaps to gain some publicity. Problem is, his arguments appear foolish to anyone who is at all familiar with the benefits industry.

Government employees should not be allowed to spend one cent of their compensation without getting approval in a referendum of the taxpayers from whom they have stolen this money.

Mr Johnston is totally misrepresenting the issue by semantically dividing the issue. When Walker talks about employees paying their fair share, he is talking about them using THEIR SALARIES TO BALANCE THE UNFUNDED LIABILITY. .

Look, there are two plans here:

1) Wisconsin Retirement System: This is a guaranteed retirement system- no matter what you contribute, as long as you fulfill your term, you get the proscribed benefit.

2) Deferred Comp Program: Where you put your money in (+ match) and only get what is in that account when you retire, like a 401(k).

Nobody disagrees that the WRS is funded by employees' earned money. But those contributions are getting them a guaranteed pension that (and this is important) TAXPAYERS WILL HAVE TO BAIL OUT IN COMING YEARS. This is because the Employees are not contributing enough to cover the expenses. That is why these are called unfunded liabilities.

Mr Johnston is playing shell games when he says this is a "different" issue about how much the plan is funded. Where else are we supposed to get this money from? Either taxpayers kick in lump-sum payments to keep the plan afloat, or the employees need to contribute a greater portion of their salary to do the same.

Gov Walker is telling the truth: State Employees DO need to contribute more to their plans, rather than the State offsetting the liability. Mr Johnston is obfuscating the issue through semantics.

Taxpayers fund public employee expenses (wages+benefits). The budget repair plan would reduce public employee expenses by having public employees pay a portion of the cost of funding their pension benefits by contributing back a portion of what they are paid by the taxpayers. Yes, that is a cut in take home pay to the public employee. Yes, that reduces the amount required from taxpayers to fund expenses of public employees. Yes, that is the whole point. The expense side of the budget is not affected at all by whether employees contribute a little, a lot, or nothing to the Deferred Compensation Program (i.e. the 403(b) plan, and wholly different from the defined-benefit state retirement pension plan, regardless of the fact that pension payments are small caps "deferred compensation").

I'm growing increasingly concerned (to say the least) by the steady beat of deficit denialism (which the Milwaukee Journal-Sentinel has had to fact-check not just once, then twice, but now three times), coupled with the apparent lack of consensus on basic rules of arithmetic.

Why is it assumed that the state has to pick up the tab if the pension fund does not have enough money? If Mr. Johnston is correct, the state workers got what they were entitled to, which is contributions of a stated percentage into the plan. If that is not enough, then they bargained poorly, but I don't see anywere in state law that the pension trust fund is entitled to anything other than the statutory contributions. So what happens if the pension fund runs out of money? Ask the Studebaker pensioners. Checks bounce. That is it. If they wanted insurance against that, they should have asked to be covered by ERISA and PBGC insurance and paid the premium that private sector plans pay for that purpose.

A pension plan is a promise. A public pension plan is a promise by politicians. And there you are.

@ mtr, I personally emailed Mr. Schneider a reference to page from the document he cites.

If you can find ANY error in my column it will be corrected forthrightly.

Unlike most journalists I respond to readers, publish my home address and telephone numbers and correct errors, even when they are details that no one but me noticed after publication.

Every story I have written in 44 plus years has stood up to scrutiny by competitors, by grand juries, by Congressional and other legislative inquiries, when examined in lawsuits (between others; I was NOT a party) and in every other forum where my work has been examined.

President GWBush changed his tax policy and signed laws based on my work; the Clintons changed how they file their taxes after I showed how foolishly they handled their money and did not do what she said they would.

People have gone to prison, an innocent man was freed (after I hunted down a killer), a worldwide CEO lost his job, many hundreds of billions were saved by taxpayers (as documented in Congressional documents) and many hundreds of millions of dollars bequeathed to the poor were safeguarded because of my work.

I am also the only journalist whose work caused a broadcast station (six in all) to lose its license for news blackouts and manipulations.

None of that would have happened if there was a scintilla of truth to the charge you hurl, cowardly, from behind a nom d'Internet.

You can read my column at tax.com

Mr. Johnson,
The only lying going on here is from you. Your attempt to distort the facts is obvious. Let's stop with the distortions and make it simple so those on the left can understand...
All public employees are paid by taxpayer dollars for their entire compensation package whether they choose to defer some of that income, take it in salary, or in a pension. If their salary is $50,000 and their benefits are $25,000, their total compensation...is $75,000. ALL paid by the taxpayer...for teachers, that's not a bad haul for approximately 9 months work...and a bigger haul for the many worthless teachers whose incomes have less to do with performance than their union membership.
Then let's look at those MANDATORY union dues in Wisconsin...they also come from that taxpayer paid compensation and fund the union and democrat causes and candidates. I somehow think you would feel differently if you were required, as the terms of your employment, to pay to a cause you do not support or to elect Republicans. By force.....It 's one of the biggest scams there is.

"Whether the plan is sound -- how it is invested, what risks were taken, how much cash was put in each year to meet that year's accrued obligations -- are all legitimate issues about the plan, which I examine in my column. "

You only examined that point after readers brought it to your attention and you had to acknowledge the obvious.

A lot of folks try to make this out to be more complicated than it really is.

I will boil it down to possibly over-simplified terms so even a "caveman" can understand...

Joe State Employee makes a salary of $4000 per month. Joe is REQUIRED to allow a flat percentage to be taken from his check to go to the pension plan. For simplification - lets say 5% (since I don't know the exact amount). So $200 per month goes to the fund. The state matches that for a total of $400 per month credited to JSE.

But Joe decides to contribute an EXTRA $200 - so the state also matches that $200... so now, Joe has contributed $400 from HIS salary, and the state taxpayers contribute $400.

So the gross amount of "compensation" JSE is getting each month is $4400 - essentially JSE is getting "paid" 10% over his actual salary.

Now I realize that the actuality is somewhat more complicated - and when you figure health care and other benefits that JSE may or may not be making a "fair" contribution too...

What would JSE's monthly salary be if the state did not match his pension contributions? It would still be $4000... no difference to Joe's pocketbook until retirement time... at which time, he would have half the funds than he would under the current system.

I think the author is correct in saying that the pension value is earned by the employee. That being the case, I think its value should be reported as part of the wages paid when discussing these peoples salaries. Lets stop saying that the average teacher in Wisconsin earns $50k or whatever. Figure out how many years they have to work and the value of that pension in current dollars.

Any actuaries know how to value this? I would bet it is a pretty fair share of earnings. Particularly if it includes post retirement health benefits.

Why has Governor Walker fixated on how much the employee is "paying" toward benefits, rather than talking about total compensation or pay?

Christian Schneider are you pretending that there can not be a generic meaning of the term "deferred compensation". No, the pension is not The Deferred Compensation Plan (the 457 plan), but a pension clearly is deferred compensation.

Mr. Johnston, it's interesting that you don't cite anything from the source documents provided by Schneider. Below is a direct quote. Janet Cooke should be proud to have company in the ever growing liars wing of the Pulitzer Prize museum.

Over time, state employee groups have negotiated or have been provided an employer "pickup" of almost all employee-required WRS contributions. The state has agreed to assume the payment of basic employee-required contributions equal to 5.0% of gross payroll for all employee classifications as well as up to 1.3% of gross payroll for any benefit adjustment contribution required from state employees in the general classification and up to 1% of gross payroll for any benefit adjustment contribution required from state employees in the protective with Social Security classification