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Thursday, July 11, 2013

Illinois Gov. Suspends Lawmakers’ Pay Over Pension Crisis

Illinois Gov. Pat Quinn speaks during a news conference announcing he would use his line-item veto on a bill that would suspend Illinois Lawmakers' pay during a new conference Wednesday, July 10, 2013, in Chicago. (M. Spencer Green/AP)

Illinois Gov. Pat Quinn speaks during a news conference announcing he would use his line-item veto on a bill that would suspend Illinois Lawmakers’ pay during a new conference Wednesday, July 10, 2013, in Chicago. (M. Spencer Green/AP)

There’s a saying in Illinois: “Grab their wallets and their hearts and minds will follow,” which is exactly what Democratic Governor Pat Quinn has done.

He’s “grabbed the wallets” of none other than every member of state legislature, saying lawmakers will not receive a salary until they fix the state’s public employee pension plan. It’s $100 billion in debt, the highest in the nation.

Governor Quinn has also suspended his own pay. We hear from the governor, as well as from Illinois state representative Elaine Nekritz.

Interview Highlights: Gov. Pat Quinn

“Up to now the taxpayers have been paying literally millions of dollars a day that the liability goes up, so now it’s time for legislatures to get hit in the pocketbook, in the wallet, and I think that certainly has gotten their attention over the last 24 hours.”

“I made it crystal clear to our Illinois General Assembly, I’m not going to sign any piecemeal budget plan or pension plan. It’s got to be comprehensive, it’s got to erase $100 billion liability. We’ve laid out the specifics for them, it can be done. ”

Interview Highlights: Rep. Elaine Nekritz

“The House and the Senate have a very different view of how to resolve the pension issue and I don’t know that taking away paychecks will move them to a different policy position than they were before.”

“I think the legislature is paying attention. And both the House and the Senate passed pension reform bills in May. We have some honest policy disagreements on how to do that and that’s we are in the process of right now, to get that done. Now hearts and minds don’t change on a dime and we don’t get numbers out of the actuaries in something other than two weeks, so are we taking some time get this right? Yes.”

Guests:

  • Pat Quinn, Governor of Illinois.
  • Elaine Nekritz, Democratic member of the Illinois House of Representatives for the 57th District.

Transcript

MEGHNA CHAKRABARTI, HOST:

It's HERE AND NOW. There's a saying in Illinois: Grab their wallets, and their hearts and minds will follow, which is exactly what Democratic Governor Pat Quinn has done. He's grabbed the wallets of none other than every member of the state legislature, saying that lawmakers will not receive a salary until they fix the state's public employee pension plan. It's $100 billion in debt, the highest in the nation.

Governor Quinn has also suspended his own pay. We're going to hear from a state rep in just a minute, but first, Illinois Governor Pat Quinn joins us via cell phone. Governor, welcome.

GOVERNOR PAT QUINN: Well, thank you, Meghna. I'm glad to be with you.

CHAKRABARTI: All right, so let me just first of all ask you, right off the bat, a lot of people are saying that what you've done is grandstanding. Is it?

QUINN: No, it's fighting for taxpayers. Our state has a serious problem over many decades of pension liability. The state legislators and the previous governors before me didn't put enough money in the pension fund, and we have a $100 billion liability, and up to now, the taxpayers have been paying literally millions of dollars every day that the liability goes up.

So now it's time for legislators to get hit in the pocketbook and the wallet, and I think that certainly has gotten their attention over the last 24 hours.

CHAKRABARTI: Now, Governor Quinn, I understand that one of the effects that this $100 billion unfunded liability is having is that it's really led to the state's credit rating to take a hit. But on the other hand, by suspending the pay of legislators, aren't you alienating exactly the group that has to come up with the solution to the problem?

QUINN: Well, the legislators do have to legislate. That's what they're elected to do. And every single one of them ran on a platform of pension reform, because this liability - where we have to put so many literally billions of dollars into the fund - that's taking away money from our schools and our public safety and our health care.

And so legislators have to put a bill on my desk. I've given them many, many opportunities to do this. I have a plan to erase the liability 100 percent, but they have refused to act, and ultimately in real life, if you blow every deadline in an important project, ultimately, your boss says, hey, we're going to do something about your paycheck.

CHAKRABARTI: Now, Governor Quinn, I understand that legislators on the Pension Reform Committee have said that they wanted to meet with you on Monday before this latest deadline that you imposed, but you just sent a representative to that meeting. I mean, could you have dealt with this personally if you'd gone to that meeting?

QUINN: Well, first of all, it's a legislative conference committee. They have two different ideas, one in the House, one in the Senate. I suggested on June 19th that they have a conference committee to bridge their legislative differences. I'm ready to sign the bill, but I'm not a legislator. They have to do their jobs so I can do my job. You know, they basically have to get the job done for the public.

CHAKRABARTI: So, Governor Quinn, I'm curious where you think about the possibility of unintended consequences of what you've done, because on the one hand, definitely, you've possibly lit a fire underneath legislators to do something about this massive unfunded liability. But on the other hand, I'm reading from, you know, folks in Illinois that they're worried that legislators are going to put together some kind of Band-Aid solution that hasn't been carefully analyzed by actuaries or budget experts, and then everyone's going to get out of town and pretend like they've solved the problem, but it's not actually going to do anything long-term.

QUINN: Well, I made it crystal clear to our Illinois General Assembly I'm not going to sign any piecemeal budget plan or pension plan. It's got to be comprehensive. It's got to erase $100 billion liability. We've laid out the specifics for them. It could be done.

CHAKRABARTI: There have been specific proposals to, for example, extend the retirement age for public employees or reduce the cost of living increases they might get. Can you foresee any package of proposals that would actually, you know, solve this problem?

QUINN: Well, the answer is yes. I think we can have a reasonable proposal that clears off this $100 billion liability, makes sure that the beneficiaries - the people who are entitled to a retirement and a pension get what they deserve - we can do all that.

CHAKRABARTI: Governor Quinn, I hear your passion about this, and I wonder, when you look across the state, for example, $100 billion unfunded liability is a big deal. And I'm wondering how much you think that has to do, or has had an effect on Illinois' sort of lackluster recovery in this recession? It hasn't done well as some of the other big states across the country.

QUINN: Well, our job creation has been steady, and I think it can be better, obviously, if we take this cloud of pension liability off of the horizon of Illinois' economy. Our car industry, our manufacturing has really rebounded. We have to keep doing more. We are also, as a state, investing in building roads and infrastructure and all that.

One thing we found when we issued our bonds a couple weeks ago, over a billion dollars in bonds, we had to pay 130 million more dollars in interest because of the pension liability downgrading our credit. So that's another reason for the legislature to wake up. I want an alarm bell ringing in their ears every day until we get this pension reform problem resolved, and we will get it done.

CHAKRABARTI: Well, Pat Quinn is the governor of the state of Illinois. Governor Quinn, thank you so much.

QUINN: Well, thank you very much, Meghna.

CHAKRABARTI: Well, let's turn to a Democratic state representative, Elaine Nekritz. She represents northwest Cook County in Illinois, and she's said that Governor Quinn's action is an unnecessary distraction. Welcome.

STATE REPRESENTATIVE ELAINE NEKRITZ: Thank you much.

CHAKRABARTI: Well, you're facing not getting your paycheck here pretty soon. I'm just wondering if you think, given the lack of progress on this pension issue in the Illinois State Legislature, is this going to get things kick-started there?

NEKRITZ: I think that will remain to be seen. The House and the Senate have a very different view of how to resolve the pension issue. And I don't know that taking away paychecks will actually move them to a different policy position than they were before.

CHAKRABARTI: Now, it's interesting because Governor Quinn has said that part of the reason why he did it is that he believes members of the legislature have met deadlines when they've been imposed by special interests, such as the NRA, but not met deadlines on behalf of taxpayers. What do you make of that?

NEKRITZ: He's referring to the concealed carry legislation that we just passed, and the deadline we met was imposed by the courts, not by the NRA. This is an issue where deadlines have not pressured people, again, to change their policy position. So we're going to have - and we are having - a heart-to-heart on how we resolve those policy differences to come up with an acceptable solution.

CHAKRABARTI: Have you received any specific proposals from Governor Quinn?

NEKRITZ: He's come up with some components to the proposal, but not an overall comprehensive proposal.

CHAKRABARTI: What do you think the people of Illinois are supposed to make of all this, that it's taken such a dramatic action from the governor to get the attention of the legislature that it's time to do something about this?

NEKRITZ: Yeah, I think the legislature is paying attention. And both the House and the Senate passed pension reform bills in May. We have some honest policy disagreements about how to do that, and that's what we're in the process of right now, to get that done. Now, hearts and minds don't change on a dime, and we don't get numbers out of actuaries in something other than two weeks, so are we taking a little time to make sure that we get this right? Yes.

CHAKRABARTI: Do you have a sense as to when you might get it right?

NEKRITZ: I'm hoping that it would be a matter of weeks.

CHAKRABARTI: Well, Illinois State Representative Elaine Nekritz represents northwest Cook County. Representative Nekritz, thanks so much for joining us.

NEKRITZ: Thank you again.

(SOUNDBITE OF MUSIC)

JEREMY HOBSON, HOST:

And another story we're following today, while we're talking governors, Meghna, Virginia Governor Bob McDonnell has not had a great year. He was a political star. Now he's the focus of some state and federal ethics investigations. Those stories are coming up later today on ALL THINGS CONSIDERED. Transcript provided by NPR, Copyright NPR.


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  • David Ward

    After two consecutive criminals from Chicago as governor in Illinois, we now have an idiot from Chicago instead. We pay the highest taxes in the nation yet we’re the biggest deadbeat state in the country. The only possible reason for that is overwhelming, systemic corruption. It’s time to clean house.

  • shopping

    tinyurl.com/nc6x6hg

  • Lanislenker

    Why wasn’t this pension shortfall a crisis 10 years ago?  Why wasn’t it a crisis 20 years ago?  Or 30 years ago?  Yes, even 40 years ago.  How can 40-some years of legislative malfeasance be erased by a governor and/or legislature that  has “a plan to erase the liability 100 percent?”  Erase?  Really?  Most people believe that compound interest helps grow a fund.  If Illinois legislators had paid the full yearly fees prescribed by actuaries over these 40-some years, then compound interest may well have made this a non-issue.  Instead, failure to pay annually has allowed compound interest to work in reverse.  Legislators too eager to spend money in other ways have caused the problem.  I don’t believe they deserve a chance to throw it under a bus.

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