August 3, 2014

And Just Over the River....

Chris Christie’s  Savage Assault on Workers

Governor, Chris Christie,  renewed his attacks on public employees in New Jersey this week. Citing the so-called “Cadillac Tax” on health benefits under Obamacare, which he claims will further raise the tax burden on the state’s citizens, he called for more cuts in public worker health care and pension benefits. Calling public employees greedy, he claimed that workers’ “excessive” benefits will further damage the fiscal health of the state.

In his February, 2014 budget address,  Christie unveiled his plan for a further assault on the public employee pension fund. His call for more “reforms” translates into more pain for public employees. While he promised to make the scheduled state contribution of $2.25 billion, the pension fund will remain underfunded due to the long-term withholding of the state contribution by past administrations, both Democrat and Republican, going back for years. Christie has promised “extreme measures” to force Legislative Democrats to a compromise. The Public Employee Retirement System (PERS) which serves 770,000 current and retired workers is underfunded by $40 billion.

When Christie took office, he unleashed a stunning attack on public employees, with the cooperation of a wing of the Democratic Party led by Senate President Steve Sweeney.  Sweeney, an Ironworkers’ International Union Vice-President, is a tool of the powerful South Jersey Democratic machine that is controlled by political heavyweight and health care industry executive, George Norcross.  Norcross was, until recently,  one of the co-owners of the Philadelphia Inquirer. This time around, Sweeney has expressed his unwillingness to reopen the pension debate.

The savage political attack against New Jersey public workers mirrored similar attacks of public employees in Wisconsin and elsewhere.  State workers were forced to pay higher pension contributions and increased health insurance premiums, as well as higher co-pays for medical and dental care.  State worker pay was frozen and the retirement age was raised to 65. Education funding, school lunch programs and community legal programs also suffered massive cuts.

In 2015, a four year suspension of collective bargaining over health benefits will end.  The Christie administration will begin negotiating new contracts with the state worker unions and the expectation is that he will push for further cuts in benefits and pensions.

This latest “reform” effort comes as Christie remains embattled over the “Bridgegate” scandal and accusations of misallocation of Hurricane Sandy Relief funds. Getting tough on public employees is a way for him to divert attention from his woes and allows him to look tough as he contends for the Republican nomination for President of the United States. Despite his austerity measures,  New Jersey still has high unemployment and has not benefited from the so-called recovery.

On May 14, 2014, Christie vowed to withhold the full pension contribution despite his legal obligation to fund state pensions. He has threatened to take back as much as $2.43 billion over the next two years in order to balance the state budget. Once again, public servants are the victims of the inability of the Governor and legislature to come up with enough money to fund state government programs. On June 30th, he used the line-item veto to slash the State pension contribution by $681 million.  This cut was upheld in court on June 25.  Public employee unions are preparing to renew their court challenge in the coming weeks.

The attack on pensions, in both the private and public sectors, is part of the neoliberal assault on the living standards of working people. The ruling class is seeking to make the working class in the United States, and internationally, pay the price for recovery from the current economic crisis.

The ruling class is intent on cutting the social wage to the bone. This means slashing and, if possible, privatizing social services and public education. Part of this has meant the demonization of public employees, especially teachers.

Over the past 30 years, the number of US workers covered under defined benefit pension plans has slipped from about 38% to below 20%. Pensions are often replaced with 401K, or some other defined contribution plan. These plans take the burden of retirement income off of employers and place them on the workers themselves. This shift from defined benefit pensions to defined contribution plans has been a feature of many two-tier union contracts, where new hires get fewer benefits than workers already in the workplace.  This sort of two-tier set up undermines the strength, solidarity, and cohesiveness of unions.

The two-party duopoly is fraying at the edges. This does not mean that an alternative to the two capitalist parties will appear overnight or will be built easily. Illusions in the “progressive” character of the Democratic Party persist. The Democrats are skilled at diverting the energy of mass movements into safe channels of electoralism.

What is necessary, both in New Jersey and nationally, is a fight back by working people against the one-sided class war being waged against us. In part, this will require building a working class political party that fights for the interests of the 99% and not Wall Street. Such a party would fight for jobs for all, for a $15/hour minimum wage, a national health care system and the right to organize and strike to name a few. The election of Kshama Sawant in Seattle, and the success of local independent labor candidates in Ohio  and the State Representative campaign of  Socialist Alternative’s Jess Spear   point  to the possibility that a new working class political party could take shape.