Rahm Emmanuel: Reduce Public Employees’ Pensions to Balance Budget

Chicago News Cooperative

Emanuel Says He Favors Reduced Pensions for Current Workers and New Hires

Published: January 8, 2011 in the New York Times

In contrast to his main rivals in the mayor’s race, Rahm Emanuel has told labor leaders that he favors reducing pension benefits for the city’s existing work force and not just for new hires.

Although Mr. Emanuel has not yet publicly detailed his plan to confront the city’s perennial budget deficits and the severely underfinanced employee pension funds, he told union officials in a private meeting on Dec. 15 that he thought it could be necessary to cut the pensions of all employees, said people who attended the meeting.

Mr. Emanuel made the comments while he was being interviewed by leaders of the Chicago Federation of Labor. That umbrella group for 300 unions has not yet endorsed any of the candidates who will be running in the Feb. 22 election to succeed Mayor Richard M. Daley, who is retiring.

“The sticking issue for all of us is the pension issue,” said a labor activist who attended the meeting with Mr. Emanuel. “I can’t tell my members we are going to support a guy who is going to cut your pensions.”

The labor leader and others who attended the meeting said they did not want to be identified for fear that Mr. Emanuel would retaliate if he were elected.

Mr. Emanuel plans to disclose his position on city finances in a speech sometime in February, said Ben LaBolt, his spokesman. Told of the union officials’ accounts of the endorsement session, Mr. LaBolt said, “Rahm told the truth about the financial conditions of the pension system and the crisis that it faces.”

In a statement, Mr. LaBolt added that Mr. Emanuel believed “fundamental reform” was necessary to ensure that workers would receive pension benefits when they retire.

“Rahm knows — and Chicagoans understand — that the pension system as currently constructed is not an honest system,” Mr. LaBolt said. “It’s not fair for taxpayers, and it’s not fair for city workers.”

Public employees’ retirement funds have been hit hard not only by the weak economy but also by early-retirement offers, wage increases and the Chicago Public Schools’ partial “pension holiday,” which has allowed the district to reduce its pension contributions.

A new state law will require Chicago and other cities in Illinois to contribute more money toward pensions for police officers and firefighters. Mr. Daley strenuously objected to that change, warning that it would result in the biggest property tax increase in Chicago’s history.

State lawmakers also approved changes last year that limit pension benefits and raise the retirement age for new public employees, but that legislation did not affect workers already on the payroll.

The mayoral candidates Miguel del Valle, Carol Moseley Braun and Gery Chico have said they favor a two-tier pension system with reduced benefits only for new hires.

“I just don’t think it’s right for current employees contracted under certain terms to be told, ‘No, that’s not going to happen,’ ” said Mr. del Valle, the city clerk, adding that he believes doing so would violate the State Constitution.


A version of this article appeared in print on January 9, 2011, on page A23A of the National edition.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: