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3 Characters in Search of Pension Reform

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We've all had a little bit of time now to digest Governor Brown's pension reform proposal, along with the various reactions. As an elected official who has recognized the need for systemic change when it comes to municipal salaries and benefits and has pushed for it since being elected in 2009, I'll cut to the chase: the Governor's most recent proposal, adopted by the state legislature, while a small step in the right direction, doesn't seem to be much more than bad political theater. The big question will be: do the voters have a taste for bad political theater?

In recent days, a number of people have written about how the governor's latest eleventh hour proposal, which was "drafted in secrecy," was a classic case of political posturing, including respected Sacramento Bee columnist Dan Walters, who describes the latest plan as "mostly fluff.

With his intimate insider knowledge, Walters succinctly describes the machinations behind the Governor's latest, watered-down proposal, which seem one part Rube Goldberg and two parts Machiavelli:

Brown's original proposal [from several months ago] would have had a minimal effect, at most, on that ever-growing debt, and the one he now accepts would have even less. Rather than take on his fellow Democrats and the state's powerful public employee unions, he meekly accepted a pension reform fig leaf.

Why?

Because neither Brown nor the Democratic legislative leaders were truly interested in overhauling an unsustainable system and preventing its massive debt from falling on future generations. Their goal was to enact something that they could call reform to help pass Brown's tax increase measure, Proposition 30.

A tip-off to that motive is the outpouring of denunciation from the unions. Their harsh criticism of the plan will be used by the tax campaign to make Brown and other Democratic politicians look like they're being tough and courageous on pensions.

Finally, as a statute, the new pension plan could be changed after November's tax election, no matter how it turns out. It's happened before.

Bingo. But while Walters gives us the motives and methodology of the governor's proposal, what he doesn't give us are all the riffs behind this exquisite little piece of political theater. Just how does one construct a bit of polit-theater, California-style, which needs to seem somewhat credible and at least slightly realistic if it is to fool at least half of the state's voters? What really goes on behind closed doors in Sacramento?

I'd certainly be the last person to know first-hand, but can envision the following scenario in my mind's eye, with apologies to Mel Brooks:

Late August, Sacramento. Governor Brown's office. The Governor, flanked by aides, is sitting on a couch with his legs kicked up on an ottoman, playing a version of "Donkey Kong" on his iPhone. Nestley, the aide on his left, taps him on the shoulder:

NESTLEY

Governor, the Speaker and Senate Prez are here to discuss (snickers)... pension reform.

GOVERNOR BROWN

What do you mean the Senate Prez? I thought Prez was in the House?

NESTLEY

Perez is in the House.

GOVERNOR BROWN

So then how can he be the Senate Perez? Do we allow that now?

NESTLEY

Uh, no, Governor, Perez is the House Speaker, he's not the Senate Prez.

GOVERNOR BROWN

So Perez isn't the Senate Prez, he's the House Perez?

NESTLEY

Yes, Governor. John Perez, who you'll recall is Villaraigosa's cousin, is the House Perez.

GOVERNOR BROWN

So, who's the Senate Prez?

NESTLEY

Steinberg, sir.

GOVERNOR BROWN

David Steinberg is the Senate Prez?

NESTLEY

No, governor, Darrell.

GOVERNOR BROWN

Darrell Perez? Is he also related to Villaraigosa?

NESTLEY

No, sir. Well, actually, sir, I can't say for sure.

GOVERNOR BROWN.

Well, any relative of Villaraigosa is a relative of mine. Shoo 'em in, Nestley, shoo 'em in.

The other aide, Brugman, walks to the door and opens it. Speaker Perez, Senate President Pro Tem Steinberg, and three public union functionaries walk in, boisterously high-fiving each other. Speaker Perez hands out cigars to his cohorts, and finally offers one to the Governor.

SPEAKER PEREZ

Cigar, Governor?

SENATE PRESIDENT STEINBERG

(moving up to give the Governor a high-five)

Get ready to seal the deal. The Senate Prez is in the house!

The Governor looks up quizzically at Steinberg.

GOVERNOR BROWN

What do you mean? I thought you're in the Senate?

SENATE PRESIDENT STEINBERG

I am. I'm the Prez.

GOVERNOR BROWN

(looking at the Speaker)

I thought he's Perez.

SPEAKER PEREZ

I am.

GOVERNOR BROWN

OK, Perez and Perez, (looks at his watch), we don't have much time.

SENATE PRESIDENT STEINBERG

Isn't it a great thing, then, that we do some of our finest work at the last possible moment?

SPEAKER PEREZ

Yes, avoids unnecessary meddling from outsiders.

GOVERNOR BROWN

You mean like the People?

SPEAKER PEREZ

Precisely, Governor.

GOVERNOR BROWN

Good work. OK, OK, Gentlemen: you ready to - in the words of the immortal Monty Hall - make a deal? Which one of you wants to be Carol Merrill?

Speaker Perez raises his hand.

GOVERNOR BROWN

Ok, thanks Antonio. Whadya got?

SPEAKER PEREZ

I looked behind door number three and guess what I saw?

GOVERNOR BROWN

I dunno. What?

SPEAKER PEREZ

Bupkes. I saw bupkes. And behind door number two and door number one.

GOVERNOR BROWN

But don't we need pension reform so we can pay the bills in the future?

SENATE PRESIDENT STEINBERG

Do you really care? You plan on being around here in 50 years? I sure don't...

GOVERNOR BROWN

Good point, David. So what you're saying is we shouldn't do anything.

The three union representatives all nod in unison.

Got it.

The Governor sits deep in thought, chewing on what he's just heard. He then says suddenly:

We have to do something. The voters demand it! We have to protect our phoney baloney jobs, Gentlemen. They'll never go for Prop 30 and my tax increases if we don't do anything.

SPEAKER PEREZ

Ah, but that's the beauty of our plan, Governor.

Speaker Perez twirls his hands, as if to say "Ta dah!"

GOVERNOR BROWN

Are you going to sing that "Sidestep" song again, Perez?

SENATE PRESIDENT STEINBERG

No, it's my turn now.

(Begins to sing)

Fellow Texans, I am proudly...

The Governor, Speaker and Senate Prez, backed by the aides and union reps, all loudly break out into "The Sidestep" with well-choreographed, Busby Berkeleyesque dance moves, ending with high-fives and the cigars being lit and puffed during the following dialogue.

SENATE PRESIDENT STEINBERG

You see, as Speaker Perez suggested, the beauty of our plan is we can do nothing without seeming to do nothing. Call it nibbling around the edges, if you will, but we can make you seem like a man of action with a nip here, a tuck there and nothing but a few simple cosmetic changes.

SPEAKER PEREZ

Get rid of a few abuses of the pension system, especially the high-profile cases and you can seem like you're tough on wasteful spending.

GOVERNOR BROWN

Yes, a man of action!

SPEAKER PEREZ

Increase the retirement age and reduce benefits for future employees. Who cares about them anyway? They didn't help you get elected, did they?

GOVERNOR BROWN

But that won't create any real savings for years, will it?

SPEAKER PEREZ

No, but it sounds real good. And future employees don't know they're gonna be future employees so they can't be pissed. And it sounds real good.

GOVERNOR BROWN

(excitedly)

Yes. It does sound real good!

SENATE PRESIDENT STEINBERG

And you can be trusted not to waste the additional tax dollars you're asking the voters to fork over...

GOVERNOR BROWN

Yes, I can be trusted! A man of action... who can be trusted...and who sounds good! Harumph! Harumph!

UNION REP #1

Harumph!

SPEAKER PEREZ

Harumph!

UNION REP #2

Harumph!

SENATE PRESIDENT STEINBERG

Harumph!

GOVERNOR BROWN

(looking over at Union Rep #3)

Hey, I didn't get a "Harumph" out of that guy!

NESTLEY

Give the Governor "Harumph!"

UNION REP #3

Harumph!

GOVERNOR BROWN

You'd better watch it, Mister.

(turns to the Speaker)

So no reforms of the CalPERS Board either?

The union reps all shake their heads in unison.

SPEAKER PEREZ

No, Governor. Not necessary. We need to maintain control of the PERS Board. Otherwise we won't be able to maintain artificially high rates of return to conceal the real level of unfunded liabilities.

GOVERNOR BROWN

OK, if you say so. But what about dealing with post-retirement medical care and other post-employment benefits?

SENATE PRESIDENT STEINBERG

You mean OPEB?

GOVERNOR BROWN

Yes, it's shameful how that cartel manages to jack up gas prices. That's not good for hard-working people anywhere. That only benefits Big Oil. We must do something! Harumph! Harumph!

The entire room goes through another round of "Harumphs," this time missed by nobody.

And as much as I like to help out our union friends here, didn't I read recently that OPEC would consume the entire state budget in 35 years if we don't do something about it?

SPEAKER PEREZ

Governor, you mean OPEB - Other Post Employment Benefits. And they are not on the table.

(motioning to the union reps)

Have you forgotten who got you elected?

The union reps all nod their heads in unison.

And, hey: you planning on being around here in 35 years? I sure am not... Remember the phrase "term limits"?

GOVERNOR BROWN

OK, you can keep your OPEC. But what about switching to hybrid pension plans, you know, a combination of the current defined benefit plans and a 401k-style plan?

SENATE PRESIDENT STEINBERG

But, Governor, surely you're not suggesting that government employees should have to have the same kinds of pension plans that everyone else has who doesn't work for the government? Surely you're not comparing your valued employees with private-sector union employees or - Gasp! - the Voters?

SPEAKER PEREZ

Indeed. I mean, what kind of governmental workers would we be able to recruit if their pensions and benefits were forced to be the same as everyone else's? You don't seriously expect that we could get "the best of the best" on our side, now do you?

GOVERNOR BROWN

Do we have "the best of the best"?

SPEAKER PEREZ

That's not the point, Governor. The point is... um, well the point is...

SENATE PRESIDENT STEINBERG

...to remember who got you elected!

The union reps nod in unison.

SPEAKER PEREZ

And to seem to do something without actually doing much of anything. Remember, we're career politicians.

SENATE PRESIDENT STEINBERG

Damn straight!

Speaker Perez and Senate President Steinberg high five each other.

SPEAKER PEREZ

And now you can tell the voters that you did something about pension reform and can be trusted with more of their tax money. And we're gonna party, party, par-tay! "Power to the people"? What nonsense! "Money to the government!" is more like it. And we're the government!

GOVERNOR BROWN

But we're not really doing much of anything. You said it yourself.

SENATE PRESIDENT STEINBERG

But perception is reality.

GOVERNOR BROWN

No, it isn't. Reality is reality.

SENATE PRESIDENT STEINBERG

OK, you got me there. So let me phrase it better: you can tell people what to think. You just need to have some plausible credibility.

GOVERNOR BROWN

Yeah... "plausible credibility."

SPEAKER PEREZ

The fact is, Governor, that most people don't like to think for themselves. So... leave the thinking to us.

GOVERNOR BROWN

"Leave the thinking to us." Wow, that's profound. Like a lyric from a Joni Mitchell song. Pure genius. Maybe we can use that in the campaign. "Raise your taxes. Give us more money so we can fund pensions that you can't have. Leave the thinking to us."

SPEAKER PEREZ

Uh, probably not a great idea to phrase it that way.

GOVERNOR BROWN

Well then how about: "We continue to attract 'the best of the best' to serve you by providing them with pensions and benefits that you can never have"?

SENATE PRESIDENT STEINBERG

Maybe not just that verbiage.

GOVERNOR BROWN

Then how about, "what's good enough for the rest of you just isn't good enough for our public employee unions"?

SPEAKER PEREZ

True, very true, Governor. But maybe you should let us handle it in a different way. We'll let our union friends feign outrage at the proposal and people will think it's actually sweeping pension reform...

GOVERNOR BROWN

...but we'll just be sweeping under the carpet that it's not really sweeping, but just creeping.

SENATE PRESIDENT STEINBERG

You got it!

(to the union reps)

C'mon, guys, show him what I mean.

UNION REP #1

You suck!

UNION REP #2

You suck!

UNION REP #3

You suck!

GOVERNOR BROWN

(almost in tears)

But I don't suck!

SENATE PRESIDENT STEINBERG

Of course, not, Governor. How about a nice, soothing game of "Donkey Kong"? And Speaker Perez and I, along with our friends, will figure out ways to spend the Prop 30 money that we'll get the voters to buy thanks to our pension reform.

GOVERNOR BROWN

But we're not really "reforming" anything!

SPEAKER PEREZ

Governor, perception is reality.

GOVERNOR BROWN

No it isn't, Antonio. Reality is reality.

SPEAKER PEREZ

Got me. But the reality is that people will leave the thinking to us. Don't you worry, Governor: a well-funded "Yes on 30" campaign will make sure of that.

GOVERNOR BROWN

More money to play with? Does that mean I get to be Santa Claus?

SPEAKER PEREZ

You sure do, Governor. And we've all been good little boys and girls, haven't we?

The union reps, along with Senate President Steinberg, Nestely and Brugman all nod in unison.

GOVERNOR BROWN

I love my job.

SPEAKER PEREZ AND SENATE PRESIDENT STEINBERG

(in unison)

So do we, Governor.

As the players move to a group high-five, the scene fades to black.