Friday, February 25, 2011

David Cay Johnston: "Out of every dollar that funds Wisconsin's pension and health insurance plans for state workers, 100 cents comes from the state workers."

David Cay Johnston opened my eyes today with information I should have been given via a union representative or any public employee. Knowing the media the way I do, I also understand how little time reporters have to cover a story, even in the age of 24/7 news. But that’s not an excuse.

The other night Rachel Maddow eviscerated PolitiFact for not being factual. Her argument; just because “fact” was in your name, doesn’t mean it’s true. The problem is, facts don't capture your imagination like making a wildly inaccurate statement.

So what about public employee benefits? How much extra money are taxpayers on the hook for when it comes to public employee benefits? ZERO. Doh!!! Check it out:

Economic nonsense is being reported as fact in most of the news reports on the Wisconsin dispute, the product of a breakdown of skepticism among journalists multiplied by their lack of understanding of basic economic principles. 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. They are not.
Out of every dollar that funds Wisconsin's pension and health insurance plans for state workers, 100 cents comes from the state workers. How can that be? Because the "contributions" consist of money that employees chose to take as deferred wages – as pensions when they retire – rather than take immediately in cash. The same is true with the health care plan.  
Thus, state workers are not being asked to simply "contribute more" (or as the argument goes, "pay their fair share” … They are being asked to accept a cut in their salaries so that the state of Wisconsin can use the money to fill the hole left by tax cuts and reduced audits of corporations in Wisconsin.  
The question journalists should be asking is "who contributes" to the state of Wisconsin's pension and health care plans. 
The fact is that all of the money going into these plans belongs to the workers because it is part of the compensation … all of the compensation they have bargained for is part of their pay and thus only the workers contribute to the pension plan. This is an indisputable fact. From the Associated Press and The New York Times to Wisconsin's biggest newspaper, and every broadcast report I have heard reporters again and again and again have written as fact what is nonsense.  
The workers currently pay 100 percent from their compensation package, but a portion of it is deducted from their paychecks and a portion of it goes directly to the pension plan.
One correct way to describe this is that the governor "wants to further reduce the cash wages that state workers currently take home in their paychecks." Most state workers already divert 5 percent of their cash wages to the pension plan, an official state website shows
By falsely describing the situation the governor has sought to create the issue as one of the workers getting a favor. The Club for Growth, in broadcast ads, blatantly lies by saying "state workers haven't had to sacrifice. They pay next to nothing for their pensions." But journalists are supposed to check the facts, not adopt lies as truths. 

UPDATE: I should have remembered the following TAXPAYER subsidized benefit for the PRIVATE SECTOR, a huge cost conservatives are NOT complaining about right now.  Hat tip to Rocknetroots:

In fact it is private sector employers who are feeding at the taxpayer trough in order to pay for a large portion of their employees health care costs. 
Here's why. Have you given thought to who really pays a major portion of a private sector worker's health care package? Taxpayers do! That's right. In the form of a $2,500 tax credit for individuals and about a $5,500 tax credit for families that the employer picks up annually from the good ol' U.S. government. What has the private sector done to earn or negotiate for this often unnoticed government "entitlement?" Absolutely nothing! Why, they didn't even do community service to work for the tax credits. So, a large portion of private sector benefits are actually subsidized - not earned. While the public sector compensation packages are negotiated earnings - not subsidized. 
If we really wanted to cut state and federal government deficits, we should instead be eliminating the health care tax credits employers like Koch Industries pick up from U.S. taxpayers for each of their employees. 

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