* Remember this post about the French riots?…
[Under French President Emmanuel Macron] pensions themselves have ceased to be indexed to inflation (and thus to retirees’ ability to buy consumer goods) […]
The tax will increase the price of fuel by about 30 cents per gallon and will continue to rise over the next few years, the French government says
* And then yesterday, Chicago Mayor Rahm Emanuel (one “m”) proposed doing away with the 3 percent automatic annual increase for pensions and proposed raising gas taxes by 30 cents a gallon, among other things.
Here’s how the mayor justified doing away with the pension AAI…
What kind of progressive, sustainable system guarantees retirees 3 percent annual compounded pay increases when inflation has been at basically zero
And here’s his reasoning for raising the gas tax…
Illinois last raised the gas tax from 16 cents per gallon to 19 cents in 1990. Emanuel said raising the tax by 20 cents would be about the equivalent to inflation over the past 28 years. He said the group of mayors settled on a range of 20 cents to 30 cents to serve as a guideline for state lawmakers when they take up debate on the issue next year.
So, inflation “has been at basically zero” to justify reducing future pension payments, but he uses more than 100 percent inflation to justify a gas tax increase.
*** UPDATE 1 *** Illinois AFL-CIO President Michael Carrigan and Chicago Federation of Labor President Bob Reiter…
“Too many politicians, including Mayor Rahm Emanuel himself, have wasted years pushing extreme, immoral and illegal schemes to slash pension benefits instead of working together to craft fair, sustainable and constitutional funding solutions.
“In Chicago and throughout Illinois, teachers, fire fighters, nurses, caregivers and other public service workers earn a modest pension and pay toward it from every check. Their pension is their life savings, and since most public employees aren’t eligible for Social Security, it is their main source of income in retirement. Reducing that already modest benefit—now just about $35,000 a year on average—is both unfair and unconstitutional.
“Those pushing to repeal the Illinois Constitution’s pension clause ignore the real problem, which is not the cost of benefits but the decades-long habitual failure of politicians to pay the employer’s share.
“They also ignore the clear, strong rulings of the Illinois Supreme Court, which have reinforced both the plain language of the pension clause and the sanctity of the contracts clause, which protect these obligations. Their unanimous decisions have forcefully made clear that any attempt to slash the modest benefits promised to employees already in a pension system would violate both Illinois and federal law.
“Real solutions are achievable, and we remain committed to working together with anyone of good faith to identify and implement them.”
*** UPDATE 2 *** Press release…
Following is a statement from Ald. Scott Waguespack (32), Chair of the City Council Progressive Reform Caucus, in response to Mayor Emanuel’s proposed constitutional amendment on pensions:
“Our caucus opposes Mayor Emanuel’s proposed constitutional amendment to eliminate pension protections.
“These workers have held up their end of their agreement. They served our communities honorably throughout their careers with the assurance that their retirement would be secure. Now, Mayor Emanuel is proposing going back on that promise, and making even more vulnerable the retirement security of tens of thousands of workers who cannot rely on Social Security.
“Mayor Emanuel has missed many opportunities over the last eight years to fight for progressive revenue options to fund our pensions. We urge the next mayor to work with Springfield to achieve a progressive income tax that asks the very wealthy and big corporations to pay their fair share, and the legalization and taxation of recreational marijuana to help fund our pensions.”