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* Word from today’s leaders meeting in Chicago is that after some vitriol between himself and House Speaker Michael Madigan, Gov. Pat Quinn has decided to back away from his stance that the “A-B” combo pension reform proposal should be passed. The proposal would’ve combined Madigan’s pension bill with Senate President John Cullerton’s bill, with Madigan’s taking effect first. If it was struck down, Cullerton’s bill would then become law.
Now, though, the plan is to send the matter to conference committee…
Gov. Pat Quinn is asking legislative leaders to form a conference committee to forge a compromise on Illinois’ $97 billion pension crisis. […]
Quinn spokeswoman Brooke Anderson says since the two leaders won’t budge, a committee of lawmakers should work it out.
Yeah. The rank and file will surely come to an agreement without their leaders’ input. This is basically a punt designed to buy some more time.
*** UPDATE 1 *** Madigan didn’t buy into the idea…
Madigan called the conference committee an “effort by the governor to distance himself from the process.”
And the stalemate continues…
Cullerton maintains that the Senate version would fly through the House — if only Madigan would call it for a floor vote.
“Why doesn’t the speaker call the bill?” Cullerton said senators ask him.
Cullerton said it was unlikely that senators would support the House version until then.
*** UPDATE 2 *** Tribune…
“I kind of felt like I was witnessing an awkward family fight,” Senate Republican Christine Radogno of Lemont said following Friday’s closed-door meeting. “It was uncomfortable and it’s clear there is not even close to an agreement between the Democrats. It was them sort of dancing around the problems they have.”
posted by Rich Miller
Friday, Jun 14, 13 @ 11:44 am
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If it quacks like a lame duck and acts like a lame duck….then it’s a lame duck!
Comment by Nickypiii Friday, Jun 14, 13 @ 11:49 am
Do we have an official time on this Quinn backtrack?
It could be a new record.
Comment by Michelle Flaherty Friday, Jun 14, 13 @ 11:50 am
Perhaps Speaker Madigan might call the Cullerton bill for a vote just as Cullerton called his.
If it fails, then we can talk compromise.
Comment by Formerly Known As... Friday, Jun 14, 13 @ 11:55 am
Quinn can’t make Madigan move.
Comment by wordslinger Friday, Jun 14, 13 @ 11:56 am
I’m unclear which bill would be the target for a conference committee. Did Quinn specify and does he even understand how the legislative process works?
I concur with the Quacking comment. Quinn is scrambling worse than normal.
Comment by Cassiopeia Friday, Jun 14, 13 @ 11:58 am
Now that’s leadership!
Comment by Whatever Friday, Jun 14, 13 @ 12:01 pm
Maybe one of the members house/senate will step up and show Madigan/Cullerton how things should be done.
Sarcasm
Comment by Fed up Friday, Jun 14, 13 @ 12:07 pm
The lunatic is in the hall
The lunatics are in my hall
The paper holds their folded faces to the floor
And every day the paper boy brings more
I can’t get that tune out of my head now.
Comment by dupage dan Friday, Jun 14, 13 @ 12:13 pm
That they’re buying time is an apt comment. I’m not sure. Is delay costing $5 or $17 million a day, or something in between.
Comment by Cook County Commoner Friday, Jun 14, 13 @ 12:16 pm
Conference Committee!!
Comment by Beardo Friday, Jun 14, 13 @ 12:19 pm
Squeezy has morphed into Donny, the Lame Duckling.
Comment by Arthur Andersen Friday, Jun 14, 13 @ 12:22 pm
==Quinn can’t make Madigan move.==
Can anyone/anything? I don’t mean that as snark.
Comment by Robert the Bruce Friday, Jun 14, 13 @ 12:24 pm
It does seem fairly logical that if the leaders can’t work something out, another group could.
But if you let the leaders pick the members of the committee, then that does indeed seem destined to fail.
Comment by Robert the Bruce Friday, Jun 14, 13 @ 12:25 pm
I wonder why the Madigan plan is supported outside of Chicago. It results in roughly a 20% income reduction for pension system members which will affect their spending.
Where do most pension system members live? Probably not Chicago given it has its own teachers pension system. I would assume the largest income impact would be in the suburbs (IEA), university towns (SURS), and Springfield (SERS).
The support among suburban members is particularly interesting in this regard.
Comment by perplexed Friday, Jun 14, 13 @ 12:32 pm
If the Speaker were truly all-powerful, he would call Cullerton’s bill for a vote simply to shoot it down and prove he still controls his caucus and can do whatever he wants, whenever he wants.
It is now becoming abundantly clear that he is not necessarily all-powerful, but perhaps all-stubborn unless he gets what he wants.
He is essentially daring his counterparts to treat him just as he treats them on this issue by demanding “my way or the highway”. Perhaps they should follow his leadership example and do exactly that.
The majority of blame for failure on this one will rest on Madigan since his chamber is the only one not to give both bills a vote.
Quinn can plausibly tell the public he would have been happy to sign a bill if the legislature had simply done their job and given him one to sign.
Cullerton is also covered in the public eye since he gave both bills a vote.
At the end of the day, the bulk of culpability for failure on this one will come back around to Speaker Madigan. Too bad he’s not negotiating.
Comment by Formerly Known As... Friday, Jun 14, 13 @ 12:32 pm
sounds like an incredibly gifted plan to us bet Billboards and The Senate MinorityLeader had a big hand in crafting this one…Teee Heee
Comment by CircularFiringSquad Friday, Jun 14, 13 @ 12:36 pm
I would label this as a shanked punt.
Comment by Norseman Friday, Jun 14, 13 @ 12:37 pm
Speaker Madigan simply knows that if he brings up SB2404 it will pass the house and he will look like the loser he is, enough said. He doesn’t have the stones.
Comment by Union Man Friday, Jun 14, 13 @ 12:43 pm
- GoldCoastConservative -
Detroit is a city not a state and - IMHO - GOP leadership in Lansing did things that made Detroit’s default and insolvency more likely rather than less likely.
Rich Miller’s phrase “entitled, wealthy white male rage” is spot on with respect to the ongoing thwarting of plans to loot the public pensions (and Social Security) for the financial benefit of entitled, wealthy white males.
Merely IMHO, as always.
Cheers!
Comment by Bill White Friday, Jun 14, 13 @ 1:12 pm
@Nickypiii - I understand that Illinois can’t declare bankruptcy. But, like Detroit, Illinois can default on its pension obligations. Pensioners should take little comfort in the language of the state constitution. Unless they can eat it or spend it, the state constitution may not be worth the paper its printed on.
Comment by GoldCoastConservative Friday, Jun 14, 13 @ 1:12 pm
Ooops, sorry for replying to a disappeared comment.
Comment by Bill White Friday, Jun 14, 13 @ 1:13 pm
Gold Coast…..
There is a prioity for payments in Illinois stipulated by the constitution. First the bond holders and second are pensions. At present it would take a long time for the pensions to miss a payment. In fact as long as the state makes normal payment it could be as long as 20 years before insolvency and probably longer! By the way the pensions were collectively funded at about 40% in 1971 and now 40 plus years later they still haven’t missed a single payment. Don’t hold your breath waiting! This is about robbing the pensions to pay for legislative pork my rich friend!
Comment by Old and In The Way Friday, Jun 14, 13 @ 1:28 pm
==
But, like Detroit, Illinois can default on its pension obligations. Pensioners should take little comfort in the language of the state constitution.
==
How can this be? If the state defaults, it won’t solely be on pensions. Vendors won’t get paid. Workers won’t get paid. Is there a situation where the state defaults on pensions only and continues as normal? Paying employees? Paying (after a time) vendors?
This seems always to be threat that’s lurking. “You pensioners better watch out, because if you don’t take your cuts, you’ll eventually get nothing.”
Is it possible that one day the state will continue to function — workers show up at the agencies, work a day, get paid every two weeks — but the pensioners in the meantime get nothing?
Comment by Frenchie Mendoza Friday, Jun 14, 13 @ 1:30 pm
As to the issue of Illinois being broke……somebody better tell the Guv and GA! Despite the backlog of bills and all the headlines…….we increased spending by almost $2 billion! Take a look at the pork, even in the education bill! As for pensions squeezing out education for funding lets get honest……we have NEVER funded education with the first dollar but generally with what is left.
Comment by Old and In The Way Friday, Jun 14, 13 @ 1:38 pm
Gov. Quinn: “Hey look, a squirrel! Or is that a kitty? Whatever it is, look over there!”
Comment by Keyrock Friday, Jun 14, 13 @ 1:41 pm
Madigan’s Bill saves the most and if it is not constitutional then neither is the Cullerton Bill- common sense suggests to go with the Madigan Bill and then allow for judicial review- Whether Cullerton had union “buy-in” isn’t relevant given that the IRTA for one is prepared to challenge his proposed legislation- either both bills are constitutional or neither is
Comment by Sue Friday, Jun 14, 13 @ 1:43 pm
The fact that the state pension system is funded at the same level as it was when the protection clause was put in the constitution is one of the more underreported facts about the current situation.
The pay-as-you-go option is a financially viable option but it would take political courage to stop a lot of marginal spending which the Quinn administration seems incapable of understanding.
Illinois needs a Jerry Brown not our current Bozo the Clown.
Comment by Cassiopeia Friday, Jun 14, 13 @ 1:45 pm
Hey Cass- Pay as you go won’t work into the future as the pension annual cost continues to grow faster the any possible revenue growth so absent reform if the pensions continue to get paid every other state program gets hammered
Comment by Sue Friday, Jun 14, 13 @ 1:54 pm
The Speaker has stuck is neck way out this time. A bright spotlight is now on this awful behavior. It’s like life in general, you have to stand up the the bully sometimes. Let’s see if Quinn or Cullerton are up to it. If they ain’t they’ll get what they deserve.
Comment by Calhoun Native Friday, Jun 14, 13 @ 1:55 pm
Old beat me to the punch in responding to rich guy.
It’s sad that the reduction proponents have convinced too many innocents that this is about saving the pensions. Folks, this is about freeing up money for other state programs. I suspect its also about showing sacrifice on the part of public workers as political cover for the legislators’ vote on extending the income tax increase.
Comment by Norseman Friday, Jun 14, 13 @ 2:00 pm
Spkr madigan sneers at the gov, and he backs away from his position? Shocking, i tell you. Shocking.
Conf cmte? Thats basically what leaders’ mygs are these days. This issue is too big, and the issues too entrenched for the traditional conf cmte to produce any thing worthwhile.
Comment by Langhorne Friday, Jun 14, 13 @ 2:03 pm
Sue, the normal cost of pensions as a percentage of salaries starts decreasing in 2015 according to the Commission on Government Forecasting and Accountability.
Comment by Norseman Friday, Jun 14, 13 @ 2:19 pm
The Illinois Supreme Court has not ruled on the constitutionality of SB 1313, which would limit health care coverage for retired state employees. Then we will know how much if any state retiree savings has been achieved by the General Assembly and Governor Quinn. At that point the legislature can move forward on solving the pension funding problem. But to say that they have done nothing is to forget about SB 1313.
Comment by Ruby Friday, Jun 14, 13 @ 2:34 pm
Norseman, “Sue” never lets facts and figures get in the way of a good rant. She does have a point, though, as the total payout (including payments on the unfunded) grows at a similar rate to the IL economy. Check that COGFA report Rich posted earlier this week for the details.
Comment by Arthur Andersen Friday, Jun 14, 13 @ 3:08 pm
As we have come to expect The Senate MINORITY Leader was especially gifted. We are blessed to have the leadership.
Fire, Aim, Ready!
Comment by CircularFiringSquad Friday, Jun 14, 13 @ 3:11 pm
Sue
Not sure where you got your “facts” but they simply don’t add up. The ramp is also a part of the problem since it was back loaded. However, underlying all of the hype is the real issue and that is the fact that under the current revenue structure neither SB1 or SB2404 fixes the states fiscal problems!,
As for the person who posted on the constitutionality of SB1 vs SB 2404 you really need to read up a bit more on the two very different approaches. Even Madigan admits that SB1 is only constitutional if the ISC finds that the state is in such a fiscal crisis that it can suspend contract law. A very scary thought to anyone who does business with any state! Also an almost insurmountable hurdle sine the state has increased it’s budget $2billion and no state has been successful, and only two have tried, since 1933. Also note that if you think we wouldn’t get dinged by the bond raters for this you are delusional!
There are no good options left at this point! Madigan’s bill is a true Hail Mary!
Comment by Old and In The Way Friday, Jun 14, 13 @ 3:15 pm
The Illinois Supreme Court has already ruled on the constitutional question, the pensions are protected why is everyone ignoring this ruling?
The People ex rel. Sklodowski vs. The State of Illinois, 182 Ill.2d 220 (1998)
From the courts decision:
“The court examined the defendants’ claims that the pension protection clause creates an enforceable contractual right only to receive benefits, not to control funding. The court concluded that the plaintiffs’ allegations of inadequate funding on the part of the State were insufficient to constitute an impairment of benefits in violation of article XIII, section 5 of the Illinois Constitution. The plaintiffs could not prove that the funds at issue were “on the verge of default or imminent bankruptcy” or that the benefits were in immediate danger of being diminished (182 Ill.2d at 233). While the Court recognized that article XIII, section 5 of the Illinois Constitution created an enforceable contractual right to benefits, such a right could not be divined to enforce the level of state contributions mandated by Public Act 86-273. The court found that the framers of the Illinois Constitution were careful to craft in the pension protection clause an amendment that would create a contractual right to benefits, while not freezing the politically sensitive area of pension financing.”
Comment by Fulfilled My Part of the Contract Friday, Jun 14, 13 @ 3:17 pm
“The fact that the state pension system is funded at the same level as it was when the protection clause was put in the constitution is one of the more underreported facts about the current situation.”
There’s a potential ‘red flag’ here, and it’s a doozie….
http://californiapublicpolicycenter.org/how-lower-earnings-will-impact-californias-total-unfunded-pension-liability/
This is for CAland, but read the summary. In particular ….
“SUMMARY: This study describes how actuaries calculate two key variables that govern pension solvency; the plan’s “accrued actuarial liability,” defined as the present value of all future obligations to pay pensions, and the plan’s “actuarial value of assets,” defined as the current value – adjusted upwards or downwards to account for market volatility – of the plan’s invested funds. The amount of the unfunded liability is the amount by which any pension plan’s liabilities exceed their assets. This study then calculates the impact of new credit evaluation standards, proposed by Moody’s Investor Services to take effect in 2014, on the calculation of a pension plan’s liability.”
The credit evaluation standards proposed by Moody’s Investor Services use a max. return of 5.5%, not the 7.5% currently being utilized by the pension plans.
Now, the buzz floating out there is that application of the new ‘guidelines’ (use 5.5% instead of 7.5%) from Moody’s Investors Services the State retirement plan funding will drop from current levels to approximately the very low 30% levels.
And instead of thirty (30) years, they are using much shorter periods of time (13 to 17 years). Ouch!
Comment by Judgment Day Friday, Jun 14, 13 @ 3:20 pm
AA, Sue was responding to a pay as you go option discussed by Cass. I certainly defer to your superior knowledge of this issue, but I believe looking at normal costs is a better determinant of the growth of a pay as you go system. I know the trend if we continue as is.
Comment by Norseman Friday, Jun 14, 13 @ 3:20 pm
My favorite thing in this discussion are the “cafeteria conservatives”. They claim to worship every word of the Constitution, but it suddenly needs to be cast aside and deemed “worthless” if there is an opportunity to bully public workers.
Comment by LincolnLounger Friday, Jun 14, 13 @ 3:46 pm
Norseman, point well made.
Comment by Arthur Andersen Friday, Jun 14, 13 @ 3:48 pm
Here is one mans opinion. Pension will get fixed….during next lame duck session. Jan 2015
Comment by sparky791 Friday, Jun 14, 13 @ 3:52 pm
–But, like Detroit, Illinois can default on its pension obligations.–
Detroit’s unique in American history. I don’t know why people insist using it as a model for anything.
A bunch of Michigan boys came up with a good internal combustion engine, adopted the assembly line of the Chicago slaughterhouses for making cheap cars, then came the Great Flood and migration of southern blacks, then came WWII and the Arsenal of Democracy, then came consumer credit, the interstates and the suburbs and two-car garages, all built on cheap gas and a devastated worldwide industrial base outside of the United States.
In 1950, Detroit — not Flint, not Cadillac, but Detroit — produced 50% of the cars in the world. It couldn’t last, unless we kept on bombing Japan and Germany indefinitely.
Detroit would still have the 2 million people that they geared up for.
But we didn’t. Japan and Germany now build cars. And since good Yankees from Michigan dragged the backwards racist plutocrats of the Old South into the modern era, and Reagan insisted on domestic content, Japanese and German auto companies now build cars in the south.
I’m sick to death of people railing on Detroit. They geared up and did their bit well. We owe them a lot for our freedom and way of life.
Comment by wordslinger Friday, Jun 14, 13 @ 4:11 pm
The cost for delaying is $5.83M using the assumptions the pension systems use.
As -Old- notes, we’ve been here before and never missed a pension payment. He’s also noted a lot of what I would have commented, including the fact that all both bills do is delay the inevitable tax increases / restructuring that needs to take place by 1 to 3 years … more robbing from the pensions to pay for schools, welfare and pork.
Plus we have the comments in the 1974/75 IFT case (and a number of subsequent cases) where the IL SC (as the members consisted at that point) made it pretty clear that the law was on the retiree’s side in the event the State did ever miss an actual pension payment.
To all the commentators just spouting off without knowing the facts, go read the Madiar report, the Martire proposal, and the COGFA report. Until you’ve read them, you don’t have a clue what you are talking about.
Comment by RNUG Friday, Jun 14, 13 @ 4:11 pm
Madigan’s plan is a Hail Mary but sometimes they work. I saw Doug Flutie pull one off once. If the courts shoot it down he can blame it on them.
Comment by Country Boy Friday, Jun 14, 13 @ 4:16 pm
The conference would show that 3 out of the 4 caucuses agree on the Speaker’s plan - assuming GOP stance has not changed.
Comment by low level Friday, Jun 14, 13 @ 4:57 pm
Very interesting commentary on Madigan/Cullerton pension conspiracy: http://www.chicagonow.com/chicago-political-commentary/2013/06/madigan-cullerton-pension-reform-conspiracy-theory-spot-on/
Comment by Both Sides Now Monday, Jun 17, 13 @ 9:40 am