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Tunneling Through the State Pension Burden

October 11, 2010

By Nicole Gelinas

Bob Herbert is right. Building a tunnel should not be beyond the combined powers of the United States government and New Jersey. Chris Christie and U.S. Transportation Secretary Ray LaHood should find a way to get this thing built.

Governor Christie should ask LaHood to approach the White House with a “cash for cuts” proposal for the tunnel. That is, the feds should offer more cash, but only by matching the cuts that Christie can wring from New Jersey’s public-sector unions.

For example, if unions agree next week to shave $1 billion off New Jersey’s future pension obligations by, say, increasing the retirement age, the feds would reward New Jersey with another $1 billion in tunnel cash now. (People can fool with the percentages; maybe the match shouldn’t be dollar-for-dollar, but you get the idea.)

As I wrote in the other newspaper Wednesday, New Jersey’s pension obligation is set to grow by $39 billion over the next 15 years. So there’s plenty of places to find a few stray billions in savings — if New Jersey’s public-sector workers want to help build a future, and help their construction-union brethren in the private-sector contracting world to get jobs.

A workable deal here would be a model for future federal aid to states (as well a nice example of bi-partisan cooperation). Washington should stop offering no-strings-attached stimulus so that states, cities, towns, and school districts can try to maintain their bubble-era compensation programs.

Instead, the White House and Congress should help states and other public entities that prove they can help themselves, by cutting back their future obligations so that they can start making — and keep making — the infrastructure investments that future generations (and ours, too!) need.

P.S. Paul Krugman also wrote about the tunnel Friday. It is wrong for Krugman — and for Herbert, too — to pin the blame for the tunnel’s possible demise on Christie. It was former governor Jon Corzine who broke ground for the project without having a completion plan in place. And it was Corzine who tolerated the out-of-control spending that has hobbled New Jersey’s capacity to build new stuff.

Original Source: http://www.nationalreview.com/corner/249299/tunneling-through-state-pension-burden-nicole-gelinas

 

 
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