ALEC Spearheads Effort To Steal From Employees to Give to Corporations


A contract is generally a written agreement, often concerning business, tenancy, or employment that is intended to be enforceable by law and because it is an agreement it is safe to conclude that two sides negotiated the contract’s conditions which are why they are enforceable by law. Around the nation public sector employees are seeing their defined retirement benefits from protected pension funds being slashed because Republicans claim deficits are unsustainable and that states and the federal government are broke. And yet the deficits are not enough to stop corporate tax subsidies that exceed the cost of funding retirement benefits.

In a new analysis from taxpayer watchdog group Good Jobs First, 10 states claimed they were drowning in budget deficits to justify Draconian retiree benefit cuts, but in those 10 states “the total annual cost of corporate subsidies, tax breaks and loopholes exceeds the total current annual pension costs.” The practice is part of a tactic an American Legislative Exchange Council (ALEC) sister organization funded by the Kochs, the State Policy Network (SPN), is ramping up to eliminate public sector pensions on a nationwide scale. The idea that pension and retirement funds are fair game for the wealthy is a Koch brother and Wall Street philosophy that Republicans in states are willingly implementing with impunity because they utter the term “deficit.”

For example, in Louisiana Republicans claimed the state’s annual pension contributions of $348 million is unaffordable and used the alleged shortfall to call for cuts to public employees’ negotiated retirement incomes. However, while claiming they are broke the same Republicans support giving subsidies, loopholes, and tax breaks to corporations at five times the cost of the state’s obligation to  retirees every year. In Illinois, Governor Pat Quinn, a Democrat, just signed legislation to cut state workers’ pensions even though the state spends $500 million more each year on corporate subsidies than it cost to fund its pension system. in Chicago, Mayor Rahm Emanuel is expected to propose similar cuts to municipal employees’ retirement benefits and cited a budget shortfall to close schools, but supports $300 million in spending on corporate subsidies, including a massive gift to a private university to construct a new basketball arena.

One of America’s most notorious crusaders to kill  public pensions, corrupt New Jersey governor Chris Christie (R), refused to make the actuarially necessary pension fund contributions and claimed New Jersey had no money to meet its obligations to public-sector workers, and to slash state workers’ pensions. Then, as if by magic, he handed out a record $1.5 billion in special tax breaks to large corporations and insisted there was still plenty of money left for new income tax cuts to benefit the rich; all while claiming the state was too broke to fund its pension system. Americans paying attention to the recent farm bill witnessed a related event when House Republicans demanded $8.7 billion in cuts to food stamps due to “deficit concerns” and promptly increased subsidies for corporate agribusiness that the conservative American Enterprise Institute reported increases annual farm subsidies by $15 billion.

The idea of cutting retiree benefits to pay for corporate subsidies and tax cuts are not a new phenomenon. In 2010 Rhode Island Republican governor Donald Carcieri urged the state to give former baseball player Curt Schilling $75 million to relocate his video game company from Massachusetts to Rhode Island. The state failed to monitor what the taxpayer subsidy was being used for and when Schilling’s firm promptly lost the money, taxpayers were on the hook for $112 million in principal and interest payments. At the same time the state had enough money to give taxpayer dollars to Schilling, and $356 million in corporate subsidies annually, the state treasurer demanded cuts to public worker pensions as well as “raising the minimum retirement age, suspending annual cost-of-living increases and replacing the contracted defined-benefit pension with a hybrid 401(k)-style plan” according to the Providence Journal. It is no surprise that the Economic Policy Institute documented that the pension fund shortfall was “due not to overly generous benefits, but to the failure of state and local government employers to pay their required share of pensions’ cost” because it used money owed to pension funds to pay for $356 million a year in corporate subsidies.

Politicians cannot have it both ways; if a state is broke they are broke. If that is the case they cannot afford to hand out corporate subsidies or tax cuts for the rich, especially if there is no money to pay negotiated and guaranteed retirement benefits. If a state is so flush with money they can afford to give out corporate subsidies and tax cuts for the rich because they failed to meet their obligation to pay their share into employee pension funds and then cut benefits, retirees have every right under the law to haul them into court for breach of contract like any other business and the court is obliged to force the state to fulfill its obligation. Of course, there is a reasonable solution that is anathema to primarily Republicans and that is raising revenue by increasing taxes and eliminating loopholes for corporations and the wealthy who have taken enough taxpayer money over the past ten years.

There is a concerted effort to raid public sector employee pensions to give corporations and the wealthy tax breaks that was the purview of Republicans but is gaining support among some state-level Democrats. In part it is because of a well-planned Republican campaign to portray public employees as overpaid and spoiled welfare recipients even though states negotiated pension contracts and defined benefits. Groups like ALEC, the Kochs, Wall Street, and the State Policy Network have specifically targeted public sector pensions for raiding because they have nearly exhausted all other programs’ resources and the idea of pension funds, like the Social Security Trust, sitting there with money that belongs to the workers is too tempting to pass up.

Every worker, whether they are public sector employees paying into a pension fund, or private sector employees paying into Social Security did so in good faith and it is their money; not the Koch brothers, Wall Street, corporations, or the wealthy’s. Whether it is a state’s malfeasance in not fulfilling its obligation to pay into pension funds according to their agreement with employees, or outright theft to enrich corporations and the rich, cutting or eliminating retirement benefits is a breach of contract and public employees deserve justice; and their own pensions paid in full according to the negotiated agreement with the states. It is despicable that some Democrats are joining the likes of Republicans, the Kochs, and their Wall Street cohort to rob public sector employees’ retirement savings, but that is the price many Americans are paying since Republicans made the term “deficit” the overriding reason to enrich the wealthy at the expense of the rest of the population. Tragically, it is not going to end until 98% of the population is in poverty that appears to be gaining support among politicians jockeying for billions of dollars in corporate campaign contributions.







Copyright PoliticusUSA LLC 2008-2023