by Ron Kenner
February 27, 2011
WISDOM OF THE STREET
BRADENTON, Fla., Feb. 18, 2011 -- Gov. Rick Scott of Florida, a very rich Republican who ran as an outsider promising to cut government and spur the creation of 700,000 jobs, tapped into a rich vein of controversy recently when he declared that the state would reject $2.4-billion the Obama Administration offered as a down payment on a high-speed rail system linking Tampa to Orlando, and later, possibly, to Jacksonville and Miami.
If the rail plan's supporters weren't sufficiently aroar, he also has announced his demand that State of Florida employees - in the only state that pays 100 percent of state worker pensions - now contribute 5 percent of the cost of their plans.
As in Wisconsin, which today is in the midst of something that looks like a Middle East people-power revolt, pension plans for government employees are a target of the large corporations that first, have to pay some of the taxes that support them, and second, have company plans that are far less generous and feel government employees should have the same.
In Wisconsin, some workers are willing to pay more into plans and earn less in salary, but all state employees are fighting for is their collective bargaining rights, especially with respect to health benefits and pension plans. They currently average $60,000 a year in salary and another $40,000 in health and pension benefits.
But there is another, inescapable conclusion that is harder to quantify and exists outside the rhetoric that surrounds controversial plans. That is the fact that pension fund and health care liabilities have morphed into amounts so large that no state or local government can deliver the promised monies to retired workers now or in the near future.
Here in Bradenton, a lovely town on the Gulf Coast in South Florida, for instance, a fire chief retired after 28 years and asked for a lump-sum payout of his pension benefits. He got the whole sum, about $1,240,000, and went away happy.
But when, a few weeks later, another fireman decided to retire after 23 years, pension-fund managers told him they could not give him the lump-sum payout of $440,000 the rules entitled him to because they no longer had the money to give. He had to settle for $4,400 a month for life.
In a microcosm, what happened in Bradenton is beginning to happen all across the country. San Diego had to declare bankruptcy because of pension fund payouts they couldn't meet; at least 14 states are apparently in similar condition, although the political edge of these debates has tended to obscure facts and the truth in favor of placing blame and pointing fingers. California, largely due to such liabilities, is now at least $25 billion in the red. The governor has frozen pay and hiring for every state agency until things improve, and that won't make much difference. Many states are just plain broke and deeply in debt.
Meanwhile, unlike the salaries my mother and father received in the Federal Civil Service, federal employees now often - usually, I should say - make more than their private-sector counterparts and enjoy far better pension plans and health benefits. Both of my parents retired with enough to live on through the '80s and early '90s, but they would not have survived on those sums today - between the stock market's wholesale theft of their invested income and the resulting theft of their home values, my father's illness alone would have bankrupted them. I miss them both, but they were fortunate to die when they did, a few months before the sub-prime recession began to hit in earnest.
America had made some regrettably profound errors in the way it has dealt with these issues. Our esteemed Chief of AR Correspondents, Randolph Holhut, pointed out one of the big problems in a recent column that showed corporate taxes in the United States have declined from 74 percent to 24 percent since 1957, a halcyon year for America in the middle of the second Eisenhower Administration.
Not content with reducing their taxes by two-thirds, corporations have sent millions of jobs overseas to reduce labor costs, and now fight to keep the portion of taxes that go to pay for the pension and health-care benefits earned by government employees at all levels, from the town dogcatcher to the elected officials of cities, counties, states and the Congress.
Much of the impetus for this wide-ranging assault comes from groups like the Reason Foundation, which is funded by the energy-producing billionaire Koch brothers, which also laid out the reasoning Gov. Scott used to cancel Florida's high-speed rail plans.
The U.S. Chamber of Commerce, its coffers filled with money from American and foreign-owned corporations can now direct unlimited amounts of money into campaigns to elect the like-minded. Organizations like the Heritage Institute, the American Enterprise Institute, American Petroleum Institute and other trade organizations back that play.
To be succinct, they are dedicating their vast resources to make the funding situation worse, and using the Koch-funded Tea Party to fight their battles. Lots of good people with decent American values have been unwittingly co-opted by the corporate minions that only want greater profits on their bottom line, not better things for Americans in general.
But let's look for a moment at the high-speed rail project. Dreamers imagine getting off a plane and getting on a train that whisks them to Disney World - simple as that. But in Los Angeles, parking and taxi concessions stopped Metro Rail miles short of the airport. Instead, late at night you can only get hourly buses to the nearest Metro Rail station in a near-deserted industrial neighborhood where the trains don't run after 1 a.m. Tampa's city mother, Mayor Pam Iorio, and its City Council also decided high-speed rail cannot go to the airport. Who would pay off the bonds on city-owned parking garages? A similar fate will probably meet rail planners in Orlando and Miami; parking concession and taxi fares are a vast source of city revenues. So in reality the hopes of dreamers do not get realized, as is often the case.
Ever hear of something called cost overruns? Go to Boston and inquire about the Big Dig, which ran $10 billion over projected costs. Metro Rail in L.A., which is a wonderful system for the most part, also ran several billions into the red. It's just the way it is when you allow change orders, construction setbacks and simple greed to get the upper hand on massive publicly funded projects. Taxpayers end up having to pay off supplemental high-interest, non-taxable bonds that cities and states are too broke to afford.
When that happens, the people pay, and the first to go are teachers. Who needs kids smart enough to figure out what's up? Special tax districts are created, local sales taxes get an added increment, state income taxes are introduced where they didn't exist before, all kinds of fees are raised, more jobs require licenses and permits to perform, and elected bodies get all the blame - meaning that offices turn over so frequently amid anger-fueled term-limit initiatives that nobody really knows how to do the jobs they were elected to perform.
In Wisconsin, where every Democratic member of the State Senate fled the state to avoid voting on a bill that would eliminate collective bargaining rights (only one had to be present to establish a quorum so Republicans could pass the bill), the fleeing senators in a wider sense represent the terrible quandary moderates, liberals and progressives face everywhere. The money isn't there to do what they want to do unless they take it from the people who elect them.
Voters have elected Republican majorities to trim spending and taxes, perhaps not knowing precisely what Election Day results would actually bring. But almost all of the Tea Party members elected to Congress last year, have no experience in elected office. They don't know what happens when they push this button or pull that handle - and then are stuck with whatever happens, which is often volatile, unpredictable and ultimately dangerous.
Well, much of this is not news. What we can contribute to this discussion is a solution, and that's all. It has political consequences, but not political origins. The solution lies in achieving a very significant breakthrough in the cost of energy. After all, when you really get down to it, Americans are fighting in Iraq and Afghanistan to ensure that our nation will have a supply of oil for the remainder of this half of the 21st Century.
Our diplomats work to protect the Suez Canal today just as they fought the Vietnam War to ensure that a hostile government in Hanoi or Saigon never controls the Straits of Malacca, through which so much of the world's oil must pass. To solve the energy problem means to solve many of the world's most costly and long-lived conflicts.
It also means a huge dislocation of economic power, one in which the world's wealth moves from the giant energy corporations to the ordinary people who become independent of them. Resisting that change is a vast federal bureaucracy the energy industry actually funds and the huge fortunes that go annually to their shareholders.
The fact that ExxonMobil, you should note, didn't pay any taxes on $14 billion in profits in once recent quarter - one in which they were liberally subsidized by the federal government with money from American taxpayers - doesn't mean that ExxonMobil doesn't still want make more profits. Like the industry as a whole, they will do anything it takes - starting wars, sinking tankers, destroying platforms, murdering heads of state, whatever - if their profits are truly threatened by someone who makes fuel out of water on desktop and dares to deploy it.
The most recent development - one of many on that front was the top-secret group of scientists from Oxford University in Cambridge who created a synthetic gasoline that would cost $1.50 a gallon if manufactured in volume. Another is the cold fusion process that which sank on the same day as the Exxon Valdez, but in a recent, courageous "60 Minutes" segment was shown to be working as promised in the laboratories of an Israeli company called Energetics.
Most important of all, as it is a comprehensive source of very cheap power for all energy needs, is the validation of Dr. Randell Mills' "hydrino" theory that would allow cars to travel 1,500 miles on a liter of water. And there's also the onboard, on-demand hydrogen electrolysis kits that can cut gasoline and diesel fuel demand by anywhere from 15 to 40 percent - again, from water, and at a low cost. All these non-polluting technologies have one basic ingredient: water. Water, in much of the world, remains free.
If these things are so great, we ask, why aren't they in widespread popular use? In truth, some - like the synthetic gasoline - are a finished product, ready to go; some, like hydrino reactors, need to be scaled up; cold fusion also falls into that category; hydrogen electrolysis, as I use in my own vehicle, is a young industry whose technology - in some cases - needs a little refinement (in fact, ExxonMobil has actually advertised it).
In every case, however, these solutions that would allow broke governments and broke people to reduce one of their greatest costs await investment on the scale of the public monies we now use to fund the oil and gas subsidies. Just that amount would be enough to push these nascent technologies the one inch further they need to go to gain widespread public use.
It is always dangerous for an opinion piece to propose one solution for a host of ills. Yet eliminating the high cost of energy would make a vast difference almost immediately upon implementation.
That's why, when we talk about wiretapping the Internet to fight al-Qaeda, about killing union rights for teachers and other public employees, about backing or not backing pro-democracy movements in the Middle East, we diffuse the one effort we really need to make: to perfect and deploy these new energy technologies without delay.
Then, when the cost of energy is gone, we can fight the other battles, having already preserved ourselves and our generations to come.
AR Correspondent Joe Shea can be reached at email@example.com. Please use AR LETTER as your Subject: header.