May 10, 2010
The Illinois State legislature just passed a law cutting pension benefits for newly hired state workers and public school teachers – with a 92 to 24 margin in the House and by 48 to 9 in the Senate, that is, with the support of both Democrats and Republicans. The bill was pushed through both the House and Senate in one day. They didn’t want to give the unions a chance to campaign against the bill, as they did to keep a similar bill from going through last fall.
Under the law, new teachers and state employees will not be able to draw a full pension until age 67 – up from 62 now. And the amount of their pension will be cut. This hits particularly hard, because about half of these workers are not in the Social Security system. The pension will be their only income after they retire.
For years, politicians had ignored their obligation to put in money every year to meet the needs of future retirees. Instead they diverted money that should have gone to pensions for their pet projects and corporate giveaways. In the case of Chicago, it meant diverting money from teachers’ pensions to numerous charter schools led by Mayor Daley’s cronies.
The result is that today the state’s pension funds combined are 54 billion dollars short of the money they need to pay retirees. The state worker pension fund has less than half the money it needs!
Having created a massive shortfall in the funds, the politicians now use that as the excuse to openly cut pensions.
The Commercial Club of Chicago, a club of the big capitalists, has been pushing these state pension reductions for years. Of course! The less state money is spent on pensions, the more money is available for handouts to big business.