across America are constitutionally required to present budgets to the members of their legislature for review, debate and ultimate passage. While this year was no exception, due to a weak economy state budgets have been problematic nationwide. As a sample of the debate that has emerged, consider Matt Bai's narration of New Jersey's version of the conflict in "How Chris Christie Did his Homework" and David Leonhardt's argument in "Union Contracts, Not Pay, Are States' Problem." Write an essay in which you use these works to develop your own specific argument in response to the differing perspectives on New Jersey's budget crisis. You should avoid merely listing problems and instead try to develop an idea about what you hope the public might learn by analyzing the reasoning of participants in the debate.
This topic does not require additional research. Keep in mind that throughout your essay you must demonstrate your comprehension of the two assigned pieces by quoting and discussing relevant passages to support your thesis. Essays with support drawing solely from personal response and/or a single author will not be considered passing. In addition, be sure to develop and explain an independent argument; essays that merely summarize the assigned readings or that substitute disproportionate quoting for original work will not earn a passing grade.
This is an excerpt from an article that appeared in print on February 27, 2011 in the Sunday Magazine of The New York Times.
Like a stand-up comedian working out-of-the-way clubs, Chris Christie travels the townships and boroughs of New Jersey, places like Hackettstown and Raritan and Scotch Plains, sharpening his riffs about the state's public employees, whom he largely blames for plunging New Jersey into a fiscal death spiral. In one well-worn routine, for instance, the governor
reminds his audiences that, until he passed a recent law that changed the system, most teachers in the state didn't pay a dime for their health care coverage, the cost of which was borne by taxpayers.
And so, Christie goes on, forced to cut more than $1 billion in local aid in order to balance the budget, he asked the teachers not only to accept a pay freeze for a year but also to begin contributing 1.5 percent of their salaries toward health care. The dominant teachers' union in the state responded by spending millions of dollars in television and radio ads to attack him.
"The argument you heard most vociferously from the teachers' union," Christie says, "was that this was the greatest assault on public education in the history of New Jersey." Here the fleshy governor
lumbers a few steps toward the audience and lowers his voice for effect. "Now, do you really think that your child is now stressed out and unable to learn because they know that their poor teacher has to pay 1V2 percent of their salary for their health care benefits? Have any of your children come home ??" any of them ??" and said, 'Mom.' " Pause. " 'Dad.' " Another pause. " 'Please. Stop the madness.' "
By this point the audience is starting to titter, but Christie remains steadfastly somber in his role as the beseeching student. " 'Just pay for my teacher's health benefits,'" he pleads, " 'and I'll get A's, I swear. But I just cannot take the stress that's being presented by a 1V2 percent contribution to health benefits.' " As the crowd breaks into appreciative guffaws, Christie waits a theatrical moment, then slams his point home. "Now, you're all laughing, right?" he says. "But this is the crap I have to hear."
Acid monologues like this have made Christie, only a little more than a year into his governorship, one of the most intriguing political figures in America. Hundreds of thousands of YouTube viewers linger on scenes from Christie's town-hall meetings, like the one in which he takes apart a teacher for her histrionics. ("If what you want to do is put on a show and giggle every time I talk, then I have no interest in answering your question.") Newly elected governors
??" not just Republicans, Christie says, but also Democrats ??" call to seek his counsel on how to confront their own staggering budget deficits and intractable unions. At a recent gathering of Republican governors
, Christie attracted a throng of supporters and journalists as he strode through the halls of the Hilton San Diego Bayfront Hotel like Bono at Davos.
While Christie has flatly ruled out a presidential run in 2012, there is enough conjecture about the possibility that I felt moved to ask him a few weeks ago if he found it exhausting to have to constantly answer the same question. "Listen, if you're going to say you're exhausted by that, you're really taking yourself too seriously," Christie told me, then broke into his imitation of a politician who is taking himself too seriously. " 'Oh, Matt, please, stop asking me about whether I should be president of the United States! The leader of the free world! Please stop! I'm exhausted by the question!' I mean, come on. If I get to that point, just slap me around, because that's really presumptuous. What it is to me is astonishing, not exhausting."
There is, in fact, something astonishing about the ascent of Chris Christie, who is about as slick as sandpaper and who now admits that even he didn't think he would beat Jon Corzine, the Democrat he unseated in 2009. Some critics have posited that Christie's success in office represents merely the triumph of self-certainty over complexity, the yearning among voters for leaders who talk bluntly and with conviction. Yet it's hard to see Christie getting so much traction if he were out there castigating, say, immigrants or Wall Street bankers. What makes Christie compelling to so many people isn't simply plain talk or swagger, but also the fact that he has found the ideal adversary for this moment of economic vertigo. Ronald Reagan had his "welfare queens," Rudy Giuliani had his criminals and "squeegee men," and now Chris Christie has his sprawling and powerful public-sector unions ??" teachers, cops and firefighters who Christie says are driving up local taxes beyond what the citizenry can afford, while also demanding the kind of lifetime security that most private-sector workers have already lost.
It may just be that Christie has stumbled onto the public-policy issue of our time, which is how to bring the exploding costs of the public workforce in line with reality. (According to a report issued last year by the Pew Center on the States, as of 2008 there was a $1 trillion gap, conservatively speaking, between what the states have promised in pensions and benefits for their retirees and what they have on hand to pay for them.) Then again, he may simply be the latest in a long line of politicians to give an uneasy public the
scapegoat it demands. Depending on your vantage point, Chris Christie is a truth-teller or a demagogue, or maybe even a little of both.
To say that New Jersey has a budget problem wouldn't really be accurate. The state has at least three major budget problems related to the costs of the public workforce, all of which contribute to a shortfall that the state's legislative accounting office projects to be almost $11 billion this year ??" an amount that's more than a third of the state's total budget. And in order to understand what's happening in statehouses all over the country, and what Christie is trying to do about it in New Jersey, it helps to have some sense of how these problems tie together.
First, there's the local aid. New Jersey sends 40 percent of its annual budget to an overlapping tangle of 566 municipalities and 600-plus school districts, in order to help them slow the mutantlike growth of local property taxes, which are among the highest in the country. Each of these little hamlets and districts negotiates its own labor contract with the police and firefighters, sanitation workers and, most consequentially, teachers, which means the contracts established by the most affluent communities end up setting a statewide standard ??" a process that drives up everyone else's costs to a level that the local governments simply can't sustain by themselves.
Second, in the long term, New Jersey doesn't have nearly enough money on hand to cover its pension obligations to teachers and other state workers. At no time in the last 17 years has New Jersey fully met its annual obligation to the pension fund, and in many of those years, the state paid nothing at all. (That didn't stop one governor
, Donald DiFrancesco, a Republican, from increasing payouts by 9 percent and lowering the retirement age before he left office, which would be kind of like Bernie Madoff writing you a $1 million check before heading off to jail.) Even had the state been contributing faithfully to the fund as it was supposed to, however, there would still be trouble ahead. That's because New Jerseyans, who are glass-half-full kind of people, have assumed an improbably healthy return of 8.25 percent annually on the state pension fund. The actual return over the last 10 years averaged only 2.6 percent.
Finally, the state will pay close to $3 billion this year in health care premiums for public employees (including retired teachers), and that number is rising fast. New Jersey has set aside exactly zero dollars to cover it. All told, in pensions and health care benefits, New Jersey's "unfunded liability" ??" that is, the amount the actuaries say it would need to find in order to meet its obligations for the next 30 years ??" has now passed the $100 billion mark.
There was little in Christie's uninspiring campaign to make anyone think he would address these issues with more tenacity than the governors
who preceded him. A U.S. attorney whose only overtly political experience entailed serving on the Morris County Board of Chosen Freeholders (seriously, they still call it that), Christie had only a fraction of Corzine's public exposure or personal fortune. About the only thing he had going for him was that Corzine was pervasively unpopular. And so rather than come up with a lot of actual ideas, which Corzine would then be free to oversimplify and distort in a barrage of television ads, Christie simply offered up a bunch of conservative platitudes and tried to make the campaign a referendum on the Democratic governor
. (When we talked during the campaign, Christie could articulate little by way of an agenda, except to say that he would "get in there and make it work.") Even a lot of Republicans thought Christie was underwhelming as a campaigner.
In the end, Christie won by about four points on Election Night in 2009, with little notion of what he was going to do next. When I asked him if there was any one moment of clarity that put him on the path from cautious candidate to union-bashing conservative hero, Christie pointed to a meeting about a month into the transition, when his aides came to him brandishing an analysis of the state's cash flow produced by Goldman Sachs. They advised the governor
-elect that, without some serious action, the state could fail to meet payroll by the end of March. After scrutinizing the budget, Christie told me, his team came to the conclusion that the only way to get control of local taxes and state spending was to go after the pension and health care benefits that the public-sector unions held sacrosanct. From that point on, it seems, Christie has conducted his governorship as if he were still a grandstanding prosecutor, taking powerful unions on perp walks with evident enthusiasm.
The centerpiece of Christie's frenzied agenda, which passed the Democratic- controlled Legislature last July, is a strict cap on local property taxes, which will be allowed to rise no more than 2 percent every year. When combined with a reduction in state aid, what this means, practically speaking, is that New Jersey's townships and cities will have to hold the line when negotiating municipal labor contracts if they want to remain solvent, because they can't rely on either their residents or the state for more money.
To help them do that, Christie has put forward 33 measures that are part of what he calls his "toolkit" for reform. These include, for instance, a proposal that would allow localities to opt out of the civil-service system altogether, giving them more control over hiring and firing local officials, and another that would limit the cash payouts that retiring workers can take for their unused sick days. On the pension front, if Christie has his way with the Legislature, most union members would contribute more to their plans than they have up to now, and all of them would retire later and receive lower benefit payments.
The crux of Christie's argument is that public-sector contracts have to reflect what has happened in the private sector, where guaranteed pensions and free health care are becoming relics. It's not surprising that this stand has ingratiated Christie to conservatives in Washington; advocacy groups and activists on the right have carried out a long campaign to discredit the ever-shrinking labor movement in the private sector, and what Christie has done, essentially, is to blast his way into the final frontier, taking on the public-sector unions that have come to wield enormous political power. More surprising is how the governor
's proposals are finding sympathy from less-partisan budget experts, if only because they don't see obvious alternatives. "I've tried to look at this objectively, and I just don't know of any other option," says Richard Keevey, who served as budget director for a Democratic governor
, Jim Florio, and a Republican governor
, Tom Kean. "You couldn't tax your way out of this."
Union leaders, on the other hand, are howling. The heads of the police and firefighters' unions say that Christie's cuts to local aid have already cost the state several hundred firemen and police officers, and they warn that his 2 percent cap on property taxes will have dire effects on public safety, as more towns and cities try to shave their payrolls to conform with the cap. "I don't think they're going to get it until the body bags pile up," Anthony Wieners, president of the police union, warns darkly.
Leaders of the teachers' union, meanwhile, are apoplectic about Christie's proposed changes to their pension plan, which they say will penalize educators for the irresponsibility of politicians. After all, they point out, it wasn't the unions who chose not to fund the pension year in and year out, and yet it's their members who will have to recalibrate their retirements if the benefits are cut.
When I made this same point to Christie, he simply shook his head. What's done is done, he told me, and it's time for someone to tell these workers the truth, which is that the state is simply never going to have the money to make good on its commitments. "Listen, if they want to travel in the Michael J. Fox time machine and change time, I guess we could try that," he said. "We could get the DeLorean out and try to go back there. But I think realistically that that was just a movie and make-believe. So we've got to live with what we've got."
Chris Christie is fat. You can use nicer words if you want ??" rotund, portly, big-boned ??" but it is what it is, and the governor
will be the first to tell you so. And because he's fat, a lot of people, consciously or not, tend to assume certain things about Christie ??" that he's undisciplined and impulsive, graceless and bullying. (Corzine's most brutal campaign ad accused Christie of "throwing his weight around.") At times, Christie seems to exploit this
persona. He likes to present himself as the proverbial bull in the china shop, the ungainly, somewhat boorish guy who lacks the artifice to keep from saying whatever obvious truth pops into his head. "I don't think you elected me because of my charm and good looks," Christie likes to say, just to show he's in on the joke.
And yet, to portray Christie in this cartoonish way, as so many critics do, is to vastly underestimate his skill as a politician. The most sophisticated communicators of the modern era hammer at a consistent argument about their moment and the response it demands, and they choose carefully constructed metaphors to make the choices ahead seem obvious ??" think of Ronald Reagan's morning in America, or Bill Clinton's bridge to the 21st century. And Christie's communications strategy is about as sophisticated as any you will find in American politics right now.
Take Christie's choice of a somewhat mundane image, the "toolkit," as a unifying frame for his proposals. As a metaphor, the toolkit works on two levels, depending on the audience. You can visualize it either in the sense of screwdrivers and hammers or, if you work in an office all day, you might envision it more as a software suite. Either way, the toolkit symbolizes flexibility and local control. It's a way of saying that Christie isn't putting unwieldy restrictions on towns and cities, as the cops and firefighters charge ??" he's just empowering those towns and cities with a variety of implements and gadgets with which to attack their budget problems themselves.
In sustaining his assault on the public-employee unions, Christie knows he has to make his subject comprehensible. One reason that leaders in a state like New Jersey haven't been able to get a handle on pension and benefit costs, despite years of dire warnings from good-government advocates, is that the subject is agonizingly dull and all but impossible to explain. There are myriad plans for all the different public-employee unions, various contribution formulas for each one and actuarial projections that require an advanced degree to unravel.
Christie, it turns out, has a preternatural gift for making the complex seem deceptively simple. Last month I saw him hold forth at a town-hall meeting in Chesilhurst, a South Jersey borough of about 1,600. Chesilhurst is about half African-American, and I sensed more curiosity than enthusiasm among the racially mixed crowd as it flowed into the little community-center gymnasium. An unusually large number of folding chairs were empty. About 20 minutes after the program was supposed to start, there came over the loudspeakers the kind of melodramatic instrumental that might introduce a local newscast, or maybe an Atlantic City magic show, and in came Christie, taking his position in the center of the crowd. The theme of the week was pension-and-benefits reform, and in his
introductory remarks, Christie explained the inefficiency in the state's health care costs not by wielding a stack of damning statistics, as some politicians might, but by relating a story.
When he was a federal prosecutor, Christie told the audience, he got to choose from about 100 health-insurance plans, ranging from cheap to quite expensive. But as soon as he became governor
, the "benefits lady" told him he had only three state plans from which to choose, Goldilocks-style; one was great, one was modestly generous and one was rather miserly. And any of the three would cost him exactly 1.5 percent of his salary.
" 'You're telling me,'" Christie said he told the woman, feigning befuddlement," 'that no matter which one I pick, the good one or the O.K. one or the bad one, I'm going to pay 1V2 percent of my salary?' And she said, 'Yes.'
"And I said, 'Then everyone picks the really good one, right?' And she said, 'Ninety- six percent of state employees pick the really good one.'
"Which led me to have two reactions," Christie told the crowd. "First, bring those other 4 percent to me! Because when I have to start laying people off, they're the first ones!" His audience burst into near hysterics. "And the second reaction was, of course I would choose the best plan," Christie said, "and so would you.
"Now listen, I don't think this is groundbreaking stuff," Christie added. "I don't think this means that instead of being governor
, you know, I should be at NASA, working on the space shuttle. I'm no genius. Just seems to me that if you give people an option to get something for nothing, they'll take it." Scanning the nodding faces around me, it seemed there wasn't a person in the gymnasium, at that point, who wouldn't have voted to make state workers and teachers pay more for the better plan.
Another thing Christie understands about political messaging, especially when your adversaries are out there portraying you as callous, is that it has to be grounded in the personal. "If you're asking people to do some really difficult things, which I am asking them to do," Christie told me, "then I think they feel more comfortable doing those things if they know you."
And so the 48-year-old Christie makes a point of sharing intimate details of his life and times ??" that he uses an asthma inhaler, that he has struggled with dieting and exercise since his days as a high-school catcher came to an end, that his mother told him on her deathbed that he should go back to work because nothing between them had been left unsaid. That last one, which elicited audible gasps of sympathy from the audience in Chesilhurst, is his way of saying that he wants to leave nothing unsaid between him and the voters, either, even if they both occasionally get hurt.
"My mother said to me all the time, 'Christopher, you're going to have choices in your life between being loved and being respected,' " Christie told his rapt audience, strains of emotion creeping into his voice. " 'And you should choose respected. Because if you're respected, love can come.' She said, 'But seeking love without also being respected ??" well that love doesn't last.' " It was as if some weird brain-switching experiment had taken place, and somewhere, at that very moment, Oprah was giving a talk about state budgets and tax policy.
There's one more piece of political narrative that Christie seems to grasp, which is that every story has both a protagonist and an antagonist, someone who stands for change and someone who plays the foil. Christie never had to look far to cast his ideal antagonists. They sit just across the street and one block down from the State House, in the building occupied by New Jersey's major teachers' union.
Union Contracts, Not Pay, Are States' Problem By David Leonhardt
This opinion piece appeared in The New York Times on March 1, 2011.
When Ed Rendell became the mayor of Philadelphia in 1992, he started a fight with the city's labor unions that will sound familiar to anyone who has been following the recent news from Wisconsin. In his inaugural address, Mr. Rendell, a Democrat, announced, "Philadelphia stands on the brink of total disaster."
He told the city's unions that they needed to accept less generous health benefits, fewer holidays and a pay freeze. The unions promised to strike. Mr. Rendell pointed out, frequently and publicly, that the city offered better benefits than private companies did. The public sided with the mayor, and on most issues, the unions eventually caved.
If you review the recent history of battles between unions and state or local governments, you'll find similar stories. In New York, Rudolph Giuliani won big concessions. In Chicago, Richard Daley did, too. In Wisconsin ??" setting aside Gov. Scott Walker's attempt to end collective bargaining ??" unions have already agreed to a significant cut in take-home pay.
It has become conventional wisdom to say that public sector unions are inherently problematic because they can use their political influence to win lavish pay from politicians. But that's not quite right. The real problem with most union contracts for public workers is not the money ??" it's almost everything else.
On money alone, many politicians are pretty tough negotiators. They have both the motive and the means. They want to spend their budget on projects that are sexier than government pensions. And, as Mr. Rendell says today, politicians can often win a fight with unions in "the court of public opinion."
No wonder that academic papers spanning more than 30 years have found that government workers receive compensation that is similar ??" with somewhat lower salaries and somewhat better benefits on average ??" to that of private sector workers with similar qualifications. One study went so far as to include workers' scores on an intelligence test, to ensure the comparison was apples to apples. Over all, government workers are modestly underpaid or overpaid, depending on which technical accounting assumptions are used to value their pensions.
Either way, modestly is the crucial word. There is no good case that government pay is a major cause of the budget problems now facing states.
Unfortunately, though, politicians do not have the same incentives to be tough negotiators on issues besides money. Why not? Because most government agencies are monopolies. They face no competition. Whether they perform beautifully or miserably, they cannot be run out of business. They also can't be run out of business by pushing off costs until a future day. So they delay too many costs and don't perform their jobs well enough.
The delaying of costs is obvious. Both politicians and union leaders have decided that generous future benefits offer the easiest way to hold down spending and still satisfy workers. The result is government pay that's skewed too heavily toward pensions and health insurance.
To be clear, I'm making an argument that's different from "Government workers are overpaid." I'm saying that they are paid in the wrong ways ??" in ways that make life easier on union leaders and elected officials, at least initially, but that eventually hurt both workers and taxpayers.
The best example is health insurance. Health plans for union workers and retirees are much more likely to require little or no co-payment, which leads to lots of medical treatments that don't make people any healthier, and to huge costs. Ultimately, some of these plans will probably prove so expensive as to be unsustainable. Workers would have been better off accepting a less generous benefit package and slightly higher salaries.
The solution today is not to cut both the pay and the benefits of public workers, as would happen if workers in Wisconsin, Ohio and elsewhere lost their right to bargain. Remember, public workers don't get especially generous salaries. The solution is to get rid of the deferred benefits that make no sense ??" the wasteful health plans, the pensions that start at age 55 and still let retirees draw a full salary elsewhere, the definitions of disability that treat herniated discs as incurable.
These changes will help the states' long-run budget problems, but of course they won't address the immediate, recession-induced crisis. Dealing with the crisis will require dealing with the second failure of government: subpar performance.
On Tuesday, an auditor released a report showing that the federal government was wasting tens of billions of dollars on specific programs that accomplished little. Inefficiency is just as big a problem in state and local governments. Yet many public sector unions have been terribly short-sighted on this issue.
They have too often blocked attempts to make government work better. Instead, they have protected their worst-performing members, at the expense of both the taxpayers and the thousands of public workers who do their jobs well. Only recently, for instance, have teachers' unions started to cooperate with serious efforts at teacher evaluation, and they are still not giving their full cooperation.
The tragedy ??" or maybe it's the good news ??" is that the government really can become more efficient when it tries. Indiana, under Gov. Mitch Daniels, a Republican, has had some success measuring its results and then improving them. (Mr. Daniels, less admirably, eliminated many state workers' bargaining rights in 2005.) Washington State, under Democratic governors
, has had success, too. The Obama administration, meanwhile, has made the federal government more productive in a variety of modest ways.
A more efficient government is one that does not need quite so many employees to do the same work. Layoffs are not always necessary, either. Attrition can reduce a payroll fairly quickly, as has happened in Indiana.
Ideally, the states' current fiscal crisis will end up being the spark that forces government to improve. But even if that happens ??" for that matter, even if Mr. Walker and some other governors
succeed at slashing worker pay ??" don't expect our budget problems to go away. They're too big.
Fat and happy government workers, however easy the caricature may be, are not the cause of our looming federal and state deficits. Neither are spineless politicians.
The cause is Americans' collective desire for low taxes and generous government benefits. We want our politicians to promise us tax cuts, a strong military, safe streets, good schools and unchanged Medicare and Social Security. And promise it all they do.
Eventually, we will have to pay for the government we want, regardless of what happens in Wisconsin.
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