The Obama administration should stop trying to undermine California's public employee pension changes.
U.S. Labor Secretary Thomas Perez's abhorrent overreach into state affairs and misapplication of federal transportation law would undermine Gov. Jerry Brown's retirement reform efforts.
Perez's actions would harm taxpayers and, ironically, the very workers he seeks to protect. Pension costs are strangling local governments, sucking away funds needed to employ workers. Absent reasonable pension cost controls, more public employees will lose their jobs.
If anything, the retirement law Brown signed a year ago does not go nearly far enough to control rising costs. It's a foundation upon which more change must be built. However, Perez apparently wants to bring down the entire structure.
The labor secretary relies on a law Congress passed in 1964 to ensure public transit agencies didn't bust unions as they acquired financially troubled private transportation companies. To this day, federal transportation funding cannot be handed out until the Labor Department determines that workers' contract benefits would be preserved and bargaining rights would continue.
Perez claims California's pension changes violate that law. Some $4.3 billion of transportation funding could be affected. In other words, Perez says workers would be harmed so he's going to harm them further by eliminating funding that would create jobs.
Worse, he's wrong. The pension changes do not affect current contract benefits nor do they infringe on collective bargaining rights. In crafting the pension law last year, Brown and the union-friendly Legislature bent over backward to ensure no current labor contracts would be affected and that no existing employees would see their pension accruals reduced in the future.
The retirement law changes mostly affect new employees. Existing workers years in the future could be required to start paying a fair share toward their pensions if they're not already.
It's well within the purview of state government to set fiscally prudent future contribution levels to protect the pension systems. Unions are free to demand other compensation in exchange. None of that changes their rights to collectively bargain.
Perez seems to take the position that agencies receiving federal transportation dollars should never reduce the compensation or benefits of their workers. It's an absurd misapplication of the decades-old law.
Brown must stand firm. Transportation workers should not be exempted from pension changes applied to all other public employees. As for the president, it's time for his administration to butt out of this state's attempts to fend off a fiscal calamity.