'Debt Bombs' — not pensions — are the real threat to public budgets, but the Big Lie about pensions is the official frame for this 'narrative'

Every month, without public discussion or debate, the Chicago Board of Education is borrowing tens (or hundreds) of millions) of dollars to fund construction and rehabilitation of schools and school buildings. But as 2009 becomes 2010, the Chicago Board of Education has no plan for such spending, has refused to hold hearings on such spending, and is agreeing to terms for the borrowing with the largest banks in the world that will result in the layoff of thousands of teachers if CPS revenues drop, as they probably will, during the next five years.

But to hear the official version of the story, the real problem with the Chicago Board of Education's budget is not the enormous debt CPS is taking on, but pension costs.

The narrative is not only being spun in Chicago, but seems to be a national version. Like "school reform" and other corporate sponsored versions of "reform," "pension reform" is going to be carried out, if those who spin the stories get away with their version, on the backs of the people, while the profits go even more to those who have done no municipal work, but who control finances.

Chicago is not the only place where this struggle is being worked out. California is the biggest.

A recent PBS report seven minutes long on the California State pension system shows the sides of the looming debate that hasn't yet taken place in Chicago, but leaves out a couple of key factual items. While the PBS California story nicely lays out the position of right-wingers and neoliberals through the words of David Crane, who works on pension issues with California Governor Arnold Schwartzenegger, the numbers are, as usual, taken out of their historical and budgetary contexts (just as Chicago is trying to do).

Above, CPS CEO Ron Huberman used the same Power Point slides at the August 26, 2009, Board of Education meeting to exaggerate the potential problems with CPS pension costs, while ignoring the fact that the Board of Education's biggest time bomb is in its spiraling debt service costs (which did not get singled out in any of Huberman's budget reports to the Board or public between January and September 2009). Because the Board is borrowing money during one of the most risky periods in recent economic history, often to fund projects deemed by the mayor to be politically expedient, CPS is facing rising debt at a time when most major institutions are reducing debt. Substance photo by George N. Schmidt.For most state workers, as with Chicago teachers, the pension benefit was a form of deferred compensation. During every strike the Chicago Teachers Union led, when a settlement came in the form of wages and benefits (often, lately, benefit cuts; just look at your drug co-pays), there was often a pension perk. The pension is a promise to workers who stick to the job.

Now the ruling class is trying to rewrite those histories.

But the biggest piece of the budget picture that is left out — from California to Chicago — when pensions are under attack is what we will begin calling the "Debt Bomb" that has been sitting under most public budgets. While the propagandists for "pension reform" talk about the current costs of pensions, they ignore the current and future costs of debt interest from the same governmental bodies that are trying to obscure debt costs while focusing, as Chicago CEO Ron Huberman does, on the costs of pensions.

One of the best videos we can expect to see updated for Chicago is the one that ran on PBS about California.

It's still up at


December 31, 2009 at 11:41 AM

By: Margaret Wilson

Retired teacher/parent

To: Retired principal

What do you mean by a two-tier system?

Will anything but the cost of living decrease affect those of us already retired?

Is the Union or anyone else organizing to fight this?

December 31, 2009 at 1:07 PM

By: Margaret Wilson

Retired teacher/parent

I just wanted to wish everyone a

HAPPY NEW YEAR!!!!!!!!! I have a couple of wishes for all of us during the coming year.

1. A return to a democratic union that is willing to fight for workers' rights instead of those of management.

2. A Union that will fight to protect our pension and strengthen it instead of allowing anyone to weaken it.

3. A successful move to block more testing and a return to the days when education was enjoyable instead of just a chore.

4. A Union that respects and truly represents its retired members instead of treating us like second class citizens.

5. A society in which all schools share the resources instead of the inbalance that currently exists.

6. Schools that open their door to parents instead of making us feel like trespassers.

7. An environment where teachers, parents, administration are equal partners working together for the good of the students.

8. A stronger economy that can provide for the needs of its citizens.

9. For the state to follow the constitution and be the primary funders of education.

10. For there to be peace in the school and an environment where children are safe to learn and encouraged to be all that they can be.

These are my wishes for all of us in the coming year.

December 31, 2009 at 1:10 PM

By: Retired Principal

Two-Tier Pension System?

Dear Margaret, current employees and retirees would be the same, a defined benefit pension. New hires would have a defined contribution pension, (ie- 401k), where they could not have enough money saved to retire. The major problem for all current retiree's will be what we pay for our health insurance! We need the State of Illinois to contribute more for our health care insurance or our health care cost will eat away at our pension!

December 31, 2009 at 2:27 PM

By: Margaret Wilson

Retired teacher/parent

To Retired Principal:

Thanks for the explanation. I wouldn't want to be someone coming into the system right now. Without a Union that is willing to fight for our interests, more and more rights are being taken away. Hearing that School Psychologists, Speech Therapists, Nurses, etc. may become contract employees under the new contract and so will no longer be part of the Union is taking away a large group of people. This attack on our pensions will make it harder to get new qualified teachers because they will go elsewhere. All we can do is pray that something happens to prevent the public school system from being totally destroyed.

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