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Miller: Power broker loses favor on pension reform

For the past few years, the Civic Committee of the Commercial Club of Chicago has been one of the most feared participants in the state’s pension reform debate. 

Ty Fahner, a former Illinois attorney general who heads the Civic Committee, managed to persuade both parties to elbow each other for a position of favor with him and his group. 

When Fahner ended up siding with the House Democrats in May and endorsing their pension reform plan, including shifting costs to school districts, House Republicans were disappointed and furious. They had been assiduously courting Fahner and figured that because the Civic Committee is composed of several top Chicago business leaders, they’d be the natural ally of choice. 

Not to mention that Fahner also formed a political action committee (“We Mean Business”) to back up his word. Everybody wanted that money, so the PAC gave his position additional strength. 

But those days appear to be behind us, at least for now. Fahner’s histrionics last week over what he claimed was an “unfixable” pension problem have all but cut him out of the Statehouse mix. “He’s made himself irrelevant,” said one top Democratic official who is intimately involved with pension reform.

In a memo to his members, Fahner wrote, “the pension crisis has grown so severe that it is now unfixable.” “There simply won’t be enough money” to pay pensions for young teachers just starting out, he wrote.

But then Fahner constructed a bizarre dichotomy by both claiming the problem is unfixable while simultaneously demanding specific changes to the pension systems. Fahner said four things had to be done “just to slow the bleeding and reduce the size of the financial burden Illinois taxpayers must bear.” Those four items included eliminating annual cost-of-living increases for pensioners, instituting a pensionable salary cap, increasing the retirement age to 67, and shifting pension costs to local employers such as school districts and universities.

Because he said there was no real fix, there’s little to no use in negotiating with him now because any solution the General Assembly comes up with – including Fahner’s – will be dismissed by Fahner as wholly inadequate. Legislative thinking goes like this: Why bend over backward to accommodate someone who will never admit that you did the right thing?  So, there’s absolutely no political or legislative advantage to dealing with the guy. 

Making things even worse, Fahner refused to disclose the actuarial data upon which his public statements were based. That has led to more than one suggestion behind the scenes that Fahner may have cooked the books to arrive at his striking conclusion. The Teachers Retirement System released a statement last week saying that Fahner’s conclusions were wrong, based on its own actuarial data. That statement just fueled the flames of suspicion.

So, it’s little wonder that, as I write this, neither of the Republican state legislative leaders have jumped to Fahner’s defense. House Republican Leader Tom Cross’ office was silent and Senate Republican Leader Christine Radogno continued to call for a balanced, comprehensive fix. Fahner wasn’t with them before, and he can’t be placated now, so he’s off the invite list.

The Senate Democrats were even harsher, issuing a statement through their attorney that ripped Fahner’s arguments to tiny shreds. Fahner earlier had backed a “comprehensive reform” plan introduced by Republicans that would cut the state’s unfunded pension liabilities by $3 billion to $5 billion. It also was so severe that just about everybody considered it unconstitutional. The Senate Democrats’ attorney, Eric Madiar, noted in his response to Fahner that the Democratic proposal currently on the table cuts the same $3 billion to $5 billion from unfunded liabilities, which Fahner now calls “insufficient” and “token.”   

The Chicago Tribune’s editorial board, whose often ill-informed catcalls about pension reform make Fahner look downright moderate, attempted to come to Fahner’s defense.  The editorial page claimed that Fahner didn’t really mean that the problem was “mathematically” unfixable, but that it was unfixable because of a lack of political will. That’s a misreading. Fahner clearly stated in his memo to the Civic Committee membership that his demanded fixes would merely “slow the bleeding” and “minimize the long-term damage” to the system.

• Rich Miller also publishes Capitol Fax, a daily political newsletter, and CapitolFax.com.

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