States lead out on fiscal, economic change

Published: Tuesday, Dec. 18 2012 11:50 a.m. MST

Rhode Island Treasurer Gina Raimondo receives applause as she addresses a rally of supporters for her pension legislation at the Statehouse, in Providence, R.I., Wednesday, Oct. 26, 2011. Raimondo and R.I. Gov. Lincoln Chafee are calling for a new system combining 401(k)-style accounts with traditional pensions.

Steven Senne, Associated Press

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Democrat Gina Raimondo is not the fiscal firebrand that public employee unions are used to battling, but the Democratic treasurer of left-leaning Rhode Island is taking a hard line on pension reform. And so far, she is winning.

The pension reform passed in 2011 freezes cost of living adjustments, raises the retirement age, and pushes public employees into a hybrid of a traditional pension and a 401k.

"We need to stand strong as Rhode Islanders, defend this important work, and move this state forward," she told the local WPRI news, in the face of public employee lawsuits designed to overturn the tightening of public pensions.

"We have a terrific legal team, and the process seems to be playing out exactly as it should, in an orderly and transparent way" said Raimondo. "I have a great deal of faith in Rhode Island's judiciary and it's the right thing to do for all people to just let the process continue."

While Washington is hamstrung between Republicans opposing tax increases and Democrats opposing changes to costly entitlements, many state governments are moving forward on their own. These include red states, Republican-dominated blue states like Michigan, blue states with coalition governments like Washington, and even blue-blue states like Rhode Island.

"If you look back on the great conservative public policy successes of the 1990s," wrote Michael Barone at Real Clear Politics, "welfare reform and crime control, the initiative came from the states and localities, mostly from Republican governors and mayors, but from many Democrats, as well."

Michigan's passage of right-to-work legislation for both public and private sectors seems to reflect activity in two neighboring states — one red (Indiana) and the other blue (Wisconsin).

Indiana recently passed right-to-work legislation, and early indications of resulting job growth are said to have emboldened Republicans up north in Michigan. Of course, the recent battles over public sector unions in Wisconsin, with the Republicans prevailing repeatedly in with a pro-Obama electorate certainly emoldened their counterparts in Michigan.

In both Washington and New York, Republicans engineered a surprise coalition control of the state senate, after two centrist Democrats broke ranks to share power with them in that body.

"This is not about power. This is not about control," state Sen. Rodney Tom, D-Bellevue, told the Seattle Times. "This is about governing in a collaborative manner."

In his review of these developments, Barone argued that states are forced to face realities the Federal government manages to avoid, which can lead to nonideological and coalition behavior. "The fiscal squeeze is felt more urgently in the states," Barone wrote, "They can't print money and can't count on Ben Bernanke's Federal Reserve to buy 70 percent of their bonds."

Eric Schulzke writes on national politics for the Deseret News. He can be contacted at eschulzke@desnews.com.

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