The Plundering Ends in November!

"Government is the great fiction, through which everybody endeavors to live at the expense of everybody else....

"There are people who think that plunder loses all its immorality as soon as it becomes legal. Personally, I cannot imagine a more alarming situation."

-- Frédéric Bastiat (1801-1850)

State House News Service
Monday, June 26, 2000

As Session Winds Down, Future Uncertain for
"Baby UI" Parental Leave Plan

By Trevor Hughes

STATE HOUSE, BOSTON, JUNE 26, 2000 ... In Germany, new mothers can stay at home with their infants for 83 weeks of paid parental leave. In Sweden, mothers can take off 72 weeks with pay. And Finnish women can stay at home with their new children, while drawing paychecks, for 69 weeks, according to study by the Labor Resource Center at the University of Massachusetts-Boston.

Contrast the situation in Europe with that of the United States, where workers are guaranteed up to 12 weeks of unpaid leave if they work for a company with 50 or more employees. There's no government-mandated provision for taking time off with pay, then returning to work.

But there's a move afoot in Massachusetts to offer new parents up to 12 weeks of unemployment benefits so they can stay home with a baby or a newly adopted infant, then return to their old job.

"It seems to me that helping new parents afford to take a modest amount of time off ... is a small price to pay for winning the loyalty of workers, for reducing some of the stresses of modern life, for strengthening families that are often fraying around the edges, and for making Massachusetts a family-friendly place to live and do business," said Steve Grossman, who owns the 100-employee MassEnvelopePlus and is planning to run for governor in 2002.

Under the so-called "Baby UI" plan, workers would tap into the state's bulging $1.87 billion employer-funded Unemployment Insurance trust fund for the benefits, estimated to cost $32-$43 million annually as it provided workers with paychecks of up to $431/week. A special legislative committee is investigating the proposal, and held a hearing on the plan at the State House today.

Sponsors such as Grossman and US Sen. Edward Kennedy say the plan will strengthen family bonds and make the state more supportive of family. But the state's traditional employer community is reluctant to embrace the plan. Employers and Gov. Paul Cellucci say the state should find an alternative way to pay for the idea.

"This proposal would take funds set aside for those who are willing and able to work but don't have jobs, and diverts them to people who have jobs but want to be paid while at home with a newborn or newly adopted child," said Rick Lord, president of the employer group Associated Industries of Massachusetts. "Paying for other social programs, no matter how laudable, out of the UI trust fund, erodes the integrity of that fund."

Cellucci later in the day said he would be "very reluctant" to approve such a plan, but declined to say if he would veto it if it reached his desk. "If the program is good enough, it ought to go through the budget process," Cellucci said, calling the Baby UI plan a "very slippery slope" that, if approved, would spur other workers to seek similar benefits.

Lord said employers recognize the need for parental leave. Many of AIM's members are developing their own leave programs, he said, but don't want to be subject to a state-mandated program amounting to a new job tax that could slow job growth. About 70 percent of AIM members already use disability insurance to provide some form of paid maternal leave, he said. A plan requiring the use of disability insurance to provide parental leave was slated to be heard later today.

Testifying on behalf of the Republican Cellucci administration, Division of Employment and Training Deputy Director Jack King sided with the employer community in warning against the Baby UI plan. "This type of program is virtually certain to cost more than these estimates," King said. "It is a really inviting concept in the abstract. The devil, however, is in the details."

But like Grossman, 29-year old Harvard University Law School student Ali Bers, who is pregnant, said she thought that having the paid leave would help employers retain workers. "Coming right out of college, I wasn't thinking about these issues," Bers said. "When I'm working, I will definitely want to find an employer with good parental leave options. I would be much more loyal to a company that gives parental leave options."

US Sen. Edward Kennedy, who has been pushing the proposal on the national level, said the Baby UI plan will update the state's jobless benefits system to reflect social changes.

"The system was originally established as a safety net at a time when men were the sole breadwinners in most families," Kennedy said in written testimony. "Since then, women have been entering the workforce in record numbers ... The unemployment insurance system should evolve to meet the changing needs of American families."

Legislative leaders are reserving public judgment on the proposal. Senate President Thomas Birmingham (D-Chelsea), who is also planning a run for the Corner Office in 2002 said he plans to discuss the matter with senators on the special commission. Birmingham two years ago authored a law diverting $18 million from the UI fund to worker training.

And Senate Minority Leader and special commission member Brian Lees (R-East Longmeadow) said that while he supports the concept of the Baby UI, "I think we are playing potentially with fire if we raid the unemployment trust fund for other things. If this program is good, we should have the guts to stand up and say it, and pay for it out of the general budget."

Lees said he's interested in finding out if the groups pushing the Baby UI plan would be willing to accept a cut in the UI premiums paid by employers, and vice versa, as part of a package deal to get the parental leave plan passed.

The whole debate could be moot -- President Bill Clinton recently told states they could explore using UI funds for parental leave, but Congress believes the president overstepped his authority. And there are indications that a Republican president would de-authorize such nascent efforts, experts told the commission today.

Bay State businesses pay an average annual $308 per employee in UI premiums, one of the country's highest rates. Businesses say that discourages expansion and makes the state less competitive. Union officials say a hefty UI fund balance is needed to protect workers in case of a recession.

The MetroWest Daily News
Monday, June 26, 2000

Now, they all want early retirement

The state's teachers union has once again scored a victory over Paul Cellucci, but this time it comes at the expense of Massachusetts taxpayers and students rather than the Republican governor.

Both the House and Senate this week brushed away Cellucci's veto of the teacher retirement bill that allows educators to seek early retirement after 30 years of experience, rather than wait until age 65. The Massachusetts Teachers Association hailed the move, saying the retirement benefits would keep teachers from leaving for better-paying jobs in the private sector. But Cellucci has warned the proposal is fiscally irresponsible and could lead to a draining of teaching talent at a time when quality educators are at a premium.

The governor makes a sound argument on this one. At a time when excellent teachers are scarce, and state education officials are so desperate to attract new ones that $20,000 signing bonuses are being offered, it doesn't make sense to pull the plug on the talent pool. As Massachusetts public schools churn their way through education reform, why make it easier for our most experienced teachers to exit the profession?

Now, police officers and firefighters want a piece of the action. Even as the Senate was ratifying the teacher retirement plan, police and fire unions were lining up similar proposals for the Legislature.

Teachers who contribute 11 percent of their weekly salary to the pension program will be able to retire with 80 percent of their salary after 30 years experience. The proposal being considered for the police retirement bill would allow officers to retire with 75 percent of their salaries after 25 years if they contributed 14 percent to the pension system. Firefighters have also begun talking about a pension system that would allow them to retire early, with union members arguing the job is exceedingly demanding at age 65.

This is precisely what state Sen. Henri Rauschenbach cautioned against as he cast the lone Senate vote against teacher retirement bill. Rauschenbach warned the package would set a new standard for public sector retirement deals. After all, who wouldn't want to retire earlier and with better benefits? Other unions would follow the path blazed by the Massachusetts Teachers Association, and legislators will feel compelled to offer similar treatment to other unions that was afforded to teachers this week.

Taxpayers will pick up the tab for this largesse. Municipalities will find themselves paying out a larger number of pension and health care benefits at a time when free cash and reserves are scarce, which means money that could be earmarked for programs and services will be diverted to retirement plans.

With a small cadre of sometime-loyal Republicans in his corner, Cellucci didn't have the bullets to win this gun fight. Only four Republicans in the House and one in the Senate supported his veto and some lawmakers argued the governor's opposition was more fueled by his dislike for the MTA than for his disapproval of the bill. But we believe he made a principled stance here, and it makes even more sense as other unions line up for their share.

Teachers, police and firefighters all labor in high-stress, high-burnout professions. We laud their efforts and support their desire to be compensated for their service. But Cellucci's argument has merit -- the teachers retirement bill and the others that surely will follow push the line of fiscal responsibility.

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