Connecticut and the United States share similar problems—government has grown too big, promised too much, and needs to transform, says David Walker, former comptroller general of the United States and founder and CEO of the Comeback America Initiative.
The good news is that solving the problems is an equal opportunity challenge for leaders on both sides of the political aisle with a will to tackle them.
Speaking at The Connecticut Economy conference this week in Rocky Hill, Walker—who served for Republican presidents (Bush 41 and 43) and Democratic (Clinton)--said that unfortunately, a “great ideological divide” in politics today is making it very difficult to craft bipartisan solutions.
Among the challenges common to the U.S. and Connecticut are tremendous unfunded liabilities—in the form of “way too generous retirement promises” for government employees; healthcare costs that are out of control, tax systems that are “mind-numbingly complex and not reflective of our economy,” and government spending that’s far beyond taxpayers’ means.
Specifically in Connecticut, said Walker, net job growth effectively stalled about 20 years ago, the state has a crippling achievement gap in educational attainment, and the state has slumped badly in outside measurements of competitiveness.
“If you have a situation that’s unsustainable,” said Walker, “it’s not a matter of whether you will change, but when and how.”
Walker’s Comeback America Initiative is also offering solutions for how Connecticut can come back.
He presented a lengthy to-do list that includes reforming state taxes and state employee and teacher retirement plans, implementing education reforms, and reopening state labor agreements. (“A promise that’s unaffordable and unsustainable is a false promise,” he said.)
Walker outlined some of the ways to put state employee retirement benefits on the right track, including:
- Creating a more affordable system of benefits for new hires
- Eliminating abuse (such as stacking overtime and sick pay into retirees’ pay formula) and changing eligibility requirements, such as requiring longer tenure, for current employees
- Capping indexing benefits for retirees (some of whom, he said, are earning, in retirement, more than those doing the jobs now).
According to Walker, the new Affordable Care Act provides an opportunity to shift pre-Medicare retirees’ healthcare onto the new health insurance exchange. For Walker, it’s about “getting government out of the healthcare business for pre-Medicare retirees,” and reflecting the realities of the economy: Fewer than 15% of private-sector employers offer healthcare to their retirees.
As proof of the bipartisan practicality of the reforms, Walker said that Chicago Mayor Rahm Emanuel (D) is reforming that city’s retirement system in order “to save $800 million.”
Walker set 2014-- when the next statewide elections take place--as Connecticut’s pivotal year. The situation “is not hopeless, but the clock is ticking. And the business community must become much more involved.”
Businesses, he said, have to “help get people elected who are committed to facing facts” and have the energy to support reforms.
For more information, contact CBIA’s Pete Gioia at 860.244.1945 or firstname.lastname@example.org.