Rahm tells Chicago union bosses pensions have to be cut

Via the indispensable Labor Union Report, comes news that Chicago mayoral candidate Rahm Emanuel is bluntly telling union bosses that pensions will have to be cut:

In contrast to his main rivals in the mayor’s race, Rahm Emanuel has told labor leaders that he favors reducing pension benefits for the city’s existing work force and not just for new hires.

Although Mr. Emanuel has not yet publicly detailed his plan to confront the city’s perennial budget deficits and the severely underfinanced employee pension funds, he told union officials in a private meeting on Dec. 15 that he thought it could be necessary to cut the pensions of all employees, said people who attended the meeting.

Mr. Emanuel made the comments while he was being interviewed by leaders of the Chicago Federation of Labor. That umbrella group for 300 unions has not yet endorsed any of the candidates who will be running in the Feb. 22 election to succeed Mayor Richard M. Daley, who is retiring.

“The sticking issue for all of us is the pension issue,” said a labor activist who attended the meeting with Mr. Emanuel. “I can’t tell my members we are going to support a guy who is going to cut your pensions.”

Well, I suppose if any Democrat has the guts to put unions in their place, it's Rahmbo. However, Illinois' problems are so bad that the city really has no choice — the state is looking at raising the state's income tax rate from 3 percent to 5.25 percent, as well as hiking the corporate tax rate to 8.4 percent. (There's also a proposed dollar-a-pack cigarette tax, a 6.25 percent internet retail tax and a property tax hike.)

Illinois has so much public-sector union debt, they really have no choice but to rein in union perks. It will be interesting to see how this economic reality effects Democrats ability to raise funds from unions going forward.

Beltway ConfidentialChicagoRahm EmanuelUS

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