(I)n the long term, New Jersey doesn’t have nearly enough money on hand to cover its pension obligations to teachers and other state workers. At no time in the last 17 years has New Jersey fully met its annual obligation to the pension fund, and in many of those years, the state paid nothing at all. (That didn’t stop one governor, Donald DiFrancesco, a Republican, from increasing payouts by 9 percent and lowering the retirement age before he left office, which would be kind of like Bernie Madoff writing you a $1 million check before heading off to jail.) Even had the state been contributing faithfully to the fund as it was supposed to, however, there would still be trouble ahead. That’s because New Jerseyans, who are glass-half-full kind of people, have assumed an improbably healthy return of 8.25 percent annually on the state pension fund. The actual return over the last 10 years averaged only 2.6 percent.
Finally, the state will pay close to $3 billion this year in health care premiums for public employees (including retired teachers), and that number is rising fast. New Jersey has set aside exactly zero dollars to cover it. All told, in pensions and health care benefits, New Jersey’s “unfunded liability” — that is, the amount the actuaries say it would need to find in order to meet its obligations for the next 30 years — has now passed the $100 billion mark.”
“One reason that leaders in a state like New Jersey haven’t been able to get a handle on pension and benefit costs… is that the subject is agonizingly dull and all but impossible to explain,” writes Bai. “Christie, it turns out, has a preternatural gift for making the complex seem deceptively simple.”
But Christie has also made the simple stick. Bai identifies the reason:
Another thing Christie understands about political messaging, especially when your adversaries are out there portraying you as callous, is that it has to be grounded in the personal.” Christie constantly weaves personal stories into his addresses, striking emotional chords among the members of his audience.
While Bai muses that Christie may have merely picked the easiest target in the teachers union, and gives time to the unions’ side of the story—including quotes from both the New Jersey Education Association’s president and executive director—he also argues that the unions have played the political game very, very badly:
Christie has gone out of his way to anoint the teachers’ union as the most sinister force in the galaxy,” writes Bai, “not because he has some long-buried torment with a teacher to work through, but because the union does a very capable job of representing for him everything about the public sector that voters don’t like.”
Early on, Christie had called for an across the board pay freeze, encouraging local public employee union to take the hit or else face the risk of massive job loss:
“Most local chapters of the union ignored him. Ultimately some 10,000 union members — teachers and support staff — saw their jobs eliminated.”
The union maintains that Christie’s plea was mere gimmickry, because the layoffs would have happened even if its local chapters acceded to the demand for a freeze. But even if this is true, it would seem to reflect a staggering lack of political calculation. Had the teachers agreed to take the short-term hit by acquiescing to a temporary freeze, it would have been worlds harder for Christie to then run around the state demanding longer-term concessions on pensions and benefits. And when the layoffs did materialize, the governor would most likely have shouldered most of the blame. Instead, the whole affair seemed to prove Christie’s point about the union’s self-involvement, and it enabled him to blame the teachers themselves for the layoffs.”
Christie has not stopped pressing that advantage.
The conclusion of the piece is that the governor is an excellent politician, has picked the smart battle, and is fighting it well. The outcome is unclear in Bai’s mind, but Christie’s detractors continue to make mistake after mistake, whether it is the unyielding unions or those who try to reduce his image to that of a bull in a china shop: