Don’t Fall for Mackinac Center’s Window Dressing

Recently, the Mackinac Center for Public Policy — a right-wing think tank funded heavily by the Koch brothers — penned an article attacking the Michigan Office of Retirement Services (ORS) for recent accounting errors. While the errors were real, the alleged inability of the agency to ably handle Michigan’s state-run pension systems was greatly overblown. The Mackinac Center’s goal on this issue is not to create clear public policy. In fact it is to create a smokescreen so that billions of dollars can be stolen from hard-working Michigan citizens and handed over to their corporate funders.

The Center described two separate instances in which data provided by ORS was inaccurate. Both cases amounted to miniscule deviations and both were corrected almost immediately. While accounting for billions of dollars, ORS recently found through their regular audit processes that they had understated state pension liabilities by .8%. This was quickly corrected. Similarly, when asked to provide to the Mackinac Center names and salary information of tens of thousands of current and former State of Michigan employees, ORS erred in the transmission of a small percentage of the names and provided inaccurate data for them. This also was corrected almost immediately.

Why is the Mackinac Center so interested in two statistically insignificant and immediately corrected errors? Because their only goal in their hit-piece is to impugn the integrity of ORS. Why is this important? Because when the ORS testified accurately last year that the Mackinac Center’s scheme for closing Michigan’s public school pension would cost the state billions, the agency became a target for character assassination.

The Mackinac Center is a small cog in a huge, national anti-pension machine, but it is the largest cog in Michigan. It was created in order to make previously unacceptable policies — such as slashing taxes on the wealthy or gutting pension benefits for working people — seem acceptable. They invented a concept called the “Overton Window,” that in essence theorizes that politicians can only be successful in enacting policies that fit in a window that is acceptable to the general public. The goal of the Mackinac Center is to shift that window by changing the terms of the discussion.

For example, while most voters would think that taking away pensions from school employees that amount to less than $20,000 annually is despicable, the Mackinac Center argues that taking those pensions away is “protecting” those workers from the ineptitude of the Office of Retirement Services. Therefore, in order to “shift the window,” they must besmirch ORS’s reputation.

Similarly, since the Mackinac Center cannot accurately dispute the ORS’s contention that closing the Michigan Public School Employees Retirement System would require an acceleration of debt payments that would cost Michigan hundreds of millions per year, they instead can “shift the window” by attacking ORS’s competence.

Problems in the school employee pension system were addressed in 2010 and again in 2012 by moving future school employees into a hybrid system and reducing retiree health care benefits. The new plan is less risky to the state while still providing a more stable retirement than the 401(k)-style snake-oil that the Mackinac Center is selling. The new system is fully funded and is projected to remain that way well into the future. Closing the old system for existing retirees will do nothing to address the plan’s current liabilities, and in fact will only serve to make it harder to pay those off in future years.

Bailey Childers is the Executive Director of the National Public Pension Coalition. Follow her on Twitter: @baileykchilders