05-12-06

Hi friends, this is Harry Blalock; General Manager for radio stations KZMI & KCNM. It's that time once again to take a look at the issues of the week, and to offer some Food For Thought.

There are those who for political or other reasons seem bent on criticizing everything the Governor does, even though they may have been calling for the next Governor to do some of these exact things 6 months to a year ago. I summarily dismiss just about everything they have to say because they have no credibility or consistency in my opinion. It would be like listening to a spy who is telling all kinds of secrets about their country and believing every word they have to say. They are trained and paid to lie, so why would you believe them? But that doesn't mean there have been no issues since this new Governor took over, I just believe it is far too early to reject him because he's done some things that we may not understand or agree with.

Right now there's a lot of criticism over his plans for the Retirement Fund. I think a couple facts need to be firmly established before there is any discussion as to whether the Governor's approach is the right or wrong one though. First you have to realize that the retirement plan we have had for government employees has been one of the most generous anywhere in the world. From what I've been told, the reason it was set up as leniently as it was is because they were trying to get people out of government jobs as soon as possible to make room for returning students and the younger workers. That may be a noble intent, but unfortunately when you build a house of cards, it will be knocked over by the first gust of wind that comes along. The system we had was absurd, even from its inception; there is no way it could continue to work long term. So why would those who set it up in the first place, and the original legislators allow such a thing to happen that they knew would eventually collapse or be in need of a huge overhaul? Well, I guess if you want the real answer to that question, you'll have to ask those who were responsible for it. And this is purely speculation on my part, but I'm guessing that greed and self-interest played a huge part in it.

After all, I don't know of anywhere else in the world that you could start working for the government at age 18, then retire at age 38 with full benefits and collecting your full amount. Let's stop and do the math for a minute here. If that employee were to live for another 20 years, he would have collected far more than he ever contributed, and he would only be 58. In this day and age, he could still expect to live another 10 - 20 years easy. So he will be collecting far, far more than he ever contributed. And unfortunately when you have a system like that in place, most people will not willingly keep working past their 20 years, but will instead opt to retire, collect their bonus, which used to be 30%, and then take another job, so they are in effect double dipping. This was not the exception, but unfortunately became the rule. This was an ill conceived and very poorly thought out plan. Anyone who could do simple math, and was capable of any cognitive thinking at all would realize that this plan was headed nowhere but failure, but yet we kept it on the book for years and years. Why? Again, I'm afraid you'd have to ask the lawmakers and those in positions of power for the past 20 years. But I'm guessing that greed and self-interest also come into play here.

Another huge part of the problem are the employees who have opted to collect their retirement and collect their bonus, but never had any intention of actually retiring. A great example of this would be Dr. James Hofschneider, the former Secretary of Public Health under the previous administration. Now it's important to remember here that while he was the Secretary of Public Health, he was also double dipping. He was collecting a full salary as the Secretary of Public Health, which is supposed to be a full time job. And at the same time, he was also collecting a huge salary as a doctor for Commonwealth Health Center, which is also supposed to be a full time job, and then some. Not a bad gig if you can get it, especially when as Secretary of Public Health you're your own boss as a doctor, and can set your own salary. And you know your buddy, the Governor who appointed you, would be happy to approve your "over the salary cap" salary. So here he was collecting two full time salaries that put him somewhere over $200,000 a year, and also hugely padding what he would be entitled to collect for his retirement. Now I'm sure if you asked him, he would tell you that he was entitled to all this money, since he was after all both working as a doctor and serving as the Secretary of Public Health. But since he was doing two jobs, he obviously couldn't have been doing either one of them full time, that just wouldn't have been possible, especially for the doctor's expectations and time requirements. But again, when you're your own boss, you can do all kinds of creative things like that and actually get away with it.

Now if those facts alone don't have you upset, you might be interested to know that Dr. Hofschneider was one of those who jumped on the retirement bandwagon at the end of last year so that he could take advantage of the 30% retirement bonus. So he retired, collected his 30% retirement bonus, but continued to work as a doctor at C.H.C. collecting his full salary in addition to his retirement. If you're confused as to how he could do this and get away with it, you need to remember that he was his own boss last year, and therefore could give himself any kind of contract with any golden parachutes he wanted. And because his job is considered essential services, he can retire and continue to work and still collect a full salary, otherwise known as double dipping. Are you beginning to see a few of the reasons that our retirement system was so badly in need of reorganization? Now a couple of the questions that immediately come to mind are:

- Why not just let him retire and hire another doctor who would probably be willing to work for less, and would also probably be more willing to work the hours required? - Are we really offering the people of the CNMI the best possible options by allowing these kinds of loopholes, and taking away the incentive for our doctors to stay productive?

Our government employee retirement system greatly benefited a few, but at everybody else's expense. Honestly, I'm not sure about all the ins and outs of the Governor's plan of how to change the system and rehabilitate it; it is far more complex than I can quickly get a handle on. But I do understand that something had to be done, and it had to be done quickly, because the situation wasn't getting any better. Somebody had to say enough is enough and put an end to the insanity. People like Dr. Hofschneider, and those in position to set themselves up the same way are probably not in favor of the Governor's plan, and I believe you can see why. It is my understanding that Dr. Hofschneider is now collecting somewhere in the neighborhood of a quarter million dollars a year between his salary and retirement. The system that allowed this kind of thing to happen is where the problem lies, and the people that took advantage of it are also a part of the problem. You can say that it was their right under the law, and you'd be right, but that doesn't make it morally right especially in light of our current financial situation in government.

I have been saying for years that our government was on the verge of bankruptcy, but yet our previous Governor kept trying to convince us all that things were pretty darn good, and that he was balancing the budget every year. One of us wasn't telling the truth. If I were the one not telling the truth, our current Governor wouldn't be in the position he is in right now having to try and figure out how to make do with a lot less money. This Governor has some very tough decisions to make, and he's going to make a lot of people mad in the process, I don't see any way around that. But the thing you really need to keep in mind is that this mess has been years in the making. This Governor hasn't had anywhere near enough time to make this kind of mess. There is plenty of blame to go around, and it needs to be handed out accordingly. You should look closely at those who are trying to cast stones over what is being proposed right now though, and see what their motives might be. We need to have some big changes, because we are facing some huge problems. The fixes won't be easy or painless, and part of the reason for that is that we have all been taken advantage of, and now is the time of reckoning. These plans may not be the best options, but if not, what are your plans, and how do you think we could better solve the situation? Until you have a better plan, you have to consider all options and see what best fits our needs and our ability to pay.

I'm Harry Blalock, thanking you once again for giving me a generous slice of your valuable time, and allowing me to share my Food For Thought.