IT WAS bad enough for Metro last month when an arbitration panel, tasked with settling a contractual dispute between the transit system and its biggest union, shrugged at the most dangerous long-term financial threat facing the agency: out-of-control pension and retiree health costs. It is inexcusable that some local elected officials are now doing the same.
Their indifference will almost certainly — maybe in a few years, assuredly within a decade — deal a severe blow to Metro, whose prospects underpin the long-term economic vitality of the Washington region. And if a significant downturn in the financial markets happens sooner rather than later, which many analysts expect, the likely outcome is further and possibly crippling service cuts in Metro, along with the likelihood of unscheduled fare increases. Those ingredients could trigger a death spiral.
That forecast is sufficiently dire, and realistic, that you’d think it would light a fire beneath politicians, who routinely pay lip service to Metro’s importance. Yet when Metro’s ticking pension time bomb was highlighted yet again the other day in a report from the Government Accountability Office, Rep. Gerald E. Connolly, a Northern Virginia Democrat who should know better — he has held local elective offices for nearly a quarter-century — ducked and covered.
One obvious prescription, among many, that would help Metro chip away at nearly $3 billion in unfunded pension and long-term health-care costs would be to shift future employees to a defined-contribution retirement system, akin to the 401(k) savings plans that have been commonplace in the private sector for more than 30 years. Metro’s second-largest employees union has already made that switch for new hires; if the largest union, Amalgamated Transit Union Local 689, followed suit, it would save the agency millions of dollars annually in the long term.
Nonetheless, in response to the GAO report, Mr. Connolly — who was instrumental in pushing for it in the first place — suggested that congressional Democrats would balk at meaningful pension reform. Shifting from a traditional pension to a defined-contribution system, he said, represents a “Republican solution.” Instead, he did what many politicians have done for years, to Metro’s detriment: He paid lip service. “We’re going to have to wrestle with that issue,” he told The Post.
Mr. Connolly says he is willing to discuss other means of attacking Metro’s pension deficit, and, critically, he favors reforming the existing arbitration system, which is part of the problem. But he seems reluctant to take on organized labor, among his party’s most reliable voting blocs, which insists on maintaining benefits that are unsustainable and out of line with those of comparable transit systems. Former transportation secretary Ray LaHood, who studied the issue, concluded that Metro’s pension is a lavish “outlier”; the agency’s hourly employees contribute just 3.1 percent of wages to their pensions, less than half the share other U.S. workers devote to theirs.
In this case, the status quo is a sweetheart deal for the unions, but a dagger pointed straight at the heart of Metro and its passengers. Escaping that fate will take political courage which, at the moment, seems in short supply.