Christie Calls for Pension Reform Now, But Doesn't Say How

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Gov. Christie delivers budget address for fiscal year 2015.

Gov. Christie demanded Tuesday that the Legislature fix the state's public employee pension and health benefit system -- or else New Jersey will go the way of Detroit.

But he didn't say how, exactly, the Democrats who control the Legislature should work with him to fix it.

The embattled governor's budget proposal, unveiled in a speech to both houses of the Legislature, calls for more spending than ever before in state history. The $34.4 billion budget must be approved by the Democrats, and could be affected by a reality for the current fiscal year: the state is down about $700 million from budgeted projections, based in part on a shortfall in tax revenue from online gambling.

Some more budget details: Christie is planning for small increases in education funding, drug courts and aid to towns affected by Sandy. He didn't propose an income tax cut, as he has in the past. And he will make a mandatory $2.2 billion payment to the pension system — the largest in state history.

But that's not enough, he said. Despite a historic, bipartisan bill that he signed in 2011, which cut benefits to teachers, cops and state workers, the state still cannot afford to pay its obligations to workers, the Republican governor said.

"We have done it before and we must do it again," Christie said, referring to reform. But he offered no clues about how he wants to change the system.

One GOP legislator said after Christie's speech that the governor just wants to sit down with Democrats and come up with ideas, like maybe moving toward 401K benefits plans.

Democrats essentially declared the proposal dead on arrival. State Senate President Steve Sweeney -- a trade union leader who was Christie's partner on the 2011 reform deal — objected to how Christie framed the pension issue. He said the reform measures already passed need time to work.

Public worker union representatives were also furious, saying Christie is demonizing them as a way of creating a platform to run for president.

His rhetoric suggests that if he does run for president, he would certainly use this issue. He is calling pensions, health benefits, and debt service “entitlements,” and of course "entitlement reform" — as it relates to Social Security, Medicare and Medicaid — is a key Republican agenda item. He even referred to pension and benefit reform as the “third rail of politics,” which is something that is usually said in reference to Social Security.

Christie has made this link before when making national speeches — saying he’s done pension reform in New Jersey and therefore entitlement reform can be achieved nationwide.

That's why some Democrats think the governor may be bluffing, using pensions as an issue to talk about, but with no plan to present a specific bill that is likely to fail in the legislature.