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Editorials
Wednesday, May 17, 2000Prison bill deserves
governor’s vetoLEGISLATORS should not be surprised by Governor Cayetano's vow to veto their recently passed prison construction bill. They should have realized that, when Cayetano demanded a privately run prison before the start of the session, he would not stand for any shenanigans intended to benefit the union employees who staff the prisons, namely members of the United Public Workers.The issue: Governor Cayetano will nix construction of a new prison because it fails to provide adequately for private operation.
Hawaii needs a new prison to adequately incarcerate one of the lowest per capita prison populations in the country -- one inmate per 344 residents compared to the national average of one in 147. Limited cell space has forced the state to house 1,200 inmates in private prisons on the mainland. The current proposal was for construction of a 1,700-bed prison on the Big Island.
Cayetano correctly contends that the state has had too many difficulties with prisons operated by state employees, and that another publicly operated one would only enlarge those problems. He believes a private facility would cost less and be subject to fewer legal constrictions than those placed on public institutions.
Of course, those views run drastically counter to the position of the UPW, which has gone to court to stifle county and state efforts at privatization of government functions. Many legislators are beholden to public employee unions for campaign support. The bill probably would have been rejected by the Legislature if the UPW had opposed it.
Cayetano characterized the bill as "convoluted." In particular, it would have called for solicitation of private bids to operate the prison, then allowed the UPW to win the contract by underbidding the lowest private bid instead of presenting a bid at the same time as private companies. That unfair system, with the potential for but no assurance of private operation, would have remained in effect for six years.
Rep. Nestor Garcia, House Public Safety and Military Affairs chairman, countered by saying that Ted Sakai, the state's public safety director, also was involved in negotiations on the bill. But Sakai lacks the political muscle of Rodrigues. Senate Judiciary Co-Chairman Avery Chumbley also seemed oblivious to Cayetano's concerns, indicating he had no intention of providing for a privately run prison.
The state's need for a new prison is not so desperate that it needs to bow to the demands of public employee unions. The prison population seems to have stabilized and may even continue to decline, if crime rates can be reduced further.
Next year's Legislature should change the proposal to make it more attractive to private bidders and permit construction of a new prison on the terms that the governor wants.
Social Security plan
ALTHOUGH George W. Bush left many details to be announced, his proposal to let Americans invest part of their Social Security taxes in stocks and bonds launches what could be one of the defining issues of the presidential campaign.
Vice President Al Gore immediately called the proposal dangerous -- a predictable response in view of the Democrats' traditional and often successful tactic of charging that the Republicans want to undermine or abolish the 65-year-old retirement system.
However, privatization of Social Security has gained support in recent years, based on the realization that much larger returns can be achieved through investing in securities than the government provides.
The fear that the Social Security system will run out of money by the time many current workers reach retirement age -- the baby boom generation, 77-million strong, is about to retire in a few years -- provides a negative motivation. People are thinking that they can't rely on Social Security for retirement and should look for ways to save.
Playing to this need, Bush asserted that under his plan "a worker who invests even a limited portion of his or her paycheck could, over a career, end up with hundreds of thousands of dollars for retirement." The Texas governor did not say how much of the current 12.4 percent Social Security tax should be freed for private investment, but the most commonly discussed option is for 2 percentage points.
This would amount to much less than total commitment to privatization. Moreover, investments could be restricted by law to those with minimal risk. Some proposals have included a fallback provision under which the government would protect investors against losses.
As assurance that he proposes no drastic changes other than limited privatization, Bush pledged to maintain current benefits for those at or near retirement, put payroll taxes off limits to prevent borrowing against the Social Security trust fund, make no increase in payroll taxes and preserve benefits for widows, widowers and the disabled.
Gore charges that diverting money into the stock market would risk Social Security's promise of a guaranteed income to the elderly and create "a system of winners and losers."
A reduction in payroll tax proceeds resulting from the siphoning of funds for private investment could create problems. Americans certainly don't want to change Social Security in a way that would create losers. Bush will have to persuade voters there would be none.
Published by Liberty Newspapers Limited PartnershipRupert E. Phillips, CEO
John M. Flanagan, Editor & Publisher
David Shapiro, Managing Editor
Diane Yukihiro Chang, Senior Editor & Editorial Page Editor
Frank Bridgewater & Michael Rovner, Assistant Managing Editors
A.A. Smyser, Contributing Editor
