Stephen Stills wrote a line in a famous Crosby Stills & Nash song. “We never failed to fail; it was the easiest thing to do.”

The mess that is the collapsing public employee pension funds for the City of Chicago is the result of decades of failed public policy. Every step of the way, our elected leaders could have taken action to right the ship and connect the promise with the money. They could have had the discipline to either pay for their promises or not make them. Instead they took the easy way out and failed forward. They pushed the hard choices to those unborn and not yet in office.

OPINION

Now we are coming to the end of that road. The bills are due — past due — and politicians are once again scrambling for a temporary patch. How can we learn from the mistakes of the past and stop failing?

In the beginning, when the plans were founded, the limit of the city’s liability was a multiple of the employee contributions to the plans. Over the years, as the employee groups were organized into unions and engaged in collective bargaining, the city gave away increases in pension benefits and pay in exchange for labor peace. Then, in 2010, the city agreed to change the formula for contributions to the police and firemen plans to “catch up” funding to the 90 percent level by 2040. With woeful underfunding over the years, this now puts an onerous burden on the city and its taxpayers that did not previously exist. The city now has to pay for all the benefits, not just the multiple of employee contributions. The same scheme was built into the “reform” of the plans for municipal workers and laborers last year. That change is being challenged in court and might be thrown out.

The Center for Pension Integrity estimates that it would cost taxpayers at least $2 to $3 billion every year for the next 40 years for the four city plans plus the teachers’ plan to catch up. If this increase was financed by real estate taxes, it would require a 50 percent tax increase for generations, all to pay for promises made decades ago. Think that’s likely to happen?

We must insist that politicians stop failing us. Here are some measures that we should demand from our city’s leaders:

First, they should give us 15-year projections for the funding levels for the five major pension funds. Where will the funds be in 15 years? We should insist that these projections be made with an assumed 6% earnings, as recommended by the Society of Actuaries, and should include the most recent actuarial tables on life expectancies.

Then, if the city’s contribution to the plans will require a big increase — as predicted given the massive underfunding over the years — they should show us these amounts in terms of the percentage increase in real estate taxes. Whether the increases are funded this way or not, the easiest way for taxpayers to assess the magnitude of the tax increase is to translate it into their real estate tax bill.

Armed with this truth we should demand that leaders stop digging the pension hole. They should terminate the plans as soon as possible and put all new hires on either Social Security or some other affordable defined contribution plan. If it is possible to freeze benefits without diminishing or impairing them, then plan termination could also stop the accrued liability from continuing to pile up.

If leaders don’t take these actions, then one ugly truth is inevitable: bankruptcy. Either the plans will become insolvent or the drain on the city budget of paying for ballooning benefits will be unsustainable. Last year the five plans paid retirement benefits of $3.2 billion. These benefits have been going up by 6 percent a year. In 15 years they will be paying $7.2 billion in benefits annually. Where will this money come from?

Leaders can’t slap together a hasty plan to get them past the next election. It’s time to demand that they look at the big picture, tell the truth, and stop failing.

Ed Bachrach is the chairman of the Center for Pension Integrity.