- The Washington Times - Wednesday, February 23, 2011

He reportedly dropped the “F-bomb” in bailout negotiations with the United Auto Workers during the U.S. auto industry meltdown two years ago, one book author claimed. Now, labor proponents in economically troubled Chicago are left to wonder what things will be like for them under mayor-to-be Rahm Emanuel.

The former White House chief of staff, who won his mayoral bid handily Tuesday, takes charge of a city facing an immediate budget shortfall projected at from $500 million to $1 billion and with its long-term pension promises to city workers underfunded by as much as $15 billion — fiscal shortfalls Mr. Emanuel vowed during the campaign to address.

And while nobody expects a showdown with the unions as bitter as the one gripping neighboring Wisconsin, observers see coming painful negotiations with municipal unions similar to those other Democratic-leaning big cities and states have had to engage in recently.

According to published accounts, the 51-year-old Mr. Emanuel, who takes office May 16, said in a private meeting with union heads in December that he favors cutting pensions of all city employees, not just the new hires.

At a press conference Wednesday, Mr. Emanuel vowed to partner with labor unions, including firefighters, police and teachers, to help resolve the pension crisis.

“I reject the way Wisconsin has approached this …,” he said. “I think when you give people the opportunity to be partners in reform, you’ll find that they are willing. It doesn’t mean every idea we will agree with, and it doesn’t mean that every idea moving forward will fully reach the savings I want. But they have to be asked, and I solicit their ideas because reform is the order of the day.”

As a tidal wave of union-related standoffs sweep through the Midwestern states, including angry Democratic legislative walkouts in Wisconsin and Indiana this week, Chicago and other cities face dire cuts to close budget gaps and reform union deals.

The Wisconsin and Indiana fights, though, both involve a Republican governor and a GOP-led legislature, and several political observers say Mr. Emanuel‘s Democratic affiliation means both that he won’t seek as much from the unions and that they could be more receptive to whatever he does seek.

Emanuel is a good Democrat. We know that President Obama has spoken out in support of collective bargaining for the union and has come out in opposition of Gov. Walker of Wisconsin,” said Ken Janda, a professor emeritus of political science at Northwestern University in the Chicago suburb of Evanston. “He’s not likely to take any action that will result in any substantial balancing of the budget on the backs of labor unions.”

Earlier this week, Mr. Emanuel himself said at a campaign stop that the pension issue means that Chicagoans “have to find, I think, common ground and a sense of hope.”

And that may be the key to a successful negotiation with the city’s unions, where Mr. Emanuel, known as both skilled and tart-tongued in political dealings as counsel to two Democrat presidents, has some support, though both the city’s police and fire unions both endorsed other candidates.

“I think it’s clear that as a former congressman and presidential chief of staff, he has a lot of political capital to work with, coming in,” said Stephen Rossi, a Republican political consultant in Chicago. “Even though some cuts will have to be made, it’s clear he does have union backing. I don’t think he’s completely at odds with labor by any means. It’s just the city has to overcome this massive structural debt. That will have to be his main priority as mayor.”

One solution Mr. Emanuel pushed during the campaign — though the city would need the Illinois state government to sign off on it — would be to restructure Chicago’s sales tax by cutting its rate while having it raise more money by covering more goods and services.

But with close to 250,000 city residents, out of a total population of 2.8 million, belonging to unions, they are a major force to be reckoned with — and have the power to shut a city down in protest.

How these negotiations pan out are critical because they may have bearing on upcoming elections where unions have pumped millions into Democratic campaigns, including an estimated $400 million in the 2008 presidential race.

“It’s clear that something has to be done. Obviously, he’s going to have to address this problem moving forward, and the question is, how far each side will be willing to go in terms of concession or compromise,” Mr. Rossi said.

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