Troubled waters for Christie-Sweeney partnership

To accomplish the first-term agenda that would burnish his image as a pragmatic leader, Gov. Christie relied on an ally across the aisle: Senate President Stephen Sweeney.

The Gloucester County Democrat backed the Republican governor on initiatives Christie would count among his key successes: requirements that public workers pay more toward their pensions, limits on police and fire salary increases reached through arbitration, and a property-tax cap.

Now, their partnership appears to be hitting a rough patch: Christie wants more changes to the state pension system, while Sweeney says Christie is picking an unnecessary battle with public workers.

While Christie said in his budget address last week that escalating pension costs were pushing the state toward a crisis that demanded action, Sweeney argued that the situation was no surprise to Christie, who signed a law in 2011 requiring the state to make the rising payments. Christie's latest budget proposal includes a record $2.25 billion pension payment.

"He can propose whatever he wants: We're not doing it," Sweeney said Thursday in his Statehouse office.

With the economy not growing as much as Christie had hoped, Sweeney said, "he's trying to direct at something he thinks he can fire the public up on again. Not this time."

At a town-hall meeting Wednesday in Morris County, Christie told attendees that he wanted to reach "bipartisan solutions" on the pension issue, but that if the Democratic-controlled Legislature didn't work with him, "I'm going to have to take more extreme measures to deal with it."

Christie hasn't specified what changes he wants, or what "extreme measures" might entail - though on a radio show Wednesday night, he said he had "significant powers" through executive action. "I'll leave it at that," he said.

Sweeney, meanwhile, says he isn't going to budge. "I'm friends with the guy; I don't dislike the governor," he said. But "how hard is it to work with somebody if they're not going to keep their commitment? That's what this really comes down to."

Christie's intimation that he had "significant powers" to carry out pension reform could be a threat to bring Sweeney and Democrats to the bargaining table, said Patrick Murray, a pollster at Monmouth University.

Christie's chances of working with Sweeney - a union leader who is widely speculated to be positioning himself to run for governor - may have been dashed by the federal and legislative investigations into alleged political payback carried out by the governor's allies at the George Washington Bridge in September, Murray said.

"You don't want to be the guy in a Democratic primary who had Christie's back when he was most troubled," Murray said.

The resolution to the pension debate "is not going to be the two of them sitting behind closed doors and mutually hammering out an agreement," Murray said. "It's going to be which one of them blinks first."

Sweeney and Christie have had heated disputes in the past. Sweeney has blocked most of the governor's nominations to the state Supreme Court, after Christie took the unprecedented step of refusing to renominate Justice John Wallace in 2010.

The court still has two vacancies; Christie said Wednesday on NJ 101.5's Ask the Governor program that he was "not optimistic it's going to be resolved."

In 2011, Sweeney told the Star-Ledger that he "wanted to punch [Christie] in the head" after a fight over budget cuts. (Two weeks later, Christie told the paper that he and Sweeney were still friends: "We have a passionate relationship," he said.)

When it comes to sparring with Christie, Sweeney "hasn't been a shrinking violet," said Sen. Raymond J. Lesniak (D., Union). But the public nature of the disputes was "out of the norm," he said.

"We're now seeing from the Senate president an increase in the intensity of the dialogue, rather than what we thought before was more of a behind-the-scenes debate between the two of them."

With Christie and Sweeney arguing over whether pension changes are needed, a Brookings Institution report issued last week said there was "some debate" over whether the changes New Jersey enacted in 2011 could be considered successful.

At that time, the pension system was facing a crisis that grew from many factors, the report said, including that the state: stopped making its full contribution in the 1990s; granted increases in benefits to public workers in the early 2000s; and was too optimistic in its investment projections, while the life span of retirees increased.

The deal reached by Christie and Sweeney required employees to contribute more toward their pensions and health benefits; raised the retirement age; suspended cost-of-living adjustments (COLAs); and required the state to phase in increased payments over seven years to meet its full obligation.

As a result, the report said, New Jersey's unfunded liability decreased from $54 billion to $35 billion. But since the state won't make its full payment until 2018 at the earliest, the report said, the total unfunded liability is projected to grow to $58 billion by 2019.

And New Jersey "did not make the kind of structural changes (such as a shift to defined contribution plan) that might have put the state pension funds on a stronger long-term fiscal path," Patrick McGuinn, a Drew University political scientist, wrote in the report.

"Here we are, at $2.25 billion, and the state's already having a hard time making the payment," McGuinn said in an interview Friday, noting that Christie has budgeted 94 percent of the state's new revenue toward three things: pensions, retiree health benefits, and debt service.

"Once we get to that $4 billion to $5 billion payment by 2018 . . . that's going to be even harder to make. Where is that money going to come from," he wondered, "if Christie maintains his no-new-tax pledge? Those are concerns."

Some of the 2011 reforms - including the suspension of COLAs, the biggest cost-saver - are being challenged in court by the state's public-sector unions. An appellate court is likely to rule on the case this spring, though the issue is likely to head to the state Supreme Court, McGuinn said.

Meanwhile, the political conditions that encouraged collaboration between Christie and Sweeney in 2011 have changed. Christie, a potential contender for the White House in 2016, could boost his image as a fiscal conservative by doing battle with unions.

And Sweeney, whose relationship with Big Labor has suffered since he worked for the 2011 overhaul, could win back union support by squaring off with Christie.

Assembly Minority Leader Jon Bramnick (R., Union) said the governor's decision to budget a $2.25 billion pension payment for next year has at least delayed any significant political fallout over pensions.

Christie and Sweeney "disagree on long-term strategy. It's not a decision that has to be made this year," Bramnick said. "I can't possibly imagine what significance this is going to have."

But the two are at odds publicly. At Wednesday's town hall, Christie appeared to take a jab at Sweeney.

"Let's not start running for governor now," he said. "Especially in the state Senate, everybody wakes up in the morning and they look in the mirror and they see a governor. Well, maybe, maybe not."

Sweeney said Thursday that his opposition "has nothing to do with running for governor."

"He's just frustrated because I'm not letting him get away with it."