A4
East Oregonian
Thursday, May 16, 2019
CHRISTOPHER RUSH
Publisher
KATHRYN B. BROWN
Owner
ANDREW CUTLER
Editor
WYATT HAUPT JR.
News Editor
JADE McDOWELL
Hermiston Editor
Founded October 16, 1875
OUR VIEW
Another aid program no substitute for trade
U
nable to reach a trade deal
with China and end punish-
ing tariffs, President Trump
last week promised American farmers
and ranchers a new round of aid as the
protracted trade battle intensified.
Trump, in a post on Twitter, said his
administration would use tariff money
collected on Chinese imports to buy
“agricultural products from our Great
Farmers, in larger amounts than China
ever did, and ship it to poor and starv-
ing countries in the form of humani-
tarian assistance.”
We take this as a sign that farm-
ers should not expect a resolution
to the dispute any time soon. That’s
unfortunate.
Trump has targeted the imbalance
in U.S.-China trade and other Chi-
nese excesses since the early days of
his campaign. China is notorious for
imposing non-tariff barriers to trade.
There are legitimate issues concerning
Chinese currency manipulation and a
lack of respect for intellectual prop-
erty rights.
The Trump administration applied
tariffs on Chinese goods in an attempt
to redress the grievances.
For all its shortcomings in other
areas, China has been a good
EO Media Group Photo/Don Jenkins, File
Cargo containers are stacked earlier this year at the Port of Tacoma in Washington state. Un-
able to reach a trade deal with China and end punishing tariffs, President Trump last week
promised American farmers and ranchers a new round of aid as the protracted trade battle
intensified.
customer for U.S. agricultural goods
— $23.8 billion in 2017, a whop-
ping 17% of U.S. ag exports. China
promptly retaliated by placing tariffs
on pork, poultry, beef, fruits and veg-
etables, dairy products, soybeans and
grains.
Since the dispute took off last year
there has been a series of tit-for-tat tar-
iff increases. Though it seemed ear-
lier this month that a deal was at hand,
the Chinese walked away and Trump
moved to increase tariffs on $200 bil-
lion of Chinese goods.
Farmers and ranchers — who
largely supported Trump’s election —
find themselves paying the tab.
It’s unclear if Trump’s tweet about
buying goods and giving them to poor
countries is an actual proposal or just
a promise to provide some type of
unspecified aid to U.S. agriculture.
Last year the administration put
$12 billion into aid for farmers and
ranchers impacted by not only Chi-
nese tariffs but the fallout from dis-
putes with Canada, Mexico, Europe
and other trading partners.
While better than nothing, the pay-
ments fell far short of the losses pro-
ducers have experienced. The admin-
istration needs to do more if it expects
farmers and ranchers to continue giv-
ing it their support.
Even if future programs were able
to make farmers whole, assistance
checks are not a replacement for stable
export markets. The trade situation
continues to hang heavy over farmers.
They rightfully worry that the trade
relationships they have worked so
hard to develop will be lost if tensions
are not soon eased.
The administration’s tariffs are hav-
ing an impact on the Chinese econ-
omy and might eventually lead to a
better trade deal for U.S. exporters. It
will be a hollow victory if farmers and
ranchers lose their livelihoods in the
course of the fight.
OTHER VIEWS
School money, PERS reform joined at hip
Albany Democrat-Herald
One of the common themes you
heard last week as teachers across
Oregon rallied for a proposed tax on
business that’s projected to raise $1
billion a year for K-12 schools was
this: It’s not about Oregon’s Public
Employees Retirement System, the
state’s badly underfunded pension
system.
“This isn’t about PERS,” was a typ-
ical comment from education officials.
“It’s about educating the kids.”
Well, now that the Legislature has
passed the so-called Student Success
Act (after Democratic leaders struck
a deal with Republicans to lure GOP
senators back to the Capitol), there’s
little doubt that K-12 classrooms will
see an infusion of cash — assuming
that the gross receipts tax at the heart
of the plan survives an almost-certain
attempt to refer it to voters.
But to pretend that this measure
doesn’t have anything to do with
PERS is to continue whistling past the
graveyard, as state leaders have done
time and time again with the pension
system.
The gross receipts tax on certain
Oregon businesses has to be consid-
ered hand-in-hand with proposals to
(at least temporarily) shield schools
from continued increases in their
PERS premiums. Otherwise, those
increased pension premiums would
eat away a growing chunk of the tax
money earmarked for schools. In fact,
by some estimates, PERS premiums
would have quickly absorbed up to
half of the money raised by the tax.
So that’s the light in which to exam-
ine the proposals issued last week by
Democratic leaders that attempt to
rein in the costs of the pension system,
which currently faces a staggering $27
billion deficit. As Ted Sickinger of The
Oregonian reported, the plan would
provide short-term cost relief to
Unsigned editorials are the opinion of
the East Oregonian editorial board. Other
columns, letters and cartoons on this page
express the opinions of the authors and not
necessarily that of the East Oregonian.
public employers. In fact, the system’s
actuary reported that the proposals
could hold public employers’ required
pension contributions flat in the two-
year budget cycle that begins in July
2021. As you watch city governments
and school districts in the mid-valley
struggle this year to cover increased
PERS costs, you can see how this
could be welcome.
That’s the good news.
Here’s the bad news: The major-
ity of the savings offered by the plan
(about two-thirds) comes from refi-
nancing the PERS deficit. The prob-
lem with that is it does nothing to trim
that $27 billion deficit. It merely kicks
the bulk of the problem down the
road. (The Democratic proposal also
calls for legislators to take control of
one of the system’s crucial earnings
assumptions, a task that
currently belongs to the PERS board.
This would seem to be an invitation
for mischief.)
It also increases the system’s vul-
nerability to a prolonged economic
slowdown, which could be a very big
deal, considering how economists now
expect such an event, if not an actual
recession, possibly as early as next
year.
The Democratic proposals also
call for redirecting a portion of pub-
lic employees’ required 6% retire-
ment contributions to a pension stabil-
ity fund instead of the supplemental
defined contribution plan, where they
go today. But this part of the proposal
may already be dead in the water, with
public employee unions vowing to go
to court if legislators go ahead with
the plan.
Here’s the upshot: The PERS
proposals most likely to withstand
legal challenges offer maybe two years
of relief, but don’t come anywhere
near a solution.
Even the legislator who’s been most
active in pitching PERS reforms, Sen.
Tim Knopp, R-Bend, noted that the
proposed package is a “temporary
fix.”
“The only thing it does is lower
rates in the short term,” Knopp told
Sickinger, the state’s leading reporter
on PERS. And then Knopp added
this sad note: “But with the political
dynamics that exist, we’ll be hard-
pressed to get too much more from
inside the building.”
Which raises the question: Who
will lead the way for substantial,
long-lasting PERS reform? It’s a man-
tle that seems to be ready for the
taking.
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