Reform bill’s failure draws criticism

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Reform bill’s failure draws criticism

The Blue House and the ruling and opposition parties traded blame after the legislature failed on Wednesday to pass a plan to reform the debt-ridden pension program for civil servants, notwithstanding the deal struck last week.

The National Assembly was scheduled to vote on a bill to amend the pension program for civil servants on Wednesday, but no vote took place as the ruling Saenuri Party and the main opposition New Politics Alliance for Democracy (NPAD) failed to reach a compromise on an additional term for the deal.

While the NPAD insisted that a change in the national pension should also be stipulated, the Saenuri Party rejected that demand.

Last week, the two sides finally agreed on the scope of reforms for the civil servant pension and set out to vote on it at Wednesday’s session. They also agreed that the next task would be improving other state-run pension programs, including the national pension, subscribed to by more than 21.1 million people, and complete the overhaul in September.

While lawmakers were confident that they were just a step away from finally reforming the pension for civil servants - attempts were initiated in 1995, 2000 and 2008, but all fell apart in the face of massive opposition from unionized government employees - the mood changed quickly this week after President Park Geun-hye and the public denounced the legislature for pushing ahead with a misleading, populist change for the national pension.

Park said Monday that the legislature had overstepped its authority to overhaul the pension for civil servants by pushing for a change in the national pension. The government further said that change would cost 1,669 trillion won($1.53 trillion) by 2083.

Controversy surrounded one particular part of the deal in which both parties would respect a recommendation from the special committee on civil servant pension reform.

The committee advised that the income replacement ratio for the national pension - the percentage of working income an individual requires to maintain the same standard of living in retirement - be raised to 50 percent from the current 40 percent.

After the agreement backfired, the Saenuri and NPAD negotiators struggled to deal with the aftermath throughout Wednesday. The NPAD insisted that the recommendation should be stipulated in the supplementary provision of the regulation that will govern the panel to reform the national pension - a demand the Saenuri Party rejected.

As April’s legislative session ended Wednesday, the long-awaited opportunity to overhaul the pension program for civil servants was once again lost. If the reform had been approved, the burden on the government to keep it afloat would have been reduced from 10 billion won a day to 6 billion won daily.

Lawmakers on Wednesday also failed to vote on about 80 other bills, including a revision for the income tax law to modify year-end tax returns. The change in the tax law was expected to have allowed about 6.38 million taxpayers to receive an average refund of 70,000 won at the end of this month.

A plan to allow local governments to issue bonds to cover the budget shortage for the free child care program was also among the bills that were not voted. The Blue House on Thursday did not hide its disappointment with the legislature for missing a rare opportunity to reform the pension program for civil servants.

“The ruling and opposition parties struggled with the plan to reform the civil servant pension program and ended up failing to keep its promise to the public,” said Kim Sung-woo, the senior presidential secretary for public affairs. “They abruptly linked the pension for civil servants with the national pension, putting an enormous burden on the public. It was a matter that required national consensus and more time for deliberation.”

“If they were truly working for the people, they should have reformed the civil servant pension first and then moved to improve the national pension by heeding public opinion and getting feedback from experts,” he said. “Even though the reform bill failed to pass yesterday, I have asked lawmakers to persevere and achieve those reforms with patience.”

Saenuri Rep. Yoo Seong-min, the ruling party floor leader, issued a statement on Wednesday shortly after voting was canceled to publicly apologize for the situation.

“Overhauling the civil servant pension is a task that we cannot give up on,” Yoo said. “We will do everything in our power to reform the program based on last week’s agreement.”

Saenuri spokesman Kim Young-woo also attacked the leader of the main opposition, Moon Jae-in, for “insisting on an unreasonable demand,” and questioned the NPAD chairman’s willingness to reform the pension program for civil servants.

As the ruling party publicly blamed the NPAD for the legislative mayhem, a behind-the-scenes dispute between the ruling party’s leadership and the presidential office also came to light in the aftermath of the failed reform.

At a closed-door meeting of lawmakers on Wednesday, Saenuri Chairman Kim Moo-sung reportedly complained that the presidential office was well aware of the details of the negotiations with the main opposition, but backtracked and criticized the agreed upon change for the national pension system following the deal’s announcement.

Floor leader Yoo agreed. “Blue House senior secretary [for political affairs Cho Yoon-sun] attended negotiations and knew about the deal,” he said. “It is absurd for the presidential office to complain about it after the fact.”

Loyalists to President Park, however, condemned senior leaders for criticizing the Blue House during the meeting.

The opposition NPAD, meanwhile, denounced both the ruling party and the presidential office.

“The Saenuri Party just abandoned its promise with the opposition party,” Moon said Wednesday night after the vote was scrapped. “They seemed to just disregard the public.”

Moon also demanded an apology from President Park. “The ruling party just overturned the agreement simply because Park complained about it,” Moon said. “This is lamentable.”

NPAD spokesman Kim Yung-rok also issued a statement to condemn the Saenuri chairman and demanded he apologize.

“[Chairman Kim] does not care about the people, and the National Assembly’s reputation was ruined,” Kim said. “For Kim, the Blue House’s order and the strategic gains by Park’s loyalists were the only things that mattered.”

It remains to be seen how the legislature will proceed with its reform plan for the civil servant pension program. After Wednesday’s session ended without a vote, Saenuri Chairman Kim claimed the deal on pension reform was “still alive” and promised to continue negotiations with the opposition party. However, he added that it was difficult to pinpoint when the bill would be voted on.

“Because there are other urgent bills that must be passed, we will try to arrange a vote as soon as possible,” he said.

If the voting session takes place, it will be sometime around May 15, an official from the ruling party said.

The NPAD, on the other hand, said it wants a monthlong legislative session in May rather than one day.

But whether it is one month or one day, the prospect appeared dim that the two sides would actually pass a reform bill. “The trust between leaders in both parties is completely ruined right now,” said an NPAD official. “Even if we address this issue again in June, I wonder if we can keep up the momentum.”

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