House override looms

Gov. Benigno R. Fitial vetoed “with regret” yesterday afternoon the contentious House Bill 17-226, which would allow non-retired members of the NMI Retirement Fund’s defined benefit plan to withdraw up to 50 percent of their contributions. House Speaker Eli Cabrera (R-Saipan), who authored the bill, said he will push for an override of the governor’s veto.

Some lawmakers interviewed yesterday either support or oppose an override of HB 17-226’s veto.

Non-retired Fund members, however, are poised to lobby lawmakers to override the veto action.

Under the vetoed bill, active members of the Fund would be allowed to take back up to 50 percent of their employee contributions regardless of years of service and without penalty or the need for them to quit their job. The rest of their employee contributions will be rolled over to the Fund’s defined contribution plan.

Fitial said that Section 4 of the bill, for example, would require an additional expenditure of over $80 million when the projected resource available for government operations is only $102 million.

Joe Pangelinan, one of the leaders of non-retired members of the Fund, said yesterday that all signs pointed to the governor’s veto so he’s not surprised that Fitial actually did so, adding that his group will lobby the Legislature to override the veto.

“The only option now is lobby the legislators for an override. I’m happy that the speaker did not recall it and stood his ground,” Pangelinan told Saipan Tribune.

Cabrera, in an interview, said he hopes there’s enough support for an override of the veto to help employees and their families cope with the financial crisis. He pointed out that many people have already lost their homes or cars because they could hardly afford paying their mortgage when their work hours are cut by 16 percent biweekly.

“Scholarship money is not reaching their kids. Utility rates are among the highest in the United States. Fuel cost on Saipan is still within the $5 range. These are just but a few of the difficulties our people are dealing with. HB 17-226 will help them access their own money. For years, they have been good payers to the institution and now they really need money to help them survive,” the speaker said.

Fitial and Lt. Gov. Eloy S. Inos on Friday last week asked Cabrera to recall HB 17-226 and at the time, Cabrera said he would. But after consultation with affected individuals and further consideration of the bill, Cabrera later decided to not recall the bill and allow the governor to act on it.

The Fitial administration said the bill does not help the government’s plan to return to the U.S. Social Security system.

The cash-strapped Retirement Fund sought bankruptcy protection on April 17.

Fitial, in his two-page veto message to Cabrera and Senate President Paul Manglona (Ind-Rota), cited two main concerns with HB 17-226, including the preservation of legislative authority and increased benefits.

“I believe, in the near future, I will have the privilege of signing a substantially similar legislative enactment; however, at this time, I must, with regret, return this with veto. Notwithstanding this action, I and my administration stand ready to work with you on solutions,” Fitial said.

Fitial, however, said he supports the bill’s sound policy objectives. He said the bill provides for access now to needed financial resources to people who need them. It has a further policy objective of reducing the future members of the defined contribution plan, and will lower future costs to the CNMI, he added.

The governor said Section 4 of the bill removes authority from the Legislature and places it with an actuary. Such an action, he said, creates a two-track budgetary.

“Just as a person can only serve one master, the budget process needs a unity of command,” he said.

The governor said on a practical matter, this same provision would require an expenditure of over $80 million. “Such an expenditure is not feasible when the overall revenue forecast is only for a total of $102 million,” he added.

Section 4 of HB 17-226 amends 1 CMC section 8362. It reads (a) Each branch of government, autonomous agencies, instrumentalities and public corporations shall make contributions to the Fund each year on an actuarially funded basis toward the annuities and benefits provided for this part. These contributions shall be equal to the sum of the following…”

The governor said Section 7 of the bill extends a new period of three additional years to take an early retirement with a full pension by paying the Class II contribution rate. This change has the effect of repealing Public Law 15-70.

“While we all desire to serve the needs of the people and increase benefits, we simply cannot afford to do so at this time,” he added.

Fitial said there are other technical issues that can be resolved in the future. However, these are technical, not policy matters, he said.

“As noted, while we may have somewhat different ways to solve issues, we share substantially similar policy objectives,” Fitial added.

An override needs at least 16 “yes” votes from the 20-member House and six “yes” votes from the nine-member Senate, lawmakers said yesterday.

In the House, the compromise version of HB 17-226 passed by a vote of 13-6. In the Senate, it passed by a 7-0 vote.

Cabrera, the bill’s author, plans to call a session next week to entertain an override of the bill’s veto.

Rep. Joseph Palacios (R-Saipan) said he supports an override, adding that active members also have to be protected and HB 17-226 is a major way to do that.

House floor leader George Camacho (Ind-Saipan) said, “There’s no override for me.” Camacho had voted for the bill.

Rep. Ralph Demapan (Cov-Saipan), one of the six House members who voted “no” to HB 17-226, said it’s sad that many people were hoping that HB 17-226 would pass.

“No doubt that if it becomes law, it will help them. But as a lawmaker, my job is not only to look at what’s in front of us, but also look at the future. When these people get older, they will not have any financial protection, any security when they need it most,” he said.

Demapan said he has been consistent with his “no” vote even when HB 17-226 was bouncing back and forth between the House and Senate.

“The administration has a plan to ensure everyone is helped, and this is about going back to Social Security system,” he said.

House minority leader Joseph Deleon Guerrero (R-Saipan) and Rep. Tony Sablan (R-Saipan), who both voted “no” to HB 17-226, separately said they will vote the same should it be presented for override.

“From the very beginning, I believe it will only accelerate the demise of the Fund, plus we need to give the negotiations with the U.S. Social Security Administration a chance and having the funds for the buyback is crucial,” he added.

Senate President Paul Manglona (Ind-Rota), for his part, said the bill went through a conference committee so that same committee should again work on the bill first and then recommend to the House and Senate what to do with the vetoed bill.

Rep. Frank Dela Cruz (R-Saipan), also among those who voted “no” to the bill, said he does not support an override.

“This will make me look hypocritical and I don’t want to be labeled as a hypocrite. You should be asking this question to those who voted to pass HB 17-226. My prediction is that they won’t have the appetite to override the veto,” he said.

Press secretary Angel Demapan had said that the Fitial administration made it very clear to lawmakers that it would be best if HB 17-226 is recalled so that amendments can be made to it in order for the intent of the bill to be conducive to the ongoing negotiations between the administration and the Social Security Administration on the matter of having active government employees opt back into the social security program.

The governor said he normally does not ask the Office of the Attorney General to work on pending legislation because the office provides advice on legislation submitted to him for final approval.

In this instance, however, the governor said the issues are of such importance that they must work together, and quickly, to address these public concerns.

“Accordingly, I will ask the attorney general to be available to work with you in such a manner as you may deem helpful and appropriate,” he added.