Business World, 19 January 2016


President Benigno S. C. Aquino III’s veto of House Bill 5842 mandating P2,000 across-the-board increase in the monthly pension of Social Security System (SSS) pensioners is the right move. Signing it into law would be fiscally irresponsible.

It would have risked the long-term financial viability of the SSS, putting in jeopardy the welfare of the more than 30 million members, for the benefit of some 2.15 million pensioners.

It goes against the ‘greatest happiness principle’ popularized by Jeremy Bentham, founder of modern utilitarianism, which states that: “as a fundamental axiom, it is the greatest happiness of the greatest number that is the measure of right and wrong.” Why sacrifice the long-term future of the 30 million SSS members for the benefit of some 2.15 million pensioners?

Passing the bill just doesn’t make sense, economically. Even during the darkest days of martial law, the Social Security System was spared from financial ruin. The late President Marcos did not meddle into the financial affairs of the SSS, a publicly sponsored social security system for private sector workers. It is the responsibility of the State to keep the Social Security System actuarially sound.

By passing the bill, Congress risks cutting short the life of SSS by some 13 years. And it is not as if the members of Congress don’t know this implication for a fact. The SSS authorities told them in clear terms that the impact of the bill mandating P2,000 across-the-board increase in SSS monthly pension would be that the SSS would go bankrupt by 2029 rather than 2042.

There is enough blame to go around for this political backlash. Let’s face the reality: the veto, though right, will have a negative impact on the President’s approval rating and his candidates’ winnability.

The President could have been spared of a lot of political backlash, headaches and heartaches, had his allies in Congress stalled, frozen, or dribbled the bill. If his allies in both Houses of Congress had political sense, they could have avoided the SSS pension bill from reaching the presidential desk.

Either the House leadership or the Senate leadership could have stalled the SSS pension hike bill. But no, both Houses passed the bill with little resistance. In the Senate, only Senator Juan Ponce Enrile had the sense to vote against it.

Mr. Aquino’s political allies in Congress — especially the Senate President and the Speaker of the House — should share the blame for this mess. They let him down.

The legislators played a game of chicken.

Facing reelection or election to higher office, they cannot afford to vote against a popular proposal. They bet that the President, with his back against the wall, would be forced to sign the bill into law. They bet wrong, but they are off the hook. They can always put the blame on the President. In the meantime, the President and his candidates will suffer the consequences of the unpopular veto.

The legislators are to blame too for coming up with a widely popular higher spending bill without identifying the funding source. That’s fiscal irresponsibility.

However, the President is not off the hook; he, too, is to blame. His first mistake is that he failed to communicate clearly to his allies in Congress what his position is on the bill. He should have made it clear to them that he would veto the bill if and when it reaches his desk.

For example, by contrast, he was crystal clear on his position on the proposed income tax reduction. His message to Congressman Romero Federico S. Quimbo, the chair of the House Ways and Means Committee, and to Senator Juan Edgardo M. Angara, the chair of the Senate Ways and Means Committee was unambiguous. Not surprisingly, proposals to reduce income taxes were stopped dead in Congress.

He was clear on the proposal to reduce income taxes, but was hazy on the SSS pension hike bill.

The President’s second mistake is that he failed to manage well his own people. What were the Presidential Liaison to the House and the Senate, respectively, doing when legislators were discussing the bill? Were they sleeping on their job? They are supposed to be the President’s eyes and ears in the House and the Senate, respectively. They failed the President too.

His third error is one of omission.

He ignored completely the Legislative Executive Development Advisory Committee (LEDAC), the appropriate forum for crafting a common legislative agenda and for threshing out differences between the President and Congress. If my memory serves me right, LEDAC has been convened only twice during the last five and a half years.

What a pity. This exceptionally useful political institution for closer executive-legislative coordination was allowed to wilt rather than blossom under the Aquino III administration.

Here are some lessons for the next President.

First, he should make his intentions crystal clear to Congress. Let Congress know what measures he wants passed and what he wants blocked or stalled. Second, he should embrace, support, and strengthen institutions for executive-legislative coordination such as the LEDAC and the Offices of the Presidential Liaison to the House and the Senate.