RIFT OVER FSM SOCIAL SECURITY LAW HIGHLIGHTS POHNPEI'S

UNCLAS KOLONIA 000047 DEPT FOR EAP/ANP E.O. 12958: N/A TAGS: PGOV SOCI FM SUBJECT: RIFT OVER FSM SOCIAL SECURITY LAW HIGHLIGHTS POHNPEI'S SECESSIONIST MOVEMENT ¶1. President Mori's proposed amendments to the Federated States of Micronesia's (FSM) Social Security law ignited criticism from politicians and the public alike, particularly in Pohnpei State. The proposal gave more ammunition to those calling for secession ahead of Pohnpei's upcoming constitutional convention. End Summary. ¶2. On September 5, 2007, President Mori submitted seven amendments to the Social Security and Prior Service Benefit Act (Title 53 of the FSM Code) for congressional consideration. The most controversial amendments included raising the retirement age from 60 to 65 and increasing Social Security payroll taxes from six to seven per cent. President Mori claimed the changes were necessary to keep the system viable. ¶3. Seventeen months later, the FSM Congress voted on the measure during its February 2009 Special Session. The vote was thirteen in favor, one against. Pohnpei State Congressman Resio Moses cast the sole "no" vote. On February 10 the bill arrived on President Mori's desk, but the President refused to sign the bill. Instead, he wrote a lengthy letter to FSM Congress Speaker Isaac Figir, stating that after much deliberation he would "wash his hands" of the bill and allow it to come into effect without his signature. The bill officially became law on March 6. ¶4. Criticism soon arose in every corner of the FSM. In Pohnpei State in particular, the reaction went beyond the normal rancor over a lost government benefit. Politicians, business leaders and private citizens alike argued that the Pohnpei State government and private sector faithfully contributed their required share into the Social Security system while other states (mainly Chuuk) did not. ¶5. The FSM Social Security Administration lends credence to these complaints. The SSA Deputy Director told Pol/Mil Assistant that Pohnpei has always been current with their payment, while Yap pays up eventually but not always on time. Kosrae and Chuuk, on the other hand, did not pay for three years due to each state's insolvency. Those two states eventually became current thanks to a donation from the People's Republic of China (PRC). ¶6. The PRC gave the FSM national government US$4 million in November 2007. The national government used part of this money to bail out Chuuk and Kosrae's Social Security obligations. While the two states became up-to-date in January 2008 and have remained out of delinquency ever since, many in Pohnpei viewed the bailout as unconstitutional. Article 12, Section 1(b) of the FSM Constitution states that "each state shall receive a share [of all foreign financial assistance] equal . . . to the share of every other state." When Chuuk and Kosrae took the lion's share of the Chinese aid, Pohnpei argued it was a violation of the "formula" for assistance distribution. ¶8. This incident simmered in the minds of Pohnpeans for more than a year before the Social Security amendments passed. Passage brought their resentment to a head. Many in Pohnpei believed that not only did the state lose its share of the Chinese money it was basically penalized for paying its Social Security taxes on time. Moreover, many Pohnpeans noted that a majority of Social Security retirement and disability benefits are paid to the citizens of Chuuk State (Chuuk has more than 50% of the FSM's total population.) ¶9. On February 24, the Pohnpei State Legislature wrote to the FSM Congress expressing their disappointment. Their resolution claimed that the FSM National Government is not fairly representing the interest of all the people and is jeopardizing the continued existence of the Federation. ¶10. On March 16, Pohnpei State Senator Dohsis Halbert attempted to repeal the amendments by introducing a bill to restore the status quo. However, the FSM Congress did not act on his bill. On March 24, Senator Halbert introduced a resolution to study Social Security programs in various jurisdictions in the Pacific Region and come up with options that may improve the FSM program. The FSM Congress adopted Senator Halbert's resolution the next day, the last day of the special session. ¶11. The adopted resolution now awaits President Mori's implementation. The 16th FSM Congress will convene on May 11. Further congressional action may depend on the progress of President Mori's efforts. CONCLUSION ¶12. Ten years ago only traditional leaders and a handful of native-born Pohnpeians expressed their desire to secede from the Federation. Now, however, the voices of secession appear much more numerous. In the past decade the national government bailed out Chuuk State twice after the local government went broke. Yet with all that extra attention, Chuuk State still lacks basic infrastructure such as a reliable water supply, a working sewer system, a consistent power supply, decent roads, and basic medical and pharmaceutical supplies. Even many of the state's schools lack chairs, desks, and textbooks. Many Pohnpeans feel that the Federation adds no value when the most populous state of the FSM, Chuuk, seems to be dragging everyone else down. ¶13. Pohnpei State's Constitution requires a new constitutional convention every ten years to review constitutional provisions. Another review is scheduled for this year, and on March 3 the citizens of Pohnpei State elected 29 convention delegates. In recent town hall meetings many of the delegates expressed their wish for a constitutional amendment that would allow Pohnpei to secede. The convention is scheduled to convene April 27. Post will report on its deliberations septel. DOUGLASSWD