Walter Russell Meade made a very interesting observation on his blog in The American Interest magazine. Meade describes the coming “blue-on-blue” battle arising between public sector unions and liberal Democratic mayors and governors whose states and municipalities are on the verge of bankruptcy due to the ever-escalating cost of public employee retirement benefits.

As Meade notes, this crisis presents not only a fiscal dilemma for the Democratic elected officials, but a political one as well. The unions believe—with considerable justification—that they played a major role in the election of these Democratic mayors and governors. They argue passionately that the pensions they achieved in collective bargaining are property rights that governments cannot deny or abridge.

The controversy in Rhode Island (a solidly “blue” state) is illustrative of what is happening around the nation on this issue. The Ocean State retained one of the nation’s top litigators, David Boies, to challenge the public pension system contracts that are crushing the state budget. As Meade notes, Boies’ liberal bona fides are legend. He represented Al Gore all the way through the Supreme Court in the aftermath of the 2000 presidential election. He also has successfully gone toe-to-toe with corporate giant Microsoft, an adversary with vastly more resources than the public employee unions of Rhode Island. Boies is handling the case for almost no compensation because he believes the pension contracts are depriving Rhode Island citizens of the basic services they need.

Rhode Island isn’t the only locality where this battle is being fought. In New York, Chicago, New Jersey and other venues, Democratic governors and mayors have hit the wall trying to balance their budgets while soaring pension costs are eating away the limited revenue available to fund basic government services. These elected officials are in what must be to them an untenable position. They would like to continue to enjoy the political support of the public employee unions, but keeping them happy leaves two other unpleasant alternatives. Either the mayors and governors will have to raise taxes even higher than the exorbitant amounts they are currently collecting, or they will have to continue to slash public services.

The media obsesses over the divisions within the ranks of the Republican Party on economic and social issues—and those divisions certainly exist. Comparatively, there is less media focus on the fractures within the Democratic Party. For example, how will the Democratic governors and mayors balance government service levels with rising pension costs? The public employee pension hostilities aren’t the only source of the conflict. The Democratic Party’s focus on expanding government is incrementally becoming more at odds with private sector unions’ desire to see more jobs that receive paychecks from private employers instead of the government. Those unions contend that the 2009 federal “stimulus” legislation put more of a focus on creating and retaining jobs in the public sector than in the private sector. The Obama administration’s refusal to give the necessary permits to green light the Keystone XL pipeline also sent a cold message to many union construction and refinery workers that their financial interests ranked below the party’s environmental stances.

At this point, there is no open revolt in the Democratic Party over the pension issue, but there certainly are potential fractures in the blue coalition. Working-class Democrats in “blue” states who don’t belong to public employee unions are getting fed up with facing ever-increasing taxes to pay for deteriorating public services while public employees in their states and cities enjoy pension and health care benefits that private sector workers can only dream about.

As Meade says in his blog: “There is a Blue Civil War coming. It will cut deeply.”

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