The Battle over the State Pension Bailout
Watchdog.org makes a mighty contribution to the sum of national despair with this report:
Nine groups representing state and local government employees slammed a House bill Wednesday that would penalize state and local governments that failed to meet disclosure and accounting requirements for public pension systems.
. . . The Public Employee Pension Transparency Act would require pension administrators to report pension funding status and contributions to the government, and forbid federal aid to distressed systems.
The state and local government organizations opposed to the bill say that there already are strict accounting and disclosure standards in place, and that the Transparency Act would be superfluous. But it’s that last provision — forbidding a federal bailout of bankrupt state-government pension funds — that is most likely bothering them. Three Republicans — Devin Nunes, Paul Ryan, and Darrell Issa — are sponsoring the bill, which would hit non-compliant states right where it hurts: by rescinding federal tax breaks for their bonds.
The unfunded liabilities for state and local government retirees pensions add up to trillions of dollars, a truly shocking figure. As many as 27 U.S. states are facing insolvency because of pension costs alone — and the other 23 should not end up on the hook for them. Illinois and California are going to come calling, and without this bill in place, or another one like it, their chances to securing a federal bailout are pretty good.