We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
States and government employee unions are united to hide the true extent of the cost of pension promises, and the impacts on other basic government services. Leading Republican congressmen have introduced legislation to shine light on these costs.
$1 trillion. That’s the gap at the end of fiscal year 2008 between the $2.35 trillion states had set aside to pay for employees’ retirement benefits and the $3.35 trillion price tag of those promises.
Why does it matter? Because every dollar spent to reduce the unfunded retirement liability cannot be used for education, public safety and other needs. Ultimately, taxpayers could face higher taxes or cuts in essential public services.
Actually, the gap may be closer to $3-trillion, as this National Bureau of Economic Research study lays out. In April, the American Enterprise Institute (AEI) study reported a $3.04-trillion shortfall in funding. The AEI recommended that pensions must disclose greater detail regarding investment risk and pension plans should reform their accounting methods to include the market value of plan liabilities. Then, legislators could have a better idea of how to reform and plan.
Require that state and local pension plans report two sets of information to the Secretary of the Treasury which will be made available on the internet for public review; one that will detail current public pension liabilities based on existing accounting methods, as well as the methods and assumptions used in that set of numbers, as well as a second set of numbers that would detail the current pension liabilities “but will do so using uniform guidelines,” including what the bill’s authors termed “more realistic discount rates, as well as controls to assure assets are counted using a reasonable estimate of fair market value”.
Deny the ability to issue federally tax-exempt bonds to any state or local government that refuses to report their public pension liabilities.
Cong. Ryan said:
“The Public Employee Pension Transparency Act will make government more accountable to taxpayers by shining a light on the financial soundness and unfunded obligations associated with these plans and I’m honored to join Representatives Nunes and Issa in sponsoring this common sense legislation.”
Additionally, the bill’s authors noted that “state and local government leaders and employee unions are already talking about the possibility of a federal bailout of their pension programs,” going on to note that “Congress must preempt this effort by making a clear policy statement that the American taxpayer will not bailout state and local governments that have recklessly promised unaffordable benefits to their workers”.
Congressman Darrell Issa, Incoming Chairman of the Oversight and Government Reform Committee said:“The American people have a right to know the truth about the unfunded liabilities being run-up by state and local pensions. Quite frankly, if they have nothing to hide, there’s no reason why the states and local governments who control public employee pensions should not embrace this effort to ensure that the taxpayers have a more transparent accounting of the true nature of pension liabilities.”
Lending its support to the measure was the U.S. Chamber of Commerce.
The National Association of Counties, United States Conference of Mayors, National League of Cities, International City/County Management Association, National Association of State Auditors Comptrollers and Treasurers, Government Finance Officers Association, International Personnel Management Association for Human Resources, National Council on Teacher Retirement and the National Association of State Retirement Administrators have announced their opposition to HR 6484, the Public Employee Pension Transparency Act
“This legislation represents a fundamental lack of understanding regarding the strong accounting rules and strict legal constraints already in place that require open and transparent governmental financial reporting and processes. The organizations urge Congress to oppose the legislation because it conflicts with existing governmental accounting standards, increases state and local government costs, and undermines investor confidence in the municipal bond market,” according to the press release.
Yeah, sure, their current oversight, management, transparency, and honesty about public sector pension obligations has worked sooo well.
Yes, it is a reasonable piece of legislation but where in the Constitution does it say the Federal government can regulate the pension funds of state and local governments? This is certainly NOT commerce as conservatives want it understood.
One could argue that labor could cross state lines to work for governments with falsely inflated claims of future retirement benefits but that seems pretty thin.
Nope, this is not the Feds' responsibility and remains the domain of sovereign states.
Let the states remain accountable for their own behaviors.
The Feds aren't forcing the states to do anything. They are threatening to turn off the massive flow of federal tax and borrowed money to the states.
That flow of money from the fed to the states shouldn't exist in the first place. It undermines the independence of the states and destroys our Federal system. It is a club that has been used over and over again - drinking age, speed limits, DWI laws, construction projects, etc...
Cut off the money and let the states sink or swim.
Not to be johnny-one-note on the "what in the devil happened to governance" question, but so many of these insoluble (insoluble without major systemic change) problems began in the last half of ClintonII. California can thank Grey Davis 1999 for today's sorry public worker union harvest. Were the actuaries on his staff that stupid? I really really doubt it.
Remember the good old days when Jerry Ford told New York to pound sand when they were broke? I think we'll have to wait at least two years for a replay - and what a replay it will be because it will be deja vu all over again for half a dozen or more states (trying to be optimistic).
It'll take a few years, but Congressman Ryan's Roadmap for America shows how we can be healty again --maybe for the first time in a hundred years, given that we now finally ALL know, beyond ANY shadow of a doubt, that leftists need to be kept far far away from actual power.