CONGRESS AND THE COMING PENSIONS CRISIS

CONGRESS AND THE COMING

PENSIONS CRISIS:

There are lots of problems with blue model governance, but the one that is about to upend the status quo around the country is the financial irresponsibility of public sector unions and politicians. The latest headlines this weekend: “Public pension costs projected to reach 30 percent of payroll” and “Across Texas, Public Pensions Face Billions In Shortfalls“. With trillions of dollars in unfunded liabilities, the problem will only grow worse.
Congress has a responsibility to hold hearings into this problem and develop a coherent approach for the inevitable moment when irresponsible, spendthrift cities and states come to Washington hat in hand, looking for bailouts.
The federal government has zero legal or even moral responsibility for the consequences of the foolish and shortsighted choices that local officials have made, but as a matter of both pragmatism and compassion, Congress won’t want the harshest punishment to fall on those who had the least power in the system—the millions of public employees who were told by their lying union leaders and lying politicians that their pensions were safe.
Any kind of pension relief needs to be tied to reforms that ensure that nothing like this ever happens again. Those reforms will include both the way pensions are funded and accounted for, shifting to defined benefit pensions for the future, and reforms in the status and powers of public sector unions. Generous help for needy victims of public pension Ponzi scams, serious reform to protect the public from any repetition of what’s happened here.

I think defined-contribution plans are safer than defined-benefit plans. Or at least less subject to jiggery-pokery. And

I don’t know if we can afford “generous help” for all the victims here, because there will be alot.

14Posted at 10:30 am by Glenn Reynolds