Lawmakers in the state of Pennsylvania have for the fourth time in as many years tried and failed to reach a compromise that would fix the second most underfunded public pension program in the country. The Associated Press has the report:
Republican-penned legislation to make sweeping changes to benefits in Pennsylvania’s big public pension systems stalled again Wednesday night, amid opposition from Democrats, labor unions and some members of the House GOP majority.It was the fourth straight year that the effort failed, after Republican lawmakers made it a top priority to respond to Pennsylvania’s massive pension debt by reducing the traditional pension benefit that has been guaranteed to public school employees and state government workers. […]The proposal primarily would have affected newly hired public school teachers and state government workers, reducing the traditional pension benefit and offering new 401(k)-style benefit options.
It’s a pity that this is going nowhere. The plan, as outlined, would not have solved all of Pennsylvania’s problems, but at least getting future retirees onto 401(k)-style plans would have been a small step in the right direction.Pennsylvania’s pension story is a familiar one: hefty returns on pension investments back to the nineties led politicians to hand out generous benefits packages to state workers without bothering to realistically budget for a future where the investment windfalls would be much smaller. After 2008, the math looks a lot different. Unfortunately, the labor unions and the state’s Democratic governor continue their quixotic war against basic arithmetic.The ugly truth is that the current arrangement is simply unsustainable, and not addressing it only leads down the road to Detroit and Puerto Rico. Wishing it weren’t so does not change things.