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Ponzi Scam
Congress and the Coming Pensions Crisis
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  • Frank Natoli

    There is a precedent, of sorts, to what the author suggests. In the 1970s, the city where I was born and raised had financially self destructed, and was in the process of criminally self destructing, when the State of New York agreed to implement a Financial Control Board, run by Felix Rohatyn, that literally took over the City of New York’s checkbook. The State oversaw every penny in and out. That worked.
    What is the probability of similar arrangement between the federal government and state governments? ZERO.
    For one, there is no constitutional authority to do so. Yes, I know, the constitution is no impediment to any action taken by Democrats. But FYI there is a Republican President and two houses of Congress starting January 20th and they will at the very least give lip service to the Constitution.
    For two, there is no way the very worst of the states, all run by Democrats, will agree to Republicans overseeing every penny in and out, and most important of all, rewriting the unsustainable pension obligations.
    The last is the nut that will only crack when state [and municpal] bankruptcies force judges, bought and paid for by Democrats, to permit rewriting state [and municipal] contracts for pensions, salaries and benefits.
    So either there will be bankruptcies and rewrites, or the federal taxpayer will assume permanent responsibility for blue state financial insanity. You pick.

    • M Snow

      The former. My husband’s pension comes from CalPERS. We have believed it was unsustainable for many years and have planned accordingly so that the collapse will be unpleasant but not catastrophic. We can’t continue robbing our children’s future to support a corrupt system.

      • Dusty Thompson

        Yet you cash your check, stolen without consent of the unborn, that will be enslaved to repay it, every single month….

        • CapitalHawk

          The idiotic comment of the day award goes to Dusty Thompson.

          • M Snow

            Thanks.

        • M Snow

          Yes, and we put it into savings for the day when “rewrites” need to be done or is it your contention that all public service pensions are immoral? My contention is that they are fine if properly funded from deductions from wages. The problem is that, at least for California, unrealistic projections have been the norm for quite awhile.

    • Fat_Man

      Frank: I was there and involved, although it was my rookie season. As I remember it. There was sequence of events that led to the creation of the controlling board.

      Two important ones were rejection of a request for a Federal bailout: “Ford to City, Drop Dead” in the words of an immortal (or was it immoral) NY Daily News headline.

      Second was a US Supreme Court Decision that NY Port Authority bonds could not be amended without the consent of the bondholders, which killed some of the woollier plans to stick the the bondholders with the tab.

      It was only after that the NY legislature came up with the controlling board.

      • Frank Natoli

        Yes, I recall the NYDS headline.
        That was also about the time that Port Authority decided it was in the real estate business, which is why it costs something like $16 to cross the Hudson River bridges and tunnels. Port Authority along with Triborough Bridge and Tunnel Authority are classic big government thieves.

  • FriendlyGoat

    “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.”

    Evidently we are not paying much attention to THIS particular Congress, which (if it gets involved in this at all) will have one and only one concern: How to avoid turning the police departments against Republicans.

  • ——————————

    People need to take responsibility for their actions.
    You have a whole lifetime to save for your future by not over spending, investing wisely, and living according to your means, not just depending on a pension.

    What a pussified society we live in….

    • Andrew Allison

      One can only hope that the politicians and union leaders will be held responsible for their criminal irresponsibility.

      • Fat_Man

        Right after they finish prosecuting Hillary.

      • f1b0nacc1

        I would love to see it, but don’t hold your breath. Those bad guys will retired in luxury, and when they die, it will be surrounded by friends and well-wishers. Their judgement will have to wait for another world….

        • Andrew Allison

          I was thinking along the lines of denying them payment from the pension funds they have so grossly looted.

          • f1b0nacc1

            The pension payments are minor bits of change compared to the graft that they have accumulated. Symbolic, and little more than that…

          • Andrew Allison

            Agreed. But as you pointed out, there’s very little chance of any penalties. It would not be symbolic to the perps.

          • f1b0nacc1

            Until we find ourselves willing to punish even those from our own tribe, we shouldn’t expect that other tribes will punish their own. Of course we are also willing to tolerate such malfeasence….

          • Andrew Allison

            Not sure whether you’re referring to the pension mess or the broader issue, but wrt the former, you’ve hit the nail on the head. The issue is to what extent should the Federal government bail out States whose voters have continually elected officials conducting public pension Ponzi schemes. Realistically, since the States’ unfunded liabilities (which include all the municipalities within their jurisdictions) differ only in degree, there’s going to be a bailout. The question is, what’s fair and reasonable and can it be achieved. Hence my suggestion.

          • f1b0nacc1

            Actually I would be much happier with a ‘no bailouts, let the chips fall where they may’ policy. this includes Red states (that should know better)….

      • ——————————

        Yes, agreed.
        ….and one can also hope that people will take responsibility for their actions in so many more ways than they do at this time in human history….

    • f1b0nacc1

      All the easier for Trump to grab them then….(grin)….

      • ——————————

        Absolutely!

        There are plenty more empty seats on the Trump train….

  • Fat_Man

    “Congress has a responsibility to hold hearings into this problem”

    The relevant areas of Federal jurisdiction are the Bankruptcy Code, the Internal Revenue Code provisions on pension plans, and the Securities laws provisions on the sale of securities. Hearings, if any, should be limited to those areas. I think the most important might be hearings on the use of actuarial opinions in the offering statements of municipal issuers. It is definitely an area where there is Federal Jurisdiction to reform the practices of the issuers, and require actuarial opinions based on sound principles.

    “… develop a coherent approach for the inevitable moment when
    irresponsible, spendthrift cities and states come to Washington hat in
    hand, looking for bailouts.”

    That should be: “I am sorry, but we will not hold the taxpayers of prudent states liable for the gold plated pensions of imprudent states”.

    Nothing short of a catastrophe will persuade the voters of states like California and New York that the blue model is not viable and must be abandoned.

    “Generous help for needy victims of public pension Ponzi scams,”

    I can see but one window crack to accomplish that without sending money to the states, but it is complicated, so I will pursue it in a separate comment.

    • MarkM

      The other relevant law is the various State Constitutions and state laws which ostensibly protect those pensions. The Bankruptcy Code can be used by various state created entities but there is really no provision or leeway for an entire state government to go through a municipal-style bankruptcy. In the Federal arena, we’re going to have to also be careful regarding some of the relevant constitutional law – so, no deprivation of property rights without due process.

  • Andrew Allison

    Why generous help? Why not Social Security like everybody else? And, pardon the recording, ERISA!

    • Fat_Man

      Many, if not most state (and local) employees are not members of Social Security, and may not have an earnings record on which to base an SS retirement payment. You must have a minimum of 40 quarters of earnings to qualify.

      This is the window of opportunity I refer to in my comment below. There are a whole bunch of issues.

      The first is the lack of complete earnings records, and more importantly, the money that their participation would have paid into the system. Of course, states can supply the information, and the IRS may have some of it. More importantly, where will the money come from?

      I think that SS should not accept the state employees as members unless the state ponies up an amount equal to the pay in (both employer and employee) that was never made plus interest. The numbers will be very big. They may exceed $250,000 per 60 year old employee. The States would only be in a position to do that if they could use what ever is in their pension plans.

      Many states, such as Illinois, would have to amend their constitutions to be able to do that. States that empty the cupboards to make the pay in, and are still short, should be required to issue GO bonds to cover the shortfall. If they bonds cannot be marketed, they should be delivered to SS which should receive the interest and the principal at maturity.

      There are many knotty issues that I do not have off the shelf answers for. Such as what to do about state employees (many of them cops or firemen) who retired before social security eligibility. Another one is how to treat current employees if the states do not want to pay the employer share, and I am not sure that the Federal Government has the constitutional power to tax the states. Those employees could be taxed as self employed.

      • Andrew Allison

        Believe it or not, I’m well aware of the fact that most public employees don’t have Social Security. The do, however, have an earnings record with the IRS. If the Federal government does bail out the pensioners, they should receive not a penny more than they would have under Social Security.

        • Fat_Man

          And the Federal Government should receive a penny less than they would have received if the pensioners had paid taxes all along.

          • Boritz

            This violates the “contract between generations” model whereby the money you pay into the system goes out the door imediately to current beneficiaries while your own account is stuffed with an IOU that the government promises to pay by collecting from someone else later. Funding up the system with real money for a beneficiary’s immediate benefit shortcircuits the part of the deal where you wait and hope they have the money to pay you when the time comes.

          • Fat_Man

            Boritz: Your model can only apply if everyone has been and will be in the system for their entire lives. Here we are talking about bringing a large number number of people, many of them middle aged and older, into the system. The older people might not be able to comply with the 40 quarter rule before they turn 66. In order to provide them with a benefit based on their earnings record with untaxed employers, the SS system must receive an endowment that would equate to what their pay in would have been if they had members of the system all along.

  • Dale Fayda

    The only long-term solution to this crisis is to de-unionize state and municipal employees. The probability of the happening in very remove even in the Red states and nil in the Blue states. Absent this type of reform, the Congress is better off letting the parties involved sink or swim on their own. No solution Congress can possibly put forth will resolve anything nor satisfy anyone. Just like with Detroit, there will likely have to a systemic collapse or two for the reality of situation to sink in and for concrete steps to be taken by the people running these locales.

    • Frank Natoli

      Agreed, because it is the unions who funnel union member dues to Democrat politicians who then funnel state tax dollars to the union members. No union dues to Democrat politicians, no need [or at least much less need] for politicians of any flavor to bankrupt the state.

  • Gary Hemminger

    I completely disagree with this statement “…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.” The millions of public employees actively wanted to be lied to, encouraged it, and then voted only for the politicians that gave their union leaders the deals they sought. They should be punished right along with their union leaders and the politicians they put into power.

    • FriendlyGoat

      Well, they won’t be. This is going to shape up as a political argument about finding ways to favor some types of public employees over others. There is very little appetite in the Republican community to unfeather the police anywhere.

      • Texas_Accountant

        We have a problem with police pensions here in Texas. There is no reason that anyone in Tennessee (or any other state) should pay. No federal bailouts of public sector workers!

        • FriendlyGoat

          Yes, you do have a problem with police pensions and I’m telling you it is very unlikely that those fellows are going to take much of a hit on them. We may slap the teachers and the water works, but Republicans are not going to antagonize the police. Watch.

      • Dusty Thompson

        Never is a long time. When 0bama’s Keynesian economic polices come due America will be long since broke.

        • FriendlyGoat

          You’re missing the point, here, and veering off to Obama. The point is that Republicans intend to keep bribing the police, no matter what happens to the rest of the public employees or their pensions.

  • Anthony

    What you describe above, WRM, is a social problem needing a “public administration” (Government at all levels) solution. I think most of us (citizens) can agree that government, as we generally converse about it, is incompetent, corrupt (perhaps), and dysfunctional (generally). But I also think (as it relates to municipal pensions and other matters) our social problems of great complexity did not emerge by accident; they reflect the influence of vested interests (in most cases). In my mind, our task (long-term but desirous of immediate attention) is how can we (citizens) make government both more competent and more honest – less inclined to be high-jacked by narrow private interests? Surely, where will the political base and will (not ideological governing disputes) come from to not only address our talked about pension problems but our nation’s fundamental collective challenges – arguing for a Congressional role vis-a-vis pension problems going forward is not systemic reform as much as letting the proverbial fox into the proverbial hen house. We need more WRM and we need to honestly ask ourselves what “active” role is needed (both technically and practically).

  • Joseph Herzrent

    Many are to blame, but few (if any) of those who caused the problems have the financial resources or the malpractice insurance to cover the massive liability that we now face. Who is it that SHOULD face the liability? Some of the public employers with the greatest pension deficits are cities with many citizens who can ill-afford to pay (Chicago, Detroit). Many of those who lived there when the liabilities were accrued have moved away. Is it like the risk of hurricane or drought? Homeowners’ and farmers’ expectations about the future have been disrupted by events beyond their control. The idea of taxpayers protecting those victims based on 100% of their expectations is absurd … particularly when those who might be asked to pay have a vote on how they are to be taxed. As it is, people already retired will use up the existing funds in less than a decade. Not only the funds set aside for them, but those set aside for everybody else. We should immediately ration the available funds as well as the available future revenues to meet only those obligations that society can afford. And the biggest haircuts should be experienced by those with the “millionaire” pensions … people who retired in their 50’s with COLA and health benefits. Wartime rationing tries to assure that everyone gets enough to sustain life. Same thing with water rationing in the desert. When it comes to bankruptcy (seemingly inevitable) or some other sort of bailout, the “fair” solution is to cap benefits of the richest retirees. This is the only way we can assure that governments can meet their other obligations (public safety, education, health, etc.).

  • Fat_Man

    “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.”

    The people who had the least power are the taxpayers, especially those who do not live or vote in the state in question. They deserve the strongest protection.

    The employees and retirees were members of the unions, and they elected their union leadership, and they ratified the contracts. They may have chosen to be fat, dumb, and happy, but it was their choice. And justice is served by letting the consequences of their choice fall on them.

    “Generous help for needy victims of public pension Ponzi scams,”

    Allowing them to join Social Security would be very generous. But, they should not get a penny more than any other person with the same earnings record would get, and the States must pay for the revenue foregone by the Social Security Trust Fund. See the colloquy between Andrew Allison and me below.

  • lhfry

    Mead must mean shifting to defined CONTRIBUTION plans for the future. The problem here is defined BENEFIT plans, which hardly suit today’s workers who are unlikely to stay in a single job for the 30 years required to qualify.

  • Pait

    I find the repeated emphasis on the supposed pension crisis misguided. Pensions are a manner by which the working sustain the retired. There are many channels to achieve what most cultures do consider as an obligation – government social security, savings and pension schemes, filial obligations, and so on. The United States uses a combination of many such schemes. They are all sustainable al long as the young are productive and willing to support the aged.

    The statement that they are pyramid schemes or something like that is based on misinterpretations of what savings and transfers are, and in confusion about how accounting for different schemes work. They have no basis on reality. I respectfully suggest that Professor Mead should focus on subjects in which his expertise is enormously useful and widely appreciated.

    • Jeffn

      “They are all sustainable al long as the young are productive and willing to support the aged.”

      Do the young get some sort of say in how much the aged get? The idea that this is some sort of no-brainer, that kids just need to work harder and pay more taxes is obscene. Most of these pensions are the equivalent of a free, no risk, 7-figure 401k- something “the young” won’t get and most of their parents won’t either. Further, ‘the young” have been told for years that current governments were adequately funding these pensions day in and day out. “The young” are just now discovering that was a lie and that they will be responsible for making contributions that you apparently felt no need to make. Good luck.

      • Pait

        I don’t think you are estimating correctly how much pensions and social security are worth. It’s not like pensioners earn like CEOs or something like that. There may be – probably are – abuses and inflated values, but it’s far from the norm.

        The point about “fully funded” is a hoax. No matter how the accounting goes, future earnings have to come out of future work. Whether someone sets money aside now, or relies on taxes later. Money in the bank does not by itself generate the products and services that the aged will need once they are no longer working.

        • Jeffn

          are you completely unfamiliar with how a pension fund or an individual 401k works? These are plans that are funded with money today that retirees draw on after they are done working. It is the investment growth of these funds that provides much of their value.
          What the states did was short the amount put away each year. They claimed they weren’t shorting the amount by assuming the pension funds would earn almost 8% each year. They really earned less than 2% in some cases. Thus the “shortfall.”
          Social security works as you describe it, but pensions and 401ks are benefits funded at while you work.

          • Pait

            The states don’t necessarily have to put the money away in advance. They can make a promise to pay the pension in the future. In either case it comes out of taxpayers’ money. The difference is actuarial, and its impact is on when to tax and when to spend, not in the actual value of the pensions.

            401k are different indeed: the funds are private. In comparison, a company’s guarantee of payment in the future is feeble, as some workers learned from the 1980s onwards – so a fund is preferable to a promised benefit in many ways. A state’s promise is almost as strong as the federal government.

            That of course doesn’t mean politicians don’t lie. If the pretended the funds would earn 8% when they actually made 2%, they’re as truthful as Agent Orange, and should be duly discarded. Notice before jumping to conclusions that returns fluctuate; what matter is the real return above inflation over the long run, not the yearly nominal earnings.

          • Jeffn

            “The states don’t necessarily have to put the money away in advance.”

            And what would one call that? An unfunded pension liability. Which, lo and behold, is the topic of todays conversation. Taxpayers are discovering the wonderful surprise that they will now be paying for promises the state made in the 80s and 90s but never budgeted for. But the state said it did budget for them- it told the taxpayers that their fathers and mothers paid those pensions in the 80s and 90s.
            So today’s taxpayers are faced with your conundrum. Peter offered to pay Paul $100,000, but Peter never had the money. How much does Sally owe Paul? Nothing. Peter does, however, owe Paul. Good luck Peter and Paul.

          • Pait

            Pensions for people currently retired come out of the work of people currently working, who don’t get to consume all the services and goods being produced.

            The rest is accounting. It is important for individuals and businesses, but for society as a whole, it’s just how you account for it. Whether a government pension has been accounted for by a savings fund, or by a promise to direct future taxes towards pensions, has no impact on the ability of the government to pay for the pension, nor on the future of the country’s economy.

            Politicians often deploy selective ignorance of this fact for electoral gain and for polemics, but a #fact it is. The only thing that may imperil the pensions is if the voters put someone in charge of the Treasury who will renege on obligations. This was unthinkable in the US until a few years ago, and although the threat of default has been deployed as a strategy for partisan gain in recent years, may the Almighty forbid that this great country follows the ruinous path of South American banana republics.

          • Jeffn

            Ok, so during the next race for state legislative seats, in the interest of transparency, all California media and the Democratic Party will remind voters that Democrats in the ’90s promised to pay the $30-some billion pension shortfall out of “future taxes” and today is the future. Too bad, cough it up. They will further note that anyone who says the state was funding a pension plan was lying- intentionally dishonest- and that this should be considered when evaluating their fitness to write newspaper columns or hold state, local or national office.
            Deal?
            And by the way, this still means Californians are responsible for paying for the pensions. The original topic of this. In fact it makes it more important that the burden fall entirely on California instead of relying on bailouts from states where the legislature didn’t lie to the people.

          • Pait

            I understand that this for you may be a matter of deeply-felt partisan politics, not of rational fact-based argument, but perhaps you will recall that California pays a lot more in federal taxes than Californians receive from the Union, and so do most so-called blue states, while the opposite is true for many red states. Also, California is very unlikely to need a bailout; unlike, for example, Texas in the S&L crisis of the 1980s or Florida in 2008, which received the bulk of the bailout through its insolvent banks.

          • Tom

            Of course, given how many of the red states get more federal dollars than they pay out by providing goods and services to the federal government…

          • Pait

            That tends to be true, but I don’t think it’s really a matter of choice, or values. Mostly, the blue states have higher incomes, resulting in higher tax rates. Also, many red states are small, and have disproportionate representation in Congress.

            Of course, being red or blue IS a matter of voter decisions. And net beneficiaries wanting to lower taxes while net contributors are happy to pay them is a little silly, but that just shows that voters are not completely rational in a purely financial sense. Maybe the most irrational thing is to insist on completely consistency.

          • charlesrwilliams

            California doesn’t pay a cent in taxes.

          • Pait

            I supposed that the slightly metaphorical usage of “California” for “Californians” would be clear to all readers. My error.

          • charlesrwilliams

            I am not nit-picking. It is an important point. A Californian pays taxes; he does not benefit if a welfare recipient in California gets money from the government vs a welfare recipient in West Virginia. States as such do not contribute to the federal government. South Carolina does not benefit at California’s expense when federal taxes are spent on a South Carolina military base. Californians do benefit when money is spent where it will generate the most bang for the buck.

          • Pait

            You may want to look at the FT article I found after our exchange. It has a wealth of data I didn’t know well. It shows that some states carry a bigger fraction of our common cost of providing for a more perfect and safe union, while others get more in benefits and don’t quite pay their respective share. The picture is of course complicated – there’s no one clear measure, and different measures give different rankings – but there are clear differences between, if you so want to call them, “winners” and “losers” from federal transfers.

            https://ftalphaville.ft.com/2016/12/16/2181274/who-wins-and-loses-from-americas-transfer-union/

          • Jeffn

            California is more than $30 billion in the hole for state and local pensions. It’s not only going to need a bailout, it’s going to have to trim it’s budget and raise state and local taxes. Which gets to the meat of this thing.
            I get that you figure people are just going to shut up and cough up $30 billion for you after all the lies. That’s not going to happen. Retirees will certainly get much of what they were promised, some sort of bailout will happen, and public unions and their supporters will be about as welcome as the Klan at a Mississippi soul food festival.

          • Pait

            If I were a betting type, I’d bet that:
            1 – California will not need a federal bailout;
            2 – California will find a way to balance its obligations and taxes without any kind of default; and
            3 – When all this happens all the people who are making exaggerated and baseless claims about California’s bailout and default will NOT recognize their predictions were wrong, misleading, and based on inadequate understanding of economic facts.

            The last one is so certain that it would be dishonest to bet, even if betting were legal and moral.

          • Jeffn

            I made a mistake, the Mercury News says the actual California shortfall is $93 billion and growing.
            According to the state, it collects $66 billion a year in state income taxes from a population of 39 million- an average of $1,692. The pension shortfall is over $2,300 per capita. The annual shortfall because of the fund performance was $16 billion last year-24% of all state income taxes if they’d actually tried to fund it. They didn’t, so you’ll have to pay that next year along with next year’s shortfall and all the previous years’ shortfall. With a 50% tax hike they could catch up in about 6 years if they’re lucky.
            I’m glad you think Californians will be comfortable with that.

            http://www.mercurynews.com/2016/07/15/borenstein-more-calpers-pension-debt-to-hit-taxpayers/

    • Pait

      A rather complete and relevant dataset and analysis is in the Financial Times article below.

      https://ftalphaville.ft.com/2016/12/16/2181274/who-wins-and-loses-from-americas-transfer-union/

      • Anthony

        Thanks.

  • m a

    Congress has a responsibility –
    To make absolutely clear this is state government not federal government problem and there will be no bailouts. None. Not a damn penny.

    It would be the height of irresponsibility to try and save the irresponsible state and local governments at the expense of well-run state and local governments.

    Bailouts, just like the bailouts in the commercial sector will just encourage the same types of behavior in the future. The folks who did this– i.e. the public at large who voted for these politicians, the labor unions and employees who demanded these excessive pensions, and the politicians/parties who agreed to them vice being fiscally responsible must deal with the consequences.
    It is the only way they’ll learn, and maintain the corporate knowledge/distaste for getting into that situation again.

  • SteveLevy

    The federal government should enact coercive conversion of existing pensions to a defined-contribution model, and legislate the mandatory adoption of the defined contribution model for all public entities.

    And, above all, NO bailout money whatsoever. Period. The government employees are not blameless in this. They took these jobs knowing clearly what the benefits were and that they were unsustainable. And then provided billions of dollars in political contributions to politicians, who with their union leader friends, only exacerbated the problem — always with the expectation that “Washington” would come to the rescue.

    With the longevity gains we have now, any organization maintaining a defined-benefit pension plan is insane. Even the Googles and Netflixes of the world, with mountains of cash, use 401(k) models. The most significant private-sector entity using defined-benefit is the auto manufacturers, and they would have gone completely tits-up if Obama and Pelosi hadn’t given them a $25 billion gift (in return for UAW campaign contributions, of course) in 2009.

    The irony is that forcibly changing all public-sector plans to defined-contribution would be the single largest injection of economic viability and activity in every one of the states affected.

    • MarkM

      When you convert an organization from a pension (defined benefit) scheme to a defined contribution scheme, the traditional route has been to freeze the existing pension benefits. You can then do an actuarial calculation of the value of the total future payout and offer participants of the existing pension the following choice: (a) take a lump-sum payout (which can be rolled over into an IRA or 401(k) type vehicle) or (b) continue to receiving payments in accordance with the now-existing formulas based on their pension as accrued today.

      Step 2 is to offer all employees who had been covered by the defined benefit retirement scheme the ability to contribute into a defined contribution type scheme like a 401(k).

      We don’t need to coerce the decision by the state and local authorities. What we do need to do is create Federal legislation which allows such a conversion (and the associated calculations) to be reviewed and approved by a Federal judge if the State or local authority makes the choice to do so. The statute should explicitly say that this conversion process is allowed if the State or local entity chooses to do so even if otherwise prohibited by the state constitution.

  • Dusty Thompson

    Being forced to pay this monster, at the point of a gun, so unionists can retire at 50 with full bennies for life is crazzzzy.

    Add in a lil “Civil Forfeiture” and we have the largest crime syndicate in existence.

    Not only should these scumbags with a costume be fired but they should all be forced to pay back 50% of what they have already stolen for us all.

  • jvermeer51

    The politicized public employee unions voted for this, they bought it, they own it and, most of all, they deserve it.

  • ChuckFinley

    My modest proposal is that the scale of the problem could be reduced to some degree if the Department of Justice investigates the IRS to find all of the individuals there who participated in the partisan harassment of Tea Party or other conservative groups and then punishes them with termination and loss of pension.

  • catorenasci

    Perhaps it makes sense for Congress to hold hearings, but not one cent of the Federal taxpayers’ money should be used to bail out the feckless, almost always Democrat-run, public employee pension plans. It was Democrats who permitted public employee unions and who passed the laws that make bargaining with them almost impossible for municipalities and states, let alone for the interests of the taxpayers to be taken into account.

    For cities, put them into bankruptcy and void the contracts. For states, amend the bankruptcy laws to permit a semi-bankruptcy status in which contracts can be voided. But relief should only be available if the states amend their constitutions to prohibit public employee unions and to prohibit defined benefit plans.

  • InklingBooks

    Quote: “Any kind of pension relief needs to be tied to reforms that ensure that nothing like this ever happens again.”

    Sorry, but human nature being what it is, relief makes genuine reform unlikely. Relief conveys the message, “Go ahead and do this again. The feds will always bail you out.”

    My own sense is that those who’re not represented by a third-party organization deserve relief. It’s perhaps too much to expect individuals, say a non-unionized teacher, to understand the complexities of retirement funding. On the other hand, those who are represented by organizations, particularly government employee unions, should have to bear the entire weight of this failure. When they choose to be represented by a union, then they became a party to those lies and deserve no sympathy.

  • Beauceron

    C’mon.
    Everyone knows that the profligate states will have their tabs picked up by the federal government. Once the Dems get back in charge, whether it’s 4 years or 8, that is what will happen. We all know this.

  • Daniel Nylen

    Pension reform is simple to plan–one idea: Let the pensions only use what funds they have and each year’s contribution should be according to the salary and numbers of employees– turn it into a pay as you go with the shortfall coming out of the pensioners— This would create accountability immediately. But how to actually implement such a plan– not possible in the current environment.

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