Congressman Introduces House Resolution Opposing Bailout of State and Local Pension Funds

On the first day of the new Congress, Rep. Jason Chaffetz (R-UT) introduced a House Resolution:

Expressing the sense of the House of Representatives that the Federal Government should not bail out State and local government employee pension plans or other plans that provide post-employment benefits to State and local government retirees.

The Resolution lays out a litany of financial challenges facing the federal government, state and local governments, Social Security and related trust funds, and various government employee pension funds. Most critically, the Resolution asserts:

numerous State and local government employee pension plans have offered overly generous retirement benefits to its employees and are in dire financial situations with combined unfunded liabilities up to $3 trillion…

Substantively, the Resolution declares:

(1) the Federal Government should not bailout State and local government employee pension plans and other post-employment benefit plans; and

(2) State and local governments should immediately institute reforms to their employee pensions plans, including replacing defined benefit plans with defined contribution plans.

As this is a simple Resolution, it will not advance toward promulgation as an actual law. The result of a House vote on this, however, may very well impact how state and local government approach what has become an extremely pressing issue.

More Resources and Commentary: