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:
- "Chaffetz Introduces Legislation Opposing Bailout of State/Local Government Employee Pension Funds" — Rep. Chaffetz press release
- "Chaffetz takes aim at unfunded pensions" — Salt Lake Tribune
- "Unionized public employees being used as scapegoats for financial crisis" — SEIU blog
- "The Texas Omen" — Paul Krugman in New York Times
- "Another Union Created Bailout?" — LRI Online
- "Robert Creamer: Time to Stand Up For The Public Sector" — Huffington Post