The Wall Street Journal’s front page on Christmas Eve was “Pensions Push Taxes Higher”–a theme echoed in Minnesota and around the country. “Cities across the nation are raising property taxes, largely citing rising pension and health-care costs for their employees and retirees.” The working assumption for government has been that pay and retirement packages would increase every year, no matter what taxpayers were experiencing. The economic downturn and high unemployment is forcing all of us to examine those long held assumptions, including the wisdom of allowing public employees to unionize (e.g. organize against the taxpayer/employer).
U.S. Representative Devin Nunes (R-CA), along with Rep. Paul Ryan (R-WI) and Rep. Darrell Issa (R-CA), sponsored legislation in early December entitled The Public Employee Pension Transparency Act (H.R. 6484) that would update the reporting and disclosure requirements for local and state pensions–and clarify that the federal government would not bail out local or state plans: Section 4 (a) reads: ” The United States shall not be liable for any obligation related to any current or future shortfall in any State or local government employee pension plan. Nothing in this Act (or any amendment made by this Act) or any other provision of law shall be construed to provide Federal Government funds to diminish or meet any current or future shortfall in, or obligation of, any State or local government employee pension plan. The preceding sentence shall also apply to the Federal Reserve.” The bill has been referred to committee–let’s ask Nunes and others to resurect it in the 112th Congress.
Here is Rep. Nunes from California
“As we speak, lucrative pension promises are being made to public employees that taxpayers simply cannot afford. The plans themselves admit to more than a $1 trillion in unfunded liabilities,” said Rep. Devin Nunes. “Unfortunately, the true level of unfunded liabilities associated with these plans – perhaps more than $3 trillion – is being hidden thanks to unrealistic accounting standards.”