The Union Liable

September 8, 2010 10:56

Bailouts: State employee pension funds are trillions of dollars underwater. Some analysts believe taxpayers will be forced to make up the shortfall. But they shouldn’t have to. They didn’t create the problem.

IBD Editorials


‘The U.S. Chamber of Commerce believes the unfunded liability for these governments could be as high as $3 trillion. With a train wreck on the schedule, policymakers have a choice before them: They can either make the hard decisions, or simply go even deeper into taxpayers’ pockets.’

‘”Assuming states don’t start defaulting on their bonds and other debts, it seems that taxpayers will be footing most of the multitrillion dollar bill for the pension promises that states have already made to workers,” Kellogg associate professor Joshua Rauh said.’

‘Simply put, such a bailout would be an outrage. Not every state is in trouble. Many have funded and managed their employees’ pensions the right way. It’s wrong for taxpayers in those states to be made liable by Washington for mistakes made by lawmakers in other states.’

‘Unions were never meant to be agents of economic ruin. But that’s what they’ve become. Though weak in the private sector, they have enough strength in the public sector, where they were once prohibited, to cause severe harm. Rather than bail them out, Washington needs to find a way to make them pay for their runaway appetites.’


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