At a House subcommittee meeting discussing one proposed solution for public employee pensions, a transparency bill designed to trace federal and state funds set aside to cover pension guarantees. Lawmakers and media types weigh in on taxes, Social Security, and how their interest groups are affected by pension cures.
Paul Ryan enters fresh from Bernanke’s hearing, to quote the Federal Reserve chair’s uncertainty as to when and how public employee pensions will be paid. This echoes Grover Norquist’s statement earlier in the same conference that everyone’s answer to the question of the day — Will public employees get the pensions promised them by their states? — is: We’re pretty sure.
Covering public employee pensions has become an enormous problem for states unable to cover even the going expense of running a government. California offered IOU’s to some employees this year, and state employees whose pensions are guaranteed by the state are subsisting on promises and guarantees, but many have not been paid. Arnold Schwarzenegger endorsed this transparency bill as he exited the office of governor, according to a presenting Ways and Means committee member.
Rep. Darrell Issa reminds the room that we will all pay for any failure. If one city or state fails, the entire country will bear the burden. Public employee pensions may not rise to the highest level on some conservative dockets, but as baby boomers retire, public budgets are braced to absorb the shock wave anticipated when the pension crisis hits.
As with every area of the economy, uncertainty quashes growth. As go public employees relying on a lifetime of pension pay-ins, so goes America, relying on receiving checks from social security, not IOU’s.