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10-01-2012, 01:53 PM #1
DeMint joins national effort to keep feds from bailing out state pension systems -IL
It was reported that $.71 cents of every education dollar in the State of Illinois goes to pensions and benefits.
DeMint joins national effort to keep feds from bailing out state pension systems
Published September 30, 2012
Illinois Democratic Gov. Pat Quinn is getting hit with a nationwide backlash over his suggestion that the federal government bail out the state employees’ pension program.
Critics have in the past several days pounced on the suggestion, made last year when Quinn, in announcing the state’s fiscal 2012 budget, said part of Illinois' long-term effort to reduce the estimate $167 billion in under-funded liabilities would be to seek “a federal guarantee of the debt.”
Among those leading the charge is Republican Sen. Jim DeMint. The South Carolina senator has joined the Illinois Policy Institute’s national “No Pension Bailout” campaign -- an effort to stop Congress from attempting to rescue failing state and municipal pension plans.
“Our greatest concern is states will assume they can run their pension systems into bankruptcy and then turn to the federal government for bailout,” DeMint said Thursday.
He also suggested the problem is the result of state legislators trying for decades to win over voters through pension promises based “on accounting methods that would put any business in jail.”
The conservative policy group estimates the total amount of under-funded pension liabilities in states is at least $2.5 trillion, with Illinois leading the nation.
The basic plan floated by Quinn would be for the federal government to rescue the pension program through buying the state’s bonds, which critics say are too financially risky to attract investors.
Quinn said after announcing the budget that seeking the federal guarantee was only a precaution, then later called the related wording a “drafting error,” according the non-partisan Citizens Against Government Waste, which nevertheless gave the governor its September 2012 “Porker of the Month” award.
The governor’s office could not be reached for comment this weekend.
The Wall Street Journal’s editorial writers recently said: “Sooner or later, we knew it would come down to this since the Democrats who are running Illinois into the ground can’t bring themselves to oppose union demands.”
In addition, an editorial Tuesday in the Chicago Tribune argued that saving Illinois will “start a stampede of demands for equal treatment from other financially troubled states” with public pension debts ranging from $1 trillion to $25 trillion.
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