DeMint: No fed bailout for state pensions
U.S. Sen. Jim DeMint, R-S.C., joined John Tillman, the institute’s CEO, on Thursday in presenting a study, proving any bailout would punish responsible states and reward reckless ones. The study shows the winners and losers by state and county.
“States will assume they can run their pension systems into debt and turn to the federal government,” said DeMint. “For decades state legislators have endeared themselves to public employees with pension promises … based on accounting methods that would put any business in jail.”
DeMint said blocking any hope of a bailout forces state politicians “to deal with this problem immediately.”
The total national public pension debt was at least $2.5 trillion two years ago and more than $4 trillion now, Tillman said.
In Illinois, he said, “we had a $7 billion tax hike that was supposed to solve all our problems, pay all our bills, and instead it all went to pensions.”
Bob Williams, president of State Budget Solutions, added that Illinois borrowed $10 billion to solve its pension crisis and “hasn’t repaid that,” as pension debt continues to grow.
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