and a possible solution.
While the Chicago Teachers Union and other mouthpieces for those luxurious government pensions prattle on about how unfair they're been treated, the grim truth is that Chicago's public pensions are in much worse shape than we're being led to believe.
If you doubt it (and can get past your built-in, blind "progressive" bias), you need to read this Chicago Tribune op-ed by Ed
Bacharach, chairman of the Chicago-based Center for Pension Integrity. If all five Chicago pension funds were realistically evaluated for their true shortfalls, he said, the debt would come up to $68 billion. "Let that sink in," he said.
Well, most organized labor sycophants won't give it a passing thought. He continues:
Unfortunately, all of the recent tax increases and added fees fall way short of what is needed to catch up the funds, even within a generation's time. The current report of the police pension plan states that, with the current "solutions" to the problem in place, the fund will still run a deficit of $681 million in the next five years.
Bacharach offers a solution, a very controversial one: Federal intervention.
The relief would not be a bailout. Instead, it would legally allow state and local governments with plans that have funding levels below 50 percent to modify plan provisions and benefits, and ultimately freeze and terminate the troubled plans. At the same time, local taxes would be raised to fund the restructured plans completely because beneficiaries shouldn't give up benefits unless they get complete security for what is left. Because the plans would be terminated, taxpayers would be able to see their way out of this crushing problem.
Bacharach concedes that this sets up an important constitutional conflict: State sovereignty as enunciated in the Tenth Amendment would collide with the "federal preemption" clause that allows Washington to pre-empt state laws. (For a legal discussion of the conflict, visit "Supremacy Clause and Federal Preemption."
I've previously wrestled with this question in "Can Chicago and Illinois declare bankruptcy?"
Here are my other blatherings on the state and municipal bankruptcy questions:
- Chicago SHOULD declare bankruptcy.
- Atlantic City might declare bankruptcy; is Chicago next?
- Chicago's only solution: a Detroit-like bankruptcy.
- In an apparent first, a public pension plan files for bankruptcy.
- Believe it or not, Illinois is flat-out broke.
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