Public Pension Hygiene Act - Making the Pols come clean on how deep the $$$$$ hole is in regards to unfunded public pensions

The State Governments have not been 100% honest with the taxpayers, and that has allowed them to dig a very, very deep hole that they will look for the Feds to fill in for them. This hole is $3.5 TRILLION Dollars deep.... That "hole" is the pensions promised to all the State Hacks who have retired early, double dipped, and set themselves up for a nice comfy retirement (backed by the Unions) even while the taxpayers have seen their retirements dry up like a puddle on a hot July afternoon.

While I don't want to see anyone deprived of their pensions, I don't see the equity in insulating Public Sector retirees from losses while we ignored millions of private sector employees who had the rug pulled out from under them. Just because you worked for the Town or the State shouldn't set you up for some "Divine Right" that the average Joe wouldn't have.....after all, the "average Joe" has been footing the bill all along.


Public Pension Hygiene Act
The first reform step is exposing the true size of the funding hole
Opinion - Wall Street Journal - 01/22/11

We're so accustomed to misnamed legislation like the Employee Free Choice Act (card check) that it's hard to believe that a welcome proposal called the Public Employee Pension Transparency Act describes what it actually purports to do. To wit, prohibit public pension bailouts by the federal government and expose the $3.5 trillion of unfunded public pension liabilities that local and state governments have obscured.

Most state and local governments currently use their own estimated rate of return on their investments to discount their liabilities. By projecting unrealistically high rates of return, states minimize their unfunded liabilities, at least on paper. Lower unfunded liabilities in turn allow them to reduce how much they and public employees must contribute to their pension funds. Inflated investment assumptions are one reason that public pension funds are unfunded to the tune of $3.5 trillion.

Public pensions typically assume an 8% annual return on average, but over the past five years state pension funds with more than $5 billion in assets have earned only 4.5%. Taxpayers must make up the difference between what the funds earn and what they need to pay retirees. For Californians that is roughly $5 billion this year.

Local taxpayers are already seeing their services whacked and taxes raised to fill these pension holes. University of California students will have to pony up 8% more next year for tuition to offset an expected $500 million in state budget cuts. Illinois residents will soon pay 67% more in income taxes, but taxpayers won't feel the full brunt for another decade when the funds begin running out of money. When Chicago's pension fund goes dry around 2019, over half of the city's revenue will be dedicated to pensions.

In the 1950s and 1960s, many private employers obscured their liabilities the way governments are doing today, though they didn't have a public backstop. Many funds went broke. In 1974 Congress established minimum funding requirements and penalized companies that underfunded pensions. The law also required companies to report and discount their liabilities using a more conservative rate of return.

These changes exploded liabilities and prompted many companies to switch from defined-benefit plans to defined-contribution plans like 401(k)s. While a majority of private workers now have defined-contribution plans, defined-benefit plans remain the norm in government.

Enter the Public Employee Pension Transparency Act, which is sponsored by House Republicans Devin Nunes and Darrell Issa of California and Wisconsin's Paul Ryan. Their bill would encourage governments to switch to defined-contribution plans by revealing the true magnitude of their unfunded liabilities. States and municipalities would have to report their liabilities to the U.S. Treasury using their own rosy investment forecasts as well as a more realistic Treasury bond rate (to be determined by a formula).

This data would make clear how much taxpayers potentially owe and increase pressure on lawmakers to fix their plans. For instance, Illinois estimated in 2009 that it had a roughly $85 billion unfunded liability. Using a Treasury discount rate, that unfunded liability balloons to $167 billion.

Out of respect for state sovereignty, the federal government shouldn't and can't tell local governments how to run or fund their pensions. But the bill doesn't do so and it also doesn't force states to fund their plans using a lower discount rate. States don't even have to comply with the law, though they would forego their ability to sell federally subsidized, tax-exempt bonds if they don't.

The bill may not persuade states like Illinois and California to revamp their pensions, but it will reveal how broken they are—and that's a start

"We must always consider that we shall be as a city upon a hill--the eyes of all people are upon us." - JFK - Jan. 9th, 1961

50 years ago today, I was a small baby in my Mother's arms.

50 Years ago today, a son of Massachusetts gave what I and many others consider a great speech, second only to his Inaugural Address. Ted Sorenson recently passed away and he was one of the key people who assisted John F. Kennedy in writing his many speeches.

This one was for the ages. It speaks to our history and sets a clear expectation for what Public Service SHOULD MEAN....Not like these feckless and greedy Bastards who only act like they can be political leaders.

Kennedy came from money, and his drive was to find ways to help others who were not as privileged...not through handouts and a permanent dole (like today) but by providing opportunity for people to WORK at being their best.

READ THESE WORDS and be in awe of what was to come....we are in need of men like JFK.

Jack, we truly miss you.

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Address of President-Elect John F. Kennedy Delivered to a Joint Convention of the General Court of the Commonwealth of Massachusetts
The State House, Boston
January 9, 1961

I have welcomed this opportunity to address this historic body, and, through you, the people of Massachusetts to whom I am so deeply indebted for a lifetime of friendship and trust.

For fourteen years I have placed my confidence in the citizens of Massachusetts--and they have generously responded by placing their confidence in me.

Now, on the Friday after next, I am to assume new and broader responsibilities. But I am not here to bid farewell to Massachusetts.

For forty-three years--whether I was in London, Washington, the South Pacific, or elsewhere--this has been my home; and, God willing, wherever I serve this shall remain my home.

It was here my grandparents were born--it is here I hope my grandchildren will be born.

I speak neither from false provincial pride nor artful political flattery. For no man about to enter high office in this country can ever be unmindful of the contribution this state has made to our national greatness.

Its leaders have shaped our destiny long before the great republic was born. Its principles have guided our footsteps in times of crisis as well as in times of calm. Its democratic institutions--including this historic body--have served as beacon lights for other nations as well as our sister states.

For what Pericles said to the Athenians has long been true of this commonwealth: "We do not imitate--for we are a model to others."

And so it is that I carry with me from this state to that high and lonely office to which I now succeed more than fond memories of firm friendships. The enduring qualities of Massachusetts--the common threads woven by the Pilgrim and the Puritan, the fisherman and the farmer, the Yankee and the immigrant--will not be and could not be forgotten in this nation's executive mansion.

They are an indelible part of my life, my convictions, my view of the past, and my hopes for the future.

Allow me to illustrate: During the last sixty days, I have been at the task of constructing an administration. It has been a long and deliberate process. Some have counseled greater speed. Others have counseled more expedient tests.

But I have been guided by the standard John Winthrop set before his shipmates on the flagship Arbella three hundred and thirty-one years ago, as they, too, faced the task of building a new government on a perilous frontier.

"We must always consider," he said, "that we shall be as a city upon a hill--the eyes of all people are upon us."

Today the eyes of all people are truly upon us--and our governments, in every branch, at every level, national, state and local, must be as a city upon a hill--constructed and inhabited by men aware of their great trust and their great responsibilities

For we are setting out upon a voyage in 1961 no less hazardous than that undertaken by the Arabella in 1630. We are committing ourselves to tasks of statecraft no less awesome than that of governing the Massachusetts Bay Colony, beset as it was then by terror without and disorder within.

History will not judge our endeavors--and a government cannot be selected--merely on the basis of color or creed or even party affiliation. Neither will competence and loyalty and stature, while essential to the utmost, suffice in times such as these.

For of those to whom much is given, much is required. And when at some future date the high court of history sits in judgment on each one of us--recording whether in our brief span of service we fulfilled our responsibilities to the state--our success or failure, in whatever office we may hold, will be measured by the answers to four questions:

First, were we truly men of courage--with the courage to stand up to one's enemies--and the courage to stand up, when necessary, to one's associates--the courage to resist public pressure, as well as private greed?

Secondly, were we truly men of judgment--with perceptive judgment of the future as well as the past--of our own mistakes as well as the mistakes of others--with enough wisdom to know that we did not know, and enough candor to admit it?

Third, were we truly men of integrity--men who never ran out on either the principles in which they believed or the people who believed in them--men who believed in us--men whom neither financial gain nor political ambition could ever divert from the fulfillment of our sacred trust?

Finally, were we truly men of dedication--with an honor mortgaged to no single individual or group, and compromised by no private obligation or aim, but devoted solely to serving the public good and the national interest.

Courage--judgment--integrity--dedication--these are the historic qualities of the Bay Colony and the Bay State--the qualities which this state has consistently sent to this chamber on Beacon Hill here in Boston and to Capitol Hill back in Washington.

And these are the qualities which, with God's help, this son of Massachusetts hopes will characterize our government's conduct in the four stormy years that lie ahead.

Humbly I ask His help in that undertaking--but aware that on earth His will is worked by men. I ask for your help and your prayers, as I embark on this new and solemn journey.