States Made Risky Bets with Pensions Before Coronavirus. Now They Want a Bailout.Washington Free Beacon, Apr 23, 2020
Staring down the coronavirus's effect on their budgets, states like New Jersey and Illinois are calling on federal leaders to backstop public pensions as part of future coronavirus relief.
Democratic leaders in those states are pushing the federal government for billions in funding to shore up underfunded public pensions. Democrats in Congress have made bailouts for state and local governments a major priority for the next round of coronavirus stimulus, even allowing a major small business loan program to run dry as Republicans refused to package a renewal with more cash for states.
But the pension shortfalls are not just a product of the bear market, experts tell the Washington Free Beacon. Some states now seeking bailouts are in part covering for more than a decade of economic mismanagement, having chased increasingly risky investments to fund generous benefits at low up-front costs. Bailouts would allow states to dodge hard questions about the viability of excessively generous public pensions.
Illinois state senate president Don Harmon (D.) over the weekend sent a letter to the state's congressional delegation asking for $10 billion for the state's chronically underfunded public pension system. On Tuesday, New Jersey state senate president Stephen Sweeney (D.) expanded on Illinois's request, asking for $500 billion in federal loans to buckling state pensions across the nation. The National Governors Association has called for $500 billion for fiscal relief generally, some of which would undoubtedly go to state pensions.
More:
https://freebeacon.com/policy/states-made-risky-bets-with-pensions-before-coronavirus-now-they-want-a-bailout/
