US House committee hearing takes aim at public sector pensions

[Stalin]

"A subcommittee of the US House Committee on Oversight & Government Reform held a hearing February 9 to prepare the way for attacks on the pension benefits of millions of state and municipal workers across the United States.

The hearing, titled “State and Municipal Debt: the Coming Crisis?” was held the same day as the introduction of a bill by Rep. Devin Nunes, Republican of California, to prohibit bailouts of states by the federal government.

The House’s Subcommittee on TARP (Troubled Asset Relief Program), Financial Services & Bailouts of Public and Private Programs questioned a panel of four experts about the potential effects on bond markets of state bankruptcies. But during the first hour of testimony the committee focused its attention on unfunded liabilities in the pension plans of millions of teachers, firefighters, transportation workers and other public employees.

The problem of state budget deficits—estimated to total between $125 billion and $140 billion and exacerbated by the ongoing economic crisis—is very real (See “US state budget deficits could top $140 billion”). However, in his opening remarks to the subcommittee, Chairman Patrick McHenry (Republican, North Carolina) ruled out any new revenues for states and blamed the problem on a “fiscal straitjacket caused primarily by … lucrative public sector union pension and health care benefits.”

These benefits, according to McHenry, will cause people to realize “in the end … that their government has actively hurt them.” This statement ignores the obvious: public sector workers and their hard-won benefits are being been demonized while Wall Street has received untold billions in bailouts from the federal government.

Testimony before the subcommittee established that, depending on the rate of return of invested pension assets, the average percentage of state and municipal budgets devoted to pensions is between 3.8 and 5 percent. To McHenry, this allocation of resources to a basic social right constitutes “reckless spending.”

http://www.wsws.org/articles/2011/feb2011/stat-f15.shtml

see also "US state budget deficits could top $140 billion" http://www.wsws.org/articles/2011/jan2011/stat-j24.shtml

Comrade Stalin

 

[Dr.Who]

It would be absolutely true, as the article indicated, that the state budgets have been hurt by the state's promises of too much money to state employees (in the form of generous pay and generous pensions). But the compensation those employees earned was negotiated, agreed upon, and contracted. Those employees did their part to live up to the contract by working the hours, now the states need to be obligated to pay that promised compensation.

What the states need to do next is renegotiate the contracts so that they will pay compensation from this moment forward that is more equitable with the job performed.

Instead what I fear they will do is try to reclaim some of the already promised money in violation of their contracts.

Can anyone doubt that there are numerous other places in a state's budget where large cuts can be made? It is just that the people who are getting the money don't want to lose it. Cuts hurt. They hurt in my budget too. But I have no choice. When I need to make cuts I have had to jettison all luxuries and have had to discover that many things I thought were needs were in fact luxuries. The states will have to do the same.

Presently many people pay large sums of money to Washington which uses some of it then turns around and sends some of it back to the states.
One thing states could do would be to assist their citizens to reduce the amount of money they have to send to Washington. Then the people would have more money to pay state income taxes and with less waste too.

Yes the article is right...their government has actively hurt the people. State representatives are suppose to represent the people of the state. Agreeing to make the people of the state send more of their money to Washington is not in the best interest of the people. People in states need to keep their own money to be used in part to make their own states run well.

The article is also right that bailouts to Wall Street did not help the people of the states. But let us not forget that the bailouts were the result of Washington spending the money that was taken from the people of the various states.

 

[dogtowner]

What needs to happen is for the states to go bankrupt and disolve these onerous pensions completely and tell the employees what they'll get instead. Exactly what should have been allowed to happen with GM and Chrysler if the president has not usurped his COnstitutional authority and seized those measnf of producton.

 

[Dr.Who]

What needs to happen is for the states to go bankrupt and disolve these onerous pensions completely and tell the employees what they'll get instead. Exactly what should have been allowed to happen with GM and Chrysler if the president has not usurped his COnstitutional authority and seized those measnf of producton.

Had the companies gone bankrupt the laws of bankruptcy would have determined in what order the various people who were owed money got paid. I am not sure but I think the pensions are pretty high on the list and they would have gotten paid. In fact, I think the pensions are funded before companies even go bankrupt so the money had already been paid.

Yes, the US gov should not be owning private businesses.

The states own plenty of money to unions (and others) and if they go bankrupt someone would have to decide who gets paid and who does not. But I would remind you that the state promised the money and contracted to pay it. If it was too much they should have never agreed to pay it in the first place rather than trying to go back after the fact to get some of it back. There are individuals who have planned their financial future based on the compensation they were paid, if the state takes it back they will suffer.

But there is no need for the states to take back money they promised to employees as compensation. There are plenty of relatively useless things in the budget that could be cut.

 

[BigRob]

The law will have to be changed to allow states to declare bankruptcy. Currently they cannot do so as I understand it. I am not sure there are the available votes for such a change.

 

[Stalin]

What needs to happen is for the states to go bankrupt and disolve these onerous pensions completely and tell the employees what they'll get instead. Exactly what should have been allowed to happen with GM and Chrysler if the president has not usurped his COnstitutional authority and seized those measnf of producton.

...er..are not both GM and Chrysler now doing rather well ?

This from nearly a year ago

"...The Obama Administration issued a report today entitled A Look Back at GM, Chrysler and the American Auto Industry. Actually, it is a short look back through the last tumultuous twelve months, to announce the unexpectedly rapid progress that General Motors and Chrysler are making toward repayment of their federal bailout money. "GM’s early repayment of its $6.7 billion loan leaves the remaining U.S. government stake in the company at $2.1 billion in preferred stock and 60.8% of the common equity," the notice reports. And, while the announcement does not say Chrysler has fully repaid its government loan, the news that “Chrysler Financial has already fully repaid (with interest) the $1.5 billion TARP loan that it received to support auto financing” is encouraging.You can read the entire report here. While Chrysler's relatively rosy outlook and General Motors' early repayment of billions will come as good news to taxpayers, their corporate success is small comfort to consumers whose warranty rights were trampled in the messy restructuring of both companies. The car buying public remains cautious. Like the manufacturers themselves, consumers are eager to pay off debts before going on a spending spree. Whether these icons of American industry will recover market share once pent-up demand spills over and credit eases will depend on whether improvement in vehicle safety and design follows the companies' financial improvement.

http://www.lemonlaws.com/2010/04/general_motors_and_chrysler_re_1.html

Comrade Stalin

 

[Gipper]

...er..are not both GM and Chrysler now doing rather well ?

This from nearly a year ago

"...The Obama Administration issued a report today entitled A Look Back at GM, Chrysler and the American Auto Industry. Actually, it is a short look back through the last tumultuous twelve months, to announce the unexpectedly rapid progress that General Motors and Chrysler are making toward repayment of their federal bailout money. "GM’s early repayment of its $6.7 billion loan leaves the remaining U.S. government stake in the company at $2.1 billion in preferred stock and 60.8% of the common equity," the notice reports. And, while the announcement does not say Chrysler has fully repaid its government loan, the news that “Chrysler Financial has already fully repaid (with interest) the $1.5 billion TARP loan that it received to support auto financing” is encouraging.You can read the entire report here. While Chrysler's relatively rosy outlook and General Motors' early repayment of billions will come as good news to taxpayers, their corporate success is small comfort to consumers whose warranty rights were trampled in the messy restructuring of both companies. The car buying public remains cautious. Like the manufacturers themselves, consumers are eager to pay off debts before going on a spending spree. Whether these icons of American industry will recover market share once pent-up demand spills over and credit eases will depend on whether improvement in vehicle safety and design follows the companies' financial improvement.

http://www.lemonlaws.com/2010/04/general_motors_and_chrysler_re_1.html

Comrade Stalin

The ends justify the means...right killer commie?

 

[Dr.Who]

...er..are not both GM and Chrysler now doing rather well ?

This from nearly a year ago

"...The Obama Administration issued a report today entitled A Look Back at GM, Chrysler and the American Auto Industry. Actually, it is a short look back through the last tumultuous twelve months, to announce the unexpectedly rapid progress that General Motors and Chrysler are making toward repayment of their federal bailout money. "GM’s early repayment of its $6.7 billion loan leaves the remaining U.S. government stake in the company at $2.1 billion in preferred stock and 60.8% of the common equity," the notice reports. And, while the announcement does not say Chrysler has fully repaid its government loan, the news that “Chrysler Financial has already fully repaid (with interest) the $1.5 billion TARP loan that it received to support auto financing” is encouraging.You can read the entire report here. While Chrysler's relatively rosy outlook and General Motors' early repayment of billions will come as good news to taxpayers, their corporate success is small comfort to consumers whose warranty rights were trampled in the messy restructuring of both companies. The car buying public remains cautious. Like the manufacturers themselves, consumers are eager to pay off debts before going on a spending spree. Whether these icons of American industry will recover market share once pent-up demand spills over and credit eases will depend on whether improvement in vehicle safety and design follows the companies' financial improvement.

http://www.lemonlaws.com/2010/04/general_motors_and_chrysler_re_1.html

Comrade Stalin

Is that the article that reported that GM had paid back the loan only later we discovered that they had paid back the loan by taking out another one?

 

[dogtowner]

The law will have to be changed to allow states to declare bankruptcy. Currently they cannot do so as I understand it. I am not sure there are the available votes for such a change.

yes and legislati9on to that end is in the pipeline.

 

[dogtowner]

Had the companies gone bankrupt the laws of bankruptcy would have determined in what order the various people who were owed money got paid. I am not sure but I think the pensions are pretty high on the list and they would have gotten paid. In fact, I think the pensions are funded before companies even go bankrupt so the money had already been paid.

Yes, the US gov should not be owning private businesses.

The states own plenty of money to unions (and others) and if they go bankrupt someone would have to decide who gets paid and who does not. But I would remind you that the state promised the money and contracted to pay it. If it was too much they should have never agreed to pay it in the first place rather than trying to go back after the fact to get some of it back. There are individuals who have planned their financial future based on the compensation they were paid, if the state takes it back they will suffer.

But there is no need for the states to take back money they promised to employees as compensation. There are plenty of relatively useless things in the budget that could be cut.

The plus is that ongoing payments would cease but as the states and Government Motors pension plans were uinderfunded, a huge burden would get massively reduced. Its far worse with the states whiuch are vastly underfunded as those states have been robbing them to cover deficit spending for years and years.

Instead the Chinese bailed out GM & CHR and our grandkids get the tab. Nice huh ?

 

[dogtowner]

Is that the article that reported that GM had paid back the loan only later we discovered that they had paid back the loan by taking out another one?

and don't forget the numerous other perks given GM by the government artificially inflating their bottom line. I'd steer clear of GM stock.

 

[Dr.Who]

The plus is that ongoing payments would cease but as the states and Government Motors pension plans were uinderfunded, a huge burden would get massively reduced. Its far worse with the states whiuch are vastly underfunded as those states have been robbing them to cover deficit spending for years and years.

Instead the Chinese bailed out GM & CHR and our grandkids get the tab. Nice huh ?

If we own the bonds we are not stuck with the tab but we get to collect the interest that those bonds earn.

If the Chinese own our debt then they have a degree of control over us.

 

[Stalin]

The ends justify the means...

No doubt you would have preferred the financial system collapse to prove the superiority of the "free" market.

This is a principle the egregious Reagan knew all too well.

"...In 1985, while Iran and Iraq were at war, Iran made a secret request to buy weapons from the United States. McFarlane sought Reagan's approval, in spite of the embargo against selling arms to Iran. McFarlane explained that the sale of arms would not only improve U.S. relations with Iran, but might in turn lead to improved relations with Lebanon, increasing U.S. influence in the troubled Middle East. Reagan was driven by a different obsession. He had become frustrated at his inability to secure the release of the seven American hostages being held by Iranian terrorists in Lebanon. As president, Reagan felt that "he had the duty to bring those Americans home," and he convinced himself that he was not negotiating with terrorists. While shipping arms to Iran violated the embargo, dealing with terrorists violated Reagan's campaign promise never to do so. Reagan had always been admired for his honesty.

The arms-for-hostages proposal divided the administration. Longtime policy adversaries Secretary of Defense Caspar Weinberger and Secretary of State George Shultz opposed the deal, but Reagan, McFarlane and CIA director William Casey supported it. With the backing of the president, the plan progressed. By the time the sales were discovered, more than 1,500 missiles had been shipped to Iran. Three hostages had been released, only to be replaced with three more, in what Secretary of State George Shultz called "a hostage bazaar."

When the Lebanese newspaper "Al-Shiraa" printed an exposé on the clandestine activities in November 1986, Reagan went on television and vehemently denied that any such operation had occurred. He retracted the statement a week later, insisting that the sale of weapons had not been an arms-for-hostages deal. Despite the fact that Reagan defended the actions by virtue of their good intentions, his honesty was doubted. Polls showed that only 14 percent of Americans believed the president when he said he had not traded arms for hostages.

http://www.pbs.org/wgbh/americanexperience/features/general-article/reagan-iran/

Selling arms to ..er..terrorists. I'm shocked

Comrade Ronald Stalin

 

[Rick]

Reagan was motivated simply by compassion for the hostages.

So shoot him at sunrise for that terrible crime.

 

[Stalin]

Reagan was motivated simply by compassion for the hostages.

So shoot him at sunrise for that terrible crime.

Well bush family friend john hinkley tried that, but like most things associated with the worst family in the world, failed.

George Senior has to wait another term and a half to prove that it was possible to be a worst president than the arch-terrorist Reagan.

Difficult, but he managed it. Remember when he threw up into the lap of the Japanese politican at a dinner.

Classic

Anyway, your logical fallacy is as usual, irrelevant ( does "ënds justifies the means" create any resonance ) and you did not answer my question or provide examples ( remember the topic )

Comrade Stalin