• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Morning Bell: Stop the State Bailouts Before They Start

    Hamtramck, Michigan, is running out of money. City Manager William Cooper tells The New York Times: “We can make it until March 1—maybe.” And Hamtramck is not alone. According to the Times, 15 municipalities have pursued bankruptcy in the past two years. And if the economy does not improve revenues, many other local governments will be in the same boat.

    Many of these cities, like Hamtramck, have already cut spending on parks, senior centers, and road maintenance. But there is one area they can’t cut: salaries, benefits, and pensions of government workers. According to the Times, 60 percent of Hamtramck’s general fund goes to paying 75 current police officers and firefighters and about 240 worker and spouse pensions. “They kind of have the Cadillac plan,” Cooper tells the Times, “and we’d kind of like the Chevy.”

    Reforming how police and fire workers are paid is an uphill climb politically, but polling shows that once voters are educated, they are open to change. A recent poll by the Florida League of Cities on Police and Fire Benefits found that, initially, most respondents did believe police and fire benefits were “about right” or “too low.” But when told that police officers and firefighters can retire after 20 years of service and receive 80 percent of their salaries for the rest of their lives, 66 percent of respondents strongly opposed this policy. And when asked if they knew that the retirement pay for an average police officer was over $70,000 per year, 71 percent said that was too high.

    The cumulative result of these pensions and benefit promises is staggering. A recent study by Robert Novy-Marx of the University of Rochester and Joshua Rauh of Northwestern University found that major pension plans for city workers have a combined estimated under-funding of $574 billion. Heritage Foundation scholar David John details: “For instance, Chicago has only about $22 billion in pension assets to pay for $66 billion in pension promises to its city workers, while New York City has $93 billion available to pay $215 billion in city pension promises, and Boston has only $3.5 billion available to pay $11 billion in promises. That means that every household in Chicago has a liability of about $42,000 just to pay pensions to city workers, while each household in New York City owes $39,000, and each in Boston owes about $31,000.”

    The problem is even worse at the state level. An earlier Novy-Marx and Rauh study of the 116 major pension plans sponsored by the 50 states found these plans had assets of about $1.8 trillion to pay pension promises of between $3.6 trillion and $5.2 trillion. This leaves a gap of between $1.8 trillion and $3.4 trillion. Unsustainable public employee compensation is a major reason why large states like California, Illinois, and New York are teetering on the brink of insolvency.

    Cities like Hamtramck may eventually be able to escape their government union contracts through bankruptcy. But that road is very difficult. About half the states have laws that allow for municipal bankruptcy filings. But many set limits, including Michigan, which appears ready to force Hamtramck to borrow money from an emergency loan board before it can file for bankruptcy. But what happens when the states run out of money bailing out their local governments? States currently do not have the ability to file for bankruptcy. So what will they do?

    California already came to Washington asking for an $8 billion bailout last year. The spendthrift 111th Congress said no. At a bare minimum the 112th Congress should hold the line and refuse to bailout any state government. Instead, Congress should consider a way for states to file for bankruptcy or its fiscal equivalent. While such a law would raise some serious federalism issues, as long as states are allowed to enter into bankruptcy voluntary, it could be constitutionally acceptable. But David John warns:

    “Such a process should not be part of a deal under which states can also receive a federal bailout. State and local governments made the mess of their finances, and they should have to clean them up. Congress should provide a mechanism to make the process more direct, giving the states the flexibility to address their fiscal problems consistent with federalism and the principles of limited constitutional government.”

    Quick Hits:

    • According to CNN, six in 10 Americans oppose Obamacare’s mandate that all individuals must buy government-approved health insurance.
    • An early feature of Obamacare that allows people who are already sick to get insurance to cover their medical costs isn’t attracting many customers.
    • Ninety-eight American banks that received $4.2 billion in TARP bailout money are teetering on the edge of collapse.
    • The Obama Administration may replace the board of directors for nearly 20 TARP-bailed-out banks that have repeatedly failed to pay the required dividends.
    • The former president of Shell Oil, John Hofmeister, says Americans could be paying $5 for a gallon of gasoline by 2012.
    Posted in Ongoing Priorities [slideshow_deploy]

    83 Responses to Morning Bell: Stop the State Bailouts Before They Start

    1. George Colgrove, VA says:

      "At a bare minimum the 112th Congress should hold the line and refuse to bailout any state government. Instead, Congress should consider a way for states to file for bankruptcy or its fiscal equivalent."

      Not only that – I think we will need to start figuring out how the US Federal Government can start bankruptcy. They have mismanaged finances, hired too many people, took on too many unconstitutional tasks, and broke the American trust. Too many people are making large sums of money off the taxpayers back.

      Instead of fixing the overspending and corruption in the state governments, they have far too much on their hands to clean up the overspending and corruption in DC.

    2. Ken Jarvis - Las Veg says:

      This is SO EASY

      Give the Rich what they want,

      and FORCE the rest us to take the


    3. John Tyson says:

      ABSOLUTELY agree. Washington state, in which I leave, has a deep spending addiction. In this state we have a guru of anti-spending and taxing initiatives and the results of the last election were that the legislature and pink guv have their hands pretty much tied with respect to raising taxes. I know the jerk governor has already been to see Obama but I expect and DEMAND that the new house lets the states fend for themselves.

      And I am a state employee, no less

    4. John Best says:

      Federal bailouts to the states are like giving crack to the crack heads. Time to say NO!

    5. geo milo california says:

      These are typical half-witted explanations done by 20 and 30 yr olds who read satistics and pour them out like syrup on panckes..If your a college educated person who has worked 35 years in a manger position in government should'nt you have 70,000 a year. If your a cop that risked your life every working day is 70,000 a year to much. Uniformed republicians as misguided as uninformed democrats are following Obama…More is less ,we are all being payed to much, we need to all make less and get less health care and less housing and less everything so that we can spend trillions on global warming while the rest of the world ignores us and laughs at our demise, blame the government worker for the collapse of America, its such an easy target, for fools and sour-grapers to use….

    6. Marilynn, Texas says:

      I keep reading and hearing about "unsustainable public employee" pension plans. My pension comes from one of those under scrutiny, yet that pension plan keeps sending out information (in print and online) that its current market value is $222.1 billion (as of 12/24). My pension is not huge, but between it and my own investments, I'm fine for now. I made more money when I was working, but I knew that before retiring. What I'd really like to see is a non-connected third party run some kind of audit and let the already-retired people know if they should prepare for a financial cataclysm.

    7. John , Morris Plains says:

      States and Municipalities are trapped and have no way of ever honoring these pension obligations. In NJ, the state pensions are so underfunded it is laughable. The pension is suppose to yield a 8.5% return per annum but has been averaging 3% for a few years now with no chance of increasing it's return with interest rates so low.

      The solution in my opinion is to borrow more money at these incredible low interest rates and pre-pay the pensions. Let the pensioners earn 8.5% somewhere themselves. The states need to get out of this business. For example, a police officer that works 20 years and gets 80% salary and benefits is unsustainable. Why not give him a lump sum now and let him invest it. So a police officer who retires at 50 and lives until 80 can expect $3.5m from the state in pension payments. So why not give him a $250k at 50 into his 401k and let him invest it. Meanwhile the states must ban all pensions and only allow 401ks otherwise a prepayment won't work.

      The pols and unions better come together on this or nobody will like the inevitable.

    8. geo milo 154 moffet says:

      These are typical half-witted explanations done by 20 and 30 yr olds who read satistics and pour them out like syrup on panckes..If your a college educated person who has worked 35 years in a manger position in government should’nt you have 70,000 a year. If your a cop that risked your life every working day is 70,000 a year to much. Uniformed republicians as misguided as uninformed democrats are following Obama…More is less ,we are all being payed to much, we need to all make less and get less health care and less housing and less everything so that we can spend trillions on global warming while the rest of the world ignores us and laughs at our demise, blame the government worker for the collapse of America, its such an easy target, for fools and sour-grapers to use….

    9. Rachel, Pasco, WA says:

      This article forgets to tell how tiring and mentally and emotionally difficult the job of a police officer or fireman is. Most quit before 20 years. Those that do not, often either are killed before that time or deserve every penny. Many lose their family, because the job is too draining on their wives. We put so much into paying for the inmates, yet so little into paying those who are working to keep us safe, the good officers and firemen. Have you seen what each state pays for the lawsuits the inmates file and their medical expenses? Did you know Metro has the same benefits. After driving a bus for 30 years, they retire with $60,000 a year paid to them and full health benefits. I will bet it is the same in the East Coast for bus drivers. We should not be cutting teachers, police, school, and the healthy sort of things. We should cut the arts and have it private funded. We should make college a private funded item. Did you all know that our Representatives are also paid their salaries forever. I was told that some of them make more than the president. Why should they get paid the rest of their life $115,000 a year and a police officer not get paid $60,000 a year? Which one is risking their life for you and me? I am not a police officer or fireman. I am standing up for them just as I would stand up for our military soldiers. Cut the money to big business, not individual hard-working people risking their life for you and me.

    10. Linda - USA says:

      We can't afford all this stuff. The piper has come calling. And not just here, but in Europe as well. Look at the violent response of young people who are told the golden goose has quit laying. It's a huge mess. We don't have the money to continue to afford it — never did, should never have gone down that path. Plus, we do not have a populace with the appropriate mentality to understand the issues and deal with them like adults. Socialism is a very immature system. Breeds dependency and immaturity.

    11. rayray, Houston says:

      Firefighters retire at 20 years of service (or 30, if there's a deferred retirement option). Firefighters lives are reduced about 7 years, and those in a few years in active stations have accumulated injuries. It's not the only job that tears up the body, but how many people want a bunch of 60 year old firemen working? Think about this.

    12. Donna Ledford, India says:

      I live in Indiana, which is one of only a few States that currently has a balanced budget. Why should the citizens of Indiana have to bail out other states that have local governments with over spending problems ?? Mitch Daniels and our State Treasurer have done wonders with the budget for Indiana and now there is a surplus. I believe Mitch Daniels decertified the local government unions and stopped the citizen hostage taking by the unions. Great Move !!

      It is unethical for any government employee to make more than their public sector counterpart in salary or benefits and then be allowed to retire before 65. They work for us and should be following the same rules and guidelines as the general public.

      I have worked full-time for over 40 years and I'm in my late 50s making approx $50,000 a year while my government counterpart makes $120,000 a year. Does anyone see any justice – social or equal- to this situation ??

    13. Lynn Rosen says:

      We have the same problem in our little community. It is a rural suburb of Pittsburgh with NO business base, 90+% middle to lower end residential. There are 20+ officers, EACH with his/her own cruiser. We have bicycle, motorcycle, and canine teams. It is ridiculous for this small community, but people are afraid to speak out. Who wants to be on the wrong side of the police? Why do these govt. employees, teachers, police, township, feel they are entitled to lifetime benefits when the citizens who pay their wages don't get anything near equal these packages? Who promised all this and WHY can't it be UN-promised now that it is economically unsustainable?

    14. Mary............WI says:

      In WI our new republican gov. Scott Walker, turned down the high speed rail money so Wisconsinites won't have to pay that back to the federal government nor will we have to pay for the upkeep for a rail system majority of WI residents didn't want. Gov Walker is also talking about, I believe the word is, discredit the state labor unions. Hopefully he cuts back on the amount of funding being given to the Univ of WI every year along with the other school systems. The rest of us are having to do without allot of items and these organizations must be made to do without too until we all get back on solid ground.

      Why should the rest of the states that are not in such bad shape financially have to fork over money to bail them out…..they will only continue mismanaging their finances because they know there's more where that came from. Same applies to the Obamacare nightmare!

      When the federal government starts bailing out states it is the end of our democracy….I think we're fast approaching that point…don't you?

    15. James, Houston, TX says:

      Prior to entering the USAF in early 1968 I first took a position with the Federal Civil Service in Oklahoma City, OK. In those days the draft was in high gear sending every new graduate to Viet Nam as soon as they took off the cap and gown. I managed to forestall that in lieu of my pledge to accept my appointment to Officer Training School beginning in January, 1968.

      During my brief position at Tinker AFB I saw first hand the government worker culture. Nothing has changed since then except it has gotten much worse. Low to zero productivity by the majority of workers while less than 10% really worked to complete projects. Theft and fraud were common in all things while the few of us who honored our positions worked to overcome this culture and make the system produce. Only in fields where errors resulted in life threatening failures did the system do a proper job and even there some slackers or worse escaped making meaningful contributions. I was ashamed to be associated with a government job. Nothing has happened to change my mind.

    16. Marie Strick, Furman says:

      I know this article is about local public employees, but it has to start at the top. Look at retirement for our Congress–outrageous!!! We are already so much in debt with the spending but the retirement and perks are out of sight for the remainder of their lifetime. Enough already.

    17. Brian says:

      It is worth repeatedly reminding people the reason for the problems in government are the taxpayer born costs of government.

      The escalating elements of our cost of living in all its manifestations are at some point rooted in the cost of government.

      The irresponsible capitulation to union demands have put us all at risk.

      The right to work model should be extended to all states and especially in government.

      People have a right to organize and form unions.

      People however do not have a right to jeopardize the operation of government, or any productive enterprise, in the name of enhancing the financial or political standing of what are essentially expendable organizations.

    18. christine says:

      It,s sad that we always blame cops & firefighters when there are so many other govt workers stuffed in cubicals & money wasting jobs everywhere. For example, recently one day after a tax hike in Oregon, I followed one of the many govt plated vans to a crappy part of town. I asked the driver what he did, after he parked next to two other huge govt vans. He said he drove one mentally handicapped guy around so that he could clean halfway_houses. Really?

    19. R Holland, Chandler, says:

      Is it time to let cites, counties and states go bankrupt? I believe that there should not be a "to big to fail" attitude for such public or private entities. Have these institutions file for bankruptcy and be turned over to a bankruptcy court that has the authority to cancel contracts, change retirements qualifications and tax structure authority. It's apparent that the politicians can't do their job.

      All governmental retirement should be converted to private 401k type programs with retirement ages raised to 65. No more government pension double dipping.

    20. James Horn, Menifee, says:

      Waaayyy back in 1983, the USG dodged the bullet regarding pension liabilities. Civil Service retirement was put onto a sunset plan. All new employees were put into investment pension plans where the USG matched up to 10% of salaries in investments.

      States and municipalities have had twenty-seven years to emulate the USG and failed to do so. Now, they are whining about their self-imposed problems. They must be forced to deal with this and not dump it onto the taxpayers.

      One example: On a regular basis, I see retired firemen and cops who retired on disability [usually with "bad backs"] with 110% of their pensions (paid by taxpayers), who are active construction workers and contractors — jobs that require physical strength, endurance, and flexibility. Is this abusive?

      Municipalities and states MUST be compelled to deal with their own self imposed problems.

    21. L Frank Morgan, Newh says:

      I believe a peaceful breakup of the nation by secessions under the constitution is the only truly constructive way forward —-central government must essentially die economically for the States to have a chance on their own! A major stip of states from Florida to Washington with Denver as a New Capital for example makes good sense for me –if we can thus avoid a shooting civil war—which I beleive is where we get to within a decade per how we are headed now

    22. Doug Whaley, Lake Ha says:

      Any congressman who votes to bail out states in fiscal trouble should be targeted to be replaced. This should be a well known agenda item in the Republican Party so congressman or woman knows it. The party should actively seek candidates to run against anyone willing to vote for a bailout. It was very obvious there are still some Republican senators who need to be replaced by their votes in the lame duck session. I would include in this group all of the senators who voted for the START Treaty.

    23. David Bowdre Califor says:

      I am forever amazed at how dificult common sense is in government.

    24. Fred Lehrer, Jupiter says:

      A tempting path, but a most destructive one, will be for the Federal government to guarantee state or municipal debt. That would probably be done without legal authority, no hinderance to this gang. Moral Hazard, anyone?

    25. gerald skey, princet says:

      I have a simple question. Who, in their right minds, would agree to permit retirement at any time with 80% of one's earned income? Everyone even vaguely interested in this subject has their own stories to tell, but the notion of people retiring at 50 years old and then collecting some atronomical amount of their salaries for the rest of their lives is – not "seems" – insane. I only wish I knew more about the options – which seem limited – available to get out of this hole. We have already seen California issue what amount to promissory notes insteead of checks to pay its obligations and I am dead certain that the 8th largest economy in the world (California) is nowhere near solvency at this time.

    26. Jim Dunlap, Yeringto says:

      The states and local municipalities should understand that Congress is allowed to use money in the national treasury only for the purposes outlined in Article I, Section 8 of the Constitution. No money is to be spent on individual or local needs, only for the national welfare.

      If Congress understood that every time they vote for bailouts that they are violating their oath of office and could be tried for malfeasance of office,Then they might read and understand the Constitution while serving prison time.

    27. LibertyAtStake, Alex says:

      I'm sorry, but no service accrues the right to bankrupt the entire society. The police and fire fighter unions are going to have to come to grips with this fact, or find themselves on the wrong side of Liberty vs. Tyranny USA 2011.

      "Because the Only Good Progressive is a Failed Progressive"

    28. Franz Schmidt, Flore says:

      If enabling state bankruptcy procedures raises "some serious federalism issues", what does the alternative of not allowing state bankruptcy do? Bailouts of state governments by the federal government would seem to me to be confiscating money from states with more conservative fiscal policies and giving it to states to reward, subsidize, sustain, and/or perpetuate their non-sustainable policies at the expense of other states. This redistribution of wealth would seem to reward fiscally irresponsible behavior and require states to support laws and policies of other states that they didn't or wouldn't enact in their own states. Which path causes the more troubling federalism issues–bankruptcy or bailouts?

    29. Hogs at the troth says:

      Bankrupting states just as they bankrupted GM. Get a clue guys…. Kick the unions out and take the problem on like a large corporation. Right-to-work is better than forced unionism.

    30. Jack W, Clearwater, says:

      Police Work and Firefighting are young folks' professions. You can't run into burning buildings or chase kids through back yards 'till your 65. Rather than lose this vital tool, (the 20 year person), for maintaing a younger viable force, we need to reform how pensions are computed.

      Many police and firefighters are allowed to pad their pensions with excessive overtime, accumulated sick pay etc. Their 50% retirement becomes 100% percent or greater. Some Firefighters "buy time." They will work overtime shifts for other members and give them the money, just to pad their own pensions. Cops in my old agency work OT at the airport, (paid by Homeland Security), and routinely pad their "legitimate" pension by 25%-75%.

      You cannot blame employees for taking what's legally available, but if we can't afford it, we need to shut off the money tap.

    31. Bill, NY says:

      Hamtramck… The canary in the coal mine.

      What's really disturbing about all this is that we have an electorate that habitually allows itself to be seduced by the idea that somehow, magically, government is able to defy the laws of economics that govern their own lives, and routinely vote in liars and fools who offer them the seductive ignorance they desire. They are unmoved by the prospect that their own children will be forced to pay for their greedy excesses.

      Our benighted piggish neighbors behave like someone who buys a $3000 HDTV off the back of a truck for $500, conveniently ignoring the obvious probability that through his purchase, he is fueling grand larceny, maybe hijacking, and perhaps even murder.

      "Stolen! Naw! Really?! I thought he just liked me!"

    32. Richard Weter, Sprin says:

      I read your daily bulletin today, December 28, 2010, and it would seem that you have switched sides. While you previously came down on the left for not supporting senior citizens it appears it is ok to dump on them if they are retired government workers specifically police officers. It would appear you support this idea simply because they are members of some union. To start with police officers may have what can be described as a union but it really isn’t because they can’t strike or take any real actions to force their government employer to support them.

      I would certainly be interested in knowing just where this average police retiree gets $70,000.00 at. Maybe I can rejoin. After 25 years I receive a little over 27,000.00 per year and taxes drops that to about 19,000.00. Try living on that! To top it off we just fought a very expensive law suit to keep them from cutting that meager amount. In addition I am not eligible to draw social security. My wife died in a car wreck and I can’t draw on her social security because, guess what, I am a retired government employee.

      Senior citizens are still senior citizens no matter where they worked. In this column today you took a very big step to the left.

    33. r anres dallas says:

      sooner or later, the piper must be paid, or in this case, reduced pay.

      it is the same olde story ou unionism, strike a deal and pass it on to the consumer.

      the chickens are coming home, but there is no feed left for them.

    34. Roger / Clarence, NY says:

      Our police and firefighters are worth what they receive because they have put the public safety ahead of their own. On the other hand, it is the Politicians on every level that are the bloodsuckers in our society. Their retirement system has nothing to do with serving the public and everything to do with feathering their own nests.

    35. Norm CT says:

      Obviously our city, state and federal unions need a reality check. But let's not forget our government keeps expanding the power of unions so they get their votes. Why would anyone be surprised at the results. It's time to level the playing field. They should have 401k programs like the private sector. That said, unlike other government employees, we ask police and firemen to put their lives on the line for us so they should be paid accordingly. Oh don't forget our over paid legislators. They had the power so they gave themselves great medical, retirement etc. They serve a few terms and behold, they end up rich.

    36. Sammy King Kentucky says:

      Twenty years of what a cop or firefighter has to do and put up with they should retire with 100% as far as I am concerned. Seems funny to me that now that the cities have lived high on the hog they want to start whinning about retirement pay. How many of ya' reading this article would do a cops job or a firemans job? Find the money somewhere else, but, leave the police officers and firemens retirements alone!

    37. john arizona says:

      Is there any doubt that the unions across the board are choking the country, and they don't seem to care. From the union's standpoint, they've got it, and any cost should be paid by the taxpayer.

      Maybe the federal government will stand up to the union bosses. (Don't bet on it!)

    38. Stan Burnette, Prair says:

      I was told recently that the FEDS are slipping California about $400 million/month to keep them afloat. Any word on this?

    39. Dennis Georgia says:

      I will be willing to bet that most if not all of these cities and states have police and fire unions, as well as employee unions for the workers. These unionms have pushed for higher salaries, greater benefits and better retirement. The politicans have given in to the unions in an effort to retain their power and controll over the people. Votes were the all i9mportant thingn to them, the unions represented these votes, higher salaries and benefits bought these votes. Unions have no place in governments, being as they are the downfall of these governments. Throw the unions out, pay a fair wage for a fair days work, provide fair benefits and pension, stop loading the backs of the tax payer. I am a law enforcement officer and have been for the last 37 years, no I do not belong to a union and knew I would never get rich in this job.

    40. TaterSalad says:

      No more bailouts! Let the system cleanse itself from bad management and Union control over legacy costs ebeing placed on the taxpayers! Enough is enough……….with greed!

    41. Hal Thomas says:

      The federal government should be taking steps to bring Washington compensation in line with private business.

      Pay and benefit cuts should be in the plan for our Federal Government.

      We no longer need the large number of Representatives to serve the States. I imagine it would take a Constitutional Amendment to change this. Now one TV appearance covers the entire State, and that would save a huge amount of money.

    42. Robert D. Boyd, Hayd says:

      As A Captain for PSA/USAirways no one said anything when USAiways canceled the Pilot's pensions leaving pilots with 1/3 of their pensions paid by the PBGC. It worked so well, that United, Delta, Northwest and others jumped on the bandwagon. This took place while CEOs and top managers took tens of millions for themselves. I personally know California police and fire fighters who are making over $100,000 a year. They can save up their sick time and vacation time, add that to their last months pay and have their pension based on that amount. Incredible! And they want the rest of America to bail them out?

    43. Judith in Michigan says:

      Let's all give public employee unions a rousing cheer. They have about 7 1/2 million members out of a US population of 330 million, but these unions are forcing America to it's knees and are driving bankruptcies across the country.

      The union leaders have promised pie-in-rhe-sky benefits to the rank and file in order to gain control and the workers' dues. With that kind of money and power, these corrupt officials can call the tune on any rules they wish. Push any agenda they want for their own personal benefit. They (and private sector unions) are a huge part of the financial straits this country is in.

      Another terrorist attack here isn't needed to bring America down. These corrupt unions are doing the job quite nicely.

    44. Gail Jones, New Mexi says:

      What lots of folks don't realize that the most current statistic states that a cop's life expectancy is 59 years. It's not only dangerous but the life style is harsh, bad hours, irregular meals and lots of stress. Firefighters the same. Both jobs are jobs for young men which is why they retire at such an early age. This isn't a secretarial position. I really don't think that a citizen wants a 71 year old cop trying to save them from a mugger. This is why states and municipalities set up pensions for public safety in this manner. They might receive 80% of their highest three years but they also paid into their fund at a much, much higher rate than for social security. Some departments don't participate in SS. In this age a cop in a well trained department must know federal, state, county and municipal laws as well as department policy. They are not Barney Fife. I for one want an elite force with very well qualified officers, most with college degrees and the salary should be in line with that. You get what you pay for.


      Let these states go Chapter 11. Renegotiate the outragous union

      programs, etc. Restart with a clean slate and clear head, maybe.


    46. laurie, Hawaii says:

      Mr. Jarvis, once you have stolen all the money from the "rich" (that is anyone who worked and did not squander his money), then what will you do? Print monopoly $ (or IOU's) like we are doing. What a terrific idea! Wake up and study a little math. Learn how much a trillion is! Do you have an idea how many years old you need to be to get one trillion minutes in your lifetime??? answer 19,000 years. Medicare is worthless. I have it. It is a joke. I would give it up in a heartbeat to have some sanity in our government. (I do not use it….it cost me more out of pocket at the doctor than if I pay cash to the doctor). So, it might be time for some of you lazy losers to stop calling us workers "rich" and do something useful, even take a math course. It is pathetic. You can't steal from your other pocket when it is already empty from caviar, cigartettes and private jets of our "so called leaders." These "leaders" tell you what you want to hear. Steal from the rich. Guess what! They are stealing from you every minute. and lieing about it. Wake up!!!

    47. Don H. Reuben, Ranch says:


    48. RogerC says:

      I firmly believe in the 10th Ammendment. Its up to the states and their voters to decide the value of the public service employees, teachers, firefighters, police. etc… However, the 10th Ammendment doesn't say that these states have a right to defray the costs of bad management to those of us that control their pension costs. There should NEVER be taxpayer funded employees of any kind making more salary and benefits than the average of those that pay for said salary and benefits. Use the military as a template, since we want to discuss the dangers of a career choice. They have a 20/30 year pension plan with benefits, Any one doing a similar job should be given the same consideration, not more, that the military doing the job. What is the average salary and benefits of a retiree from the military after 20 years?? Much less than those they are expected to pay taxes to support. Fix your own problems, states with the pension problem. YOU created them.

    49. Ken Kaiser, Battle G says:

      Why is it that the first target for cutting budgets is always the benefits of those in the riskiest positions. Why not million dollar bike trails, in state tuition to illegal aliens, new buildings and facilities for bureaucracies that are no longer needed or effective or duplicative, leases for automobiles for state and local executives etc. There are hundreds of places to cut. These states are not just spending money on firefighters and policeman. They are spending a great deal on programs that are not necessary or that can be deferred. The benefits for those that take risks are easy targets. Why not take the time to make meaningful cuts first, otherwise recruiting as with the services will become more and more difficult.

    50. Ross Calloway, Pensa says:

      There's no need for a bailout. There is a way out of debt for states and counties. It is done by decreasing cost, with little effort and no sacrifice required.

      The solution was on the platform of several gubernatorial candidates this last election. Best place to start decreasing cost is at the bank. One that works for the people, instead of the other way around.


    51. randydutton says:

      All public employee should get 2.5% of their base salary per year of service – just like our military.

      DECERTIFY public employee unions.

    52. David VanNorman Wind says:

      It is time to start cutting salaries and the big benefits that many in the public people get The retirement some of these people get are three to four times what private sector retires get and we pay for this.Federal and state governments should get trimmed also .

    53. Jeanne Stotler,Woodb says:

      My husband worked for METRO and it's predesessors in this area, he retired at age 60 after working 38 years, he signed for a reduced annuity so I would have an income if he died. He had a stroke shortly before retiring and a heart attack and other health issues due to diabeatis and died 4-1/2 years after retiring and when I tried to collect I got nothing. I worked hard, raised our kids and I depend on SS, I paid into it. METRO covienently lost his records and never sent him a copy either, Union says they can't help as he was Union member not me. Life is not always fair but Unions are sure making it rough on the rest of us, yes police and fire fighters earn their benefits and like those from METRO pay into the system, METRO deducted every week for ret., SS and medicare as well as Union dues and medical Ins, sure they matched some of it bur they screwed a lot of us as well.

    54. Ron Hansen, Bourbonn says:

      The only solution is the one that will be resisted mightily by the unions and thw workers that belong to them.

      1. Identify the workers that are no longer needed and fire them. (No Pension benefits till 65.)

      2. Identify all workers making more than those in the private sector for the same jobs and lower their salaries to private sector rates.

      3. Divvy up the available money in the pension funds according to years of service and start a 401K type plan for all public employees. School Teachers, Fireman, Policemen, all of them.

      4. Tell them then to retire whenever they want, but no guarantee of benefits or deluxe Health Care.

      This is the way most of America lives and the Public Sector needs to get with the program.

    55. Al from Fl says:

      The States should not be bailed out. They need to balance their budget (and not use bogus revenue projections). What level of funding is "about right" for pensions is a subjective thing but the major requirement has to be that the program is sustainable and requires that the employee pays into the system. The States need to break the unions and bring common sense back into both the pension picture and, in the case of our schools, bring education back into the school system – not PC, liberal socialism.

    56. Mark, Chicago says:

      Payed fireman tell us they have a strong desire to care for and protect others. The next minute they tell us, they must be payed top dollar (i.e., $70,000 retirement). Volunter fireman tell us they have a strong desire to care for others and want to protect us. The next minute they keep doing it without pay. Which fireman do you believe?

    57. gary smothers says:

      all of your subjects seem to be more or less in crisis or approaching crisis mode. But there is one topic of world wide significance the is being almost totally ignored "WATER". As an example the President Bush Family is buying huge tracks of land water rights in south america that sits on one of the largest water supplies in the world. The Nestle company is bust pumping the great lakes dry. Their huge pumping stations are double fences with the entrance labled as a "Sanctuary" and ca only be seen from the air. Mr. Perkins in Texas has and is buying massive amounts of land again that sits over a major water table for the U.S. Where is the water being pumped going? Asia including our friend China. If you control water you can control the world. There are no regulations for the chemicals in bottled water. Therefore the enemy could place mind controling drugs in that water to make the populace docile making war to conquer unnessary. All the states were this is going on politicans have been bought off. Retired governors and congressmen refuse to talk about the subject. In Texas Mr. Perkins (right name?) bought off all the state represenitves neccesary to have his land labled as animal sanctuarys and will pay nothing for the water he extracts at will.

    58. Gman12 says:

      I agree with Ron, just so far.

      1.. Retirement begins at 65, like the rest of us.

      2, No double dipping allowed.

      3. Allow employee to manage a percent of their retirement (6-10%) like a SEP IRA.

    59. Trevor, Horseshoe Ba says:

      What laws preclude States from filing bankruptcy? Where does the Constitution say Congress has the power to be involved? If such a law exists, it probably violates the Constitution and should be nullified by any State needing to file bankruptcy.

    60. EON59 says:

      Your examples are very good, but not all government entities gave these sweetheart deals. Many county and city workers across the country have not received these massive pay increases and golden pensions. We need to get away from generalizing. California, New York, Massachusetts, Illinois are not the only states or government bodies in the country. They may be the dumbest and scummiest, but they shouldn't be considered the only. Sometimes a shotgun approach is not appropriate. Generalizing is lazy research.

    61. Ben C. Ann Arbor, MI says:

      Ken Jarvis: again, please define "rich" so we can have a meaningful discussion. Generalizations such as yours are meaningless unless we agree on the defintions of the words. Again, Forbes has evaluated the networh of the top 400 wealthiest indivduals and found it to be 1.25 trillion dollars. Even if you taxed them 100% the revenue would be a drop in the bucket when compared to the US debt and unfunded liabilities of a hundred plus trillion dollars. It is not a matter of "taxing the rich." It is a matter of decreasing the spending. The core of the problem is that social welfare programs for which you seem to be very proud have resulted in the destruction of the family unit. Your agenda has created the problem, not helped it. Here in Ann Arbor the liberals are lamenting that the Delonis Shelter for the Homeless will not receive millions from the federal govenment. It seems that personal responsibility has evaporated and replaced by help from "big brother." Governments are broke and it is a fact you need to accept. Socialism works as long as you can use other peoples money. Today, the "other people" have had enough of your agenda.

    62. Blair Franconia, NH says:

      Now that Republicans control the House, and are almost even in the Senate, there are three chances of that happening: Slim, none, and a snowball's in hell. The state

      bailouts won't happen.

    63. Bobbie says:

      Every state suggesting a need to be bailed out, is simple admission government neglected, corrupted or intentionally mismanaged their state's budget. Hold government accountable on the basis of their actions, causing unfair burdensome effects forced on the innocent people they lead.. It would be nice if more than a few members in government of so many, had decency and dignity.

      Have them removed from their positions on the basis of their derelictions and in handcuffs as this is criminal.

    64. Brad Kelley, Severna says:

      California and New York came to Washington asking for a handout last year. But when Congress refused, O'Bama diverted funds form his failed "high-speed rail" project. I can find nothing about how this money is to be returned. Maybe it's just an extra special "Thank You" for helping O'Bama get elected.

    65. SHARON LOUGH says:

      It's not the governments job to bail out states that have no desire to be responsible for the mess they created with pension funds and other government programs. California had a chance for a new outlook for their state and they went with the same mess.

    66. Jessie Kentucky says:

      i for one dont see the problem

      print more money that seams to be the answer

      print enough to let each state have a few hundred extra bundles laying around just in case of an unplaned problem

    67. Lee-White Tanks AZ says:

      This author is "Right on the Money" no pun intended.

      A legal mechanism for the States to file bankruptcy should be one of the first items on the agenda of the new congress when it is seated. This could be one of the few new bills where real bipartisan agreement might be possible.

      There should be under no circumstances any consideration of Federal Bailouts from any Federal source for floundering States and Municipalities. The US House of Representatives is the only legitimate source of Federal Funding for whatever cause. It must retain that "Constitutional" status against all comers including the Administration and the Fed.

      As for the States and Cities in trouble, they got that way, local voters let them get into these messes. Let them find their own way out.

    68. Mike, Chicago says:

      Don't bail out the states. They need to learn how to mangage better and they can start by cutting public aid except for the elderly and infirmed.

    69. george,hendersonvill says:

      I believe in pensions however I don't see how you can get a guaranteed benefit especially when therest of us in the workforce have nothing guaranteed especially our retirements.Like FDR I do not believe in public unions because there is too much politics involved and its ripe for corruption which is exactly what has happened.Also these individuals need to put in at least half of their retirement money themselves.It never should be just the taxpayer paying the whole bill. People in these public pension funds need to come down to earth like the rest of us.

    70. Howard Wolf says:

      We have always had the means to deal with those who overspend and are consequently staring disaster in the face. It's called bankruptcy court. Let competent judges pay creditors what he can and start over. It will mean that there will be losers all around for sure, but it must be done.

      I would suggest a new federal law that mandates the end of a political career for a period not to exceed ten years for any county, city council, or state legislator, congressperson or senator whose malfeasance or ineptitude led to their community's bankruptcy.

    71. Pat Dennis says:

      let me get this straight.

      A city cop works 20 years and is at home every night and gets 80% of his salary upon retirement for the rest of his life???

      A Soldier works 20 yrs. Deploys numerous times during those 20 yrs for sometimes years at a time. Fights wars for the rest of us and Is typically paid less than the average city cop. Yet he only receives 50% upon retirement????

      WHAT IS WRONG WITH THIS PICTURE????????????????????

    72. Judy, MA says:

      Laurie from Hawaii, TY for your comment to Jarvis! It couldn't had been better stated. Very tired of the same old comments re: the rich. Well, they supply the jobs. And if the tax code was done right maybe they wouldn't have so many loop holes. Which I don't blame them at all to take advantage of. They are not the problem it's the Government. They are also strapped by big unions. No wonder they leave this Country to make a profit. The Unions are our terrorists within.

    73. Fred, Michigan says:

      And here I thought Heritage was going to provide a respectable conservative analysis….

      Hamtramck is broke. Why? Gee, lets see who we can point to. Sure, let's point to those cops and firefighters and their pensions. Easy targets. Those bad cops and firefighters get to retire after 20 years! Bad, bad, bad!! Except, those cops and firefighters strap on anywhere from 20-70 pounds of equipment and run into the burning house, the overturned car, the armed robbery, the rape, the domestic assault for 20 or 25 years on a daily basis. Public Safety is a young persons business. Public Safety is a physical business. It is not reasonable to expect a 55 year old man to chase an 18 yr old Burglary suspect through a bunch of backyards and then fight with him when he's caught.

      The problem ladies and gentlemen, as has been mentioned but lost in the cacophony of selfish outrage, is SPENDING! Hamtramck apparently did not take a regular look at their budget over the years to find out where they were spending their money and whether or not their responsibilities were being met. It's the same reason that California, New York and others have been calling on the Federal Gov't to bail them out. It's real easy to not put as much away for retirement, Christmas, or whatever, as you should because you'd like that new flat screen TV, or that new Wii for the kids, or the new community center that no one uses. Well, that's what these broke governments did. They spent and spent and spent and never figured out what to do if revenues fell and now they're on the hook for billions and don't know how it happened? Seriously!? Don't you take a look at your savings and spending from time to time to see where you're at? To see if you're doing better than you thought or if you should save a little more? Maybe not take that trip to the Caribbean? Maybe not eat out so much? Maybe not build that new community center? Well, government should too.

      You may not think it's reasonable to give someone an 80% retirement after 20 years. (Personally, I think that's a little high) But, folks, that's fixed. It was negotiated in good faith. These governments are not "strapped" by big unions. The cities and counties and states agreed to it. Sounds good right now, but in 10 years because of inflation, it's going to be worth a third of what it was. How about our elected representatives? How about their pensions? 100% for life????? How about their Health Care? Exempt from the mandate they hoisted on all of us? And paid for by us? Really?

      You want to be outraged? Be outraged at that.

    74. P. Justin Robicheau says:

      God I hope we don't have to start bailing states out. If that starts to happen we are gonna be in deep trouble.

    75. geo millos, big tree says:

      deflation is the real devil it will swallow us all, and destroy our way of life, that is ,by the way, the direction both parties are headed. Pay less ,spend less, give less to pensions ,less money to go around ,less money lto buy things. Economist on t.v. asked where do you put your money in defaltionary times…his answer, no where…………..

    76. RandyT, USA says:

      There are GASB (Governmental Accounting Standards Board) standards on reporting pension assets, just as there are FASB standards for private sector organizations.

      The problem is, nobody forces governments to follow them. Governments flout them routinely.

      Most public sector pension funds are woefully underfunded by normal standards. They assume ridiculously high rates of return on their investments, and ridiculously low assets-to-liabilities ratios, then say they are in OK shape.

      Public sector employee and retiree benefits and pensions will stress or break many states and municipalities in the next 5 to 10 years.

    77. Norm Klevens says:

      If people think that an employee who goes to work for an agency like the CHP, PD or FD in 1990 under specific conditions, including retirement, risk his / her life on many occasions o r be seriously injured during the course of 20 years and then at the end of that period, the conditions that were in effect in 1990 can be changed 20 yrs later because a handful of degreed "geniuses" paid, with tax payer money. their voters for planting grass or doing some ridiculous study [or gave benefits to illegal immigrants, like Arnold] and now do not have the money to keep their committment, you are someone I do not want to know. Changes need to be made, but to new hires and not to those who accepted a job under specific pretenses.

    78. Robert H. Davidson says:

      'All things", come to an end so must poor fiscal responsibility. America must come to grips with it's down turn in the economy. It is better to right this ship before it turtles itself into oblivion and the light of America is lost to humanity. We must do what is right no matter how much it hurts now. Once we realize America cannot be all things to all, we will begin to right our own ship. Politicians like N.J. Gov. Chris Christy have the right idea, if you do not have the money or resources than you cannot afford it, get rid of it. Every Govt. entity needs to have the same thinking. Keep cutting until and no matter how much it hurts you right your own ship. We have some rough seas to navigate let us get started sooner than later!

    79. D.Bailey, Rockville says:

      An observation: Police and firefighters are usually underpaid and have very demanding hours and schedules. They put their lives on the line and are expected to be of the highest integrity. I feel they deserve a break on retirement for what they do. Your piece seemed to disrespect them. Wrong thing to do.

    80. Pingback: World Spinner

    81. Ren Faires, Springfi says:

      An annual salary of $70,000 is not "too much" when you take into consideration that police and fire fighters put their lives on the line every day for 20 years (or more) to protect us. However, they don't start out making $70,000 annually … that's what they work up to over the course of 20 years IF they survive that long. The average American worker earns over $50,000 annually, is offered a 401k or some other type of pension, and most have the option of retiring with full benefits after 25 – 30 years. Every Congress person earns a minimum of $174,000 annually while in Congress and retires with 100% benefits. Hello???

      It's easy to blame police and fire fighters for local govt financial woes because they're in the public eye. But, until the "average American" is willing to step in front of a bullet, walk into a burning building to save the life of someone else, or simply do without these men and women who protect us from criminals or rescue us from dangerous situations, they have no right to complain about the amount of money our police and fire fighters earn. Instead of complaining about police/fire fighter salaries/pensions, why not look into how much your state senator/representative or local govt officials earn annually and receive in retirement benefits?? How about other govt employees??

      As for California, Illinois, and New York "teetering on the brink of insolvency," there is no teetering … they *are* insolvent. But, their insolvency isn't a result of or solely due to police and fire fighter pensions and shame on anyone who blames police and fire fighter salaries and pensions for that problem. No, those states are rife with corruption, labor unions, and the "spend, spend, spend" mindset at all levels.

      State and local govts should be required to resolve their financial problems without federal intervention/dollars. But, resolve the problems they must … and without reneging on their pension agreements. Hint: eliminating labor unions would be a tremendous first step toward solving the problems and regaining solvency. Just saying ….

    82. Pingback: Union Free | Positive Employee Relations | Employee Free Choice Act | Labor Relations Institute

    83. Doug California says:

      If and when states like California are allowed to go bankrupt and cancel the public employee contracts and retirement laws that were part of good faith collective bargaining for those employees, than wouldn't the states assets, land, parks, buildings also be a risk when the Bankruptcy Judge sell off those assets to pay the states debts?

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.