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Congress Can’t Afford to Bail Out High-Spending States
Gov. Andrew Cuomo (NY-D) speaks to union group. (Lev Radin / Shutterstock.com)
The crisis in problem states is fueled mainly by unfunded pension liabilities. Public employee unions and the politicians they elect have for decades promised lavish pensions to union members, far exceeding those paid to wealth-creating private-sector employees. But adequate funding was never provided and the over-optimistic financial market returns didn’t materialize. The result is a growing total of $4.9 trillion in contractually enforceable liabilities to state retirees. There is no way the states can make these payments.
