Most Read
    Image 01 Image 02 Image 03

    Next big funding fight – Bailing out blue state pension problems

    Next big funding fight – Bailing out blue state pension problems

    Pelosi and Democrats repeatedly have tried to extort massive state bailouts necessitated by public sector union pension problems — it hasn’t worked so far, and if it’s up to Mitch McConnell, it never will.

    Nancy Pelosi, dragging Chuck Schumer along by his collar, caused enormous damage in delaying both the massive $2 trillion relief bill and then the follow up expansion of funding of the Paycheck Protection Program.

    Remember when the media lost its mind over closure of some national monuments during various Obama-era government shutdowns (which weren’t really shutdowns, more scalebacks)? Pelosi has caught none of that hell despite causing millions of workers and thousands of businesses real pain.

    In each case, Pelosi wasn’t just stalling for her pet pork projects and social justice agenda items like nationalized mail-in voting. She was trying to extort bailouts of blue states by holding virus relief funds hostage.

    In each case, Republicans gave on a few things, but not on any of the social justice issues and not on the blue state bailouts.

    The state bailouts are separate from helping states deal with the current crisis. There was $150 billion in the first large package for that, and in the future Republicans will consider additional targeting funding. That is, funding targeted at costs the states incur specifically as a result of the Wuhan coronavirus. That’s not very controversial.

    But that’s not what Pelosi and the Democrats really want. What they want is a massive several hundred billion dollar unrestritced bailout of states to help places like Illinois dig out of public sector union pension holes. For decades public sector unions have taken state and local governments to the cleaners because unlike private sector unions, there is not balance of bargaining power. The public sector unions contribute to the politicians to get their people in place in the legislature and state house, then ‘negotiate’ with the people beholden to them.

    In numerous blue states, including Rhode Island, even the occasional Republican or reformist Democrat Governor is powerless against this public sector union power in the legislature. States and cities are drowning in unfunded pension obligations.

    That’s the context in which Mitch McConnell said he would not oppose changing the bankruptcy laws to allow states to declare bankruptcy:

    Senate Majority Leader Mitch McConnell (R-Ky.) on Tuesday said that he supports letting states declare bankruptcy as they face mounting budget constraints sparked by the coronavirus and as Democrats pledge to seek more federal funding.

    McConnell, during an interview with radio host Hugh Hewitt, said any additional federal assistance to state and local governments needed to be “thoroughly evaluated.”

    “I would certainly be in favor of allowing states to use the bankruptcy route. It saves some cities. And there’s no good reason for it not to be available. My guess is their first choice would be for the federal government to borrow money from future generations to send it down to them now so they don’t have to do that. That’s not something I’m going to be in favor of,” McConnell said….

    “You raised yourself the important issue of what states have done, many of them have done it to themselves with their pension programs. There’s not going to be any desire on the Republican side to bail out state pensions by borrowing money from future generations,” McConnell said, after Hewitt floated Illinois, California and Connecticut as examples of states that have overly generous benefits for public employees.

    “We’ll certainly insist that anything we’d borrow to send down to the states is not spent on solving problems that they created for themselves over the years with their pension program,” McConnell added.

    You can read the full McConnell interview here.

    It’s not, as Democrats claim, that he wants states to go bankrupt, but the threat of bankruptcy would give states the leverage to renegotiate the abusive pensions systems. And if push came to shove, the pension systems could be reformed through the banktruptcy process.

    McConnell’s suggestion would allow states to reform their own houses, but it also would rip apart the Democrat incestuous relationship between public sector unions and state government. So McConnell’s suggestion is both fiscally reasonable, and politically savvy.

    This will be the fight. Pelosi may be crowing victory, but she got nuthin’ this time around.


    Donations tax deductible
    to the full extent allowed by law.


    How soon will there be a proposal for Washington to give money to the states to make up for lost sales taxes?

    GatorGuy | April 24, 2020 at 11:16 am

    I can think of no better example of two sides talking past each other, employing visions and concepts that don’t make contact with the other, than the state public service union pension/budget issue. There might be no clearer instance of two incompatible, irreconcilable, and wholly different views of the world insofar as one side, the Democrats’, evidently in this instance have no substantive relationship with — certainly, therefore, no vital interest in the notion and practice of — financial or political accountability.

    They institutionalized the incestuous “elect me, we’ll negotiate later” anti-social treachery with the PSUs on the back of the taxpayers they have long pretended to lead and govern (read: in actuality, deceive and manipulate, plunder and disserve), and then pathologically assert the chutzpah to foot the bill to the taxpayers all over again in the scam of getting themselves off the accountability/political hook.

    The Dems, we must deduce, view any such professional, legislative responsibility to do otherwise as retired and irrelevant. Their self-evident lack of any need to exercise restraint and decency, ie, ethical conduct in the service of good government just comports perfectly with their commitment to avoid any obstacle in their essential agenda to hold on to power.

    Of course, they know the press won’t bother them and that’s how they so easily continue to sin against society. Hopefully, the Republicans will, and not enable this vicious slime-formation to endure.

    No wonder the Dems are comfortable with — indeed, they promote — the sight and tragic existence of — the destitute-homeless, surely the abandoned mentally ill, shooting up virus-contaminated poison, infecting and rendering contagious their bodies and souls, while defecating on their own cities’ streets. In the end, you see, members of this party have, ironically, no shame. Nor any sense of deserved guilt.

    Isn’t this a classic description of an institutional sociopathy?

    McConnell is right. Let them pay for their shameful crime. They indeed earned the right to be punished, if not disgraced, in paving their own road to political perdition. Our civil society, or what’s left of it, has simply had enough of their parasitic filth.

    alaskabob | April 24, 2020 at 11:53 am

    The “inflate your way out of debt” brings us to the path of the Weimar Republic. All it takes is for China to fashion a replacement global reserve currency for the dollar and conquest is complete. The Dems see life as a cabaret, while our enemies believe “tomorrow belongs to me.”

    I wonder how many agreements have a COLA which would defeat a bailout?

    CommoChief | April 24, 2020 at 12:58 pm

    How about these states that want additional federal funding prepare an itemized listing of what they have spent and what tax income they have received since say March 1st through April 30. That’s the delta. Now adjust for the infusion of federal dollars already approved to be sent to the state’s for hospitals and testing plus the not earmarked $150 Billion the state’s are already getting.

    If the state’s can show a loss for the period then maybe we can at least think about it. However, that conversation would include some very unpleasant reality being delivered. Cost cutting in education spending for instance. Take N.Y. spends overwhelmingly the most per pupil with results near the bottom. Why, cost of living. Why is NYC cost of living so high? Policy choices such as rent control and limits on new residential housing.

    So for NYC to ask for more, they would need to be willing to overturn those policies. Why, well overturning those restrictions on housing means more affordable housing, which means lower cost of living which means reduction in education budget which means those dollars can be spent on other purposes.

    Until these ‘progressive’ states are willing to change their profligate spending ways, as would every other borrower, then they can bear the budgetary burden that they created. To want free money from the federal taxpayers to support their spendthrift lifestyle choices is a bridge too far.

    MAJack | April 24, 2020 at 2:05 pm

    NO bailouts period. Let the states go back to the pensioners they LIED to for years and admit (as they said in Animal House), “You fu*#ed up, you trusted us”. The next election would prve very interesting in these oases of liberal largess.

      CommoChief in reply to MAJack. | April 24, 2020 at 4:49 pm


      I agree with you. The point of my post above is to demonstrate
      1. They are not out of money based on those parameters
      2. Their fiscal issues are of their own making not corona
      3. They will have to open up the books and cut to the bone prior to seeking funds from federal taxpayers in other states

      These states are not willing to admit this nor make any changes. They simply want free funds. Not going to happen.

    Leave a Comment

    Leave a Reply

    You must be logged in to post a comment.

    Notify me of followup comments via e-mail (or subscribe without commenting.)

    Font Resize
    Contrast Mode
    Send this to a friend