The GOP Congress wants accounting but no bailout for state and local pension funds. Republicans want to know how much debt state- and local-government pension funds have amassed, even as they move to head off any federal rescue of those retiree-benefit programs, the
Wall Street Journal reports.
A bill in the House would force localities to report their pension red ink to the U.S. government or be stripped of their power to raise money by issuing bonds.
“The point of this is to smoke the rats out of their holes," said bill co-author Rep. Devin Nunes, Republican of California
(pictured). "What is the total amount of pension debt? No one really knows."
The bill could trigger a fight over states’ rights between conservatives who dislike federal mandates and congressional Republicans trying to come up with a number. The question of how to pay for ballooning pension guarantees at the state and local level has intensified during an economic downturn in which tax revenues have shrunk.
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