In response to concerns about the future of unfunded state and local government employee pension plans, Utah Republican Rep. Jason Chaffetz introduced legislation Thursday to preempt federal bailouts of these unfunded liabilites.
Chaffetz’s resolution would state Congress’ opposition to the federal government providing funding for these plans.
“This is a massive problem, a massive disaster about to happen,” Chaffetz told The Daily Caller. “It is a bit of a warning shot across the bow to a number of states to let them know that Congress is in no mood to bailout their woes.”
It is expected that with more than $3 trillion in pension obligations to state and local government employees, many states will be coming to the federal government with their hands out.
Chaffetz points to four reasons to eschew federal aid for these pensions, namely that state governments already rely heavily on federal funding, that since 2000 local and state government employment has grown 9 percent while private sector employment has shrunk 2 percent, that the federal government is already stretched too thin, and that bailouts are unfair to state governments that have been fiscally responsible.
“Excessive debt at all levels of government is a serious problem, and expecting a heavily indebted federal government to bail out state and local governments simply compounds the problem,” said Chaffetz.
The bill now goes to committee where it will await future action.