States Made Risky Bets with Pensions Before Coronavirus. Now They Want a Bailout.

WASHINGTON FREEBEACON.COM

Staring down the coronavirus’s effect on their budgets, states like New Jersey and Illinois are calling on federal leaders to backstop public pensions as part of future coronavirus relief. Democratic leaders in those states are pushing the federal government for billions in funding to shore up underfunded public pensions. Democrats in Congress have made bailouts for state and local governments a major priority for the next round of coronavirus stimulus, even allowing a major small business loan program to run dry as Republicans refused to package a renewal with more cash for states. But the pension shortfalls are not just a product of the bear market, experts tell the Washington Free Beacon. Some states now seeking bailouts are in part covering for more than a decade of economic mismanagement, having chased increasingly risky investments to fund generous benefits at low up-front costs. Bailouts would allow states to dodge hard questions about the viability of excessively generous public pensions.

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