The right’s sinister new plot against pensions
As state legislatures prepare for their upcoming sessions, you will no doubt hear a lot about public pensions. More specifically, you will hear allegations that states are going bankrupt because of their pension obligations to public employees. These claims will inevitably be used to argue that states must renege on their pension promises to retirees.
This is what I've called the Plot Against Pensions in a report I recently completed for the Institute for America's Future. Engineered by billionaire former Enron trader John Arnold, championed by seemingly nonpartisan groups like the Pew Charitable Trusts and operating in states throughout America, this plot is not designed to strengthen pensions or to save taxpayer money, as its proponents claim. It is designed to slash public employees' guaranteed retirement income in order to both protect states' corporate welfare and, in some cases, enrich Wall Street.
Consider the math of state budgets. According to Pew's estimates, "The gap between states' assets and their obligations for public sector retirement benefits (is) $1.38 trillion" over 30 years. As the Center for Economic and Policy Research notes, this gap was not caused by benefit increases, as conservatives suggest. Data prove that most of it was caused by the stock market decline that accompanied the 2008 financial collapse.