26 June 2013

Political Pushback on Pensions?

As I have posted many times (most recently here), underfunded municipal and state government pensions are a financial albatross or looming time bomb, take your pick. But what can be done? Municipal bankruptcy is one way but its costs are prohibitive for most cities. States don't have access to bankruptcy relief in any form. And the fine-grained and complex nature of the problem generally escapes public notice. But maybe that will change.

Reuters reports here that a "Texas hedge fund billionaire" is planning to fund "groups supporting ballot initiatives that would scale back ... overly lavish public employee pension deals." I wonder if John Arnold's previous association with Enron and his now-defunct natural-gas trading hedge fund will influence how his efforts are perceived? His reported contributions to Barack Obama's presidential election campaigns might provide political cover but SEIU is not happy: "It's the height of narcissism for a Texas billionaire who doesn't have to worry about his retirement to come into California and try to meddle with the secure retirement of working-class people," said a union rep.

Frankly, I don't expect anything to come of this. Of course, the same will probably be said of the article about municipal bankruptcy and pensions I'm writing this summer.

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