After Obamacare, Cities Want Pension Bailout Too
After decades of kicking the financial can down the road, some of America’s biggest cities now want to try throwing it up the ladder.
Starting January 1, Detroit will move its retirees to Michigan’s federally-run Obamacare exchange. Instead of the previous full coverage paid for by taxpayers, each retiree will get a $125 monthly stipend. The move is projected to save the city roughly $120 million.
Chicago and other cash-strapped cities are considering similar options.
But the move to offload state and local obligations onto federal taxpayers is just getting started. Writing for City Journal, Steven Malanga explains that municipal debt related to unfunded pensions far outweighs the amount owed to retiree health benefits.
To big city mayors the solutions, of course, are identical – Ask Uncle Sam for a bailout.
At some point, America’s entitlement culture – up and down the socio-economic ladder – has to take a back seat to fiscal reality. We’ll see if enough people are ready to have such a debate when the 2016 presidential election rolls around.
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