The government, we believe, can make reasonable payments provided that the administration stops hiring nonessential personnel and make whatever accommodations are necessary to settle its debt. Fund officials, for their part, should stop grandstanding. They should sit down to negotiate with administration officials — exactly what the administration and lawmakers have been saying all this time.
Previous Fund board members may have neglected their fiduciary duty by not pressing administration officials for payments and by accepting worthless promissory notes in exchange for a permanent deferment of payments. Even the current board members were initially complacent but that changed as we approached general election year.
Now even if this administration and its successors were to pay a minimum sum to the Retirement Fund with regularity, it is not reasonable to expect that the hundreds of millions of dollars owed to the Fund will ever be paid. You can only lay off so many people. You can only raise taxes and fees to a certain level. But will there be enough businesses and people left to pay the needed amount?
One possible way to remedy the shortfall is to float a pension bond.
Critics of this plan, however, worry more about a disastrous future than the calamity already staring us in the face. They also fail to recognize that the government will not risk a default on bond payments. The stakes are simply too high for any administration to ignore. Indeed, the only routine payments the government does not ignore, aside from payroll, are bond payments. This proposal also has the affect of forcing the government to choose between current employees, retirees and bond holders on the one hand, and future temporary employees on the other. That is a simple enough calculation for anyone to make — but not if you are running for another term in office. Of course, no one can compel an administration to observe a law it chooses to ignore, except for the voting public. In short, if the law is not sufficient to compel compliance then there are the voters, the final arbiter of all disputes in a democratic society.
As FDR once said, “It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.”
The House of Representatives, in any case, was right to pass its amended version of S.L.I 16-10 and we urge the Senate to follow suit.
Put it on the ballot and let the debates begin.
Lost opportunities
THE government, no matter how cash-strapped it is, seems unable to file the necessary paperwork to qualify for federal stimulus money. Like its predecessors, this administration has allowed tens of millions of dollars in federal grants go by the wayside because it just wasn’t prepared to compete for the funds — even after more than three years in power.
This is an important lesson for future administrations.
