A subcommittee of the US House Committee on Oversight & Government Reform held a hearing February 9 to prepare the way for attacks on the pension benefits of millions of state and municipal workers across the United States.
The hearing, titled “State and Municipal Debt: the Coming Crisis?” was held the same day as the introduction of a bill by Rep. Devin Nunes, Republican of California, to prohibit bailouts of states by the federal government.
The problem of state budget deficits—estimated to total between $125 billion and $140 billion and exacerbated by the ongoing economic crisis—is very real (See “US state budget deficits could top $140 billion”). However, in his opening remarks to the subcommittee, Chairman Patrick McHenry (Republican, North Carolina) ruled out any new revenues for states and blamed the problem on a “fiscal straitjacket caused primarily by … lucrative public sector union pension and health care benefits...”
...the average percentage of state and municipal budgets devoted to pensions is between 3.8 and 5 percent. To McHenry, this allocation of resources to a basic social right constitutes “reckless spending.”McHenry claimed in his opening statement Wednesday that “government has outgrown our capacity to pay for it.”
In fact, the opposite is true: plenty of wealth exists for the provision of benefits and health care, but state and municipal governments have spent decades giving tax breaks to companies that threaten to move elsewhere or to lay off workers.http://www.wsws.org/articles/2011/feb2011/stat-f15.shtml