The quiet looting of America’s Pension Funds is underway
By DAVID SIROTA
September 27, 2013
The looting has been done quietly through means such as a manufactured crises, underpayment or non-payment by cities and States and the deviation of funds to risky alternative investments.
Conservative activists are manufacturing the perception of a public pension crisis in order to both slash modest retiree benefits and preserve expensive corporate subsidies and tax breaks. States and cities have for years been failing to fully fund the annual pension obligations.
They have used funds that were supposed to go to pensions to instead finance expensive tax cuts and corporate subsidies. That has helped create a real but manageable pension shortfall. Yet, instead of citing such a shortfall as reason to end expensive tax cuts and subsidies, conservative activists and lawmakers are citing it as a reason to slash retiree benefits.
The amount states and cities spend on corporate subsidies and so-called tax expenditures is far more than the pension shortfalls they face. Yet, conservative activists and lawmakers are citing the pension shortfalls and not the subsidies as the cause of budget squeezes.
They are then claiming that cutting retiree benefits is the solution rather than simply rolling back the more expensive tax breaks and subsidies. According to Pew, public pensions face a 30-year shortfall of $1.38 trillion, or $46 billion on an annual basis.