MuniLand

Issa’s municipal pension hearing

House_Oversight_April_14_2011

Congressman Darrell Issa’s Committee on Oversight and Reform meet today on state and municipal debt.

The hearing was really a dressed up fight over municipal pensions and collective bargaining rights.

The concern is that bond investors, worried about unknown pension liabilities, will increasingly require more yield for the risk of owning municipals. And some think a  solution is to remove the current form of guaranteed pensions.

Many public workers do not get Social Security; rather they get a municipal pension. This is a “defined benefit”.

Defined benefit plans are like Social Security or a fixed annuity. You and/or your employor pay into the plan for a number of years and at retirement you receive a monthly check for a fixed amount adjusted for the cost of living (COLA) increases.

Muni sweeps: Tough choices ahead

US Capito ~ 1910l

Congressman Darrell Issa’s Committee on Oversight and Reform is holding a hearing this morning on state and municipal debt.

Should be an idealogical rodeo.

This is the third hearing on the topic for the Committee. The previous hearings  ”State and Municipal Debt: The Coming Crisis?” part 1 and part 2 are here.

I listened to the second hearing held on March 15. The range of views on the severity of the indebtedness of states and towns was startling.

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