The always informative Kevin D. Williamson has a wicked neat idea at NRO. He recognizes that the feds like to attach strings to aid. He explains why the attempt to eliminate stock buybacks was so silly.
He recognizes the need for federal aid to states and the problem:
There is a good case for providing some short-term aid to states and cities whose revenue streams are currently smoking ruins in the wake of a global crisis over which they had no control. But that is not the question. The question is whether Washington should bail them out of troubles that are only tangentially related to the epidemic. The answer to that is, No.
We absolutely agree. Part of the reason we agree is, see below for why, we are from Wisconsin. He is not quite right when he says:
The main issue here is the unfunded liabilities of the state and local pension systems, particularly in Democrat-run jurisdictions such as the state of Illinois and the city of Dallas. [Emphasis added]
If we look at the map here of the funded ratio of pension liabilities from 2017 it is hard to find a political pattern. Illinois is 50th and KY is 48th. As a state retiree we feel good that WI is number one. It is true that Democrats run essentially all of the big cities where there are numerous pension problems. It is also true that CA has a ratio in the middle (27th) but the size of that state, in both senses, means that unfunded amount for CA is very large. So it is less of a red/blue problem than Kevin D. suggests.
He gives some ideas to Mitch McConnell and the GOP:
It would be entirely appropriate to encumber aid in such a way as to prevent its being used for any other than a relatively narrow range of specified purposes. But, because money is fungible, that sort of legislative guardrail might not be enough. A better approach would be to condition aid on distressed states’ and cities’ actually addressing their unfunded liabilities, which are the root of the problem here. To that end, Congress could require that states adopt reasonably responsible pension practices in order to participate in ongoing assistance programs; “reasonably responsible” here would mean renegotiating programs with beneficiaries in order to begin to align the promises that have been made with the resources needed to make good on them and seeing to it that states start making actuarially required contributions to pension plans going forward. Of course that assumes a level of credibility and discipline not obviously in evidence in Washington (or in Austin, or in Frankfort, or in Olympia), but so does every alternative.
We think renegotiating pension agreements and making actuarially required contributions is a great solution. We are not sure if the former is legally feasible. The GOP might find other good solutions. We are almost sure it won’t happen. One reason is that Washington never does anything that smart. But the other, and more important reason is, Mitch is from KY. Check the map. Sadly, we are not going to see a legislative solution that prevents federal aid from being used to pay off unfunded pension liabilities..