Feb. 15, 2017, Fairfax, Va.—Americans for Limited Government President Rick Manning today issued the following statement praising legislation by U.S. Rep. Brian Babin (R-Texas) that would block any Federal Reserve bailout of state and local government pension plans:
“U.S. Rep. Babin’s planned legislation blocking any Federal Reserve bailout of state and local government pension plans is an important protection against the disastrous temptation to monetize bad political decisions that have put many large state and local pension funds in jeopardy. Fiscally irresponsible states and cities should never have access to a printing press to pay their bills, and Babin’s bill will close a loophole in federal law that lets the central bank purchase muni bonds that back pension plans. If states and cities cannot meet their pension obligations particularly in defined benefit plans, they need to renegotiate the commitments that have been made so they can be sustained over the long term, not turn to the Fed for bailouts. This is a critical fix that will incentivize states and cities to get their fiscal houses in order and warrants immediate consideration and passage in the House.”
“State and Local Pensions Accountability and Security Act,” U.S. Rep. Brian Babin, Feb. 15, 2017 at https://getliberty.org/wp-content/uploads/2017/02/State-and-Local-Pension-Accountability-and-Security-Act.pdf
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