We Can’t Break AIG Bonus Contracts But Worker Pensions? No Problem!

[Omaha Steve]

http://fdlaction.firedoglake.com/2011/02/23/we-cant-break-aig-bonus-contracts-but-worker-pensions-no-problem/

By: Jane Hamsher Wednesday February 23, 2011 9:16 am

It seemed like only yesterday that a contract was sacrosanct. Remember 2009, and those AIG bonuses, paid for with taxpayer dollars?

The administration official said the Treasury Department did its own legal analysis and concluded that those contracts could not be broken.

Larry Summers:

We are a country of law. There are contracts. The government cannot just abrogate contracts.

But now that we’re talking about breaking contract to pay back pensions that middle class workers have paid into over the course of their professional careers, well — that’s another story.

Chris Christie:

The promises of the past are too expensive.

Let’s compare. Per the latest Pew study in 2008 (PDF):
Wisconsin Pension Fund

(figures in thousands)
Total liabilities: $77,412,000
Unfunded liabilities: $252,600
Total percentage of liabilities covered by fund assets: 99.67%

According to Dave Stella of the Wisconsin Department of Employee Trust Fund, the system’s assets were worth $79.8 billion at the end of last month, and the last solvency test at the end of December determined a funding ratio of 99.8%.

FULL story and chart at link.

[spooky3]

1. Hamsher makes excellent points.