Can We Afford Gov't Workers and Pensions?

" Brides here's our lead stories city and state governments across the country are going broke. And yet the transit workers in Philadelphia are striking to keep that raises generous pensions no layoff clauses and the ten dollop so weak health care insurance. Can we afford at all. Stephen mind as we need Manhattan institute frequent guest and valued guests on this program Stephen welcome back thank you. I want to broaden this out this seems to me -- true that the states and municipalities all across the country have made promises to pay extremely. Generous pension health benefits to retirees a week camp afforded. Obama -- overstating the case. I know you're not first of all. -- that the the long term bills now estimated at two point seven trillion dollars. And a lot of that for instance is retiree health care benefits which is something. That you don't even see anymore in the private sector the private sector essentially they're going to let Medicare take care of it. From the public sector because people retire at the age of 55. They've got that ten years for the -- Medicare. Huge huge bills for that give -- example New York State has a 140 billion dollars in pension liabilities. It also has forty billion dollars in health care retiree liabilities -- they're the health care liabilities alone are coming up. Rapidly on on on petulant so and broad. General Tom most retired government locusts can retire at the age of 55 given a certain number of years of service whether it's 20 ability depending with a police all right sure I'll take is what we've got a fifty usually. Police have fifty deaths so you can retire at a relatively young age by today's event I think -- and you retire on a guaranteed. Pension. Relating to your forma income usually half of what you used to -- yeah. And that's indexed to inflation for the rest of your life in many cases and you'll like it to live if you retire 1555. You probably going to live life expectancy and other fellow teen years can. Well I would -- certainly going to live with anywhere between 75 and -- life expectancy of people at 55 in America I think is another 25 years so without longevity extent yes absolutely Al liability. Increased and the irony is that in the private sector as longevity expense people who are working longer in fact as you know our Social Security system is gradually increasing the age when benefits begin. Until eventually sixty's so we're going in opposite direction of government look at -- become that it leaked. They look much better pensions much better benefits and increasingly better pay well thought out well. Just take Philadelphia oil transit systems and you're in Philadelphia the average pay of workers something like 51000 dollars here. Right in New York City it's in the mid sixties that's far better and transportation workers in the private sector are making these days all right come to the quick canyon city a state not a city a state happen to declare bankruptcy because -- cannot meet its liabilities the pension written technically states can't declare bankruptcy that this is this is an issue that we're going to be facing pretty soon I think there's going to be a constitutional issue. About whether or not these pension funds can go bankrupt and the states can can somehow -- another restructure their pension fund. Because the costs long term are staggering and there is taking money away from everything else a state cannot go bankrupt. No no not the current in the current environment but a municipality cannot -- California went back and there are a lot of other California municipalities that are looking at precisely that to get out of these pension obligations. In fact there's a bill in the California legislature. To try to make it tougher for municipalities to go bankrupt because the unions are so scared that that's exactly what's going to happen out there ethnic animosity maligned got Manhattan institute thank you very much even."