Friday, May 27, 2005

You can pay me now or you can pay me later

I have a bet with Louis, one of the doormen of the House. He maintains the legislature will adjourn on time. I put ten bucks down to say we are going into overtime. And everytime I see him, he intones the same mantra: you can pay me now or you can pay me later.

Looks like I'm paying up, because the leaders apparently have convinced the governor to agree to skip out on two billion plus of pension payments for the next two years to plug the deficit.

Given that most observers think the pensions are too expensive to begin with, maybe starving the beast is as close to trimming benefits as one can get.

But it sure would be nice if Republicans would agree to float some bonds at 5 percent to cover the 2 billion instead of the de facto 8 percent loan in interest not earned that we are borrowing from the pensions. Unless, of course, we pull a United and just never fully cover the cost of the pensions.

There are no good options. Maybe this is the least worst. I definitely want to finance the future, not the past, and spending our dollars on schools, health care and infrastruture instead of pensions fits that bill.

2 comments:

FightforJustice said...

Of course we're still going to have to pay for pensions, we're just postponing it and making the ultimate bill much higher. That higher bill will eventually crowd out spending on those things Dan prefers.

Nathan Kaufman said...

It may not be a good thing to see elimination or deterioration of defined benefit pensions.