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Manhattan Institute Senior Fellow Steve Malanga on whether Chicago Mayor Rahm Emanuel is dumping Chicago's debt onto taxpayers.
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Well the city of Chicago's in big financial trouble and like many governments local governments they haven't fully funded there.
Retiree pension and health care costs in Chicago's case they owe fifteen billion dollars and they don't have it.
So what are they going to do.
Well one idea being floated is to dump the retirees health care on two under Obama care exchange next year.
Isn't this just getting rid of their financial problems by dumping it on the rest of buzz in the country and if they do it how -- other cities will do the exact same plan.
Joining me out Manhattan institute senior fellow Steve -- Steve.
Are they gonna do it.
Well the evidence that the amount of money they can say is so great that it's almost like they're saying well we be irresponsible.
Not to true -- And of course if they can say that what we have is we have states in America that have.
Three quarters of a trillion dollars in these health care promises that they haven't found it.
We have cities in America that I have a 120 billion dollars in additional promises they haven't funded.
-- -- -- You just as -- as the magic hat where -- they're able to do is say -- dump this on the common national taxpayers.
And -- and wash our hands up.
Well you know it looks very compelling if you read the arguments that were made.
Essentially Rahm Emanuel.
Commit put together -- commission to study the health care -- -- They have a huge pension problem but they haven't some respect even a bigger health care problem the reason to help your problem is bigger.
Is these states and cities they haven't actually put aside any money to pay for their retiree health care.
And so they have to take it out of their budget it's not even coming out of a pension fund you know.
So it's like right now -- pay as you go.
And the commission several it's costing us a 110.
Million dollars a year already added the city budget.
And ten years is gonna cost 550 million that's out -- if this is growing.
So one commission member wrote a piece that says let's let obamacare to take care but -- save half.
Maybe more than half its.
-- -- they've got four different pension and retiree health plans.
But a debate on what you do do you want for firework -- police one for labor one for most of that -- but.
But they're there for the police and fire they're only.
They've only put thirty cents on the dollar is -- what they're what they're supposed to have been the -- they're so far -- -- I'm looking at if you're policeman or fireman in Chicago.
-- one hand you're thinking I'm not gonna get this benefit they can't afford it and they're gonna pull the rug out from underneath me when I'm older.
But at the same -- -- but I don't wanna go into an exchange doing.
Well.
Here's the thing that's very interesting point -- -- on the one hand.
This is a way to keep this benefit because there's a whole debate about whether unlike pensions which are contract in which you basically if you.
You know you the courts are gonna say you have to come up with a pension money -- -- you really just go bust.
There's a debate about whether these health care promises -- really promises in Texas they believe for instance that they can the say -- the programs -- over.
And one of the recommendations of this commission is let's just stop the program right now.
OK so if -- union.
Or government employee in your threatened with this -- you have two choices here -- a way to sustain it.
Maybe the benefits won't be as high you'll be on an exchange instead of on you know but you're still gonna -- -- something.
Yeah yes so.
And this is this coming down to they cannot meet the promises they've made out well -- -- people on unfortunately have to understand that.
It's not right it -- moral it probably illegal follows it ill BM whatever you -- -- -- well unsustainable.
Out of it's -- you know and -- -- and the big problem is that both the pension.
And the health care -- systems in the public sector haven't structured so the politicians can make promises.
And accumulate what I call soft debts that they don't have to pay for years until somebody comes from the Kerr office.
So if Chicago does this.
Are we gonna see a land side of other cities and now reason even states.
Doing I can't imagine why they wouldn't do it because they have as I said they've only funded 5% of the -- though -- they don't have the money.
So.
Does that mean that all the projections about obamacare and the cost to the taxpayers.
To subsidize folks in the Obama care exchange -- His way under what it's really gonna cost.
Tom I'd never seen a government health care program that didn't cost a lot more than people said it was gonna cost we know that about Medicaid we know that about Medicare from the very beginning when they're put into place they exceeded projections.
I you don't just to save -- -- very important -- it is like saying can't get on the sun's gonna write off tomorrow I had whatever it is Steve maligned yet.
The story not going away -- I think for combined.
Coming.
