Working to ensure Americans are not financially liable for any future federal government bailouts, Sen. Orrin Hatch (R-Utah) recently joined with Sens. Ron Johnson (R-Wis.) and David Vitter (R-La.) to introduce an amendment that would protect taxpayers from state or local government bailouts.
The proposed amendment was added to the Transportation, Housing and Urban Development appropriations bill that is currently being debated in the Senate. The amendment would require that no money appropriated to the Department of Transportation or the Department of Housing and Urban Development be used to spare a local government from being placed into receivership, to allow a local government to exit from receivership or to prevent a state government from defaulting on its obligations.
“Ballooning debt – driven largely by bloated retiree pension and health benefits and mismanaged budgets – has financially crippled cities and municipalities across the country and even forced them into bankruptcy,” Hatch said. “Whatever the financial fiasco, however, it’s the responsibility of the local governments to fix. The federal government will not step in, as this amendment makes clear, and bail them out.”
Hatch is the ranking member on the Senate Finance Committee, which has jurisdiction over pension policy. He issued a report in 2012 on the public pension debt crisis that emphasized the importance of avoiding a federal bailout of state and local government. Hatch also recently introduced the Secure Annuities for Employee Retirement Act of 2013 that makes a new type of pension plan available that can never be underfunded and removes pension-related risks of federal bailouts of state and local governments going forward.