The Biden administration is trying to prohibit California from receiving billions of dollars in new federal aid because, the administration claims, the state's 2013 Public Employee Pension Reform Act denied workers the right to bargain for changes to their retirement benefits.
The administration is strong-arming the state and its municipalities to choose between tens of billions of dollars in savings for a deeply indebted pension system and grants from Washington.
In response, the state passed PEPRA, which reduced pension accrual rates for new workers.
The Labor Department's ruling, California governor Gavin Newsom said in a letter to Walsh, "Deprives financially beleaguered California public transit agencies that serve essential workers and our most vulnerable residents of critical support, including American Rescue Plan Act funds that those agencies need to survive through the pandemic." Newsom called the decision a "Complete reversal" from a 2019 ruling by the Labor Department, which held that the state's pension reforms did not represent a violation of federal law.
State and local pension debt has skyrocketed, from about $900 billion in 2013 to about $1.6 trillion today.
Passed over the objections of public-worker unions, who claimed the reform law violated their bargaining rights, the bipartisan pension legislation was projected to save the deeply indebted state system some $180 billion over 30 years.
Now the administration seems intent on using that money to undermine state pension reform in California-and, if successful there, who knows where else.
https://www.city-journal.org/undermining-pension-reform?wallit_nosession=1
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