The Nunes Digest is updated for your weekend reading. To view the Digest, click on the picture below:
Friday, April 22, 2016
Friday, April 15, 2016
Puerto Rico is struggling with a fiscal crisis stemming, to a large degree, from its unfunded pension liabilities of $46 billion. Unable to cope with this disaster, Puerto Rico's governor signed a bill allowing his government to stop paying its debt. He also declared a state of emergency at the Government Development Bank in hopes of preserving essential government services.
The results of these catastrophic pension debts should serve as a warning in the mainland United States, where state and local public pension debts are growing rapidly. It's hard to tell exactly how big these debts are because officials often disguise them by assuming unrealistic rates of investment returns and by using other accounting gimmicks. However, Standford University Professor of Finance Joshua Rauh recently calculated the total shortfall at an astounding $3.4 trillion.
If these funds begin going insolvent, the consequences would likely include pension cuts, big losses to creditors, government fiscal crises, and damaging ripple effects throughout the wider economy. In fact, some pension fund officials seem to think they don't need to stabilize their finances at all—because if they do go bust, they believe the federal government would bail them out rather than deal with the ensuing disruptions.
I'd like to impose some discipline on these officials and rid them of their fantasies of a taxpayer-funded bailout. That's why I recently reintroduced the Public Employee Pension Transparency Act in the House of Representatives. The bill would do two main things: give state and local pension funds incentives to stop using accounting tricks when reporting their liabilities, and prohibit the federal government from bailing out any of these funds.
It's not too late to instill some accountability on public pension funds. Since many are unwilling to act responsibly on their own accord, let's give them some extra motivation.
Friday, April 1, 2016
The U.S. Bureau of Reclamation announced today that westside farmers will receive a minuscule 5 percent water allocation for 2016, following zero percent allocations for the previous two years. This means westside growers will continue to struggle with critical water shortages for the near future.
Water bureaucrats will undoubtedly continue blaming the drought and global warming. But those excuses are becoming even harder to believe in light of the wet conditions brought by El Nino. So what could possibly be responsible for this crisis? The Sacramento Bee offers a hint: "Federal and state officials have throttled back their water pumping from the Delta in recent weeks because of concerns over potential harm to Delta smelt and other endangered fish species."
As you probably know, in the House of Representatives we have passed four bills in the last four years to ease federal regulations that limit Delta water pumping. Every one of our bills has died in the Senate amid opposition from Senators Boxer and Feinstein. Last December, we made a last-ditch attempt to negotiate a compromise with Senator Feinstein that would allow us to capture more water during El Nino this year - and the senator walked away.
As extreme environmentalists continue to grieve over their precious little Delta smelt - which are not even being saved by these draconian water restrictions - westside farmers will be fallowing more land. Seeing as these people feed the nation, we need to keep fighting for them - no matter how long it takes - until their water supply is fully restored.