U.S. Rep. Timothy V. Johnson and eighteen of his Congressional colleagues are sending a clear message to Illinois and other states: there will be no more federal bailouts.
Earlier this year, Illinois Governor Pat Quinn suggested the federal government would guarantee the $85 billion in unfunded pension liabilities. In a letter addressed to the leaders of the Illinois State Legislature on October 17th Rep. Johnson and his colleagues made clear that there would be no state bailouts for reckless spending. Republicans in Congress believe that Illinois must reform the State's public pension system. The letter states that "Bold, necessary reforms will take a strong commitment by State leaders to fix the problem." Inaction is not an option and neither is a federal loan guarantee.
The State of Illinois currently faces a $13 billion budget shortfall. To stymie the flow of red ink, as opposed to spending within the state's means, during a lame duck session, the Illinois legislature passed a 66% personal income tax increase and a 46% corporate task increase to cover this year's deficit. These increases will not cover the $13 billion current budget shortfall, much less the $85 billion unfunded pension liabilities.
"The federal government cannot even meet its own obligations much less bail out states' unfunded liabilities," Rep. Johnson said on Monday. "Congress is borrowing forty cents for every dollar it spends. The reality is that we, at the federal level, are making difficult changes in the way we do business. Likewise, Governors must work with state legislatures to make sacrifices in order to get their fiscal houses in order, not simply forcing taxpayers to make sacrifices in the form of record tax increases in the lame duck session of the state legislature. The failed policy option of tax increases on the middle class and job creators will not make up for years of over-spending and over-promising. It will harm job growth, hurt the middle class and fails to reform the structural problems. A state bailout is not the answer."
Congressman Johnson has worked hard in Congress to restore fiscal sanity to Washington, DC. He strongly supports cutting spending, capping it as a percentage of GDP and balancing the federal budget.