Rhode Island crashes into fiscal reality

You can add Rhode Island to the list of states that are painfully having to overhaul their public worker pension programs because they have made financial promises they cannot keep.

Democrats overwhelmingly control the Legislature of Rhode Island, and they have long maintained close relations with Big Labor, in part by offering unionized government workers lavish pension benefits.

But the state is running billions of dollars short to fund those promises.

Why? Well, there are several reasons -- one being that roughly half of retired government workers in Rhode Island actually have been getting more money each year from their pensions than they received during their final working years. That's a recipe for disaster.

So legislators in Rhode Island have enacted a law reforming the pension system. There will no longer be automatic annual increases in pension benefits, and the law raises the retirement age for a lot of public workers.

Not surprisingly, Big Labor in Rhode Island plans to file a lawsuit to protect the out-of-control pension benefits.

But public worker compensation packages are a serious threat -- and not only in Rhode Island.

All told, states face a shortfall of almost $1.3 trillion on the benefits they have promised to government workers, according to a study this year by the Pew Center on the States.

And at the federal level, we face the bankruptcy of Medicare just a few short years down the road. That's because Washington has continued to add benefits -- such as the Medicare prescription drug benefit -- without the means to pay for them.

The longer we wait to reform those entitlements, the more drastic and painful it is going to be when we finally have to do so.

The wise path, of course, would be to begin the reforms now rather than let the crisis fester for several more years. But there is little indication from Washington that wisdom plays much of a role in managing our national finances.

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