US hits debt limit today !
Treasury Secretary Timothy Geithner said Monday that he will immediately halt investments in two big government pension plans so the government can continue to borrow money.
Geithner informed Congress of his decision in a letter stating that the government had officially reached its $14.3 trillion borrowing limit. He repeated a warning that if lawmakers do not increase the borrowing limit by August 2, the government is at risk of an unprecedented default on its debt.
We need pension reforms now as we are getting saddled with unprecedented amounts of debt which will be a drag on our economy in the future and a burden on the next generation. Its seems more likely that the next generation will not live the american dream if don't make the hard choices today. Gov. Cuomo's new cost cutting pension system plan is a step in the right direction.
Long Island's governments, school districts and public agencies will be billed more than $1.2 billion to finance the pensions of public workers in the next 12 months, according to a Newsday analysis. The state comptroller oversees the Employees' Retirement System and the Police and Fire Retirement System , which together cover workers in counties, towns, villages, water companies, libraries and fire districts as well as some nonprofessional employees in schools.
ALBANY - Gov. Andrew Cuomo will soon announce a proposal for a new, less generous pension system for future state, local and school employees that is designed to save taxpayers $93 billion over 30 years, according to two officials briefed on the plan.
If approved by the Legislature, the proposal would increase the retirement age to 65 for all public employees hired after the law was passed. It would also end early retirement, force employees to pay twice as much toward their pension, and end the “padding” of pensions through overtime pay, sick time and other means.
Current employees and retirees wouldn’t be affected. New York City has a separate pension fund and city officials are considering their own pension reforms.The two officials spoke to The Associated Press on the condition of anonymity because Cuomo hadn’t yet announced the legislative proposal. A Cuomo spokesman declined to comment.
“There’s a lot of mythology that there are gold-plated retirements out there,” Stephen Madarasz, spokesman for the Civil Service Employees Association union, said Friday. He said the average pension for a CSEA retiree is $14,000 a year.
Madarasz said the governor’s task force that broadly recommended a new tier in March ignores “the shared sacrifice already shouldered by public employees."
Given already implemented pension-reform plans, “there are no immediate savings to be gained" though another set of reforms, CSEA stated in March.
A set of reforms, known as Tier V, was passed by the Legislature in 2009 under Gov. David Paterson with union leaders’ support. The plan is projected to save $38 billion over the next 30 years.
Cuomo’s Tier VI for public workers outside New York City would:
- Raise the minimum age of retirement to 65. Retirement age is now 62 for most employees and 57 for teachers. Early retirement, now allowed at 55 years old with a 38 percent penalty, would end.
- Require workers to put in 12 years before they qualify for a pension. Employees are now “vested” after 10 years.
- Require new employees to pay twice as much toward their pension plan.
- End the practice of “padding” a pension using overtime pay late in service, unused vacation and certain sick leave.
- Cap pensions for the highest paid state employees — physicians at state teaching hospitals, CEOs of public authorities and utilities among them — based on the governor’s $179,000 salary. Many of those employees earn far more.
- Eliminate a “multiplier” that boosts a pension after 20 years and 25 years of service.
The proposal doesn’t replace the traditional public pension with a 401(k) retirement plan common in the private sector, where employees pay far more or all of the contributions.
The Cuomo administration said government contributions to pensions rose as many as 20 times since 2001 for teachers, government workers, police and firefighters.
Suffolk County Executive Steven Levy, who has led the fight for pension reform among counties, recently said now is the time for governments to trade in pensions for 401(k) plans. He has said generous public pensions are unaffordable to taxpayers.