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House Co-Sponsorship Memoranda
House of Representatives
Session of 2019 - 2020
Regular Session
MEMORANDUM
| Posted: | March 4, 2019 04:16 PM |
|---|---|
| From: | Representative Francis X. Ryan and Rep. Seth M. Grove |
| To: | All House members |
| Subject: | RESOLUTION - URGING U.S. CONGRESS TO REIMBURSE THE COMMONWEALTH OF PA FOR FUNDING LOSSES IN THE STATES PENSIONS & MUNICIPAL PENSIONS FUNDS AS A RESULT OF FEDERAL RESERVE POLICY OF QUANTITATIVE EASING |
In the near future, Representative Grove and myself intend to reintroduce a resolution urging Congress of the United States to reimburse the Commonwealth of Pennsylvania for the funding losses in the state’s pension funds and municipal pension funds as a result of the Federal Reserve policy of quantitative easing enacted in 2008 and still in force today (former HR522). Quantitative Easing came from a Federal Reserve policy to deal with the housing bubble. Due to the ERISA standards, state and municipal pension funds are invested in a balanced portfolio using the prudent person rule. Therefore during periods of artificially low interest rates returns on bonds are below rates which would normally occur with markets which have not been interfered with. For Pennsylvania, the losses on the pension funds, due to quantitative easing, are in excess of $24 billion. That same $24 billion is part of the state’s $70 billion of unfunded pension liabilities (many estimate the unfunded liability to be in excess of $110 Billion). Repayment of this deficiency is made up by increasing property taxes and income taxes for the citizens of the Commonwealth. The damages for the nation for all the states and municipalities would likely to be in excess of $200 billion. These losses reflect a hidden tax caused by the Federal Reserve and imposed on states and municipalities. The Federal Reserve must be held responsible for covering the losses of some of the bank loan losses due to their duplicity and the policies which created the housing bubble to begin with. Additionally the Federal Reserve should be held liable and responsible for the underperformance of investment assets held by state municipalities due to quantitative easing. In addition to the damages, the Federal Reserve should be required to pay damages to the states and municipalities. The Federal Reserve must also be overhauled to include a formal audit and risk assessment of its financial statements and operating standards to permit greater oversight by the Department of the Treasury and the Department of Justice. Too much is at stake not to rein in this shadow government. Our resolution asks the Treasurer of the Commonwealth to enter discussions with the Federal Reserve and with the other states to seek restitution from the Federal Reserve for the damages to the state and municipal pension plans due to Quantitative Easing. In discussions with the Treasurer, the resolution has changed from last term to authorize the Treasurer to PA to reduce the damages claimed by the benefit received by the Commonwealth of lower interest rates on our debt. It is expected that the benefit may be in excess of $15 Billion resulting in a net claim of $9 Billion. We are seeking to have other States join us in this claim. Please join us in co-sponsoring this most important resolution. |
Introduced as HR167
Memo Updated: March 4, 2019 04:17 PM