Tag: Forbes

As Federal Aid Stalled, State And Local Governments Issued Bonds To Pay Current Bills

Mary Pat Campbell

Link: https://www.forbes.com/sites/lizfarmer/2021/01/30/as-congress-stalled-on-a-relief-package-governments-relied-on-borrowing-to-pay-the-bills/?

Excerpt:

Between August and mid-December of 2020, at least one-quarter of large bond issuances in the municipal market involved some form of deficit financing, according to an analysis by Municipal Market Analytics (MMA). The firm analyzed 442 municipal bond issuances that totaled at least $100 million.

MMA’s Matt Fabian and Lisa Washburn added that their tally was conservative and that as many as half of those 442 issuances may have involved deficit financing because the ultimate use of the money wasn’t always clear.

“These are not typical uses of the municipal bond market, where an overwhelming majority of financing is for long-term infrastructure projects,” they told the Pew Charitable Trusts. “But last year, with state and local governments seeking as much as possible to avoid cutting spending, raising taxes, or postponing pension payments, they shifted their emphasis to short-term and temporary solutions. As the pandemic continued and federal stimulus money dried up, they increasingly took on debt for budgetary help.”

Author(s): Liz Farmer

Publication Date: 30 January 2021

Publication Site: Forbes

Biden Says Vaccine Will Be Available To All Americans By The End Of July

Mary Pat Campbell

Link: https://www.forbes.com/sites/andrewsolender/2021/02/16/biden-says-vaccine-will-be-available-to-all-americans-by-the-end-of-july/

Excerpt:

At the start of the town hall, Biden told moderator Anderson Cooper that the U.S. will have “over 600 million doses” of coronavirus vaccine by the end of July, which he said would be “enough to vaccinate every single American.”

Biden emphasized that his deadline refers to vaccine availability, not the number of vaccines administered, a key distinction considering the logistical pitfalls that have hampered some states’ vaccine rollouts.

Author(s): Andrew Solender

Publication Date: 16 February 2021

Publication Site: Forbes

Multiemployer Pension Plan Bailout Update: The Good News, Bad News, And The Pricetag

Mary Pat Campbell

Link: https://www.forbes.com/sites/ebauer/2021/02/16/multiemployer-pension-plan-bailout-update-the-good-news-bad-news-and-the-pricetag/?sh=7d41ea2e6fb9

Excerpt:

The legislation states that its objective is “to pay all benefits due” up until 2051. However, experts with whom I spoke explained that this is not intended as a complete funding of all benefits due during the period, but only meant to fill in the gaps so that, added together with their current assets and future contributions, there will be enough funds to pay benefits for the next 30 years.

The bad news:

The text of the legislation, as written at the moment, does not spell out any of these mechanics. Is the plan to require contributions at the same level as these troubled plans are currently paying in, or more, or less? To what extent would those contributions be used to build assets for future accruals, vs. being “spent” on already-accrued benefits by being included in the calculations of federal bailout funds, as offsetting money? My expert friends did not know, and, to be honest, this is the sort of detail that, in any prior pension funding legislation, is spelled out in the law itself rather than left for the PBGC (Pension Benefit Guaranty Corporation) to sort out as regulation. This is concerning, because it risks the whole program going south very quickly.

Author(s): Elizabeth Bauer

Publication Date: 16 February 2021

Publication Site: Forbes

Budget Deficits And Massive Governments Layoffs Stalled The Last Economic Recovery. But This Time Could Be Different.

Mary Pat Campbell

Link: https://www.forbes.com/sites/lizfarmer/2021/01/27/budget-deficits-and-massive-governments-layoffs–prolonged-the-last-economic-recovery-but-this-time-could-be-different

Excerpt:

Orlando Cruz, senior vice president of ICMA-RC, says the layoffs following the Great Recession took years to recover from. “The layoffs, the furloughs, the early retirements we saw then really put states and localities in a hole through next decade to the point where — even before Covid — they had hard time recruiting in certain skill sets,” he said.

Now, he added, “governments are thinking strategically in terms of hiring.” State and local worker layoffs appear to have peaked in April — that’s different from the slow and steady layoffs that occurred over many months during the last recession. “Governments know they have to compete with other sectors for talent,” Cruz said during a call with reporters. What’s more, he said, budget constraints in the coming years will “make it harder to back fill those positions laid off.”

Author(s): Liz Farmer

Publication Date: 27 January 2021

Publication Site: Forbes

The Covid Spend-O-Rama’s Multiemployer Pension Bailouts: Some Disappointed First Impressions

Mary Pat Campbell

Link: https://www.forbes.com/sites/ebauer/2021/02/09/the-covid-spend-o-ramas-multiemployer-pension-bailouts–some-first-impressions/?sh=5fa34dbb2e62

Excerpt:

Which brings us to yesterday’s proposal. It is named the “Butch Lewis Emergency Pension Plan Relief Act of 2021” but it is not the “Butch Lewis Act” and it is not the “Emergency Pension Plan Relief Act of 2021.”

There are some commonalities, to be sure. The new bill maintains the provision which allows plans to use the “zone” status from prior to the pandemic to avoid designation as endangered, critical, or critical and declining. It allows plans to stretch their “funding improvement and rehabilitation period” from 10 to 15, or from 15 to 20 year, depending on the plan’s particulars. It permits plans to amortize asset losses over 30 years to reduce their required contributions — plus, added in the new version, the option to also defer recognizing “other losses related to the virus SARS-CoV-2” such as reductions in employment or increases in retirements.

But there’s another change that’s substantial. In the prior, HEROES Act version, the drafters maintained the concept of the “partition,” shifting liabilities for a portion of an at-risk pension to the PBGC and funneling extra funds there to be able to make those payments; to be sure, that version had planned to increase the maximum benefit substantially in order to protect retirees from benefit cuts, but the structure remained somewhat similar. The new proposal simply sends cash to eligible ailing multiemployer plans directly.

….

A straightforward read of this, then, is that every penny of pension benefits due to be paid to present or future retirees, for the next 30 years, would be paid by the federal government.

Author(s): Elizabeth Bauer

Publication Date: 9 February 2021

Publication Site: Forbes