Epstein on getting out of public pension contracts

Chicago’s Richard Epstein, on whether states may be able to repudiate some of their pension liabilities and bring public pensions in line with those in the private sector:

I think that the . . . sensible approach is to side-step the bankruptcy proceedings and find ways to attack the union pension obligations directly, given their enormous size. It is odd that these days the only sacred contracts are those which the state enters into with unions for the benefit of their members.

The key question is whether it will be possible to persuade the courts that these pension agreements were the result of political self-dealing, which means that they should be set aside unless it could be shown that the state received fair value for the services rendered when it made those deals. I think that case is bold but winnable, yet only when the situation becomes truly desperate.

FGS