Legislation Quick Search
11/24/2017 05:22 PM
Pennsylvania House of Representatives
http://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20170&cosponId=24490
Share:
Home / House Co-Sponsorship Memoranda

House Co-Sponsorship Memoranda

By Member | By Date | Keyword Search


House of Representatives
Session of 2017 - 2018 Regular Session

MEMORANDUM

Posted: September 6, 2017 12:34 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 Seth Grove and I intend to introduce 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 enforced today. Quantitative Easing came from a Federal Reserve policy to deal with the housing bubble.

Retired Senator Dodd and retired Congressman Barney Frank were been quick to blame the banking industry for the housing bubble bursting and responded in kind with the Dodd Frank bill. Nowhere in that legislation did Congress and the regulatory bodies accept their duplicity in the crisis and rein themselves in.

The Federal Reserve specifically had a direct hand in the crisis of the housing bubble and its eventual bursting which lead to financial meltdown in the economy the effects of which have been felt for almost 10 years. In a similar vein, the damage that the Federal Reserve has done to the states and to municipalities and their budgets with its policy of quantitative easing is almost incalculable.

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.

The Federal Reserve and its monetary policies attempt to control the economy while at the same time not knowing all the factors which impact an economy. By doing so the Federal Reserve has interfered with and caused damage to the states and localities in much the same way the Federal Reserve accused the banking industry.

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.

Please join us in co-sponsoring this most important resolution.



Introduced as HR522