"Illinois may seek federal guarantee of pension bonds"

[WhiskeyGirl]

Why should U.S. taxpayers bailout Illinois?  If the funds were sustainable, would they need a bailout?

In my mind, this isn't a guarantee, but a bailout.  The only thing to be guaranteed is that the funds will fail and need billions...

US - Illinois, which plans to sell $3.7bn of pension bonds next week, may seek a federal guarantee on retirement-system debts if its unfunded liabilities can’t be eliminated, according to budget documents.

The documents underline Republicans' concern in Washington that US taxpayers may be forced to bail out public-employee pensions that have failed to set aside enough money to pay for the promised benefits. Asset values of state pension plans fell to about 76% of obligations in 2009 from 82% in fiscal 2008, according to data compiled by Bloomberg.

Republicans, who control the US House of Representatives, are backing a bill that would require state and local pensions to use more conservative assumptions than they do now to report the size of their liabilities to the federal government. The measure has drawn fire from organized labour and public officials, who say it is a way to attack unions by making their retirement benefits look unsustainable.

Why isn't it 100% funded?  Maybe they will 'look' unsustainable because they are?  Maybe they need some rigorous stress test?  Perpetual unemployment in the private sector of 35%?

read more here - http://www.globalpensions.com/global-pensions/news/2027678/illinois-seek-federal-guarantee-pension-bonds