Chicago's pension problem has reached a 'boiling point'

The Business Insider reports:

The tale starts like so many others: with pensions. Many years ago the Chicago school system granted generous pension benefits to its employees. But then the city, which operates the school system, didn’t keep up with its end of the funding.

From 1995 to 2004, the city of Chicago didn’t contribute one nickel to the school district’s pension system, even though it is responsible for a portion of contributions in addition to what employees put in.

In the mid-2000s the city got back on track, but by that time the system had a significant shortfall. Then the financial crisis of 2008 hit, crushing the value of the pension and also weighing on the city’s ability to make its obligatory payments.

To give itself some breathing room, the city granted itself a “pension holiday” from 2011 to 2013, allowing for smaller payments than it should have made. Today the city of Chicago must contribute about $700 million to the CPS pension system, an amount that’s increasing by roughly 7% per year.

For a school system that is running half a billion dollars in the red, that’s simply an unworkable number.

No word yet on this story from Barack Obama: who did nothing in the Illinois state Senate to try and prevent this problem.