The Illini in the coalmine. Illinois could be tasting what others states might have to swallow soon. On Friday, ratings agency Standard & Poor’s downgraded Illinois’ credit rating from A to A-minus. It was the state’s second downgrade in the past year, and it comes just days before the Illinois will issue $500 million in new bonds to pay for road and transportation projects. The lower rating, now the worst in the nation, means the state will have to pay higher interest rates to get people to buy their bonds. State Treasurer Dan Rutherford said the lower rating would cost Illinois $95 million on this issue alone. But Illinois is not alone. The reason for the downgrade is its unfunded pension liability, a problem of virtually every state in the nation. In 2010, the American Enterprise Institute said the unfunded pension liability of the states now exceeds $3 trillion. One of the implications is this: The next time you hear that the federal debt is $16 trillion or $17 trillion or $18 trillion, just know that our real debt—with this liability added in—is at least $3 trillion more.
Happenings on the Hill. Conventional wisdom is that things will be pretty quiet in Washington this week. The House is not in session and the most significant business before the Senate is the confirmation of John Kerry (D-Mass.) as secretary of state. I’m not saying that confirming a secretary of state is not a big deal, but this confirmation is a slam-dunk. The only possible drama might come when the Senate takes up a bill providing $50 billion in Superstorm Sandy relief. Sen. Mike Lee (R-Utah) introduced an amendment requiring offsets, or spending cuts elsewhere. Lee’s amendment has little chance in the Democratic-controlled Senate, but the debate could be quite a show.
Active hurricane season. Speaking of Superstorm Sandy, 2012 was tied for the third most active Atlantic hurricane season on record. Pundits blame global warming for the size and frequency of the storms. That theory takes a hit when you learn that one of the years tying 2012 was 1887. In fact, it’s possible that 1887 may have been even worse. Because of satellite technology, we know much more about hurricanes of the past 50 years than we do about those of the pre-satellite era. That’s why in 2000 the National Oceanic and Atmospheric Administration launched the Atlantic Hurricane Reanalysis Project to determine the true number of hurricanes in the pre-satellite era. The project uses shipboard and other records. Currently, scientists say we have an “undercount bias” of up to six tropical storms per year between 1851 and 1885 and up to four per year between 1886 and 1910. That could mean that current hurricane activity is much closer to normal than some of the alarmists would have us believe.
School choice momentum. This week is National School Choice Week. A half-dozen sponsoring organizations kicked off the week with a rally in Phoenix on Friday attended by an estimated 7,000 people. School Choice Week events take place in all 50 states, more than 3,500 in all. One interesting aspect of the event is a whistle-stop train tour going from Los Angeles to New York. School choice is already breaking out all over. This year, more than 2 million students are in home schools and more than 4 million students are in Christian schools. Millions more are in non-religious private schools. Of course, that still leaves more than 80 million in the largely failing public school system, but at least it’s a start.