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The “Great Recession” of 2008 decimated many facets of the U.S. economy in the short-term but the long-term effect of the recession on the retirement security of millions of Americans is a story in progress. This study investigates the impact of the 2008 recession on the public pensions of state and local government employees. Prior to the recession, the 19 million current state and local government employees enjoyed the prospect of a retirement built on the tradition FDR’s three “legs”: a private pension from their employer, personal savings, and Social Security. Although the “first leg” of retirement, the private pension, disappeared in the late 20th century for the majority of American workers, state and local public sector employees were the exception-with about 90% eligible for a defined benefit pension at the beginning of the 21st century (GAO 2008). The 2008 recession, effected all U.S. states, however the response to reduced investment earnings for state-administered public pensions varied. The National Conference of State Legislatures (NCSL) noted in one year, 44 states enacted 269 pension bills (NCSL 2013). The changes enacted in state legislation, all involved a reduction in benefits. The retrenchment actions ranged from suspended cost-of-living allowance (COLA) increases and increased employee contributions to the loss of the defined pension benefit. Several states, after the 2008 recession, terminated the defined pension benefit for future employees, one state (Rhode Island) changed to a hybrid plan for current employees. Scholars seeking to understand retrenchment of benefits argue the lack of a “public outcry” permit elected officials to act without fear of a backlash (Pierson 1994). Conversely, conditions that prevent political opponents to transfer costs to a losing coalition and instead compromise on a long-term sharing of costs, is considered policy investment (Jacobs 2011). This study seeks to use retrenchment and investment theories to explain the public pension actions U.S. states took following the 2008 recession. The quantitative analysis confirms several expectations of retrenchment theory, such as the importance of interest groups, represented by the number of public sector employees in a state and the level of unionization within a state’s public sector. Investment theory predictions are not confirmed in the quantitative analysis, however a case study analysis of Delaware does find conditions of political compromise resulting in long-term stability for the pension plans. The quantitative analysis expected to find a strong “mirror” relationship between a pension plan’s funded ratio (assets to liabilities) and the state’s annual required contribution (ARC). The relationship between the two key measures, while positive and significant, is small. The unexpected finding led to a focus on ARC payments and the political conditions surrounding the decision to fund or not fund a state’s annual contribution. Delaware and Oklahoma are examples of states with adequate ARC payments yet contradictory public pension actions. Rhode Island and New Jersey are states with inadequate ARC payments, yet also contradictory public pension actions. Understanding the conditions that led to a state’s decision to pay or not pay the ARC also uncovers a host of actions states take to manipulate their required contributions. Regardless of similar institutions and budget processes across the 50 states, not every political institution gets the same results. Politics and state norms will change the outcome. / Political Science

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No / The Atlantic burden-sharing debate during the early part of the twenty-first century is shaping up to be very different from those of NATO's first fifty years. The resources needed for direct defence of western Europe have fallen sharply, and further cuts are possible. The gradual strengthening of European cooperation means that the EU is becoming an actor in its own right in many international regimes. Debates about which countries are pulling their weight internationally are also taking into account contributions to non-military international public goods¿financing EU enlargement, aiding the Third World, reducing emissions of climate-damaging pollutants. In this new multidimensional debate, it becomes more apparent that states that contribute more to one regime often do less than most in another. Germany, for example, is concerned about its excessive contribution to the costs of EU enlargement, but it spends considerably less than France and the UK on defence. European countries contribute three times as much as the United States to Third World aid, and will soon pay almost twice as much into the UN budget. Yet they were dependent on the US to provide most of the military forces in the 1999 Kosovo conflict, and would be even more dependent in the event of a future Gulf war. This widening of the burden-sharing debate contains both dangers and opportunities. It could lead to a fragmentation of the Atlantic dialogue, with each side talking past the other on an increasing number of issues, ranging from global warming to Balkan peacekeeping. In order to avoid such a dangerous situation, the US and European states should maintain the principle that all must make a contribution to efforts to tackle common problems, whether it be through troops in Kosovo or commitments to reducing greenhouse gas emissions. Yet there should also be some flexibility in defining who does how much. The preparedness of some countries to lead, by doing more, will be essential if international cooperation is to have a chance to work.