Moody's Downgrades Chicago, Cites Rahm's Pension Mismanagement

Moody's Downgrades Chicago, Cites Rahm's Pension Mismanagement

Like the president he served, Rahm Emanuel, who was Barack Obama’s chief of staff before he became Chicago’s mayor,inherited a debt crisis and made it worse. 

And this led Moody’s, theratings agency, to downgrade Chicago’s general obligation rating,which had been “stable,” to “negative,” according to Reuters.

Moody’s, in a statement, said: “Chicago’s administration has yet tounveil a detailed strategy for improving pension funding levels and isnot currently contributing the full annual required contributions.

“Should pension pressures continue to escalate absent a specific planof reform, the city’s credit quality will likely weaken.”

According to Reuters, the city of Chicago’s “unfunded liability forits fire, police, laborers and municipal pension funds is projected toreach $19.2 billion at the end of 2012, up from $14.6 billion at the end2009.”

It looks like the revolving door between Chicago and Washington isonly serving to ensure a race to the bottom between the two entities’ credit ratings.