Are Union Pensions Bankrupting America?

This is a RUSH transcript from "The O'Reilly Factor," January 25, 2011. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: In the "Impact" segment tonight: According to the New York Post, pensions for city and state workers are going crazy. In fact, pension payments of more than $100,000 a year in the public sector increased 43 percent in New York alone last year. All across the country it's the same deal, public pensions bankrupting cities and states.

So how did this happen? Joining us now from Washington, Fox News political analyst Charles Krauthammer. Charles, is this an outrage or am I overstating things?

CHARLES KRAUTHAMMER, FOX NEWS POLITICAL ANALYST: No, it is an outrage. You are not overstating it. But the irony is it's perfectly legal and it was predictable. I mean, one of the reasons FDR opposed government unions was because he said himself that any public strike – a strike by public workers would be unconscionable. He also understood that the kind of negotiations that you have when you are a public sector union is totally different from what you have in the private sector. In the private sector, the boss negotiates with the union and gives away the store. The boss loses his entire enterprise and he loses his shirt. When public union negotiates with a politician, he can give away the store and he can still get re-elected. Nobody is going to remember or even care about in a re-election campaign whether he promised a pension 30 years hence that nobody really understands in the first place. So you have got this cozy relationship between politicians and the union bosses.

And here is how it worked, Bill. The unions would get the sweetheart deals. They would then, of course, use the dues to create slush funds and with that money they would then get the same politicians re-elected who then would negotiate more sweetheart deals. And this routine where the politicians and the unions fed each other would go on for decades with your tax money.

O'REILLY: And it has gone on for decades. Now we are seeing that states like California, New York, Ohio, that have a big union presence, can't pay. They can't afford the $100,000 a year pensions. There is just not enough money to do that and the entitlement spending. They can't pay.

KRAUTHAMMER: And it is stealing from everything else that state governments do. In New Jersey, they have got about a quarter of a million retirees. If you add up the pensions and the health care and the other side, the benefits, that cost the New Jersey taxpayer $11 billion a year. That's $11 billion a year that you can't spend on education, you can't spend on health care, and you can't spend on public safety. Those numbers are huge, and they are not something that the states can sustain.