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NJ Pension Solution: Hit Up The Feds For A Loan?

By David Madden

TRENTON, N.J., (CBS) -- New Jersey's top Democrat has proposed a plan to have the federal government help put deficit-riddled pension funds from coast to coast back in the black.

State Senate President Steve Sweeney says 27 states have outstanding pension obligations topping $10 billion each. New Jersey's stands at $51 billion. All together, the states need more than a trillion dollars in help.

Sweeney's plan? Go to the feds, but not for a bailout.

"This would be a loan pool that states would have to ask the voters, get voter approval to borrow this money at one percent interest," Sweeney told KYW Newsradio, "and then they would have to agree to make sure that they make their pension obligations going forward."

The Gloucester County Democrat, who's expected to run for Governor in 2017, believes prudent investment of that loaned money would more than take care of paying it back.

"If we had the ability to borrow $51 billion and I made 7 percent on that $51 billion and I'm paying back one, I've got my pension plan healthy," Sweeney said.

He believes if the feds could help Wall Street and the automotive industry, they can step up to help states address their pension problems. Sweeney will lobby legislative counterparts in other states before trying to get congressional action.

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