It seemed like only yesterday that a contract was sacrosanct. Remember 2009, and those AIG bonuses, paid for with taxpayer dollars?

The administration official said the Treasury Department did its own legal analysis and concluded that those contracts could not be broken.

Larry Summers:

We are a country of law. There are contracts. The government cannot just abrogate contracts.

But now that we’re talking about breaking contract to pay back pensions that middle class workers have paid into over the course of their professional careers, well — that’s another story.

Chris Christie:

The promises of the past are too expensive.

Let’s compare. Per the latest Pew study in 2008 (PDF):

Wisconsin Pension Fund

(figures in thousands)
Total liabilities: $77,412,000
Unfunded liabilities: $252,600
Total percentage of liabilities covered by fund assets: 99.67%

According to Dave Stella of the Wisconsin Department of Employee Trust Fund, the system’s assets were worth $79.8 billion at the end of last month, and the last solvency test at the end of December determined a funding ratio of 99.8%.

Then there are the bonuses paid by top 10 TARP beneficiaries in 2008, per the New York Attorney General’s report (PDF):

Bank TARP funds 2008 Bonuses
Bank of America $45 billion $3.3 billion
Bank of NY Mellon $3 billion $945 million
Citigroup $45 billion $5.3 billion
Goldman Sachs 10 billion $4.8 billion
J.P Morgan Chase $25 billion $8.7 billion
Merrill Lynch $10 billion $3.6 billion
Morgan Stanley $10 billion $4.5 billion
State Street Corp $2 billion $470 million
Wells Fargo $25 billion $978 million
Total $175 billion $32.6 billion

AIG also received $170 billion in bailout funds from the Treasury and the Federal Reserve.  But they apparently could not break their contracts to pay $1.2 billion in bonuses in 2009.

Suddenly “fiscal hawks” like Chris Christie think it’s fine to break the contracts of public workers because $252,600,000 that isn’t even due now means the “promises of the past” are too expensive.

You don’t hear too much about Orin Kramer’s decision to sink $115 million of New Jersey pension fund money into Lehmans right before the collapse.  Or the fact that both Chris Christie and Christie Todd Whitman have diverted billions from the New Jersey pension fund into the state budget.  That’s evidently just “reform.”

So, where was all this “fiscally responsible” fighting spirit when  it came to paying out $32.6 billion in taxpayer funded banker bonuses?

Well, as Larry Summers said, “we are a country of law.”