America's housing and derivatives crises may be behind us, but another ticking time bomb looms just ahead in the many severely underfunded state and local government employee pensions.

Cities and counties alone face an estimated $574 billion in unfunded public pension liabilities, a recent Northwestern University study found. Philadelphia ($9.7 billion in unfunded liabilities), Boston ($7.5 billion) and Chicago ($44.8 billion) are all projected to run out of pension money by the end of this decade. Their problems only compound the multitrillion-dollar problem of unfunded state pensions.

Estimates of the problem's true size vary, because the governments with the biggest shortfalls often try to conceal their dire circumstances. In jurisdictions across America, pension funds attribute unrealistic values to investments and assume unrealistic rates of return. They protect themselves with exemptions from freedom of information laws, or even withhold information despite those laws.

In Illinois, the Chicago Tribune reported last month, public pension funds are specifically exempted from disclosing basic information, such as the values of their investments. In Pittsburgh, the Tribune-Review reports that the city's struggling pension fund has been withholding details even from city councilmen. As of last month, Pittsburgh's pension fund hadn't updated the data on its Web site in four years. Its directors fear that the state will take it and open its books to the public.

"The challenge," says Rep. Devin Nunes, R-Calif., "is that we know it's a problem. But we don't know how big the problem is."

Whether you are a taxpayer or one of the millions of Americans counting on public pension funds for your retirement, it is in your interest to know how badly each public pension system is underfunded. Indeed, you have a right to know, because your money is at stake. This growing problem could lead to massive benefit cuts or even more massive tax increases in your city or state. The problem will never be solved unless everyone understands it.

So how do you force states and municipalities to be open and honest about their pension liabilities? Nunes thinks he has the answer, and Reps. Paul Ryan, R-Wis., and Darrell Issa, R-Calif., agree. Last week, the three introduced the Public Employee Pension Transparency Act, which would use what leverage the federal government already has to force a truthful disclosure of public pension liabilities.

Every year, America's smaller governments issue bonds that have an advantage over other forms of debt. Provided that the issuers meet all of the criteria under federal law, interest from these bonds is exempted from federal taxes. This augments the after-tax yield of state and municipal bonds, making them compare more favorably with other conservative investments, such as corporate bonds. This indirect subsidy from Uncle Sam to local governments comes to about $40 billion annually.

Nunes' bill, in addition to barring future pension bailouts by federal taxpayers, simply adds a requirement for state and local governments that want to issue tax-exempt bonds. Unless they hand over complete information on the health of their pension funds to the U.S. Treasury Department, they won't qualify for the treasured tax exemption. You want to borrow money and build that new school or town square? Then show us your books.

The bill directs the Treasury Department to post the information online. Citizens will be able to make an apples-to-apples comparison of the health of the nation's many pension funds, using realistic and uniform rates of return.

Nunes' bill isn't a solution to the coming pension crisis, but it is a very good first step. "At least it gives us something to fight for," he says. He acknowledges that the bill won't pass the House until next year -- he's just proposed it now in order to give it some early attention and drum up support. And even in the new, more Republican Congress, it is unlikely to overcome the Senate's 60-vote hurdle. What's more, President Obama could veto it, especially if public-sector unions feel threatened by the proposal's ban on bailouts.

But when a problem reaches the trillion-dollar level, political pressure has a way of solving it. Government transparency is not, or at least should not be, a partisan issue. And after this recent election, American voters don't seem eager for yet another bailout.

David Freddoso is The Examiner's online opinion editor. He can be reached at