Chicago Needs to Fix Its Spending Problem, and Soon: Editorial

Chicago, the city of broad shoulders and big ambitions, is facing a series of self-made calamities. Among them is a fiscal crunch that may soon become a crisis.

In recent years, Chicago has lagged the US in job creation, wage growth and other key metrics while surpassing its peer cities in violent crime. Chronic budget shortfalls and the country’s most underfunded pensions have left it with the lowest credit rating of any major US city, including Detroit, which went bankrupt in 2013.

Worse awaits: A $36.5 billion liability racked up by the city’s four municipal pension funds, just 26% funded ...