In a closely-watched ruling with potentially far-reaching effects, a federal bankruptcy judge has ruled Stockton, CA may proceed with cutting health care benefits for retirees while it is in bankruptcy. This seemingly tiny crack in the dike protecting public pension benefits could easily turn into a major breach and perhaps even threaten the dike itself. Yes, this is that serious. Those who want to break public unions and their pensions will be lining up on one side while those defending the pensions will frantically be looking for ways to block bankrupt municipalities from restructuring labor and pension agreements.