I think the powers that be are in a quandry.  They have a legal as well as moral obligation to honor the PACT contracts and they do not want to be the odd ball out.  At the same time, they don't want to be the front runner on a solution in case it fails.  So they play the old wait and see game hoping that in time the PACT holders will either go away or somebody else will come up with a solution that looks like it will work, then they will claim it was their idea all along.

I also don't think there is much doubt that in the end Alabama will honor the contracts.  The title of the program PREPAID Affordable College Tuition as much as states that the contract holder is buying tuition before it is needed.  There is a vested right in college tuition implicit in the title of the program.  Also, if it was not guaranteed, then why would their be a need for a second 529 plan that states up front that it is an investment with all of the inherent risks.  TWO investment plans from one state would be redundant.  The state meant for PACT to be what it says...PREPAID Affordable College Tuition and for the 529 plan to be what it says on the State Treasurer's website: 

     "The Program is sponsored by the State of Alabama and is designed to be a Qualified Tuition Program under Section 529 of the Internal Revenue Code. The FDIC, the State of Alabama, the Treasurer of the State of the Alabama, the Board of Trustees of the Program Trust Fund or any other federal or state governmental agency do not insure or guarantee accounts and investments under the Program." 

The PACT page does not state this.

In the end, after all the blustering, postering, and politicking...we will prevail.