Rick Manning: ‘No’ to union pension bailout

The writer is director of communications for Americans for Limited Government, a conservative advocacy group based in Fairfax, Va. He is the former public affairs chief of staff for the U.S. Department of Labor.

Just when you thought Congress might have run out of bailout ideas for politically favored groups, along comes a bill from U.S. Sen. Robert Casey, D-Pa., to bail out union pension funds.

Operating under the benign- sounding title “Create Jobs and Save Benefits Act of 2010,” Casey’s bill is actually nothing more than a transfer of approximately $165 billion in labor-union pension debt over to the U.S. taxpayers.

For decades, one of the primary organizing tools used by labor unions has been the promise that their members will enjoy secure pensions upon retirement. Most of these union pensions are held in what are known as multi-employer pension funds. Created in 1974 as part of the Employee Retirement Income Security Act, these funds are an agreement between a union and two or more employers to fund the pensions of workers and retirees.

The rub is that if a company goes out of business, its employees remain in the system and become the remaining company’s responsibility. As these multi-employer pension plans become more and more insolvent, the unions that run many of them do not take the fiscally responsible step of cutting benefits, raising the retirement age, asking the members to contribute to the fund or, gasp, contributing to the fund using union dues money. Instead, many have just wished that the problem would go away.

Now, the piper is demanding to be paid.

Moody’s rating service has found that large multi-employer pension funds are underfunded by $165 billion. This includes funds that either pay or secure the retirement for many Teamsters, AFL-CIO and SEIU members, and other large, politically connected unions.

Not surprisingly, these unions are using the clout gained from spending their cash on politics rather than pensions to demand a taxpayer bailout.

Enter Sen. Casey and his House supporters, Earl Pomeroy, D-N.D., and Pat Tiberi, R-Ohio, who have a “solution”: Keep the benefits for the members of the multi-employer pension funds the same, but have them guaranteed by the Pension Benefits Guaranty Corporation (PBGC).

Who guarantees the PBGC? You guessed it, you and I, the American taxpayer. Just another proposal pushing one set of favored constituents over the rest and which will ensure that the dizzying growth of our nation’s deficit continues unabated.

This comes at a time when our nation’s debt is projected by the Congressional Budget Office to match our gross domestic product as early as 2013, threatening our nation’s AAA bond rating.

Incredibly, among the eight House Republicans who have joined Tiberi in supporting the addition of $165 billion to our national debt to bail out the irresponsible management of these pension funds are: John Linder (Georgia), Peter Roskam (Illinois), Thaddeus McCotter (Minnesota), Steven LaTourette (Ohio), JoAnn Emerson (Missouri) and Aaron Schock (Illinois).

It always sounds good to say that you are helping preserve people’s pensions. Unfortunately, in this instance, Casey, Pomeroy and Tiberi would ask the vast majority of working Americans without a defined pension to put less into their personal retirement account in order to preserve the status quo of union member retirees.

This is a perfect example of the government playing Robin Hood in reverse: Taking from those who are mostly without fixed pensions in order to preserve the comfort level of those who have union pensions, while allowing unions to continue to organize across the United States and claim that paid pensions are a benefit that their members can expect to receive.

This is seemingly elegant solution could instead be the tipping point from which our debt-ridden economy is never able to recover.

The Senate Health, Education, Labor and Pensions Committee will hold a hearing on the Casey bill on Thursday.

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