Joe Biden gives his union buddies a taxpayer-funded bailout of public pension plans
In a campaign stop in Cleveland, Ohio earlier this week, Joe Biden brought a smile to the faces of his union buddies when he announced a $90 billion taxpayer-funded bailout of public pension plans.
Biden praised the bailout provided by the American Rescue Plan’s Special Financial Assistance program and how it will protect millions of retired union workers from seeing their benefits slashed when their plan becomes insolvent, which many are projected to do in the next few years (via Cleveland.com):
During an afternoon appearance at Max S. Hayes High School on the West Side, Biden trumpeted provisions to the American Rescue Plan to keep at-risk pensions solvent through at least 2051 while also using the official White House visit to knock GOP lawmakers for refusing to support the legislation. He also warned that Republicans could target cuts to other benefits programs should they experience massive gains in upcoming elections.
Speaking to a group of hundreds of union workers and supporters, Biden announced the finalization of a rule providing nearly $90 billion for the Pension Benefit Guarantee Corporation which would help shore up multiemployer pensions for union retirees. Biden, along with several others who joined him on stage, called it one of the biggest victories for union workers in the past 50 years.
While Joe Biden is taking the “credit,” the stage for this taxpayer-financed bailout was first set by Donald Trump and the Republican-led Senate in June 2020. Big surprise, right?
Immediately after the $2.2 trillion CARES Act was signed into law by Donald Trump, Republicans and Democrats immediately went to work on another massive COVID relief bill: Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act.
The $3 trillion HEROES Act received serious consideration at the time despite claims by the Donald Trump and Mitch McConnell that it had little likelihood of becoming law. One of the areas of contention between Republicans and Democrats concerning the HEROES Act dealt with the nearly $1 trillion earmarked for state and public-school bailouts with Republicans allegedly “opposing” it and Democrats supporting it.
But the die had already been cast after governors and mayors across the country shut down their economies in an overreaction to COVID. Not only did their tyrannical actions destroy the incomes of small businesses but government income as well. Besides the obvious impact this had on day-to-day cashflow, COVID tyranny also created a problem for unfunded and underfunded public employee pensions — a problem that existed even before COVID.
“Their shaky financial foundations were in fact set long ago—through unsustainable obligations like retirement benefits for public employees, excessive borrowing, and deferred maintenance of public buildings and infrastructure. The result has been a long-building budget imbalance now estimated in the trillions of dollars.”
~ John Locke Foundation President John Hood
Democrats claimed at the time that state bailouts included in the bill wouldn’t be used to address pension shortfalls, but no such limitation existed in the bill. So, when Democrats successfully passed a modified edition of the HEROES Act after retaking Washington in 2021, taxpayers were about to be put on the hook for bailouts for public employee pensions, but in such a way as to keep it hidden until it was too late.
Though the HEROES Act never became law, it served as the model used by Joe Biden and the Democrats to provide the taxpayer-funded bailout of private union pensions included in the $2 trillion American Rescue Plan.
Still, Democratic Socialists weren’t content with the multi-billion-dollar bailout of pensions included in the American Rescue Plan because it didn’t provide enough money to the Pension Benefit Guaranty Corporation (PBGC) to rescue multiemployer union pension plans from the act’s botched rescue.
As you can see from Biden’s comments above, he gave them what they wanted.
Of course, government has no role to play concerning unfunded and/or underfunded public pensions (via The Center Square):
“[Biden] is saving private union pensions by making ordinary Americans pay for them,” said Rachel Greszler, an expert at the Heritage Foundation. “And 6% of private sector workers are unionized so many of the blue-collar workers that aren’t part of a union, or maybe they are part of a union that no longer has a pension plan, they are the ones who are going to bear the burden.”
Critics also say the federal funds are a true bailout because the federal funds are not requiring any major reforms from the unions. The funds are also only enough to delay the insolvency of a fraction of the funds, critics say, and not fix the problem.
“It actually makes it worse because it creates incentives in the short term for plans to promise more and to make worse assumptions than they already were so they can qualify under this short window to get bailouts, and there are no consequences going forward,” Greszler said. “And now that the federal government established that we are going to bail out these plans, plan administrators know that the sooner their plans become insolvent, the higher the likelihood they have of getting that bailout.” (Emphasis mine)
Taxpayers should not be on the hook for the mismanagement of public pension funds by their unions, and they absolutely should not be forced to secure the retirements of public employees. Unfortunately, I don’t think any of this matters to the far-left elitists in Washington — not when there are votes to be bought and power to be seized.
“The backbone of the country are [sic] the working women and men, the middle class, and you know there’s a middle class for one reason: American unions,” Biden said during his announcement of taxpayer-funded bailouts of public pension plans.
Translation? “I just bought and paid for your vote.”
David Leach is the owner of the Strident Conservative. He holds people of every political stripe accountable for their failure to uphold conservative values, and he promotes those values instead of political parties.
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