Remember when Obama said, no more bailouts?
Neither does he.
Not really a surprise though is it.
President Obama urged reluctant lawmakers Saturday to quickly approve nearly $50 billion in emergency aid to state and local governments, saying the money is needed to avoid “massive layoffs of teachers, police and firefighters” and to support the still-fragile economic recovery.
In a letter to congressional leaders, Obama defended last year’s huge economic stimulus package, saying it helped break the economy’s free fall, but argued that more spending is urgent and unavoidable. “We must take these emergency measures,” he wrote in an appeal aimed primarily at members of his own party.
“I think there is spending fatigue,” House Majority Leader Steny H. Hoyer (D-Md.) said recently. “It’s tough in both houses to get votes.”
Democrats, particularly in the House, have voted for politically costly initiatives at Obama’s insistence, most notably health-care and climate change legislation. But faced with an electorate widely viewed as angry and hostile to incumbents, many are increasingly reluctant to take politically unpopular positions.
The House last month stripped Obama’s request for $24 billion in state aid from a bill that would extend emergency benefits for jobless workers. Senate Majority Leader Harry M. Reid (D-Nev.) hopes to restore that funding but with debate in that chamber set to resume this week, he acknowledges that he has yet to assemble the votes for final passage. Obama’s request for $23 billion to avert the layoffs of as many as 300,000 public school teachers has not won support in either chamber.
Gotta protect your union base, and the expense of everyone else.
“He’s calling on Congress to pass a [jobless] bill that will add about $80 billion to the deficit, but then calls for fiscal discipline; he says these measures need to be targeted and temporary, but then calls for extending programs passed in the stimulus more than a year ago,” Stewart said in an e-mail. Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell (R-Ky.)
He says to Michigan High Schoolers to be responsible for your actions, then turns around and blames BP for everything.
And we won’t even go into the still rampant virulent disease of Bush Derangement Syndrome!!
Republicans have offered an alternative package that proposes to cover the cost of additional jobless benefits — but not aid to state governments — by cutting federal spending elsewhere. In contrast to the Democratic bill, the GOP measure would reduce deficits by nearly $55 billion over the next decade, according to the nonpartisan Congressional Budget Office.
But will Democrats listen, hell no. It’s not on The Agenda.
Feeling tapped out after stimulus, ObamaCare and everything else? Senator Bob Casey has one more deal for you. If the Pennsylvania Democrat gets his way, U.S. taxpayers will also pick up the astonishing tab for poorly managed union pension plans.
Mr. Casey is gathering support for his curiously named “Create Jobs and Save Benefits Act,” a bailout for union-run retirement plans. Similar to House legislation from North Dakota Democrat Earl Pomeroy and Ohio Republican Patrick Tiberi, the bill would transfer tens of billions of dollars worth of retiree liabilities to the Pension Benefit Guaranty Corporation, i.e., to taxpayers.
At issue are multi-employer pension plans, in which companies across an industry pay into a single pension pool. The plans are predominately run by unions and for years have distinguished themselves by poor management. The Labor Department in 2008 listed 230 multi-employer plans that were either endangered (less than 80% funded), or critical (less than 65% funded), or that had applied to government for funding relief. By 2009 that number had soared to 640.
The financial crash is partly to blame, but even before 2006 only about 6% of multi-employer plans were fully funded, compared to about 31% of single-employer plans. The real problem is that multi-employer plans have become a sort of pension Ponzi scheme.
Unions love multi-employer plans because they let workers keep their retirement benefits even if they switch jobs to another participating company. This encourages lifelong union membership. Unions are less enthusiastic about paying the bills. The negotiating priority of union leaders is to get hefty wage increases and benefits for current workers, leaving the scraps to the pensions of retirees who no longer vote in union elections.
When a company in an industry goes out of business, meanwhile, the remaining firms are still on the hook for all costs of the multi-employer plan. This explains why the trucking industry is backing Mr. Casey’s bill, and why Mr. Casey announced his legislation at a Pennsylvania facility of YRC Worldwide, a Kansas trucking outfit. Someone has to pay for years of the industry agreeing to Teamster demands.
Mr. Casey’s bill would cordon off “orphaned” pensions—those for which an employer has stopped contributing or withdrawn from a multi-employer fund—and put them into a separate account. Surviving companies would pay benefits to these orphans for five years, after which they’d get kicked to the PBGC, which would shoulder the benefits until the last retiree or beneficiary dies. The remaining multi-employer plan would be back in the black, free to start the negative-feedback loop of underpayments and overpromises again.
All of this is a raw deal for union pensioners who worked a lifetime in expectation of certain benefits. The PBGC’s current maximum payment to any plan participant is $12,800 a year. Mr. Casey’s bill raises that to $21,000 year, still only a fraction of existing pension promises.
Not that the PBGC has the cash to pay more. The agency’s deficit was $21 billion as of last September, and it is expected to rise to an estimated $34 billion by 2019. Mr. Casey is claiming his multi-employer-bailout scheme will cost a mere $8 billion, but Moody’s estimated last year that multi-employer plans were $165 billion underfunded.
The tab is likely to be much higher given the moral hazard Mr. Casey would create. As Hudson Institute economist Diana Furchtgott-Roth notes, the bill creates “a vicious circle. Once PGBC took over some plans, other employers would want to declare bankruptcy, unload plans on the PGBC, and reorganize under another name. The incentives to do this would be enormous.”
In 2006 Congress passed the Pension Protection Act to prod companies and unions to shape up their pension plans, whether by lowering benefits, increasing contributions from employers and workers, or even raising retirement ages. The fact that many unions and companies have refused to use these tools does not make their mistake the obligation of U.S. taxpayers. If unions really cared about protecting retirees, they’d ditch defined-benefit plans and adopt 401(k) plans that give workers control over their retirement assets.
Union chiefs prefer the power that comes with managing huge pension investments—even if they’re failing. They are now counting on Mr. Casey to preserve their power by making taxpayers pick up the tab for years of pension mismanagement. With the union priority of “card check” stalled, word is that the Casey bailout is Big Labor’s consolation prize. Taxpayers should let Congress know they don’t want to pay.(WSJ)
Washington Examiner (excerpt):
Given the liabilities involved, very few companies are willing to enter multi-employer pension plans voluntarily. They usually have to be forced by unions in negotiations and arbitration. Lawmakers may support a pension plan bailout on the grounds that it’s not fair to employers, but unions knew exactly what they were doing when they forced companies into these plans.
Nobody is pointing out that it was wrong for unions to force companies into these untenable positions to begin with. It’s doubly wrong to make the 93 percent of privately employed Americans who don’t belong to a union — who have to contribute to their own 401(k)s for retirement — pay also for the retirements of the seven percent who have or are greedily bludgeoning their employers out of existence.
But Obama has to take of he peeps. Screw everyone else.
Especially in an election year.
Report from the Treasury Department. The report to Congress warned that U.S. debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015 .
At that point, Treasury reckons, the ratio of debt to gross domestic product would be 102% compared with 93% this year.
But don’t worry, the Government is here to help you!
Neither does he.
Not really a surprise though is it.
President Obama urged reluctant lawmakers Saturday to quickly approve nearly $50 billion in emergency aid to state and local governments, saying the money is needed to avoid “massive layoffs of teachers, police and firefighters” and to support the still-fragile economic recovery.
In a letter to congressional leaders, Obama defended last year’s huge economic stimulus package, saying it helped break the economy’s free fall, but argued that more spending is urgent and unavoidable. “We must take these emergency measures,” he wrote in an appeal aimed primarily at members of his own party.
“I think there is spending fatigue,” House Majority Leader Steny H. Hoyer (D-Md.) said recently. “It’s tough in both houses to get votes.”
Democrats, particularly in the House, have voted for politically costly initiatives at Obama’s insistence, most notably health-care and climate change legislation. But faced with an electorate widely viewed as angry and hostile to incumbents, many are increasingly reluctant to take politically unpopular positions.
The House last month stripped Obama’s request for $24 billion in state aid from a bill that would extend emergency benefits for jobless workers. Senate Majority Leader Harry M. Reid (D-Nev.) hopes to restore that funding but with debate in that chamber set to resume this week, he acknowledges that he has yet to assemble the votes for final passage. Obama’s request for $23 billion to avert the layoffs of as many as 300,000 public school teachers has not won support in either chamber.
Gotta protect your union base, and the expense of everyone else.
“He’s calling on Congress to pass a [jobless] bill that will add about $80 billion to the deficit, but then calls for fiscal discipline; he says these measures need to be targeted and temporary, but then calls for extending programs passed in the stimulus more than a year ago,” Stewart said in an e-mail. Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell (R-Ky.)
He says to Michigan High Schoolers to be responsible for your actions, then turns around and blames BP for everything.
And we won’t even go into the still rampant virulent disease of Bush Derangement Syndrome!!
Republicans have offered an alternative package that proposes to cover the cost of additional jobless benefits — but not aid to state governments — by cutting federal spending elsewhere. In contrast to the Democratic bill, the GOP measure would reduce deficits by nearly $55 billion over the next decade, according to the nonpartisan Congressional Budget Office.
But will Democrats listen, hell no. It’s not on The Agenda.
Feeling tapped out after stimulus, ObamaCare and everything else? Senator Bob Casey has one more deal for you. If the Pennsylvania Democrat gets his way, U.S. taxpayers will also pick up the astonishing tab for poorly managed union pension plans.
Mr. Casey is gathering support for his curiously named “Create Jobs and Save Benefits Act,” a bailout for union-run retirement plans. Similar to House legislation from North Dakota Democrat Earl Pomeroy and Ohio Republican Patrick Tiberi, the bill would transfer tens of billions of dollars worth of retiree liabilities to the Pension Benefit Guaranty Corporation, i.e., to taxpayers.
At issue are multi-employer pension plans, in which companies across an industry pay into a single pension pool. The plans are predominately run by unions and for years have distinguished themselves by poor management. The Labor Department in 2008 listed 230 multi-employer plans that were either endangered (less than 80% funded), or critical (less than 65% funded), or that had applied to government for funding relief. By 2009 that number had soared to 640.
The financial crash is partly to blame, but even before 2006 only about 6% of multi-employer plans were fully funded, compared to about 31% of single-employer plans. The real problem is that multi-employer plans have become a sort of pension Ponzi scheme.
Unions love multi-employer plans because they let workers keep their retirement benefits even if they switch jobs to another participating company. This encourages lifelong union membership. Unions are less enthusiastic about paying the bills. The negotiating priority of union leaders is to get hefty wage increases and benefits for current workers, leaving the scraps to the pensions of retirees who no longer vote in union elections.
When a company in an industry goes out of business, meanwhile, the remaining firms are still on the hook for all costs of the multi-employer plan. This explains why the trucking industry is backing Mr. Casey’s bill, and why Mr. Casey announced his legislation at a Pennsylvania facility of YRC Worldwide, a Kansas trucking outfit. Someone has to pay for years of the industry agreeing to Teamster demands.
Mr. Casey’s bill would cordon off “orphaned” pensions—those for which an employer has stopped contributing or withdrawn from a multi-employer fund—and put them into a separate account. Surviving companies would pay benefits to these orphans for five years, after which they’d get kicked to the PBGC, which would shoulder the benefits until the last retiree or beneficiary dies. The remaining multi-employer plan would be back in the black, free to start the negative-feedback loop of underpayments and overpromises again.
All of this is a raw deal for union pensioners who worked a lifetime in expectation of certain benefits. The PBGC’s current maximum payment to any plan participant is $12,800 a year. Mr. Casey’s bill raises that to $21,000 year, still only a fraction of existing pension promises.
Not that the PBGC has the cash to pay more. The agency’s deficit was $21 billion as of last September, and it is expected to rise to an estimated $34 billion by 2019. Mr. Casey is claiming his multi-employer-bailout scheme will cost a mere $8 billion, but Moody’s estimated last year that multi-employer plans were $165 billion underfunded.
The tab is likely to be much higher given the moral hazard Mr. Casey would create. As Hudson Institute economist Diana Furchtgott-Roth notes, the bill creates “a vicious circle. Once PGBC took over some plans, other employers would want to declare bankruptcy, unload plans on the PGBC, and reorganize under another name. The incentives to do this would be enormous.”
In 2006 Congress passed the Pension Protection Act to prod companies and unions to shape up their pension plans, whether by lowering benefits, increasing contributions from employers and workers, or even raising retirement ages. The fact that many unions and companies have refused to use these tools does not make their mistake the obligation of U.S. taxpayers. If unions really cared about protecting retirees, they’d ditch defined-benefit plans and adopt 401(k) plans that give workers control over their retirement assets.
Union chiefs prefer the power that comes with managing huge pension investments—even if they’re failing. They are now counting on Mr. Casey to preserve their power by making taxpayers pick up the tab for years of pension mismanagement. With the union priority of “card check” stalled, word is that the Casey bailout is Big Labor’s consolation prize. Taxpayers should let Congress know they don’t want to pay.(WSJ)
Washington Examiner (excerpt):
So union management bleeds one company dry, then makes an unrelated company responsible for picking up their pension obligations. Then they start bleeding them dry. When there’s no one left to bleed dry, they have Democratic senators and House members in their pocket to push this bill on the taxpayer.
Bottom line is that unions are taken care of, while taxpayers are left to shell out billions. Nice racket, huh?Given the liabilities involved, very few companies are willing to enter multi-employer pension plans voluntarily. They usually have to be forced by unions in negotiations and arbitration. Lawmakers may support a pension plan bailout on the grounds that it’s not fair to employers, but unions knew exactly what they were doing when they forced companies into these plans.
Nobody is pointing out that it was wrong for unions to force companies into these untenable positions to begin with. It’s doubly wrong to make the 93 percent of privately employed Americans who don’t belong to a union — who have to contribute to their own 401(k)s for retirement — pay also for the retirements of the seven percent who have or are greedily bludgeoning their employers out of existence.
But Obama has to take of he peeps. Screw everyone else.
Especially in an election year.
Report from the Treasury Department. The report to Congress warned that U.S. debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015 .
At that point, Treasury reckons, the ratio of debt to gross domestic product would be 102% compared with 93% this year.
But don’t worry, the Government is here to help you!
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