In October, actress Jane Fonda made headlines when she said the coronavirus was “God’s gift to the left.” That statement has proven true on many levels. Some, including myself, believe that, had the pandemic never materialized, former President Donald Trump would have easily won reelection.
Anyway, the economic devastation caused by the lockdowns has forced the government to pass several enormous COVID-19 relief bills into which the Democrats have been able to tuck away a myriad of wish-list items, the most recent $1.9 trillion aid package being perhaps the most egregious.
On Tuesday, The New York Times reported that the bill passed by the Senate last weekend includes an $86 billion bailout for failing pensions. The article’s subtitle informs readers that “Democrats pushed through a big aid measure for multiemployer pensions whose problems predate the pandemic.”
Actually, I’m surprised the Times reported this.
The Times tells us the $86 billion aid package “has nothing to do with the pandemic” and represents “a taxpayer bailout for about 185 union pension plans that are so close to collapse that without the rescue, more than a million retired truck drivers, retail clerks, builders and others could be forced to forgo retirement income.”
Specifically, “the bailout targets multiemployer pension plans, which bring groups of companies together with a union to provide guaranteed benefits. All told, about 1,400 of the plans cover about 10.7 million active and retired workers, often in fields like construction or entertainment where the workers move from job to job. As the work force ages, an alarming number of the plans are running out of money. The trend predated the pandemic and is a result of fading unions, serial bankruptcies and the misplaced hope that investment income would foot most of the bill so that employers and workers wouldn’t have to.”
Ohio Sen. Sherrod Brown, a Democrat, said last week, “It goes back to the fact that these workers didn’t do anything wrong. They have earned these pensions.”
Two things, Senator. First, the countless owners of small businesses who were forced to shut their doors because of the lockdowns, didn’t do anything wrong either.
Secondly, the precarious condition of these union pension plans is the result of years of poor management. The state of these pensions was dire long before the pandemic reached our shores.
Republicans have called this provision “a union handout masquerading as pandemic relief.” They do have a point.
Tennessee Sen. Bill Hagerty, a Republican, said last week, “Just to show you how bad this bill is, there’s more money in this to bail out union pension funds than all the money combined for vaccine distribution and testing.”
According to the Times, “Using taxpayer dollars to bail out pension plans is almost unheard of. … The federal government does provide a backstop for certain failing pension plans through the Pension Benefit Guaranty Corporation, which acts like an insurer and makes companies pay premiums, but does not get taxpayer dollars. Currently, the pension agency has separate insurance programs for single-employer and multiemployer pensions. The single-employer program is in good shape, but the multiemployer program is fragile.”
Several conservatives react to the pension bailout in the following tweets.
"The provision does not require the plans to pay back the bailout, freeze accruals or end the practices that led to their current distress"
this ON ITS OWN is a massive scandal. Biden's Bailout Bill is the biggest single act of corruption in U.S. historyhttps://t.co/CMTttpO3Uf
— steve hilton (@SteveHiltonx) March 9, 2021
Washington spending $86 billion to bail out *private* pensions is a strong indicator of how Congress will respond to the SocSec & Medicare trust funds hitting zero – no reforms, just permanent bailouts. That's how you get $100 trillion in 30-year deficits.https://t.co/BSehLTw0QW
— Brian Riedl 🧀 (@Brian_Riedl) March 9, 2021
Frankly, there are far more contemptible provisions in the relief package that have received almost no media coverage. Nor is it a coincidence that they benefit the home city of House Speaker Nancy Pelosi and the home state of Senate Majority Leader Chuck Schumer.
Republicans argue that due to years of fiscal mismanagement in blue states and cities combined with their longer and more drastic lockdowns during the pandemic, this provision will “disproportionately benefit blue states.”
The stimulus package includes $350 billion to bail out state, local and tribal governments, a provision that has Republicans outraged.
“They want to send wheelbarrows of cash to state and local bureaucrats to bail out mismanagement from before the pandemic,” Senate Minority Leader Mitch McConnell told colleagues last week, according to USA Today. “They’re changing the previous bipartisan funding formula in ways that will especially bias the money toward big blue states.”
The article quotes Kentucky Rep. James Comer, a Republican, echoing McConnell’s sentiments. He said, “The bill contains a $350 billion bailout for locked-down, poorly managed states with no strings attached. The sneaky formula used by Democrats ensures that most of the money goes to liberals in California and New York rather than to rural communities.”
It’s not surprising that Senate Majority Leader Chuck Schumer disagrees. USA Today reports that Schumer sees this provision as “an American wish list” instead of a “liberal wish list.” He said, “Funding to keep teachers, firefighters, transit workers, first responders in red states and blue on the job. So many of the people affected by this bill are not liberals or Democrats. They may be Republicans, they may be independents, they may be conservatives. But they’re Americans who want some help to get out of this morass.”
The San Francisco Chronicle reported on Tuesday that funding from this bill “will erase the majority of San Francisco’s projected $650 million budget deficit over the next two years, saving City Hall from having to make painful service cuts and layoffs — for now.”
Conservatives will be so relieved to hear that.