Mark Hemingway, Washington Examiner:
A new Financial Accounting Standards Board (FASB) rule taking effect in December requires greater transparency for union pension plans and threatens to bankrupt organized labor.
In order to survive, unions need a bailout and fast. This presents a political problem — if unions go bankrupt, so do Democrats. Eleven of the top 20 largest political contributors are labor unions, and nearly all of that money is spent campaigning against Republicans.
By bailing out unions, Democrats are bailing out themselves.
Unions have known for years that their multiemployer pension plans have unfunded liabilities that could run hundreds of billions of dollars.
That’s why unions have been loath to accurately report their pension liabilities — requiring transparency could devastate whole industries as banks and creditors will likely refuse to lend money to companies on the hook for such outrageous pension obligations.
Fortunately for them, it’s much cheaper for unions to buy the White House and Congress than to fund their pensions properly. Even by their normally profligate standards, unions went for broke in 2008, spending $400 million electing Democrats. In 2010, “Democrats are relying more than ever this year on another outside force to help even the playing field: organized labor,” reports the New York Times.
Despite being beholden, Democrats have been unable to enact the two laws unions most desire.
Democrats pushed hard but unsuccessfully for Card Check. That legislation would remove the secret ballot in union elections. By making union votes public, labor organizers would know who to target and intimidate in order to pressure them to change their vote.
With new unions, they could use mandatory binding arbitration to force additional businesses to infuse cash into their failing multiemployer pension plans.
The other piece of legislation is, not surprisingly, a bailout bill offered by Sen. Bob Casey, D-Pa., and co-sponsored by Senate Majority Whip Richard Durbin, D-Ill. (A similar piece of legislation is being offered in the House by Rep. Earl Pomery, D-N.D.) The bill would make failing union pension plans fully backed by the Pension Benefit Guaranty Corp., a government-sponsored entity.
In the plain language of the bill, “obligations of the corporation which are financed by the fund created by this subsection shall be obligations of the United States.” It creates a fund that these pension plans will be able to go to that will be filled by taxpayer funds as needed through the normal appropriations process.
In this sense, Casey’s bill is an entitlement for the 7 percent of Americans still in labor unions. There is literally no dollar figure in the bill, but the PBGC had a deficit of $21 billion last year and it’s estimated that shoring up failing union pension plans could cost taxpayers another $165 billion.
Rather than make union managers and businesses accountable for their pension mismanagement, these plans would have the full backing of the federal government, removing financial pressures to make the plans fiscally responsible.
[…]
With Republicans likely to control at least one chamber of Congress after November and post-census redistricting helping the GOP retain control, a lame duck session could be the Democrats last chance to save unions and help keep their campaign coffers filled.
The question is: Will Republicans be able to stop another special-interest bailout before January? If they succeed, it could be the beginning of the end for unions as an influential political force.
— Or, alternately, Republicans could try to buy themselves some union support.
After all, the establishment GOP hasn’t exactly broken its neck trying to eradicate other taxpayer-funded ponzi schemes; perhaps the “pragmatic” move here is to control what they haven’t had the stomach to legislatively invalidate.
Wouldn’t put it past them, is all I’m saying. But then, I’m a bit soured on establishment Republicans, who seem content to force, eg., McCain or Romney down my throat — and who, because they seem to find it politically savvy to “compromise” with a leftward moving Democrat party, have perforce moved the Republican party to a point where JFK might even find them a bit to his left.
Call my cynical. I can take it.
(h/t Carin)
Establishment-ublicans would be stupid enough to try it — but they’d be forgetting that Big Labor isn’t pro-Democrat solely out of gratitude. SEIU thugs don’t beat people up just because there’s money in it; they do it because their radical ideology both demands and excuses it.
Getting bought by the GOP would cramp their elbow-throwing style.
Hmmm, this sounds like one of those issues that these folks are going to start compromising on, “GOP House Leaders seek to avoid mistakes of ’94”. I can’t tell you how happy I will be to support Republicans in the future, if they screw us all after we’ve brought them back from the brink of irrelevance. If so, I hope they show their colors quickly so that we can get something else in place for 2012.
This kind of story can make a cynic out of anyone.
McGehee.
The Unions wouldn’t have to throw elbows for Republicans. Thats the sweet deal of it all. They would still beat on the Kenneth Gladneys of the world, just that they would do so with the help of pragmatic “conservatives” like McCain, Murkowski and Graham. Those are black eyes and bruises I would not want to own.
Not in my name.
McGehee —
When mutual backscratching and money is involved, ideology takes a back seat — both for politicians and the union leadership.
They can keep up appearances for public consumption. Hell, they can even truly despise what one another stand for. Won’t stop them from a few backroom deals, I’d bet.
I voted yesterday – straight tea party endorsed ticket. Funny thing though – and I’d like to hear from my fellow Texans on this – the regional Tea Party was advocating the Dem for Railroad Commissioner versus the Rep candidate. Is this true up in your areas?
The Establishment-ublicans are certainly stupid enough to try to buy off Big Labor. Big Labor will not stay bought.
I guarantee it.
Rush was just yammering away on a related topic. That the “inside the beltway” folks are no different, whether there is an R or D in front of their name. They just all wanna get paid. His nuance is that these folks are the elites; the political elites.
THAT’s who I’m voting against. Many of the folks running in Michigan are running against entrenched interests. Will they be the same? we’ve gotta hold their feet to the fire and demand that.
But, I’m not going to declare failure prematurely.
Jeff, you’re cynical
So am I.
we should email our aldermen about this
Outlaw Cynic. I like it.
as far as your theory goes this says “Patrick Tiberi, R-Ohio” is one of “the driving forces behind this measure”
Patrick is a proud member of Meghan’s Palin-endorsed coward daddy’s little club what likes to ass-rape them some America.
Perhaps elected officials shouldn’t be allowed to create financial obligations–whether they be pensions or other expenses–that are more than a certain number of years into the future. The way things are now, a state or city’s officials can let people retire at fifty with a monster pension, then be long gone when the huge wad of obligated payments piles up.
Shareholders could impose the same limits on companies, if they wanted to.
“— Or, alternately, Republicans could try to buy themselves some union support.”
*gasp* Did you just call Whitman a whore?!
OTT, I hope you went along with it. Democrats should be approached with great suspicion, but in this case it’s the lesser of two weevils.
Carrilo, basically a McCainiac, lost the primary because he’s (a) sick and (b) entitled and doesn’t mind saying so. That left an edge for Porter, who is sort of a poster child for “does not know what the f* he’s supposed to be doing.” Getting rid of Carrilo is a minor plus, but it won’t help to turn the office over to somebody whose main knowledge of the oil and gas industry comes from filling his car up at the local Valero (neê Diamond Shamrock) and filing for the royalties on his clients’ wells (he’s an accountant).
There are enough Republicans on the Commission that the damage Weems can do is limited, especially if Perry wins, and at least the guy doesn’t think “Barnet” is a miniature hay-storage facility.
Regards,
Ric
See what diverting all those payments to bankroll worthless pols accomplished?
– Actually there might be an opportunity to get the unions back under control if the Reps were smart about it. I know, and don’t care, what ideology they follow as long as they’re obligated to vote moderate on election day.
– No sense though that the Reps would do it right.
When were private-sector union members ever “obligated” to vote Democrat? Most union members were voting Republican during and immediately after the Reagan years. That only changed when the balance of union membership shifted over to the government.
As long as most union members are public-sector, they will always vote for the party that favors bigger government. That will increase pressure on the Establicans to go even farther left, which is bad for children and other living things.
Trying to use Big Labor against the Democrats is like trying to use the One Ring against Sauron. Bad mojo, start to finish.
I’m not bad, just misunderstood…
Well, okay. One biscuit, just this once.
If you’re not cynical, you’re not paying attention.
Republicans are going to win big in November by default. Then they’re going to suck. That’s what they do.
Saturday morning links…
‘Charity Has Never Solved Anything’ Speaking of charity, Bracing for the Big State Bailout Also related, “Unions are desperate for a tax-paid pension bailout” On other topics, Why The GOP Will Never Cut The Size Of Government If Reagan couldn’t do i…