Director Martin
Scorsese’s new, award-winning film “The Irishman” contains some important
history for lawmakers as they prepare to vote on a spending
package that would provide a multibillion-dollar taxpayer bailout to one
select union.
That union is the
United Mine Workers of America.
For the first
time in history, Congress is poised to use taxpayer dollars to fund the broken
pension promises of a private-sector union and private employers.
We can bet this
won’t be a one-and-done move, however.
The next big pension plan in line for a bailout is a Teamsters’ union plan—the Central States, Southeast and Southwest Pension Fund.
Organized crime within the Teamsters union was the plot of “The Irishman.” Central to the story of the 3-1/2-hour feature film was the virtually unchecked control over the Teamsters’ pension fund by then-Teamsters boss Jimmy Hoffa, using it for mafia-related loans and personal gain.
In fact, it was fraud and conspiracy related to the union’s pension fund that landed Hoffa in prison, and after that, the Teamsters’ pension fund was under federal oversight for decades.
Of course, not all—and, hopefully, only a small fraction of—union-run pension plans have been plagued by illegal activities.
Yet, nearly all have suffered from serious mismanagement, made possible by special treatment given to union-run pension plans that were given wide latitude in lieu of more stringent funding rules required of nonunion plans.
As a result, virtually the entire multiemployer pension system on the path toward insolvency.
Across the U.S.,
close to 1,400 multiemployer pension plans have collectively set aside only 43
cents on the dollar to pay promised pensions. In total, the Pension Benefit
Guaranty Corporation estimates that multiemployer plans have $638
billion in unfunded pension promises.
The United Mine Workers of America covers fewer than 1 percent of multiemployer pension recipients, and its roughly $6 billion in underfunding is only the tip of the iceberg.
The Central States Teamsters pension plan has about $44 billion in unfunded pension promises, with the roughly five dozen other Teamsters-associated pensions plans adding even more.
While these two
plans have drawn significant attention and consideration for taxpayer bailouts,
they represent only a small fraction of all multiemployer pension plans,
workers, and retirees.
It’s
wrong that employers and unions were allowed to make promises without properly
funding them, and it’s unfair that nearly 100,000 coal miners, 1.4 million Teamsters members, and more than 9 million other workers and retirees with
private union pensions across the U.S. stand to lose a significant portion of
their pension benefits through no fault of their own.
But taxpayers
had no role in these broken pension promises, and despite the United Mine
Workers of America’s claim, the federal government did not make a promise to coal miners.
The solution to the multiemployer pension crisis is not to bail out just one of more than 1,300 massively underfunded union pension plans without doing anything to improve the system.
That would either create huge inequities—with mine workers receiving 100 percent of promised benefits, while others receive mere pennies on the dollar—or else it would set the stage for a massive taxpayer bailout of numerous other private and public pensions.
If Congress
opens the door to pension bailouts—including $638
billion in private union pensions and up to $6 trillion in state and local pensions—the price tag could reach $52,000 for every household in the U.S.
Congress
needs to change the rules so that this never happens again, to maintain the
Pension Benefit Guaranty Corporation solvency as a pension safety net, and to require
plans to act sooner, rather than later, to minimize pension losses.
Instead
of tying a selective bailout for just one union pension plan onto an
end-of-the-year spending bill, Congress should provide a comprehensive solution
to the multiemployer pension crisis—one that doesn’t just shift the bill to
taxpayers and one that doesn’t leave 99 out of 100 pensioners in the
lurch.
Source material can be found at this site.
