Mish’s has the full story stemming out of the possible bankruptcy of YRC Worldwide, America’s largest trucking company (which, by the way, is yet another indicator of just how bad the economy really is). Here is the crux of the matter:
Rep. Earl Pomeroy, North Dakota Democrat, is drafting legislation that would amount to a massive, employer-crippling bailout for struggling union pensions. The congressman is trying to spin this as a cheap, proactive way to shore up said pensions. He claims that his bill is a response to an “urgent plea [from employers] for manageable and predictable pension funding rules as the nation works [its] way back to recovery.”
In reality, the bill as currently drafted would be a costly sop to unions, which have done so much to get Mr. Pomeroy elected. (Twelve out of his top 21 donors are unions, according to opensecrets.org.) It would allow the unions, which have badly mismanaged pension funds in the past, to make new companies liable for the pension obligations of workers at other companies, in other industries. It also would create an explicit taxpayer guarantee if it all comes crashing down.
The devil is in the details of the draft, the text of which can be found on the congressman’s Web site. The changes it introduces are chilling.
The draft would allow union-controlled multiemployer pension plans to form alliances with one another. It also would create something known as a fifth fund that the Pension Benefit Guarantee Corp., with taxpayer help, would use to prop up failing union pension plans.
Multiemployer union pension alliances might sound innocent enough, but consider what that actually means. Moody’s Investors Service recently warned of a vast underfunding problem with multiemployer pensions. Many employers fear being shackled into them. Even though the funds are controlled by unions, employers are liable not just for their own employees, but for every worker in the plan regardless of how the plan is managed or mismanaged.
The so-called last-man-standing rule holds that if every other company in a multiemployer pension plan goes bankrupt, closes or pulls out of the plan, the one survivor is responsible for every single employee covered by the plan, even those who never worked for him. UPS paid $6.1 billion in withdrawal fees just to escape the Teamsters Central States pension fund.
The “last man standing” under Pomeroy’s plan is you, dear taxpayer. Pomeroy, of course, is a wholly owned subsidiary of Big Union and as the unions have saddled corporations with crushing pension plans, it is natural that, instead of getting rid of the burden, the unions are casting about for a way to make everyone pay for their profligacy. Its in the nature of things that a Democrat falls easily in to line with this.
As we can see, the Democrats’ seem bent on putting as much of their constituency on the public dime as possible. They want ACORN using tax payer dollars to do the ballot box stuffing Democrats used to have to pay for on their own – why not also have the taxpayer fund the pension funds of those unions which provide so much cash to Democrat campaigns?
We’ll have a lot of repealing to do…
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