Taxpayers pick up tab on pension payback for Biden’s Big Labor friends

Empower Wisconsin | Dec. 12, 2022

By M.D. Kittle

MADISON — Labor organizations contributed $27.5 million to presidential candidate Joe Biden’s 2020 campaign and supporting groups. Now, it’s payback time.

Flanked by some of the fattest cats in Big Labor, the president last week announced $36 billion in federal taxpayer money will go to bail out the mismanaged Central States Pension Fund. It’s part of some $90 billion marked for multi-employer pension relief crammed inside the mammoth American Rescue Plan Act.

Said act was pitched as the vehicle to rescue the U.S. from the ravages of a pandemic, but much of the $1.9 trillion funding frenzy passed by the Democrat-controlled congress went to political pet projects. And Biden, who has billed himself as “the most pro-union president you’ve ever seen,” was going to make sure his Big Labor pals got to be first at the trough.

Union bosses sure are grateful.

“This is wonderful news for all Central States participants. After more than a decade of work to save our Pension Fund, our voices have been heard by Congress and the Administration, to whom we are eternally grateful for their legislative rescue,” states a press release from the Teamsters’ pension fund, which represents more than 350,000 union workers and retirees.

Some 22,000 union workers and retirees in the Badger State will benefit from the bailout, which is expected to keep the troubled pension fund solvent at least through 2051. 

“This is definitely a political payout. You only have to see who was on stage with (Biden) to recognize that,” said Mark Mix, president of the National Right to Work Legal Defense Foundation.

Mix said the political gift is a relief for hundreds of thousands of hard-working Americans who put in their time on a promise of safe retirement savings, but the bailout comes on the backs of taxpayers to the benefit of what once was described as the “most abused, misused fund in America.” Mix said taxpayers are on the hook for everything, making it harder for non-union businesses to compete.

“And I don’t know what your 401(k) looks like these days, but mine is not so good. What about us? Should we ask the government to bail out our pensions?” Mix said. The average 401 (k) balance plunged for the third consecutive quarter, down 23 percent, according to a report late last month by Fidelity Investments, the nation’s largest 401(k) plan operator.

Aharon Friedman, a former senior advisor for tax policy at the U.S. Treasury, argues the Biden administration is once again flouting the law with its latest taxpayer money dump, much like its student loan bailout.

“Forcing taxpayers with losses in their own retirement plans to selectively bailout severely mismanaged union plans is bad enough. But the Pension Benefit Guaranty Corporation (PBGC) rule finalized changing the statutory interest rate to increase the taxpayer funds plans receive is completely without statutory authority,” Friedman wrote in The Hill. 

U.S. Rep. Tom Tiffany (R-WI 7th CD) said the pension bailout is part of the bigger issue of the left’s “spending blowout” that has occurred over the past two years. Democrat-controlled legislative and executive branches have racked up trillions of dollars in debt, mortgaging the future of young workers to prop up the pensions of Baby Boomers.

“You can see this great wealth transfer going to people over 50 years of age,” Tiffany said. “That’s what the pension bailout is about, it’s meant to reward political friends, and make sure wealth continues to flow to them.” He added that those collecting the defined benefits now borne by taxpayers won’t be around when the bill is called.

“They can keep partying like it’s 1999, but the people 20, 25 who are just starting out, they’re going to pay the bill for this,” the congressman said. 

Mix points to the crack coming in the state public sector pension liability crisis, the “next shoe to drop.” A recent report by the American Legislative Exchange Council showed unfunded state pension liabilities have climbed to $8.28 trillion.

“The reckoning is coming,” Tiffany said of rising debt throughout government.

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One response to “Taxpayers pick up tab on pension payback for Biden’s Big Labor friends”

  1. David Krantz Avatar
    David Krantz

    Would be nice if everyone could get that rate of return on investments.

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