Bailouts for Unions

By Kevin J. Price

No one doubts the influence unions had on the election of Barack Obama as President of the United States and of the Democrat majorities in both Houses of Congress. That support came in huge amounts of time and money. Now those unions are looking for payback for their assistance and it could cost taxpayers billions of dollars.

The American people are infuriated at both the Congress and the President because of their spending behaviors. It is the consensus of pundits, politicians, and journalists that there will be a shift in the majority party in the House and even the possibility of a GOP majority in the Senate. In spite of this, Democrat leaders are willing to risk job security to appease the powerful unions.

Fox Business has noted A Democratic Senator has introduced "legislation for a bailout of troubled union pension funds. If passed, the bill could put another $165 billion in liabilities on the shoulders of American taxpayers. The bill, which would put the Pension Benefit Guarantee Corporation behind struggling pensions for union workers, is being introduced by Senator Bob Casey, (D-Pa.), who says it will save jobs and help people." This legislation was introduced in May and seems on the road to passage just a few months away from a pivotal election. What "jobs" and "people" will be helped by this legislation? Casey hopes that it will be him and and his Democratic colleagues.

Bob Casey does not face reelection until 2012 and in typical political cynicism, I'm sure he thinks his constituents have the memories of a gnat and will forget about his actions in 2010. I'm beginning to doubt it when one considers the far reaching implications. Gerri Willis of Fox Business has noted that "these pensions are in bad shape; as of 2006, well before the market dropped and recession began, only 6% of these funds were doing well." If moral hazard still mattered, economic realities would require the companies that manage these pensions to pursue serious reforms. Instead, since the bailout is coming from taxpayers and there is no impetus for reform, we are looking at a pension system that will go from bad to worse. Casey, Democrats, and unions won't mind because they got what they were looking for -- more power and money. Taxpayers, on the other hand, will have one more reason to make sure that the 2010 elections are very memorable for the party in power.
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Kevin Price
Host, Price of Business, M-F at 11 am on CBS Radio News
Frequently found on Strategy Room at FoxNews.com
Syndicated columnist whose articles appear on a variety of media outlets.
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