Skip to comments.A costly way to address the pension crisis: Why federal bailouts are a bad idea
Posted on 01/24/2019 9:29:21 AM PST by SeekAndFind
When both Democratic and Republican lawmakers recently joined together to support a taxpayer-funded, multibillion-dollar bailout of big union pension funds, you didnt need to be a swamp creature to know something has gone terribly wrong in Washington, D.C.
But that is exactly what happened when U.S. Rep. Richard Neal, Massachusetts Democrat, chairman of the Ways & Means Committee, offered a so-called bipartisan plan to address the pension crisis. However, this proposed bailout of organized labors retirement plans would cost federal taxpayers billions while setting a dangerous precedent that would expose taxpayers and laborers to more financial mischief.
The expectation for this type of bailout is presumably why labor unions as well as the public sector still offer traditional pensions, while the rest of the United States has largely moved to 401(k) plans.
In a pension plan, employees earn pension benefits and receive monthly checks when they retire. Corporations have long understood that over-promising pensions to their employees is financially reckless and will come back to bite them, and so have embraced 401(k) plans instead. Yet neither labor unions nor state and local governments seem to care as much about the risks of making irresponsible and unfunded pension promises.
(Excerpt) Read more at washingtontimes.com ...
Back during the days of the Bank Bailouts ... which should NOT have happened ... I remember posting that “Too Big to Fail” should only ever be the title of some porno.
So why is it that they want to bail out the corrupt union retirement but steal Social Security funds to the tune or over $13T??
Because there is no Social Security fund or guarantee to Social Security benefits.
In Fleming vs. Nestor the US Supreme Court ruled that that workers have no legally binding contractual rights to their Social Security benefits, and that those benefits can be cut or even eliminated at any time. To engraft upon the Social Security system a concept of accrued property rights would deprive it of the flexibility and boldness in adjustment to ever changing conditions which it demands. The Court went on to say, It is apparent that the non-contractual interest of an employee covered by the [Social Security] Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits is bottomed on his contractual premium payments.
In an earlier case, Helvering v. Davis (1937), the Court had ruled that Social Security was not a contributory insurance program, saying, The proceeds of both the employee and employer taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way.
In other words, Social Security is not an insurance program at all. It is simply a payroll tax on one side and a welfare program on the other. Your Social Security benefits are always subject to the whim of 535 politicians in Washington. Congress has cut Social Security benefits in the past and is likely to do so in the future.
So the 13T number that you pulled out of the air is nothing more than conspiracy theory nonsense. There is no theft of “social security” funds.
And on the subject of this article there should be NO BAIL OUT of union pensions by the American taxpayer!!!
Bailing out any group or institution only invites more of the same bad behavior......................
The union lied to him about a pension.
The government lied to all of us about social security.
Deal with it.
The didn’t steal anything. The politicians could decide tomorrow to end all benefits but keep the tax in place. SS is whatever the politicians want it to be. There are no SS funds and never have been. Today’s taxes are given to today’s recipients any extra is spent on other things. The difference between today’s taxes and todays payments, if positive, is put into US Treasuries which can only be repaid through taxes at time of redemption.
SS and union pensions are about the same thing. Both are political ploys designed to generate Democrat votes. Both have been overused and overpromised and underfunded. The art is to get the recipients believing the are “owed” (when legally they are not) and was “robbed” (sometimes true with unions) so that they will lobby the government to protect them.
You want to take money from me and give to your dad?
Did I miss the Republicans the article the headlines said were backing this?
Looks to me like the Democrats in charge of big cities promised public sector employees a fantastic pension and didn’t bother to save enough money to pay them and now wnt the rest of the country yo bail them out.
Bad idea. And inevitable.
Go to Congress with a sufficiently butt-puckering Chicken Little story and you WILL get a bailout.
We all learned that lesson in 2009.
How in the world can pension plans be broke?
And government employees dont pay into Socialist Insecurity.
politicians are bribed by unions They approve retirements over and above projected revenue.
Thee phony up the projections like CALPers in Cal. Let’s say we project an increase of 8% annually in the invested funds and it;’s comes in at 2.9. The pension is already loved into the employee contracts. Cal has done this more than once. They liter justify and the public doesn’t pay attention. The unions are stronger than the public because they bribe them.
already LOCKED into the contract
I guess we should use taxpayer money to make sure every business is profitable.
Richie Neal has his head so far Pelosis ass its scary. Pelosi stopped short once, and Richie had to wear a neck brace for a month.
No, they just want to take money from you.
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