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A costly way to address the pension crisis: Why federal bailouts are a bad idea
Washington Times ^ | 01/24/2019 | Joshua Rauh

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 didn’t 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 labor’s 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 ...


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: bailouts; crisis; pension
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1 posted on 01/24/2019 9:29:21 AM PST by SeekAndFind
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To: SeekAndFind

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.


2 posted on 01/24/2019 9:33:34 AM PST by Rurudyne (Standup Philosopher)
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To: SeekAndFind

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??


3 posted on 01/24/2019 9:34:01 AM PST by mountainlion (Live well for those that did not make it back.)
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To: SeekAndFind
You want to tell 400,000 retired union guys (my dad was a teamster for 42 years and worked full time until he was 72) that the pension they were promised is no longer coming? Even with a federal bailout, my father's pension goes from 38,000 a year to about 20,000 a year.

Blame politics and money managers, not the retired blue collars. AND, while we're giving free shit to illegal immigrants, our fathers deserve to be supported.
4 posted on 01/24/2019 9:43:31 AM PST by akalinin
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To: mountainlion

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!!!


5 posted on 01/24/2019 9:44:59 AM PST by CharlesMartelsGhost
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To: SeekAndFind

Bailing out any group or institution only invites more of the same bad behavior......................


6 posted on 01/24/2019 9:45:30 AM PST by Red Badger (We are headed for a Civil War. It won't be nice like the last one....................)
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To: akalinin

The union lied to him about a pension.

The government lied to all of us about social security.

Deal with it.


7 posted on 01/24/2019 9:45:37 AM PST by NorthMountain (... the right of the peopIe to keep and bear arms shall not be infringed)
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To: mountainlion

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.


8 posted on 01/24/2019 9:53:29 AM PST by FreedomNotSafety
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To: akalinin

You want to take money from me and give to your dad?


9 posted on 01/24/2019 9:55:31 AM PST by TexasGator (Z1z)
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To: SeekAndFind

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.


10 posted on 01/24/2019 9:56:36 AM PST by antidemoncrat
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To: NorthMountain
Oh believe me, his group of retirees is dealing with it on every level they can.

Now, the deal is the pensions remain at the current level until the fund runs dry sometime ~2025.

The pension managers (whose salaries run mid 6-figures) were threatened with a 50% reduction in their salary if the pensions are cut 50%. That straightened things out for a little while, but the money's going to dry up at some point.
11 posted on 01/24/2019 9:57:45 AM PST by akalinin
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To: SeekAndFind

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.


12 posted on 01/24/2019 10:00:05 AM PST by Buckeye McFrog
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To: TexasGator
You want to take money from me and give to your dad?

You're already doing it, and so am I.
13 posted on 01/24/2019 10:02:22 AM PST by akalinin
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To: SeekAndFind

How in the world can pension plans be broke?


14 posted on 01/24/2019 10:05:38 AM PST by blueunicorn6 ("A crack shot and a good dancer")
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To: mountainlion

And government employees don’t pay into Socialist Insecurity.


15 posted on 01/24/2019 10:07:57 AM PST by FrdmLvr (They never thought she would lose.)
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To: blueunicorn6

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.


16 posted on 01/24/2019 10:08:41 AM PST by morphing libertarian (Use Comey's Report; Indict Hillary now; build Kate's wall. --- Proud Smelly Walmart Deplorable)
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To: morphing libertarian

already LOCKED into the contract


17 posted on 01/24/2019 10:10:27 AM PST by morphing libertarian (Use Comey's Report; Indict Hillary now; build Kate's wall. --- Proud Smelly Walmart Deplorable)
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To: SeekAndFind

I guess we should use taxpayer money to make sure every business is profitable.


18 posted on 01/24/2019 10:14:36 AM PST by blueunicorn6 ("A crack shot and a good dancer")
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To: SeekAndFind

Richie Neal has his head so far Pelosi’s ass it’s scary. Pelosi stopped short once, and Richie had to wear a neck brace for a month.


19 posted on 01/24/2019 10:14:37 AM PST by Vermont Lt
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To: TexasGator

No, they just want to take money from you.


20 posted on 01/24/2019 10:15:32 AM PST by Vermont Lt
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