The $86 Billion Pension Bailout
Most conservatives have probably had mixed feelings about the recently-passed Covid relief bill. On one hand, the government is spending far too much money and is spending it on things it shouldn’t; blue state bailouts, pork for certain districts, school funding through 2028, etc. Money it doesn’t have to spend, I might add, given our ridiculously large national debt. On the other hand, the Covid lockdowns have essentially been a “taking” from businesses, especially the decimated small business, so it would seem cruel and capricious to “take” from them without providing proper remuneration.
The thing is, the lockdowns have mostly ended. People are back to work. And the recent Covid Bill isn’t meant to help them out. it’s just a bribe and blue state bailout. Along those lines, one of the worst aspects of the bill is its $86 billion bailout of blue state pensions.
Just think about that. Under the guise of “fighting Covid,” the government is spending tens of billions of dollars on funding pensions in blue states that had overpromised and invested poorly. $86 billion dollars of your money is being spent on the pensions of former government employees that never worked a productive day in their lives.
Here is what Andrew Wilford at RealClearMarkets had to say about the pension bailout:
“Included in the American Rescue Plan Act of 2021 is $86 billion for federal grants to cover the costs of insolvent multiemployer pension plans. In total, these funds are intended to bail out the roughly 130 multiemployer pension plans, covering 1.3 million American workers, that are in critical situations (about one tenth of all American multiemployer pension plans and workers).
Multiemployer pension plans are collectively bargained pension programs for multiple businesses sharing some common characteristics (often geographic location or industry). In theory, consolidating the pension plans of multiple businesses makes it easier to diversify and allows workers to still receive pension benefits even if their individual business goes bankrupt. But in practice, many multiemployer pensions seem to instead count on being too big to fail.”
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In fact, the $86 billion likely isn’t even the full amount of your dollars that will be spend on shoring up the blue state pensions! As the Wall Street Journal noted, the $360 billion given to states is fungible, so many of those blue states with underfunded pensions will likely indirectly spend their funds on pensions:
“Much of the relief will invariably flow to government union pension funds, which are underfunded in states like Illinois, New Jersey and Connecticut. To inoculate themselves from GOP attacks, Democrats specified in the bill that relief funds may not be used “for deposit into any pension fund.” But money is fungible. States can pay out of their general funds for pensions and use the federal cash for something else.”
Even if those indirect pension bailouts aren’t considered, the $86 billion is a ridiculously large amount. In fact, according to the Daily Caller, it’s more than is being spent on vaccinations!
“More than a million unionized truck drivers, retail clerks, construction workers and others would likely miss out on retirement income without the bailout, according to The New York Times. The union bailout, among the $1.9 trillion coronavirus relief package’s provisions unrelated to the pandemic, rescues 185 pension plans across several states.
“There’s more money in this to bailout [sic] union pension funds, than all the money combined for vaccine distribution and testing,” Republican Tennessee Sen. Bill Hagerty tweeted last week.”
Yet worse (somehow), the $86 billion isn’t even contingent on the pensions fixing the problem! They don’t have to figure out how to fully fund themselves, rework how they operate, or do anything else to ensure this problem doesn’t rear its ugly head again in the future! Here’s what Townhall reported on that problematic aspect of it:
“What’s even more appalling? “The provision does not require the plans to pay back the bailout, freeze accruals or to end the practices that led to their current distress, which means their troubles could recur. Nor does it explain what will happen when the taxpayer money runs out 30 years from now.”
That led some to argue that not only is the Covid “relief” bill “the biggest single act of corruption in U.S. history,” but that this bailout provision alone is a “massive scandal.”
And, as Brian Riedl noted on Twitter, that no-strings-attached nature of the $86 billion blue state pension bailout is a sign that the government won’t even bother with trying to fix the problems with Medicare or other entitlements. It’ll just bail them out:
The Covid Bill is horrific. It’s not about Covid, fighting Covid, or helping alleviate the negative effects Covid has had on Americans. Instead, it’s a passive barrel of pork dripping with fat and corruption. Most every aspect of it is terrible, but the $86 billion blue state pension bailout is somehow even worse. It rewards irresponsible behavior, spends money that a government with empty coffers can’t afford to spend, and is a sign the government will keep doing so in the future.