{"id":32800,"date":"2018-03-11T20:43:42","date_gmt":"2018-03-12T00:43:42","guid":{"rendered":"http:\/\/www.rightwinggranny.com\/?p=32800"},"modified":"2018-03-11T20:43:42","modified_gmt":"2018-03-12T00:43:42","slug":"this-is-not-a-new-idea","status":"publish","type":"post","link":"https:\/\/www.rightwinggranny.com\/?p=32800","title":{"rendered":"This Is Not A New Idea"},"content":{"rendered":"

On Friday, The Daily Signal<\/a> posted an article about a proposal before Congress<\/a> asking taxpayers<\/a> to make loans<\/a> to private, union-run pension plans<\/a>. This is a really bad idea. We have seen what has happened to the college loan<\/a> program since the government took it over. Just in case you think the idea of the government bailing out union pension plans is far-fetched, I posted an article<\/a> about this idea in October of 2010.<\/p>\n

The article reports:<\/p>\n

The Butch Lewis Act\u2014a proposal to bail out<\/a> private-sector<\/a> pensions through loans as well as direct cash assistance\u2014acknowledges the high probability of default by stipulating that pension plans that have trouble repaying their loans after 30 years of interest-only payments will be eligible for forgiveness or alternative repayment plans.<\/strong><\/p>\n

A loan with a zero-consequence default option for the borrower is not a loan\u2014it\u2019s a bailout.<\/strong><\/p>\n

But it\u2019s not just defaults that taxpayers need to be concerned about. There\u2019s also the cost of providing highly subsidized, low- or no-interest loans for 15 to 30 years, as well as the risk that plans will increase\u2014rather than decrease\u2014their unfunded liabilities over the course of their loans.<\/strong><\/p>\n

These features could lead to loans to insolvent pension plans costing taxpayers more than direct cash bailouts.<\/strong><\/p>\n

But those costs won\u2019t be apparent in the official government score because the Congressional Budget Office<\/a> is required to score loans<\/a> under the assumption that insolvent pension plans are essentially riskless borrowers.<\/strong><\/p>\n

In reality, loans to insolvent pension plans could cost taxpayers hundreds of billions of dollars. The most liberal proposals\u2014which supplement loans with direct cash assistance\u2014could cost more than the entirety of multiemployer pensions\u2019 half-trillion-dollar shortfall.<\/strong><\/p>\n

Does anyone really believe that these loans will be paid back? Union membership is down, and various courts are hearing cases that will make the mandatory payment of union dues<\/a> by non-union members who work in a union shop illegal. Both of these factors will make the union retirement plans (actually a true Ponzi scheme<\/a>) unsustainable.<\/p>\n

The article concludes:<\/p>\n

Coping with roughly $500 billion in private union pensions\u2019 unfunded promises will not be easy. There are ways<\/a> to minimize losses to workers who have earned pension benefits and protect taxpayers from paying for private pensions\u2019 broken promises.<\/strong><\/p>\n

Policymakers should look to improve the solvency of the Pension Benefit Guaranty Corp.\u2019s multiemployer program through premium increases and other reforms; end union pensions\u2019 preferential treatment; enact and enforce sound funding rules; hold pension trustees liable for financial decisions; act sooner rather than later to enact needed reforms, including benefit reductions; and explicitly prohibit federal pension bailouts.<\/strong><\/p>\n

None of these actions provide a costless cure-all, but they offer more fair and rational solutions that don\u2019t treat taxpayers as guarantors of private-sector promises or set the stage for even more mismanagement and reckless behavior.<\/strong><\/p>\n

There is no reason every American should pay for the fact that the unions have not sufficiently funded their retirement plans!<\/p>\n","protected":false},"excerpt":{"rendered":"

On Friday, The Daily Signal posted an article about a proposal before Congress asking taxpayers to make loans to private, union-run pension plans. This is a really bad idea. We have seen what has happened to the college loan program … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[735,10974,595,3021,11490,11491,1373],"class_list":["post-32800","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-congress","tag-congressional-budget-office-cbo","tag-pension","tag-ponzi-scheme","tag-taxpayers","tag-the-butch-lewis-act","tag-union-dues"],"_links":{"self":[{"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=\/wp\/v2\/posts\/32800","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=32800"}],"version-history":[{"count":1,"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=\/wp\/v2\/posts\/32800\/revisions"}],"predecessor-version":[{"id":32801,"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=\/wp\/v2\/posts\/32800\/revisions\/32801"}],"wp:attachment":[{"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=32800"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=32800"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.rightwinggranny.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=32800"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}