Biden Shoveled $36 Billion In Taxpayer Funds To Bail Out Teamsters For Mismanaged Pensions
‘The largest private pension bailout in American history’ gave each beneficiary of the Central States Pension Fund nearly $100,000.
By Peter Reichard – February 23, 2023
5 MIN READ
Can Americans be bribed with their own money? The powers that be are certainly putting that question to the test. In recent years, we’ve seen inflation-inducing cash giveaways associated with “Covid relief.” We’ve seen the ongoing attempts at profoundly inequitable student loan forgiveness. In December, we saw a $1.7 trillion pork pie omnibus appropriations bill passed by a Congress that had no time to read it.
Lost in all of this has been one spectacular giveaway: $100,000 per beneficiary of the Central States Pension Fund (CSPF). The fund provides pension benefits to nearly 360,000 private-sector workers and retirees, mostly Teamsters Union members. U.S. Rep. Kevin Brady, R-Texas, called the deal out in December, noting it was “the largest private pension bailout in American history” that benefited only “a tiny minority of workers.” He suggested it resulted from the insanity of “allowing those who mismanaged pensions to determine whether their funds qualify for taxpayer assistance with no safeguards.”
The $36 billion comes almost two years after the passage of the $1.9 trillion American Rescue Plan. That “rescue” was the Biden administration’s Covid spending bonanza. Biden signed it into law in the spring of 2021, when the economy was already well into recovery. The housing market was booming. The stock market was on a steady upward climb. It was obvious that the “rescue” would cause inflation. It was obvious Democrats were taking advantage of an opportunity to give away public largesse. And did they ever.
Lest we doubt the ongoing influence of the Teamsters in American politics, the recent $36 billion giveaway says it all. It says to the union bosses, who make up half of the CSPF board: “You can watch the pension fund’s health decline for decades. You can make unrealistic promises to employees. You can keep the plan below 75 percent funded. You can depend on a pyramid concept where imaginary new members keep coming in to pay for retired members. None of that matters now. The politicians you own will bail you out with the public’s money. In fact, you can take such largesse that union workers in other multi-employer plans get left with only crumbs. Write yourself a check. And, as a bonus, we won’t ask you to change anything.”
Workers of the world are not united here. This is a cash grab benefiting one group of roughly 360,000 (3 percent) of the 11 million participants in the multi-employer plans.
And Covid, schmovid. Even before the panic and the lockdowns, the Congressional Research Service reported that the multi-employer pensions were underfunded by $650 billion. In 2018, CSPF had been projected to reach insolvency by 2025.
Trillions of Dollars Short
To be sure, this bailout falls under the mantra, “Never let a crisis go to waste.” In 2017 and 2019, massive private pension bailouts were introduced and reintroduced. Both times, a more conservative Senate beat them back in the name of fiscal sanity. Opponents of the bailouts pointed out that the bills failed to address the structural problems that put these pension plans on the road to insolvency in the first place. But by 2021, amid the larger Covid-tide spending spree, proponents found their opportunity. No strings attached.
Now a precedent has been set. The Congressional Budget Office has already said: Sorry, the $86 billion the American Rescue Plan tagged for the union pension plans is not enough. Meanwhile, taxpayers more broadly are faced with a bigger devil lurking in the shadows. America’s public pension plans have robbed the henhouse for years through risky investments, chronic underfunding, implausible rate of return projections, inadequate employee contributions, overly generous benefits, and just plain public-sector greed. These state and local pensions present a problem to be measured in the trillions of dollars.
How much is the Teamsters’ mere $36 billion? To put it in perspective, you could run the state of Colorado for a year on that money. You could run all five states of New Hampshire, Vermont, South Dakota, Wyoming, and Idaho, and still have billions left over. The $36 billion is $108 from each man, woman, and child in America into the pockets of the Teamsters. And the White House bragged about it in a press release.
Three of the 10 richest counties in America are suburbs of our nation’s capital, and that in large part is because D.C. has become a feeding trough. One of the big piggies, of course, is the Teamsters union. Through the last two federal election cycles, the Teamsters spent more than $9 million on lobbying and more than $10 million in member dues, fattening the campaign coffers of the union oligarchy’s friends.
By the way, if the name Central States Pension Fund rings an unpleasant bell, that’s because it was the vehicle created by the Teamsters President Jimmy Hoffa as a means of enriching himself. He used the fund to make loans to his mobster friends and took kickbacks, which landed him in jail. He then turned control of the fund to a mobbed-up friend, who was himself jailed for taking kickbacks. And then the replacement’s replacement was also jailed for taking kickbacks.
Can such a tree bring forth good fruit? Should you and your children pay to maintain the status quo?
Peter Reichard is executive vice president of the Center for Independent Employees, a nonprofit legal defense foundation that assists employees opposed to union oppression. He has led nonpartisan, public policy research organizations for over 20 years. His body of work includes award-winning studies on pension reform.