February 12, 2020
primary season gets underway, one candidate, President Trump, doesn’t seem
particularly worried about which presidential hopeful wins which state. He has
a strong economic record to run on and he can seemingly easily expose the follies
of his opponents’ big government plans. But he has a potential Achilles’ heel:
failing multiemployer pension plans. Unless Trump embraces a sensible approach
to managing millions in underwater pensions, people in the United States may
have to deal with a President Biden … or Sanders.
problems are particularly pronounced in states such as Wisconsin, Michigan, and
Pennsylvania, where once-powerful companies in industries such as trucking have
closed en masse. According to some back-of-the-envelope calculations,
approximately 440,000 people in Michigan are trapped in underperforming
multiemployer plans. That figure is 155,000 in Wisconsin and 495,000 in
these retirees don’t get their due, it’ll be a pox on the house of whichever incumbent
holds the levers of power. Politicians could, of course, take the “easy way
out” and rescue these plans via a $100 billion taxpayer bailout. However, this policy move
wouldn’t exactly ingratiate Trump and his congressional allies with citizens
already tired of rampant taxation (especially in high-tax states such as
Michigan and Wisconsin). Plus, it would simply set the stage for more reckless
behavior and another bailout down the road.
Senate Finance Committee Chairman Chuck Grassley and Sen. Lamar Alexander released a proposal last year that can fix the issue
without bilking taxpayers. Their suggested fix strengthens reporting
requirements for these plans, ensuring that pension sponsors cannot continue to
underreport liabilities and leave everyone else with the bill.
Grassley-Alexander proposal may not be perfect, and some watchdog groups will
inevitably complain that the government is too active in managing multiemployer
liabilities in the first place. But the plan provides the only feasible,
real-world alternative to runaway bailouts and pension cuts while sparing
retirees from the recklessness of their former employers.
supporting these bold proposed reforms, Trump can send a message to graying
Rust Belt workers that he has their back and is willing to go to bat for them.
And, taxpayers can rest easy knowing that their hard-earned dollars are safe
from ill-advised bailouts. This makes for good politics, but most importantly,
the proposal provides peace of mind for millions of people without breaking the
Ross Marchand is the director of policy for the
Taxpayers Protection Alliance.
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