Short Take: For The Love of Teamsters
As it turned out, a bad stock market and rocky economy is just as bad for pension fund investments as it is for everyone else’s. It sucks, of course, but it’s not as if this comes as a surprise. Unless you’re a Teamster. And unless your president really loves unions and wants your love in return.
President Biden announced Thursday that he was investing $36 billion in federal funds to save the pensions of more than 350,000 union workers and retirees, a demonstration of commitment to labor just a week after a rupture over an imposed settlement of a threatened rail strike.
After using Congress to quash a railway labor strike, the president needed some big show of union love to prove his bona fides as the president everyone needed in 1934. What better show could there be than taking taxpayer money and giving it to a private union pension fund? And what more reliable union to give it to than the Teamsters?
“Thanks to today’s announcement, hundreds of thousands of Americans can feel that sense of dignity again knowing that they’ve provided for their families and their future, and it’s secure,” Mr. Biden said, joined by Sean M. O’Brien, president of the Teamsters, and Liz Shuler, president of the A.F.L.-C.I.O., as well as Marty Walsh, the U.S. secretary of labor.
Dignity? Cool, but then, what about the “dignity” of those from whom the money was taken, the taxpayers who weren’t Teamsters members?
The $36 billion, drawn from the $1.9 trillion American Rescue Plan passed last year, will go to the Central States Pension Fund, which is largely made up of Teamster workers and retirees. The fund has been the largest financially distressed multi-employer pension plan in the nation. As a result of shortfalls, pensioners were facing 60 percent cuts over the next few years, but the White House said the federal funding will now ensure full benefits through 2051.
Pension funds are overseen by trustees, who invest the pension monies and use the proceeds of their investments to pay out to their members. When the stock market and economy go south, pensions become “distressed,” pretty much like everyone else who has invested their savings in the expectation that it will increase and be there when they retire. Many of us, lawyers for example, don’t get pensions and must rely on our own savings and investment for our “dignity.”
In his remarks, Mr. Biden expressed sympathy for workers and retirees facing cuts not of their own making. “For 30, 40, 50 years you work hard every single day to provide for your family. You do everything right,” he said. “But then imagine losing half of that pension or more through no fault of your own. You did your part. You paid in. Imagine what it does financially to your peace of mind, to your dignity.”
Can you imagine? It’s almost like the exact same thing that happens to the rest of us when the market crashes and our savings and investments go poof and there isn’t a damn thing we can do about it. Didn’t we do everything right too? Was it our fault? What about our peace of mind, our dignity?
Many of the affected workers and retirees are clustered in Midwestern states that have been battlegrounds in recent elections, including Michigan, Ohio, Wisconsin and Minnesota as well as other states like Missouri, Illinois, Florida and Texas.
On the one hand, unions are huge, HUGE, contributors to political campaigns, money that could be used to fund, oh, pensions but are instead handed off to politicians whom unions believe will love them dearly, usually Democrats.
On the other hand, Midwest Teamsters members and retirees have not felt loved by the Dems in a while, regardless of their preferred pronouns, so this $36 billion infusion to shore up their distressed pensions, which some might consider a blatant gift of cash to private sector union members, might buy $36 billion in votes in return.
But their dignity is paid for by taxes. The taxes we pay. The government compels us to pay in and then hands it over to the Teamsters’ pension fund with a pretty bow and note that says, “With love, Joe.”
“Now, American taxpayers are being forced to cover promises that pension trustees never should have been allowed to make.”
Perhaps the pensioners were lied to by their very own trustees, who promised them guaranteed riches, good economy or bad. Granted, the pensioners may have felt that they were lied to by their union when they learned that investments didn’t produce enough wealth to buy them the dignity they expected.
Of course, that same distressed market did the same to the rest of us, who still have to pay our taxes so the Teamsters can enjoy the dignity Biden gave them and we paid for, even if we’ve all watched our dignity lost in an inflationary spiral. It’s not that I expect Joe to send me $36 billion. I just don’t want Joe charging me for the gift he’s giving the Teamsters to buy their love in ’24. If Joe wants to show pensioners some love, let him pay for it without reaching into my pocket, as my savings and investments aren’t doing a whole lot better than the Teamsters’ pension fund.