Democrats argue $86 billion bailout for union-managed pensions in COVID stimulus bill saved money
House Speaker Pelosi has said the union-managed pension funding was 'for the children' and their grandparents
House Democrats are defending the inclusion of an $86 billion union-managed pension bailout in the $1.9 trillion COVID-19 stimulus bill that President Biden recently signed into law, arguing that the cost would have been larger in the future if Congress didn't act now.
Some Republicans in Congress have said the union pension funding didn't belong in a pandemic stimulus bill.
Some conservatives have referred to the bailout as a giveaway to unions that's unfair to American taxpayers without union-managed pensions. House Democrats were asked to respond to that criticism.
"We had a study for one year on this issue. You have the multi-employer pensions that are in trouble, not because of any mismanagement, but because of deregulation and a lot of the companies went out of business and are not contributing to the plans, stock market collapsed and hadn't recovered and then that's the reason these plans are underwater," House Education and Labor Committee Chairman Bobby Scott said during a Congressional Black Caucus press conference on the Biden stimulus bill.
"And we found that we could fix the problem for about one-third of the cost of the problem. The problem is that when these things go overboard, if you ignore the pain and suffering of people losing their pensions, they're going to show up on Medicaid, they're going to show up on SNAP benefits, they're going to pay less taxes," he also said.
Rep. Joyce Beatty (D-Ohio), chairwoman of the Congressional Black Caucus, agreed with Scott.
"My answer is in the same light. I was going to say you pay on the front end to save from paying on the back end," she said. "And it's so important because part of what we're doing is it's about people. It's about making their lives better so I strongly support everything that my chairman has just said."
House Speaker Nancy Pelosi has said the union-managed pension funding was "for the children" and their grandparents.
Scott said there would have been about $170 billion dollars over the next 10 years "going out" compared to the $86 billion Congress spent to fund the troubled pensions.
"So we had a choice. We could fix it and save money or we could inflict pain on people and spend a lot more," he said. "I don't know why anybody would suggest that we're going to pay money to inflict pain."
Scott said on Tuesday the Democrats' focus was on saving people's pensions and saving money.
"There were a lot of businesses that where going to go bankrupt trying to continue paying the pensions, because of what's called 'the last man standing rule.' As businesses go bankrupt and aren't contributing, the remaining businesses are liable for the difference. And a lot of businesses were on the brink of heading over the cliff," Scott said.
He added that some businesses "were presently having difficulty borrowing money because the bankers could look at their balance sheet and notice that they're obligated for these pension funds that they can't afford and a lot of businesses were going bankrupt too. So it wasn't just the workers, a lot of businesses were at risk if we didn't do something."