Trillion-Dollar Union-Boss Bailout Stalled

Resistance to Pelosi Scheme Coalesces in Right to Work States

For decades, fiscally irresponsible Big Labor politicians in government union boss-stronghold states like Illinois, New Jersey and Connecticut have been piling up ever-increasing unfunded liabilities for taxpaying employees and employers in their jurisdictions.

Several months ago, in desperation, politicians in these states seized upon COVID-19 and the huge economic shock resulting from efforts to contain it as an opportunity to make citizens of less profligate states pick up the tab for Illinois, New Jersey, Connecticut, et al.

Their instrument of choice is the so-called “HEROES” Act (H.R.6800), a $3 trillion, federal taxpayer-funded bailout package. 

It was rubber-stamped by the U.S. House in May. And just a few weeks ago, many proponents of H.R.6800 clearly believed the U.S. Senate would face irresistible pressure to ram through either H.R.6800 itself or something similar before Labor Day.

Hundreds of Billions of Dollars Already Allotted For States, Localities

By early this spring, state and local government finances across the country were under intense strain partly due to COVID-19 itself, and perhaps to an even greater extent because of the mandatory shutdowns of “nonessential” businesses instituted by politicians in all but a handful of the 50 states.

To help suddenly strapped states, cities, counties and towns make it through the government-imposed shutdowns, bipartisan majorities in the U.S. Congress quickly made available upwards of $200 billion in direct relief, on top of as much as $500 billion in subsidized loans, to states and localities.

But Big Labor D.C. politicians led by House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles Schumer (D-N.Y.) weren’t satisfied with federal assistance that was specifically crafted to address fiscal problems stemming from the pandemic and efforts to “flatten the curve” of infections.

Even as bipartisan and extraordinarily costly relief measures were sailing through Congress, Ms. Pelosi, Mr. Schumer, and their cohorts were already hatching a plot. 

In the words of Stanford University finance professor Joshua Rauh, their aim is to turn “coronavirus assistance” into a “federal bailout of states and municipalities that have mismanaged their funds for decades . . . .”

On May 12, Ms. Pelosi unveiled H.R.6800, a union-boss wish list that includes nearly $1.1 trillion in funds for state and local governments. 

Forced-Dues States Have Long Been Overspending At Big Labor’s Behest

“The $1.1 trillion,” said National Right to Work Committee Vice President Matthew Leen, “would supposedly go to help public officials close temporary budget gaps that are direct results of the coronavirus and coronavirus shutdowns.

“The reality is that H.R.6800, if adopted, will enable Big Labor-ruled states to paper over with federal tax dollars catastrophic deficits and soaring long-term debts that are primarily the result of chronic out-of-control spending and other poor budgetary decisions by union-label politicians.

“Of course, all 50 states have been hurt fiscally this year as a consequence of plummeting sales, personal income, and/or other tax revenues.

“But the enormous budget problems now faced by the Prairie State and many others obviously are rooted in longstanding policies that authorize the firing of employees for refusal to pay union dues or fees as a job condition and grant monopoly privileges to government union bosses.

“As journalist Steven Malanga reported last year in City Journal, the nine states that had the worst records from 2003-17 of ‘spending more than they generate in taxes, fees, and federal grants’ are New Jersey, Illinois, Connecticut, Massachusetts, Kentucky, Maryland, New York, California and Delaware.

“Eight of these states are forced-unionism. And Kentucky, the only one that isn’t, did not adopt its Right to Work law until 2017.

“Another trait that ‘virtually all the [worst] overspenders have in common,’ added Mr. Malanga, is ‘a high degree of [monopolistic] public-sector unionization.’ 

“Among the 10 states whose spending most exceeded the revenues they took in, nine ‘have union rates well above the national average for the public sector,’ and six rank in the top 10 for ‘the percentage of unionized workers within government.’”

Union Bosses ‘Have Over-Promised and Under-Delivered to Workers’

Just before the House roll-call on H.R.6800, during which Ms. Pelosi gave free passes to vote “no” to a handful of especially politically vulnerable Democrat members, while herding the rest into line, the Committee contacted every U.S. representative to communicate strong Right to Work opposition.

“For decades,” wrote Committee Director of Federal Affairs Ben Arcuri, “state governments and government union bosses have colluded to expand the size, scope, and cost of government,” cutting deals that “were never sustainable in the long term.”

Most egregiously of all, “state politicians beholden to government union bosses have promised” pension benefits to public employees “far beyond states’ ability to pay.”

They have “over-promised and under-delivered to workers, placing short-term gain over long-term sustainability.” The burden of this irresponsibility must not be transferred over to already hard-pressed federal taxpayers, Mr. Arcuri concluded.

After Ms. Pelosi got her way and H.R.6800 sailed through the House, Right to Work staff repeatedly communicated with Senate Majority Leader Mitch McConnell’s (R-Ky.) office about the need to prevent H.R.6800 or any other government-union-pension bailout from being passed by his chamber.

Ms. Pelosi, Mr. Schumer, and their cohorts clearly calculated that, as bloated as H.R.6800 is, the suffering connected to the horrific 15.6% decline in employment the U.S. experienced in March and April would ultimately leave Mr. McConnell and President Trump with no choice.

They would have to acquiesce to H.R.6800, or something very much like it, or face a sharp backlash from states and localities across the country.

What Big Labor politicians apparently overlooked is the fact that the overwhelming majority of the 27 Right to Work states were in a far better position to weather the COVID-19 storm than were the bastions of compulsory unionism.

Right to Work States Are Balancing Their Budgets, Despite the Pandemic

As economist Stephen Moore, a frequent television commentator and an advisor to Donald Trump’s 2016 campaign, noted recently in an interview with the Epoch Times, Utah, South Dakota, Nebraska and Iowa — all Right to Work states — have actually balanced their budgets for the current fiscal year.

“Contrary to Nancy Pelosi’s expectations,” said Mr. Leen, “the governors and lawmakers of Right to Work states have not joined their counterparts in Illinois, New Jersey and Connecticut in pressing for a federal bailout. 

“That’s undoubtedly a key reason why neither Mitch McConnell nor Donald Trump has seen fit, up to now, to seek a ‘compromise’ with Nancy Pelosi over her proposed $1.1 trillion bailout for government union bosses.”

Mr. Leen emphasized that federal taxpayers who live in relatively fiscally responsible states aren’t out of the woods yet:

“Depending on the dynamics of the closing weeks of the 2020 presidential and congressional campaigns, there is a danger that a phony ‘compromise’ bailout will emerge. It would be less outrageous than H.R.6800, but still hand billions and billions of unrestricted dollars to Big Labor state and local politicians.

“And even if H.R.6800 fails this year, 2021 could be a different story.

“If Big Labor politicians control the White House and both chambers of Congress next year, it may unfortunately be impossible to stop an enormous forced-dues-state bailout from happening.”