US House Speaker Nancy Pelosi’s Pending Union-Boss Bailout

‘Coronavirus’ Aid Shouldn’t Reward Egregious Fiscal Mismanagement

On April 14, Big Labor Democrat politicians in Illinois, led by Senate President Don Harmon, demanded that Congress approve a multi-billion-dollar federal taxpayer bailout of their state’s underwater government pension funds. Credit: Justin L. Fowler State Journal-Register (Springfield, Ill.), via AP

The 2020 coronavirus pandemic and the draconian political responses to it made in state after state are putting state and local government finances across the country under immense pressure.

To help suddenly strapped states, cities, counties and towns make it through the government-imposed shutdowns, bipartisan majorities in the U.S. Congress approved upwards of $200 billion in direct relief, plus $500 billion in loans, to states and localities within weeks after the coronavirus lockdowns commenced.

But Big Labor D.C. politicians led by House Speaker Nancy Pelosi (Calif.) are now cynically scheming, in the words of Stanford finance professor Joshua Rauh, to turn “coronavirus assistance” into a “federal bailout of states and municipalities that have mismanaged their funds for decades . . . “

Committee Ready to Fight  Bailout That Favors Union Dons in Forced-Dues States

Fortunately, if Ms. Pelosi rams through her chamber a new “no strings attached” bailout favoring union bosses in Big Labor strongholds over residents of more fiscally prudent Right to Work states, the National Right to Work Committee stands ready to fight this scheme in the Senate.

Of course, Nancy Pelosi and other top Capitol Hill Democrats like Senate Minority Leader Charles Schumer (N.Y.) aren’t so foolish as to admit plainly that a bailout for government union dons and politicians who have made unsustainable pension promises to civil servants is what they want.

Instead, they claim additional hundreds of billions of dollars in taxpayer money are needed to help state and local governments “mitigate lost revenue.”

 But on April 14, Democrat politicians in government union boss-ruled Illinois, quite possibly the worst fiscal basket case among the 50 states, let the cat out of the bag.

 ‘What Is Beyond Galling Is Using the Coronavirus As an Excuse’

 That day, union-label state Senate President Don Harmon (Chicago), acting on behalf of the entire Democrat caucus in his chamber, posted a letter to all members of the Prairie State’s congressional delegation.

It called for $41.6 billion in federal money for Illinois, including “$10 billion in pension relief, directly for the state’s retirement systems . . . .”

Mr. Harmon also asked for $9.6 billion in direct aid to Illinois municipalities, which he explicitly suggested could be used to help “fund retirement systems” for public-safety officers.

In an April 19 editorial denouncing the Harmon gambit, which apparently has the backing of Democrat Gov. J.B. Pritzker, the Chicago Tribune acknowledged it’s no surprise a state whose politicians “failed to take seriously decades of fiscal warning bells” would eventually seek a federal bailout.

“What is beyond galling,” explained the newspaper’s editors, “is using the coronavirus as an excuse.”

Pension Problem Is ‘Not Even Remotely Related to COVID-19’

National Right to Work Committee President Mark Mix commented:

“One might have hoped that even D.C. Beltway politicians wouldn’t dare to bring up legislation taking billions and billions of dollars from hardworking people in relatively fiscally responsible Right to Work states and using the money to bail out fiscal sinkholes like forced-unionism Illinois.

“Especially since, as the Chicago Sun-Times put it in its editorial regarding Don Harmon’s chutzpah, ‘cash-strapped retirement systems’ are a problem ‘not even remotely related to COVID-19.’

“But at a time when Congress is throwing around unprecedented sums of money to try to mitigate the enormous economic destruction wrought by a pandemic and policies hastily put in place to stem the spread of the virus, very few lawmakers wish to be seen standing in the way.

“It is under circumstances like these that some of the worst programs ever instituted by Congress were put into place.

“That’s why Right to Work members and supporters need to be on high alert. We have to be ready to mobilize, on short notice, millions and millions of citizens to stop a union-boss bailout cynically disguised as coronavirus relief.

Long Before COVID-19, Many Big Labor-Ruled States Were Facing Insolvency

The most recent analysis of unfunded liabilities of state-administered pension plans in the 50 states by the American Legislative Exchange Council (ALEC) clearly shows that this problem is typically far more severe in states where forced union dues and government-sector monopoly bargaining are permitted.

“Unaccountable and Unaffordable 2018,” released by ALEC in March 2019, calculated that unfunded liabilities of state-administered pensions using a “proper, risk-free discount rate” totaled nearly $6 trillion nationwide.

That’s equivalent to $18,300 “for every resident of the United States.” The 23 states that have yet to adopt Right to Work laws had an average unfunded per capita pension liability of $23,199 in 2018. In contrast, the 27 states with Right to Work laws on the books had an aggregate per capita pension liability that was 41% lower.

All of the six states with the greatest per capita government pension liability (Alaska, Connecticut, California, Illinois, Oregon and Hawaii) allow employees to be fired for refusal to fork over forced union dues or fees, and have extraordinarily powerful government unions.

Boss of Gigantic National Government Union Pushes For $700 Billion Bailout

But all of the nine states with the lowest per capita pension liability (Tennessee, Indiana, Nebraska, Florida, Idaho, Wisconsin, Utah, North Carolina and Oklahoma) are Right to Work.

“If every insolvent Big Labor-dominated state were to get a federal taxpayer bailout proportionate to what Illinois is proposing,” warned Mr. Mix, “the added cost, piled on to all the borrowed money Congress has already spent on coronavirus relief, could be enough to precipitate an even deeper national fiscal crisis.

“On April 21, Lee Saunders, the president of the 1.3 million-member American Federation of State, County and Municipal Employees [AFSCME/AFL-CIO] union, brazenly called for ‘at least $700 billion in additional aid’ to state and local governments. And he wants a big chunk of this money to be ‘unrestricted.’”

As this Newsletter goes to press in early May, members of both chambers of Congress are expected to return soon to Washington, D.C., so that regular sessions can be resumed.

The Committee stands ready to wage an all-out battle to block any legislation, no matter how it is labeled, that grants special favors to union boss-owned states like Illinois based on their extraordinary fiscal irresponsibility.

And the National Right to Work Newsletter will continue to report on this story as it develops.

Speaker Pelosi is cynically scheming, in the words of Stanford professor Joshua Rauh, to turn “coronavirus assistance” into a “federal bailout of states and municipalities that have mismanaged their funds for decades . . . .” Credit: Andrew Harnik, Associated Press