In Congress, Oklahoma delegation pans union pension bailout
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Published: 01-Jun-2010

By Patrick B. McGuigan

Published: 01-Jun-2010

Members of the Oklahoma congressional delegation are quickly reaching a conservative consensus against a percolating proposal to fund generous pensions negotiated in union contracts over recent decades, provisions now contributing to yet another pension funding crisis. CapitolBeatOK has completed a quick survey of the state’s two U.S. Senators and five U.S. Representatives and found near-unanimity against any bail out scheme.

Jon Ward, in a May 27 posting for “The Daily Caller” sketched what he called “a fiery debate” that erupted in Washington, D.C. just before Memorial Day weekend.

Speculation then abounded that members of Congress might include a $165 billion measure to “bail out” failing union pension plans, as part of what Ward called “an already bloated emergency spending bill.”

Although nothing along those lines hit the floor, a proposal co-sponsored by two Democrats, U.S. Sen. Bob Casey of Pennsylvania and Rep. Earl Pomeroy of North Dakota, could create what anti-tax and business groups called “the framework for a taxpayer funded bailout for failing pension plans.”

As Ward reported, “Many employers are withdrawing from pension funds as they face higher costs in paying for funds where mostly union beneficiaries outnumber payees and where the fund’s performance has been lackluster.

“So, Democrats and some Republicans argue, businesses should not have to pay into a pension fund to support their own employees plus ‘orphan employees’ of firms who have left the fund (the withdrawing firms do have to pay penalties and fees in order to exit a fund).”

The Casey/Pomeroy proposal would create a new fund within the Pension Benefit Guaranty Corporation to be financed by the U.S. government. Critics note the corporation is already $21 billion in the red, and the fund deficit is expected to reach $34 billion by 2019.

The Casey/Pomeroy idea allegedly had garnered some Republican support, but one notable backer was merely alleged -- U.S. Rep. Mike Pence of Indiana said he had been listed incorrectly. Several weeks ago he insisted that his name be removed from the Casey/Pomeroy proposal.

While the issue percolates in Washington, D.C, members of the Oklahoma congressional delegation have rapidly coalesced around a highly negative consensus concerning any potential bailout.

Jared G. Young, communications director for U.S. Sen. Jim Inhofe of Tulsa told CapitolBeatOK, “Senator Inhofe's position on this is that it is an issue that needs to be addressed, but we need to protect taxpayers in the process.”

Young noted, “The Pensions Benefit Guarantee Corporation (PBGC) currently insures private defined benefit plans and is supported by insurance premiums paid for by plan sponsors. It also receives funds from general tax revenues.”

Anticipating the “bailout” could become part of S. 3157, the Create Jobs and Save Benefits Act, Young said such an approach “would essentially use taxpayer funds to help out private pensions. How many more times are taxpayers going to be asked to bail out various sectors of the economy?”

John Hart, spokesman for U.S. Sen. Tom Coburn, told CapitolBeatOK:

“He’s against the bill. He doesn’t see any reason why taxpayers need to bail out union pension funds. These funds would never be offset without a major fight. ‘Pay-go’ rules are routinely ignored. This would add to our $13 trillion debt, which is undermining our future. If we continue on this course we won’t have an economy in which unions can operate.”

The Sooner State’s sole Democrat, U.S. Rep. Dan Boren, was also critical. In a statement emailed to CapitolBeatOK, the Muskogee Democrat said, "I have not read the specifics of the bill yet and I want to give it further study, but I can tell you that any new spending without an offset is something that really concerns me. We simply cannot afford any more deficit spending at this time."

U.S. Rep. Tom Cole of Moore, who represents a district running from south Oklahoma City to the Red River, gave a quite specific critique: "With a $1.6 trillion dollar national debt, Congress should be focused on passing spending cuts. Instead, President Obama and congressional Democrats keep introducing one new spending proposal after another.”

Cole, who stopped by the state Capitol pressroom on Tuesday to make his re-election announcement, added, “Using a war funding bill as an opportunity to bail out their union friends is just the latest example of the majority party's misguided priorities and indifference to the concerns of the American people."

U.S. Rep. John Sullivan of Tulsa, told CapitolBeatOK, “Enough is enough – the American people are sick and tired of being stuck with the bill while President Obama and Congressional Democrats try to bailout every industry known to man. A $165 billion bailout for labor unions is just another example of the arrogant Washington establishment not listening to the American people. My position is simple: no more bailouts -- period.”

Katie Bruns, a spokeswoman for U.S. Rep. Mary Fallin, the Oklahoma City congresswoman seeking the Republican gubernatorial nomination in this summer’s primary told CapitolBeatOK: "Congresswoman Fallin will not be supporting a taxpayer funded bailout for unions, nor will she be supporting the larger spending bill this provision may be attached to.”

Bruns continued, “Mary's position is clear: we cannot borrow and spend our way out of a recession. She is not going to support another bloated spending bill that will set the stage for job killing tax increases while heaping debt on future generations, nor will she support a bailout for labor unions."

U.S. Rep. Frank Lucas, who district has the largest geographic area in the delegation – a sprawling district that runs from just outside Tulsa to the Panhandle, and along the western state line to the Red River – took a neutral stance, for now. Describing the proposed bailout as still “in an infancy stage,” Lucas’ communications director Leslie Shedd told CapitolBeatOK, “we aren’t going to comment on this story right now.”

A reasonable surmise, however, is that Lucas will join the ranks of congressional critics of the bailout concept.

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