“On the Holmes Front,” with Frank Holmes
President Joe Biden this week announced a major initiative to have taxpayers bail out labor unions, which are among his closest supporters and the most active donors to the Democratic Party.
Biden announced this week that, if union pensions go bankrupt, U.S. taxpayers will bail them out… but he made no similar guarantee to the vast majority of Americans.
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It’s known as the American Rescue Plan’s Special Financial Assistance program. It says when union pensions go insolvent, the government will pay the difference. Biden himself said in Ohio that his administration has spent $90 billion on the union bailout—so far.
“[Biden] is saving private union pensions by making ordinary Americans pay for them,” said Rachel Greszler of the Heritage Foundation.
Only 10.3 percent of the nation’s overall workforce belong to a union—down from about a third of Americans decades ago. For private-sector workers, the number is even lower: 6.1 percent.
For the other 90 percent of Americans, Biden has nothing. But 33.9 percent of his fellow public sector workers belong to unions… and Biden’s coming to the rescue.
Greszler described how Biden’s union allies have built their entire pension on a house of cards. They would vastly overpromise union employees how much their money would grow over the years, she said, claiming massive stock market-like gains that were never based on real numbers.
She said this let union officials tell their members that, while they couldn’t negotiate higher wages as part of the new contract, workers would see more money when they retired. Then, unions would tell employers not to worry; it wouldn’t cost them a dime.
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With an aging workforce, there’s been an increase in retirements. The check has come due—and it’s about to bounce.
“The entire system is on track to pay only 42 cents on the dollar in promised benefits,” said Greszler. That leaves U.S. taxpayers to pick up the other 68 cents.
It’s easy to understand why Biden is bailing out unions: They’re one of his top contributors.
Labor unions donated $27.5 million to his 2020 presidential campaign or the Democrat-aligned super PACs and outside organizations that backed him. Labor unions gave President Donald Trump only $360,000, even though rank-and-file union members don’t necessarily hold the same political views as union leadership.
Unions gave Biden their money; now Biden’s giving unions your money.
Observers warn that the Biden administration’s move might only encourage unions to engage in riskier behavior in the future, knowing the Democrats will force taxpayers to make up the difference.
“The White House is going to allow the same pension fund managers – who have been historically awful at their jobs – the ability to make riskier investments with not only hardworking American’s pensions, but also the nearly $100 billion worth of taxpayer dollars delivered to unions under the guise of COVID relief,” Derek Kreifels, CEO of the State Financial Officers Foundation, told Fox Business.
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Worse yet, Biden put “zero safeguards in place to prevent the plans from running out of money again,” said Ryan Frost, a policy analyst at Reason Foundation’s Pension Integrity Project. He may have set American taxpayers up to bail out his union allies’ pension fund failures again, and again, and again—just like the banks.
Biden defended his plan on Wednesday in Cleveland, saying a $90 billion bailout is “small in comparison to the bailouts of businesses and major corporations and banks”—but American voters oppose both kinds of bailouts. If either union fat cats or big bankers want to risk their own money, that’s their business. Voters don’t understand why U.S. taxpayers should be on the hook to underwrite the bad behavior of others.
Even many on the Left share this belief. “Privatizing profits while socializing risks isn’t capitalism: it’s rigged roulette,” Rep. Ro Khanna, D-Calif., wrote in the prestigious Harvard Business Review.
Americans are sick of politicians spending recklessly and then shifting funds around to benefit their campaign donors.
It’s time to pull the plug on government bailouts and other programs that grease the hands of Democratic donors. Americans can begin by voting out the shady politicians who made the pay-offs possible.
Make politicians realize they work for us, or they can begin collecting their own pension out of office.
Frank Holmes is a veteran journalist and an outspoken conservative that talks about the news that was in his weekly article, “On The Holmes Front.”