27 May 2010
Senate Majority Leader Harry Reid
522 Hart Senate Office Building
Washington, DC 20510
House Speaker Nancy Pelosi
235 Cannon HOB
Washington, DC 20515
Senate Republican Leader Mitch McConnell
361-A Russell Senate Office Building
Washington, DC 20510
House Republican Leader John Boehner
1011 Longworth H.O.B.
Washington, DC 20515
Dear Leader Reid, Speaker Pelosi, Leader McConnell and Leader Boehner:
We, the undersigned organizations, on behalf of millions of American taxpayers strongly urge you to oppose legislation which provides the framework for a taxpayer funded bailout for failing pension plans.
Two recently introduced bills fit that description: the Preserve Benefits and Jobs Act of 2009 (H.R. 3936) and the Create Jobs and Save Benefits Act of 2010 (S. 3157). If enacted, they would jeopardize billions of taxpayer dollars to shore up massively underfunded union pension plans.
These two bills mark a stark departure from traditional pension insurance. The Pension Benefit Guarantee Corporation (PBGC) insures the pensions of more than 44 million American workers and retirees in over 29,000 private, company-run single-employer and union-run multiemployer defined benefit pension plans. PBGC receives no funds from general tax revenues. Its operations are supported by insurance premiums—set by Congress—paid for by sponsors of defined benefits plans.
The two bills propose to use taxpayer dollars to bail out several multiemployer plans. Using taxpayer funds to pay for private pensions would be a first in PBGC history. That would be patently unjust. Most of the funds that would be eligible for this bailout were severely underfunded well before the financial crisis hit. That underfunding is largely due to mismanagement by the plan sponsors, who would now get a pass, at taxpayer expense.
In 2009, Moody's Global Corporate Finance estimated that the nation's largest 126 multiemployer plans had a collective funding shortfall of $165 billion. In 2006, well before the financial crisis, only 59 percent of multiemployer plans had 80 percent or more—what the Department of Labor considers healthy—of the assets required to pay for their obligations. By comparison, 86 percent of non-union plans were funded above that level.
One bailed-out plan would be the Teamsters Central States Plan, which in 2007 was underfunded by over $23 billion, and had only 46 percent of the funding necessary to pay its retires. Taxpayers could be forced to pay much of that if these two bills are enacted.
We ask you oppose the bailouts in H.R. 3936 and S. 3157 and instead consider more sensible pension reform that will protect both workers and taxpayers.
Sincerely,
Gordon Colby, Manager Brian M Johnson, Executive Director
Allen's Union Farms Maine Alliance for Worker Freedom
David Keane, President Ron Scheberle, Executive Director
American Conservative Union American Legislative Exchange Council
Bill Wilson, President Ryan Ellis, Executive Director
Americans for Limited Government Americans Shareholders
Grover G. Norquist, President Susan A. Carleson, Chairman/CEO
Americans for Tax Reform American Civil Rights Union
Mattie Corrao, Executive Director Jeff Mazzella, President
Center for Fiscal Accountability Center for Individual Freedom
Eli Lehrer, Director Chuck Muth, President
Center for Risk, Regulation Citizen Outreach
and Markets
Chip Faulkner, President Jason Gloyd, Chairman
Citizens for Limited Taxation Coalition Opposed to Additional Spending
& Taxes
Matthew Brouillette, President/CEO Fred Smith, President
Commonwealth Foundation Competitive Enterprise Institution
Thomas Schatz, President Phyllis Schlafly, President
Council for Citizens Against Eagle Forum
Government Waste
Charles W. Baird, Ph.D. John McClaughry, President
Economist, Author, Scholar Ethan Allen Institute
Bob Williams, Founder Matt Kibbe, President
Evergreen Freedom Foundation FreedomWorks
Jamie Story, President Mario H. Lopez, President
Grassroot Institute of Hawaii Hispanic Leadership Fund
Greg Blankenship, President Cam Carter, VP of Federal Affairs
Illinois Alliance for Growth Indiana Chamber of Commerce, Inc.
Joyanna Diaz, Executive VP Phil Wilson, President
Land Care Incorporated Labor Relations Institute
Bob Barr, Chairman Joe Seehusen, President/CEO
Liberty Guard Liberty Guard
Vincent Snowbarger,
Acting Director, PBGC
R. Clarke Cooper, Executive Director Mark Turek, Chairman
Log Cabin Republicans Maine Taxpayers United
Tarren Bragdon, CEO Mayor Paul LePage
The Maine Heritage Policy Center Mayor of Waterville, Maine
Duane Parde, President Louie Hunter, President
National Taxpayers Union NetworkGeorgia LLC
Dustin Gawrylow, President Brandon Dutcher, President
North Dakota Taxpayers' Association Oklahoma Council of Public Affairs
Todd A. Kruse, President Charlie Gerow, President
Property Rights Association of Minnesota Quantum Communications
Ron Miller, Executive Director William Greene, Ph.D., President
Regular Folks United RightMarch.com
Samuel M. Slom, President Jason Williams, Executive Director
Smart Business Hawaii Taxpayer Association of Oregon
Lisa Miller, President Ben Cunningham, President
Tea Party, WDC Tennessee Tax Revolt, Inc.
C. Preston Noell III, President Dane vonBreichenruchardt, President
Tradition, Family, Property, Inc. U.S. Bill of Rights Foundation
Brent Husson, President Susan Gore, President
Worldscape Landscaping Inc. Wyoming Liberty Group
Jim Martin, Chairman
60 Plus Association