A Penny Saved Is a Penny Not Spent — on Politics

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By Dr. Merrill Matthews – When a child wastes his allowance on foolish things, wise and prudent parents will be reluctant to hand over more money if that child comes begging. And that’s just how taxpayers should feel about a new effort to bailout labor union pensions.


Pennsylvania Senator Bob Casey has introduced the “Create Jobs and Save Benefits Act,” otherwise known as the “Buy Union Votes and Boost My 2012 Reelection Chances” bill. In essence, the bill would transfer billions of dollars in unfunded pension liabilities from mostly union-managed multi-employer pension plans to the Pension Benefit Guaranty Corporation (PBGC), which is backed by taxpayers.

But even as unions push for taxpayers to fill the gap in their underfunded and mismanaged pension plans, they drop millions of dollars in union dues on political causes.

Just last week we learned that unions spent $10 million trying to defeat incumbent Arkansas Senator Blanche Lincoln in the state’s Democratic primary. The White House apparently thought the money was wasted; the unions responded that even though they lost, the money was well spent.

In addition, several groups, including unions, are contributing to a $125 million, five-year White House project to convince Americans they really do want ObamaCare.

How much money do unions spend on political activities? No one knows for sure because the unions do their best to mislead or hide it. UnionFacts.com reports, “[T]he National Institute for Labor Relations Research estimated that total union political expenditures reached $925 million in the 2004 cycle.”  It has surely gone up significantly in the last few cycles.

Of course, union members have a constitutional right to support the candidates of their choice. But when union pensions are underfunded, then dues money should be diverted to the pensions first, not political activities.

True, redirecting roughly $1 billion from political activities to shoring up their pensions may not be enough. Senator Casey estimates that about $8 billion would do the trick; Moody’s puts it around $165 billon, according to The Wall Street Journal.

But it would be a start, and a better economy could help fill the gaps. Just like that foolish, wasteful child, when unions waste their money and then beg for bailouts somebody has to act like the wise and prudent adults.

Today’s TaxByte was written by IPI Resident Scholar Dr. Merrill Matthews.