Amid the endless, wearying news cycles about the coronavirus, one fact of life has been strikingly consistent with ordinary times: Every imaginable group with a long-standing financial or ideological interest wants to use the pandemic as an excuse to highlight or advance that interest.
Special interests have been pushing arguments supporting or opposing mergers, praising or vilifying pharmacy benefit managers, supporting price supports for ethanol or oil, and advocating for complicated, obscure positions on patent law. Liberal groups, laughably, have been arguing for pausing the confirmation of President Trump’s judicial nominees “until the shock of the pandemic has been diminished.” Everybody is trying to use the coronavirus as an excuse for whatever special-interest provision they always wanted previously.
The coronavirus is the new excuse for bailing out the Post Office, as Democrats were trying to do long before the virus struck. It has also become the latest excuse for the bailout of Illinois — the Deadbeat State, which has been seeking out a bailout for the better part of a decade.
It isn’t always about money, either. Even as the coronavirus fells socialized healthcare systems throughout Europe at rates far worse than the United States, it has inexplicably become the latest argument for “Medicare for all.” It is the new excuse for universal basic income.
And for some people, the coronavirus is just an opportunity to score cheap political points. For example, we do not believe for even one second that Nancy Pelosi actually opposes the repatriation of Americans in China — her stated reason for attacking Trump’s early handling of the crisis. We are certain that, in any other circumstance, she would vigorously denounce such a position as illegal and racist. Anthropologists will likely look back and conclude that the virus had a strange effect on people’s behavior.
Another bad idea now getting a second wind thanks to the plague is a bailout of private, union-controlled pension funds. Democrats have been pushing this idea for decades. Now, they are pushing it again, hoping to exploit the fact that the nation is in crisis.
But if ever there were a bad time to bail out pensions, this is it.
For more than a decade, we have been making the case against bailing out union multiemployer pension funds. But the current proposal is more dangerous than anything we’ve seen previously. House Democrats’ Rehabilitation for Multiemployer Pension Plans Act begins by handing out $71 billion to poorly run union pensions. Then it does something even more dangerous — it gives them $43 billion in taxpayer-backed loans, at low interest rates. They would then invest the money in a presumably depressed stock market, hoping to make back the money they’ve lost in high-risk investments.
From a historical perspective, a diversified stock portfolio represents a reliable long-term strategy for building wealth. But this kind of borrow-and-invest strategy, doubling down on losing bets, is precisely what gives investing a bad name. It is akin to the worst excesses of the financial crisis a decade ago, or at least as close to gambling as the stock market gets. Ordinary investors who act in this way consistently fail to beat the market and are, in fact, far more likely to lose their shirts. Indeed, it should come as no surprise that the Congressional Budget Office expects most of this money never to be repaid.
The Democrats’ proposal would spend over $100 billion to kick down the road a preexisting structural problem of 125 multiemployer union pension funds that were failing even in good times, all the while overpromising and underfunding the retirement of the workers they were charged with protecting.
Millions of older workers’ retirement savings depend on how responsible Congress cares to be now. This is really a question of whether to reward union trustees’ incompetence with a 12-figure gift from taxpayers or to enact reforms to the entity Congress created to insure pensions, the Pension Benefit Guaranty Corporation. Reforms would ensure that they are sustainable in the long run, so that the pensioners of tomorrow get what they’re promised without bailouts.
Everyone has suffered retirement losses in this pandemic. That does not mean it should become union bosses’ chance to get their hands on massive sums of taxpayer money. In fact, resources are scarce, and Congress is already being forced to spend trillions just to help ordinary people make ends meet. Whoever you are with your hand held out, this is the moment when you should accept having your special cause or bailout be sent straight to the bottom of the pile.
