Democrats have a three-stage strategy when they want to destroy an industry: Pick a politically vulnerable target, then pile on new regulatory costs, and finally demand that taxpayers bail out the victims of the destruction. We’re now in phase three in President Obama’s war on coal, with Democrats demanding that Congress save the United Mine Workers pension fund.
The United Mine Workers of America (UMWA) runs a multi-employer pension plan that has struggled as coal has shrunk under Mr. Obama’s political assault and competition from natural gas. For every worker there are now 10 retirees. Liabilities have exploded as bankrupt companies have stopped paying for their workers and retirees.
Benefits are underfunded by $5.6 billion, or about $600,000 per worker, and the pension plan is projected to go broke by 2025. A retiree who worked 30 years would then receive a maximum of $12,870 per year from the federal Pension Benefit Guaranty Corporation (PBGC) versus $24,250.
Congress has tried to help coal miners avoid this fate. In 1992 Congress authorized the U.S. Treasury to divert interest from the Abandoned Mine Land Reclamation Fund, which is financed by taxes on coal production, to the union’s retiree health care. In 2006 Congress allowed taxpayers to be billed if interest from the reclamation fund doesn’t cover the cost of the union’s generous health-care benefits. In 2015 interest transfers accounted for $32 million while taxpayers chipped in $142 million.
Now the union wants taxpayers to underwrite the pensions. Legislation propping up the union’s pension fund has gained steam as both parties mine for votes in the Rust Belt. Last week the Senate Finance Committee approved a bill that would allow up to $490 million in taxpayer subsidies and interest from the reclamation fund to be redirected to the union’s retiree health and pension benefits.
The Congressional Budget Office estimates that backfilling the pension and retiree health benefits would cost $3.5 billion over the next decade. Although the federal government helped establish the UMWA pension plan in 1947, taxpayers have never been liable for benefits beyond what is guaranteed by the PBGC. Congress has also never provided financial assistance to any private, state or local pension plan.
http://www.wsj.com/articles/the-obama-clinton-coal-bailout-1475190767
First, kill off the industry, then get taxpayers to fund the pensions of the workers.
Why should we?
