Research

In hopes of keeping their Democratic supporters in power, major unions are planning on spending hundreds of millions of dollars to support Democrats in the 2010 elections. And in return, they hope the Democrats in Washington will bailout their seriously underfunded pension funds, rolling the dice on political favors while going all-in with money that could and should be shoring up their members’ pension plans. The Hill follows the money:

The American Federation of State, County and Municipal Employees (AFSCME) plans to spend in excess of $50 million during the 2010 campaign, part of which will fund ‘a massive incumbent protection program,’ according to Gerry McEntee, president of the union… The Service Employees International Union (SEIU) plans to spend $44 million in total on its 2010 election program. 

These figures are on top of the over $53 million that the AFL-CIO plans on spending, also in an aggressive attempt to save Democratic incumbents who have shamelessly lavished taxpayer money on union priorities.

One of those union boss priorities is getting the government to bailout the union pension funds.  Why is that? The Washington Times details union debt and pension woes:

SEIU is $85 million in debt… the union owes $80 million to Bank of America and $5 million to Amalgamated Bank… Many SEIU local pension plans are in as bad a shape as the national plans – if not worse.  In 2007, well before the financial meltdown, the SEIU Local 32BJ Building Maintenance Contractors Association Pension Plan was funded at an anemic 41 percent, the SEIU 1199 Greater New York Pension Fund at 58 percent, the 32BJ District Building Operators Pension Trust Fund at 56 percent, and the Service Employees 32BJ North Pension Fund at 68 percent.”

In order to cover up these liabilities, unions are asking the government for a pension bailout, making employers with collective bargaining agreements cover the underfunded pensions. Unions have a way of mismanaging members’ and taxpayers’ money with an eye towards bailouts. The Los Angeles Times has remarked on the wastefulness:

[T]he $23-billion Keep Our Educators Working Act, expected to reach the Senate floor by the beginning of next week… would come on top of $54 billion in stabilization funds given to schools last year in addition to Title I and other federal education spending. That money was supposed to last schools for two academic years, but unions exerted heavy pressure on school districts to spend all or most of it in the first year in the hopes that more money would show up by the next year.

When an investment fund pays off early investors with new investors’ money, it is called a Ponzi scheme. This is no different. With a history of reckless spending, the unions are hoping their election bankrolling will leave their coffers flush with taxpayer money. And if the Democrats are able to pass their job-killing, big government agenda, this is exactly what will happen. And the unions will remain unaccountable to anyone, including their own members. With a racket like this, the unions can’t afford not to gamble on their binge spending friends in Washington.