Washington, D.C. (August 24, 2009) – The Workforce Fairness Institute (WFI) today issued the following statement in response to a news report revealing a $10 billion provision within “thousands of pages of health care overhaul bills that could help the [United Auto Workers] UAW’s retiree health-care plan and other union-backed plans.”
“Union bosses have mismanaged and squandered the hard-earned dues of their members leaving many workers with bankrupt pension programs and ruined retirements. Yet, these same Big Labor bosses – who have come up with hundreds of millions of dollars to help elect Members of Congress – stand to benefit from another big government bailout totaling $10 billion,” said Katie Packer, executive director of the Workforce Fairness Institute. “And if union boss supporters on Capitol Hill rewarding their political benefactors wasn’t bad enough, these same elected officials continue to press for legislation that would allow the government to mandate contracts on workers and small businesses – without their consent – resulting in massive job loss and increased unemployment. Clearly, some in Washington, D.C. have yet to receive the message the American people are sending loudly and clearly, stop the special-interest giveaways and immediately table the job-killing Employee ‘Forced’ Choice Act.”
The Workforce Fairness Institute is an organization committed to educating voters, employers, employees and citizens about issues affecting the workplace. To learn more, please visit: http://www.workforcefairness.com.
To schedule an interview with a Workforce Fairness Institute representative, please contact Kelly Oliver (ext. 140) or Mary Beth Hutchins (ext. 105) at (703) 683-5004.
BACKGROUND:
Detroit Free-Press: “$10B Aimed At Union Retirees”:
“Anti[-]labor forces say it’s welfare for the UAW and Democrats’ union allies. Labor supporters say it falls short of what’s needed as tens of thousands of union members are pushed into early retirement as employers cut back health care coverage. They’re both talking about a $10-billion provision tucked deep inside thousands of pages of health care overhaul bills that could help the UAW’s retiree health-care plan and other union-backed plans. It would see the government – at least temporarily – pay 80 cents on the dollar to corporate and union insurance plans for claims between $15,000 and $90,000 for retirees age 55 to 64 … Labor advocates say even more funding may be needed. ‘It is not enough money,’ said former U.S. Rep. David Bonior, a Mt. Clemens Democrat who chairs the board at Washington, D.C.-based American Rights at Work, a labor advocacy group. ‘That will have to be supplemented to fill the gap.’ Without U.S. aid, union health plans could fail … Outside experts estimate the funds have about 30 cents in cash for every dollar of future claims, with no guarantee of what its stock assets will be worth. Lance Wallach, a New York-based [Voluntary Employee Benefit Association] VEBA expert, says if the funds ‘don’t get something, they’re out of business in 12 years.’ That something may be national health care reform. Key provisions in House and Senate proposals set aside $10 billion to pay some claims for early retirees covered by employers and VEBAs, before other cost-saving measures kick in … John Sheils, vice president of the Lewin Group, a health care research firm owned by a United Healthcare subsidiary, said the money likely will run out in less than two years. Then, like with the recent cash-for-clunkers clamor, Congress could feel obligated to add money to the program. ‘From a political perspective, I think it’s very, very difficult for the Congress to actually close down programs,’ Sheils said. ‘This is something people could get used to very quickly.’ Labor unions, including the UAW -- which has taken on about $90 billion in health care liabilities for its retirees from the three metro Detroit automakers -- have fought hard for the so-called reinsurance provision that would cover 80% of early retirement claims between $15,000 and $90,000. According to outside experts, the UAW’s VEBAs have only about 30% of the cash needed to cover retirement health benefits for about 850,000 people -- making it the second biggest retiree insurance pool in the nation, with only California’s pension plan larger … It’s not just the UAW fighting for the funding. The provision has the backing of the United Steelworkers of America and the Communications Workers of America. The AFL-CIO also pushed for the program in congressional hearings.” (Justin Hyde & Todd Spangler, “$10B Aimed At Union Retirees,” Detroit Free-Press, 8/24/09)
