Biden’s Christmas Gift to the Teamsters

In the movie “Hoffa” — about the life of the Teamster’s titanic president, Jimmy Hoffa, played by Jack Nicholson in the actor’s greatest performance — there’s a fictional figure, Hoffa’s aide, played by Danny DeVito, also in his greatest role. In the movie, the two go to jail for doing business with the mafia and for chicken feed compared to the $36 billion that, in real life, the union’s latest financial angel, Joe Biden, is steering into the Teamster’s troubled pension plan.We don’t want to make too much of that analogy. At the same time, it’s hard to see Mr. Biden’s decision to divert billions from taxpayers to backstop the Teamsters’ pensions as anything other than a holiday gift to unions with a ribbon tied around it. That’s not to say anything against the retired Teamsters themselves, who certainly deserve better than to lose their hard-earned retirement fund. The bailout, though, sets a dangerous precedent.“It’s about dignity,” Mr. Biden crowed yesterday alongside union bosses from the Teamsters and the AFL-CIO at the White House Thursday. Mr. Biden noted that 350,000 union members and retirees would be spared from having their pensions slashed by up to 60 percent. Left unmentioned amid the celebration was exactly why the pension was failing in the first place. A Texas Republican, Congressman Kevin Brady, has a hard-headed view of it. “The largest private pension bailout in American history,” is how the congressman describes it — a gift to “those who mismanaged pensions.” This, Mr. Brady notes, points to the larger concern of underfunded pensions, a $650 billion problem. Worse, the Biden bailout will help only “a tiny minority” of America’s workforce. Mr. Brady notes that retirees in other pension plans for unions “that are not as politically connected as the Teamsters” are out of luck. “American taxpayers are being forced to cover promises that pension trustees never should have been allowed to make,” Mr. Brady contends. In many cases, these union pensions cover employees working for many different companies. The pensions are managed by a mix of company and union officials. There are incentives to over promise on benefits without providing enough money to cover them. Why are taxpayers bailing them out?Mr. Biden’s largesse represents what the AP calls the “largest amount of federal aid provided for a pension plan” — so far. Now that the precedent has been set, what incentive do pension managers have to straighten out their books and make sure their resources line up with the promises they made to retirees? This threatens to put taxpayers on the hook for hundreds of billions — or more — in dubious pension promises.The giveaway to the Teamsters is remarkable, too, because of that union’s history of corruption. The pension Mr. Biden just bailed out was formed in 1955 by Jimmy Hoffa, who saw it “not as a fiduciary responsibility, but as a means of winning friends and influencing people,” Forbes reports. It became the “most abused, misused pension fund in America,” Forbes notes, in part due to the infiltration, in the Hoffa era, of the union by organized crime.As for the timing of Mr. Biden’s holiday bailout, the fix was in after the passage of the Democrats’ inflation-fueling Covid stimulus bill early in 2021. That measure, which poured trillions of federal tax dollars into an already-recovering economy, is one of the main triggers of the current crisis of runaway prices. It’s a reminder that, especially for retirees, the inflated cost of living is just as much a hit to the wallet as, say, a failed pension fund.Which brings us back to the Hollywood version. The Sun has a certain regard for Jimmy Hoffa. The Master Freight Agreement, which he negotiated, is one of the great instruments in the history of organized labor. It helped form the American middle class. Hoffa was released from prison in a deal with President Nixon, whom the Teamsters endorsed in 1972. Our view is that the Teamsters would have been far better off sticking with the GOP.

Biden’s Christmas Gift to the Teamsters

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