Texas Insider Report: AUSTIN TEXAS 
The so-called Create Jobs and Save Benefits Act of 2010 introduced by Sen. Robert Casey (D-Pa.) is a microtargeted bailout for underfunded union pensions that could cost taxpayers billions say F. Vincent Vernuccio labor policy council and Ivan Osorio editorial director and fellow in labor policy at the Competitive Enterprise Institute.
- The bill would create a special fund in the Pension Benefit Guarantee Corporation (PBGC) an agency chartered by Congress that insures private sector pensions.
- The PBGC is funded through premiums paid by private companies to insure retirees if a plan sponsor were to become insolvent.
- Caseys bill would direct taxpayer dollars to shore up some underfunded union pension plans.
Caseys bill would create a new fund for the PBGC called the fifth fund which would be obligations of the United States. In other words taxpayers not just PBGC premium payers would be on the hook.
Money in the fifth fund would go to orphans -- employees whose employers have stopped contributing to their plan -- of certain existing pensions.
Phyllis Borzi the assistant secretary of labor for the agency in charge of pension plans is skeptical that the legislation will fix the current situation. She commented that the root of the problem is a sharp decline in the number of new employers joining union pension plans and a dramatic drop in the ratio of employees to retirees.
Estimates on the bills cost vary widely.
- Sen. Casey very conservatively predicts the bill will cost $8 billion to $10 billion.
- News outlets such as the Wall Street Journal Washington Examiner and Fox Business estimate the bill could cost as much as $165 billion.
Source: F. Vincent Vernuccio and Ivan Osorio
Democrats Support Yet Another Bailout Competitive Enterprise Institute November 1 2010.
