(Headline USA) President Joe Biden announced on Thursday that he plans to spend $36 billion in taxpayer dollars to bail out the Teamsters union’s pension plan, which is projected to run out of money by 2025.
The Central States Pension Fund is facing insolvency and is spending $2 billion per year more than it is taking in from contributions. Right now, the fund has $7.4 billion in assets, according to its most recent quarterly financial report.
Teamsters union officials have blamed the fund’s financial woes on rising costs and a drop in the number of active workers participating in the fund.
A White House fact sheet previewing Biden’s announcement said the administration’s bail out would ensure 350,000 union workers have their benefits through at least 2051. Without the funds, the White House claimed, the benefits could be cut by as much as 60%.
“Ensuring that workers and their families enjoy the retirement security they earned through a lifetime of work is a central part of President Biden’s economic plan,” the White House said. “President Biden is building the economy from the bottom up and middle out, including helping to ensure a dignified retirement for all American workers and their families.”
Biden plans to fund the bailout through the American Rescue Plan Act, which was passed in March 2021.
“Union workers and their families are finally able to breathe a huge sigh of relief, knowing that their hard-earned retirement savings have been rescued from steep cuts,” assistant labor secretary for employee benefits security Lisa Gomez told CNBC.
Critics of the move have blasted it as an attempt by Biden to get back in the good graces of organized labor after he encouraged Congress to pass a law forcing rail workers to accept a deal that many of them disliked.
They also slammed Biden for rewarding the Teamster union’s fiscal mismanagement and forcing American taxpayers to bear the cost.
“Joe Biden is spending $36 billion of YOUR tax dollars to bailout big unions that have failed to properly manage their money,” said Sen. Marsha Blackburn, R-Tenn.
