For years another potential multibillion fiscal catastrophe has been brewing, obscured by higher-profile storms created by taxpayer bailouts of Detroit and Wall Street and the looming crash of underfunded public employee pension plans.
For the first time, taxpayers may become responsible for the nongovernmental pension liabilities of union collective bargaining contracts in construction, trucking and other industries in which workers move from one employer to another. Some estimate that these multiemployer pensions are $165 billion short of committed obligations for paying retirees' defined benefits.
It's not a new problem, but it has been under the radar for years as it's worsened. In 2004, the libertarian Cato Institute's Richard A. Ippolito warned that underfunded private-sector pension funds increased the likelihood of a taxpayer bailout.
A bill in Washington would put taxpayers on the hook for multiemployer plan obligations backed by the PBGC, which so far has been financed only by insurance premiums, investment income and pension plan assets. How much tax support will be required is in dispute. We fear the total also will be open to negotiation and union pressure.
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