COVID relief includes hidden bailout for public employee pensions

public employee pensions

What does the current COVID relief package have in common with bailouts of public employee pensions? Nothing, but that didn’t stop Biden and the Democrats from using coronavirus hysteria as an excuse to give their public sector union buddies a nice little kickback.

The Strident Conservative warned this would happen.

Immediately after the $2.2 trillion CARES Act was signed into law by Donald Trump a year ago, Republicans and Democrats went to work on another massive spending known as the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act.

The $3 trillion HEROES Act was receiving serious consideration at the time despite claims by the Donald Trump and the Republican majority in the Senate that the bill had little likelihood of becoming law. Shortly after it passed in the House, Trump went on record in favor of more Coronavirus relief, and his Treasury Secretary, Steve Mnuchin, admitted there was a “strong likelihood” of another bailout.

One of the areas of contention between Republicans and Democrats concerning the HEROES Act dealt with the nearly $1 trillion earmarked for state and public-school bailouts with Republicans allegedly “opposing” it and Democrats supporting it.

But the die had already been cast after governors and mayors across the country had shut down their economies in an overreaction to to COVID. Not only did coronavirus tyranny destroy the incomes of small businesses, it destroyed government income as well. This obviously had an impact on government’s day-to-day cashflow, but it made a crisis that existed before the so-called pandemic — unfunded and underfunded public employee pensions — an even bigger problem.

“Their shaky financial foundations were in fact set long ago—through unsustainable obligations like retirement benefits for public employees, excessive borrowing, and deferred maintenance of public buildings and infrastructure. The result has been a long-building budget imbalance now estimated in the trillions of dollars.”

~ John Locke Foundation President John Hood

Democrats claimed at the time that state bailouts included in the bill wouldn’t be used to address pension shortfalls, but no such limitation existed in the bill.

When Democrats successfully passed a modified edition of the HEROES Act immediately after retaking Washington, taxpayers were put on the hook for bailouts for public employee pensions, but in such a way as to keep it hidden until it was too late.

How? The fungibility of money. Taxpayer financing of abortions performed by Planned Parenthood is an example of what this looks like.

Under the HYDE Amendment, taxpayer funds can’t be spent to pay for abortions, but they can used to pay for other services provided by the abortion industry. But since money is fungible, Planned Parenthood can move it around from one account to another. In the end, even though they use taxpayer funds for non-abortion services, the baby butchers are free to reallocate money from those accounts to pay for abortions.

A op-ed by Peter Roff shows us exactly how this applies to the bailouts for public employee pensions using California as an example.

In California, whenever someone calls 9-1-1, the fire department is most likely the first to arrive — not because it’s needed, but because it generates a bigger reimbursement from the feds.

Significant portions of city budgets are now dedicated to employee salaries and benefits. As pension obligations rise, if new revenue sources cannot be tapped by, for example, bringing emergency services “in-house,” critical programs are reduced or eliminated.

Those days must end. These obligations are driving states toward default — or were until the so-called stimulus passed.

California’s total estimated pension liability is something like $1 trillion. To balance its books, Sacramento had to get money from taxpayers in Florida, South Dakota, Utah and, other, better-managed states (through the COVID-19 stimulus) to close the gap. (emphasis mine)

In other words, California is able to provide bailouts for public employee pensions by reallocating money from non-pension accounts, which have been subsidized via massive reimbursements through the COVID relief package courtesy of taxpayers across the nation.

By the way, a similar financial shell game will be played in Biden’s $2.5 trillion infrastructure plan where improvements to roads and bridges will be used as cover to finance the pet projects of the Far-Left.

FYI… the recent decision by the Senate parliamentarian allowing Democrats to advance multiple reconciliation packages this year by a simple majority (filibuster rules won’t apply) gives Chuck Schumer everything he needs to get it passed.

From gun control to the Green New Deal, coronavirus hysteria has been used as a “never let a crisis go to waste” opportunity for far-left politicians in both parties to make big government even bigger while chipping away at liberty and the free market.

This is why the politicians and public sector employees whose campaign contributions keep them in office have seized on the coronavirus crisis to replenish the funds in their chronically underfunded pension plans while the voters weren’t looking.

Taxpayers should not be on the hook for the mismanagement of state governments, and they absolutely should not be forced to secure the retirements of public employees. Especially, when you consider how these states destroyed the futures of millions of Americans by driving them out of business in response to coronavirus.

Unfortunately, I don’t think any of this matters to the far-left elitists in Washington; not when there are votes to be bought, liberty to be destroyed, and power to be seized.


David Leach is the owner of the Strident Conservative. He holds people of every political stripe accountable for their failure to uphold conservative values, and he promotes those values instead of political parties.

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