Big Labor backs Democrats

Chris Prandoni Federal Affairs Manager, ATR
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With Democrats fighting to hold onto their majorities in the House and Senate, they have enlisted their most ardent supporter — Big Labor — to help push back against a resurgent Republican Party. No interest group has been more vital to the Democratic Party’s recent success than organized labor, which spent nearly $400 million on Democratic candidates during the 2008 election cycle.

Given the implications of this election — a Republican-controlled House would have enormous leverage over an administration that has shown an unwillingness to negotiate with Republicans — organized labor has pledged to throw everything but the kitchen sink at GOP candidates. The AFL-CIO and the Service Employees International Union (SEIU) put their bad blood aside and announced that they will spend a combined $88 million during this year’s election cycle. The American Federation of State, County and Municipal Employees — a government employee union — plans to spend about $50 million.

An analysis of the campaign contributions made by labor unions so far in this election cycle reveals the close relationship between organized labor and the Democratic Party. Nine of the 10 largest Democratic political action committees are union-funded. The chart below lists those nine political action committees and the amounts they have given to Democratic candidates this cycle.

Labor Union Political Action Committee Amount Contributed
Intl Brotherhood of Electrical Workers $2,323,373
Operating Engineers Union $1,879,300
American Federation of State, County, Municipal Employees $1,749,000
Teamsters Union $1,588,910
Laborers Union $1,582,500
Machinists/Aerospace Workers Union $1,527,500
American Federation of Teachers $1,482,250
Plumbers/Pipefitters Union $1,389,975
International Assn of Fire Fighters $1,355,500

Meanwhile, four of the top five donors to 527 groups were unions. The chart below lists those four organizations and the amount they have contributed to 527 groups this cycle.

Organization Recipient
Service Employees International Union $10,764,321
United Food & Commercial Workers Union $3,562,014
American Federation of State, County, Municipal Employees $2,382,873
Operating Engineers Union $2,196,245

Having spent hundreds of millions of dollars helping Democrats build their huge majority over the past four years, organized labor is frustrated by the absence of a tangible victory — they have no single piece of legislation to hang their hat on. Sure, Obama issued executive orders favoring unions in construction and federal contracting, scuttled pending free trade agreements with allies, appointed numerous union-friendly officials to prominent positions, funneled billions in stimulus dollars to unionized workers, and coddled the UAW during the Chrysler bankruptcy process, but labor wants more.

Due to their falling popularity with the American public, labor unions have been relegated to cutting backroom deals with those they help get elected. The legislative victory unions were counting on was the misnamed Employee Free-Choice Act (EFCA), a bill which would have eliminated workers’ rights to a secret ballot when deciding unionization and mandated a government-appointed arbitrator to rewrite union-employer contracts during disputes. “Card check” would have stopped the union membership skid and solidified union power for years to come.

While the lame duck session may breathe new life into EFCA, it is likely that this toxic bill will lay dormant for some time. Subtly acknowledging this, unions have shifted their priorities to new bills which address Big Labor’s most pressing long-term problem — an upside-down, unsustainable pension system.

Most large unions enroll their employees in a multiemployer defined benefit pension system. Operating under the “last-man-standing” rule, every employer is liable for every retiree in the pool. Initially thought to reduce risk by pooling pensions together, the real result has been to burden employers with bankrupt companies’ pension payments. The underfunding of multiemployer pension plans is so pervasive that in 2009 Moody’s estimated that multiemployer plans were underfunded by $165 billion.

With enormous pension liabilities threatening to bankrupt some of America’s largest unions, legislation has emerged that would effectively bail out struggling union plans. Rep. Earl Pomeroy (D-ND) introduced H.R.3936, the Preserve Benefits and Jobs Act of 2009,  which looks to put taxpayers on the hook for union negotiated and managed pension plans by creating a new entity solely responsibly for shoring up underfunded pension plans. The bill sets no limits to taxpayers’ exposure — which is likely to be in the hundreds of billions — as there are currently over 300 multiemployer pension plans that are in critical or endangered condition.

Signaling the Senate leadership’s support for a union bailout, Democratic Whip Dick Durbin (D-IL) recently co-sponsored Senator Bob Casey’s (D-PA.) legislation, S. 3157, the “Create Jobs and Save Benefits Act of 2010” — the Senate’s version of Pomeroy’s bill.

Democratic members facing tough races will likely enlist Big Labor to drum up support and money for their campaigns. Look for unions to push the Pomeroy and Casey pension bailout bills during a lame duck session as “card check” is an increasingly-difficult sell.

Taxpayers have spent the past year and a half bailing out various interest groups, compelling voters to throw out the Congress that implemented these preferential policies. Unions know their only chance to get theirs is during a lame duck session, when soon-to-be unemployed members of Congress must expiate for prior support.

Christopher Prandoni is the Executive Director of the Alliance for Worker Freedom, an affiliate of Americans for Tax Reform.