Taxpayers shouldn't pay for
UAW's rich health care benefits Detroit News editorial, 8/25/09
One reason the public so distrusts the health care plan being
considered by Congress is that so many troublesome details keep
bubbling out of the massive legislation.
The latest example is the $10 billion taxpayers will be asked to
shell out to prop up the United Auto Workers' retiree health
insurance program.
That provision is tucked deep into the bill passed by the House.
In effect, it would ask every taxpayer, regardless of whether
they'll have health insurance coverage themselves after they retire
-- and most won't -- to chip in to maintain the UAW's coverage,
which even after the union's givebacks is still better than what the
average American worker receives.
The helping hand is a recognition by Congress that the union's
volunteer employee benefit association, or VEBA, can't possibly stay
solvent if it is asked to cover all of the union workers taking
early buyouts from the Detroit automakers.
So the union's supporters added language to the House's gargantuan
health care bill that requires the federal government to pick up
most of the cost of catastrophic claims for union retirees age 55 to
64.
The biggest beneficiary would be the UAW, which got $60 billion from
the Big Three in exchange for taking on the obligation for retiree
health care.
But the bankruptcies of General Motors and Chrysler forced the UAW
and President Ron Gettelfinger to swap $24 billion of the VEBA
payments for stock of uncertain value, and now a fund that was
supposed to last for 80 years is projected to be depleted in 12
years.
Unless, of course, the union sharply trims retiree benefits. That's
a step it ought to take, but doesn't have to as long as it has
friends in Congress.
But even the $10 billion giveaway in the health care bill won't be
enough to keep the VEBA solvent. Benefit cuts are inevitable.
As Congress works to hammer out a health care reform bill that
everyone can live with, payoffs like this one to a key Democratic
constituency shouldn't survive.
Taxpayers should not be stuck paying for union benefits they didn't
negotiate and, for the most part, don't enjoy themselves.
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