Why EFCA? A Teamster Letter Explains

by Brad Peck

Here is a copy of a letter in which a Teamster pension manager writes (my emphasis throughout):

It has come to my attention that some Wall Street investment managers are raising money, lobbying, or contributing to the lobbying efforts of other organizations against the Employee Free Choice Act (EFCA). In so-doing, I believe these managers are undermining the Interests of the Cleveland Bakers & Teamsters Pension and Health & Welfare Funds, our plan participants and beneficiaries.

Wait why just them?  I thought EFCA was a panacea for the entire economy, not just one special interest? Is that not true? Please explain...

Especially important to me as a trustee, EFCA would strengthen defined benefit plans by fueling broad-based economic growth and increased plan participation from newly organized union members.

Oh. I get it. Everyone's retirement plans have taken a hit from the recession, but union funds were in trouble long before that, due to mismanagement and a strategy of using pension funds as a weapon through proxy campaigns which do nothing to further their investment. Now they are trying to get EFCA passed to force workers to cover their failure and build up funds for even more activism...on say...health care.

The best chance for compromise legislation on health care may be a plan under construction in the Senate Finance Committee that would pay for a public plan in part by taxing some worker health benefits...But those union members serving under collective bargaining agreements would not be subjected to the tax, according to proposals under discussion. Union workers enjoy some of the most extensive and costliest health benefits, and union officials complained their members would be unfairly burdened by a health care tax because their contracts cannot be changed quickly enough to avoid it. Union members also represent one of the biggest and most powerful Democratic constituencies and their support of any health care reform proposal is viewed as essential to getting a bill passed in Congress...Critics of the Baucus proposal to exempt unions from a health care benefits tax said the exclusion could be used to lure into unions employees who are anxious to avoid the benefits tax.

Or as the Chamber's Randy Johnson testified yesterday:

Proposals to tax employee health benefits would also have extremely negative reverberations in the economy. These taxes would fall directly on workers, who would see their taxable income increased – although employers would also see FICA and payroll taxes increase, and would have to pass some or all of those costs on to the workers. To alleviate this pressure some in Congress are proposing that only certain individuals have their benefits taxed – an administrative nightmare for employers and a recipe for bad health policy. Worst of all, some are proposing to give union workers a pass, thus directly taxing every non-union American worker to subsidize overly generous union benefits.

So, in addition to Big Labor's regulatory capture - which isn't working very well - the "legislative capture" of America's workers is moving right along. We all better prepare for our "butt whipping."