Economy

Trump should make resolving the coming multi-employer pension plan crisis his cause!

It will ensure his re-election.

By George Landrith:

With two years of strong economic growth, rising wages, and record employment, President Donald Trump can argue that his policies have returned Americans to prosperity. This is a very strong campaign theme for 2020.

But a number of states that Trump narrowly won in 2016 may be more problematic in 2020. It seems unlikely the Democrat will repeat Hillary Clinton’s mistake of not campaigning in Wisconsin or ignoring traditional blue-collar voters. Additionally, Democrats currently strongly favor former Vice President Joe Biden. He runs well in blue collar areas and some think that he could syphon off enough union and blue collar voters to deprive Trump of a reelection victory.

But there is a way that President Trump can lock up states like Pennsylvania, Wisconsin, Michigan, Ohio and Florida. And there is also a way that President Trump can flip states like Colorado, Minnesota, Nevada, New Hampshire and Maine into his winning column in 2020. If that were to happen, Trump could win reelection by an impressive electoral margin.

Here’s how. There is a looming economic disaster that has been building for decades. If President Trump steps in and averts this potential economic pitfall, it would virtually guarantee him an impressive reelection victory in 2020. Trump gets credit for doing what Obama said couldn’t be done with the economy. He could also get credit for this unsolved pending crisis.

Many multi-employer pension and defined pension plans are now on the brink of failure. They carry over $600 billion of unfunded liabilities and are dangerously close to failing. Millions of retired Americans in states like Pennsylvania, Wisconsin, Michigan, Minnesota, Ohio, Nevada, Florida, Colorado, Maine and New Hampshire could lose their retirement. If that happens, they will be thrust onto the welfare rolls and the fruits of their life’s work will be lost. Even those who don’t have such pensions, are at risk. The 2008 housing bubble that triggered a huge economic slowdown, impacted everyone — not merely those whose mortgage was foreclosed upon.

Congress has not been able to find a pension fix. But if President Trump were to make solving this problem his own cause, he would further cement his reputation as a leader who thinks about working-class people and finds solutions that strengthen the economy. He would also get credit for heading off and preventing a financial disaster that would become the impetus for another budget busting bailout and a new call for more and more regulations. Remember 2009?

Finding a solution will be positive with almost everyone. Conservatives will appreciate that he saved taxpayer money and prevented an emergency that would be used as an excuse to grow government and bust budgets. Blue collar workers will appreciate that he saved their pensions. And Americans everywhere will appreciate a solution that strengthens and extends the strong economic outlook.

Let’s look at the numbers. Trump won Pennsylvania in 2016 by 44,292 votes. Against Biden in 2020, that may not be enough. But by providing leadership on the pension problem, President Trump can lock-up a state like Pennsylvania. There are more than 493,000 Pennsylvanians who are participants in multi-employer pension plans. And each of those pension plan participants has family, relatives, friends and neighbors, so the impact will be even larger. By making the pension problem his own cause, President Trump can easily carry Pennsylvania — even if he were running against Benjamin Franklin!

What about other states? Trump won Michigan by 10,704 votes. But there are more than 440,000 multi-employer pension participants in Michigan. And once you count family and friends, it is likely more than a million potential voters. In Wisconsin, Trump won by 22,748 votes. Almost seven times that number of multi-employer pension participants live in the state. Imagine how they and their family and friends and neighbors vote when it becomes clear that not only did Trump get the economy rolling again, he headed off a major financial disaster that would hit the pension participants hard and the reverberations would hit the rest of the country as well.

In Ohio, a consistent battleground state, there are almost half a million participants in multi-employer plans. In Florida, there are more than 340,000. In Colorado almost 200,000. In Maine, more than 50,000. In Nevada almost 135,000. In Minnesota, more than 278,000. In each case, those numbers could either expand upon Trump’s 2016 victory, or flip a state that he narrowly lost in 2016, to make it part of his expanded victory in 2020. And once you account for family and friends, those numbers only increase the potential for an impressive reelection victory.

A workable and permanent solution will include a number of important facets. First, the affected pension plans must be reformed by requiring them to meet more rigorous and realistic actuarial standards. Second, the reform must engage all the stakeholders to share in the costs, including at least temporarily, the retirees — rather than passing off the costs to taxpayers. Third, modest loan guarantees must be authorized to help pension plans that make the required reforms. This will allow them to get through their short term cash crunch and get back on a firm actuarial footing when the loans would be fully repaid. Fourth, the Pension Benefit Guarantee Corporation (PBGC) must be reformed to make it function as a real insurer where risks and cost balance out. If nothing is done, the PBGC will be bankrupt within 6 years — leaving taxpayers to make good on its promises which will cost hundreds of billions.

If President Trump becomes the champion of a wise pension plan solution like this, he will both please his existing base and substantially grow it! He can virtually guarantee an impressive 2020 reelection victory simply by championing sound policy that will benefit all Americans generally and endangered pension voters specifically.

George Landrith is the President of Frontiers of Freedom an educational foundation whose mission is to promote the principles of individual freedom, peace through strength, limited government, free enterprise, free markets, and traditional American values as found in the Constitution and the Declaration of Independence.

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