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Istook1057 A Washington Gimmick-More Spending, More Bailouts, Weaker Pension Plans

Recorded on June 28, 2012

From The Heritage Foundation, I'm Ernest Istook.


Congress has a plan that could cause more bailouts.


Here is their new gimmick:


Companies would be allowed to pay less into the retirement funds for their workers. But they would pay higher premiums to the federal Pension Benefit Guaranty Fund. That fund pays partial benefits to retirees if a company retirement plan goes bust.


But for now companies save money because the higher insurance premiums are cheaper than what they save by paying less into retirement plans. That raises today's profits, so companies pay more in taxes. Next Congress claims it's a revenue-raiser, and higher revenue is used to justify more spending.


But now your company retirement is less stable, and it's more likely that taxpayers will have to bail it out someday.


It's another Washington gimmick—a money game they make sound good, but ends up with more spending and more bailouts.


From The Heritage Foundation, I'm Ernest Istook.