Taxpayers face (multi-billion dollar) tab for airline pensions

[UpInArms]

http://www.oaklandtribune.com/Stories/0,1413,82~1865~2308107,00.html

In an echo of the savings and loan industry collapse of the 1980s, the federal agency that insures company pensions is facing a possible cascade of bankruptcies and pension defaults in the airline industry.

Some experts fear such problems could lead to another multibillion-dollar taxpayer bailout.

"The similarities are incredible," said George J. Benston, a finance professor at Emory University in Atlanta who has written extensively on the regulatory failures that led to the costly savings and loan bailout.

Deposits in savings institutions are, like pensions, guaranteed by a federal insurance program. The savings industry first sickened because changes in market conditions made the traditional way savings and loans operated unprofitable, but government delays and policy missteps then made the situation much worse. In the end taxpayers bailed out the industry -- at a cost, according to various estimates, of $150 billion to $200 billion.

<snip>

The Pension Benefit Guaranty Corp. is already hobbled by debt, having picked up the pieces of more than 3,200 failed pension plans in its 30-year life. The scale of the failures has risen sharply in the last three years, but the agency has few tools at its disposal to prevent the situation from becoming worse.

<snip>

It is impossible to predict the exact size of any pension bail-out, although economic projections by the agency suggest that in the worst case, a bailout within the next decade involving failures beyond the airlines could cost taxpayers up to $110 billion.

...more...


"Ah'm gonna pick up whar ma daddy lef' off" - GWB (campaign 2000)

[Hotler]

1. Where did the money go???

Dig deep and look hard. Follow the money and inside this soon to be huge mountain of shit is a bunch of new era robber barons. The CEO's will never be held accountable. It's OK for the workers to lose their pension, or have it stolen, but the good'ol boys at the top have theirs guaranteed.

[TahitiNut]

2. It's just the beginning. Pensions have been underfunded ...

... everywhere and we're looking at a meltdown coming for a couple of years. This time, the bailout should be funded 150% by a surtax on corporate profits. Fuck 'em. :grr:


The underfunding of the PBGC more than quadrupled under the Busholini regime. On September 30, 2001, the PBGC had a net positive position of $7.8 billion; on September 30 2003, merely two years into the Busholini regime, the net position had fallen by more than $19 billion to a deficit of $11.5 billion!

[NashVegas]

3. Agreed

..

[KittyWampus]

4. Nationalize Them. We;ve Already Put Enough Taxpayer Dollars In

[Voltaire99]

6. Good idea, but...

...try telling it to the Daschles.

[lottie244]

5. All brought to you by the Bush regime.

We are getting hit twice with this one.

[Jacobin]

7. More fall-out from de-regulation

The airlines in the U.S. before de-regulation were actually a rather pleasant mode of transport.

Try it now, if you haven't lately.