Crony-Backed Fake-Privatization Plan Won't Cut Government Worker Pensions One Single Dime

In all the flurry of upset over President Trump’s recently-unveiled budget, there’s a detail that isn’t getting much attention, but should: As in his earlier budget blueprint, this one calls for privatization of the air traffic control system, a pet concern of airline-lobbyist-diddling Pennsylvania Rep. Bill Shuster.


The proposal has encountered fierce opposition from conservatives, due to its national security, taxation and union-boosting implications. And it turns out that even though we currently have a Republican President, Senate and House- meaning zero political justification for union-assuaging- the plan endorsed by the budget conforms exactly to the air traffic controllers’ union’s Christmas list. Contrary to prior speculation, it will not only keep air traffic controllers’ compensation the same (or better); it will not cut air traffic controllers’ pensions one single dime.

Here’s the situation.

After the budget came out, Politico (subscription) spotted a footnote in OMB budget documents that suggested money might be saved by changing retirement plans for air traffic controllers as part of the so-called privatization:

Additionally, a footnote in budget documents released by OMB last night notes that it proposes to ‘reduce federal agency costs through changes to current civilian employee retirement plans.’ It’s unclear if the budget is proposing changes to retirement plans for the workers that remain after the transition, or if the controller workforce would also be included — a key distinction, considering Shuster won approval from the National Air Traffic Controllers Association in part because his proposal would retain their pay structure and benefits.


But then this happened:

We questioned earlier this week whether the budget’s proposed air traffic control overhaul would affect retirement plans for controllers because of the wording in one of OMB’s footnotes. But administration officials say they weren’t intended to be tied together and were mentioned in the same footnote because each proposal – removing ATC operations from the FAA and making changes to civilian employee retirement plans – would reduce discretionary spending caps in a similar fashion.

Translated, this means that the air traffic controllers’s union is still getting everything it wants out of this proposed deal. Which means continued high costs. Which almost certainly means, given the structure of the proposed “privatized” air traffic control entity, higher taxes which will be dubbed “fees” because, you know, no one likes taxes. All this, while the plan is projected to increase the deficit.

The Trump team may be insufficiently experienced with policy to understand the point, but the rest of us have known the deal for years now: Union giveaways cost your and my money. And this is why unions affected by policy changes endorsing those policy changes should always be viewed very skeptically.


That’s especially the case where government employee retirement plans are concerned, as just about anyone who’s followed any news on this subject in, say, California or Illinois knows all too well.


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