UAW and GM Get Covert Bailout Through ObamaCare

The Obama Administration continues to find ways to funnel taxpayer funds to General Motors and the UAW. A hidden bailout was recently uncovered buried within the Obamacare bill. This latest giveaway goes by the name of “Early Retiree Reinsurance Program” or ERRP for short. reported last week that the program was discovered by investigators for the House Energy and Commerce Committee.

ERRP’s price tag to taxpayers is $5 billion. The goal of the program is to provide subsidies to unions, states (for public employees) and corporations for health care coverage for retirees aged between 55 and 64. To date, over $2 billion has been given away. And who’s the biggest recipient? The UAW cashes in at number one receiving about $207 million of political payback. That was more than the states of New York, California and Texas, combined, received. Bailed out GM also gets a piece of the pie, having received more than $19 million from the program. GM currently benefits from having transferred health care liability to the UAW in a Voluntary Employees’ Beneficiary Association (VEBA) agreement from 2007. Funding for this same VEBA account came from taxpayers and GM bondholders who sacrificed in order to benefit the UAW in the GM bankruptcy process.

The majority of Americans that make a living without the luxury of belonging to politically connected unions (like the UAW) should be outraged by this latest insult. While politicians in Washington speak of raising the retirement age to qualify for Social Security benefits, taxpayers are funding the retirements of union members who are only 55 years old. If these union members don’t want to work until the ripe old age of 65, taxpayers should not be expected to foot the bill. This is just one more example of the wealth redistribution that the Obama Administration unfairly levels against Americans who do not belong to one of Obama’s protected classes. There seems to be no end in sight, particularly when it comes to the most-favored UAW and GM.

There are many ways that our government can continue to funnel taxpayer funds to GM and the UAW. Treasury actually went so far as to change tax code in 2009 so that GM could benefit from a $45 billion tax loss carry-over credit that it otherwise would not have been able to receive. The Chevy Volt gets a $7500 tax subsidy for every vehicle sold, even though it is technically a hybrid vehicle with unimpressive efficiency. While GM has been struggling to sell many of the $42,000 cars to retail customers, President Obama has committed to using taxpayer money to purchase Volts for government fleets. I am sure more taxpayer funds will be made available to GM under the guise of a noble quest to produce Green vehicles.

The temptation for the Obama Administration to continue to waste taxpayer money on GM remains, especially while our government retains an ownership interest. A struggling GM with a falling stock price makes that temptation even greater. Treasury’s taxpayer funded stake in GM should be divested as soon as possible. In addition, our elected representatives should protect Americans from further wasteful spending policies that discriminate against non-unionized citizens.


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