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Bulls & Bears
On Saturday June 27, 2009 on "Bulls & Bears," Brenda Buttner was joined by Gary B. Smith, Pat Dorsey, Eric Bolling, Tobin Smith and Steve Leser.
Plan to ‘Exempt’ Unions From Health Benefits Tax: Giving Unions a Free Ride?
ERIC BOLLING: Of course they're going push for national health care — they're not going pay for it. Under the current proposal passed around the senate, the benefits the union members would receive wouldn’t be taxed. Everyone else will to pay for it. This plan could be anywhere between a trillion dollars, as the Obama administration tells us, $1.6 Trillion that some senators are talking, and up to $3.5 trillion that the GOP thinks might happen. Here's the issue, though. Let's say you exclude the unions from taxes on healthcare benefits. We're just going to drive everyone who has a choice right into the union membership. You're going push them right into union ranks so they don't pay taxes on their healthcare ranks.
STEVE LESER: Unions have been at the forefront for the national health care fight for the last 30 or 40 years. The real reason, by the way, that this tax benefit would be exempt to them is they've got these multiyear collective bargain agreements where they've already given up significant amounts of pay to get a good benefits package. If you take that away from them, now they're saying, we're going tax you, take even more pay away from these folks, and it's just not fair. They've already paid for this.
GARY B.: Look, there's always an agenda here, and Eric hit the nail on the head. This is a free ride for unions. Look, unions have been on the ropes for 10, 20 years now. Their membership is continuing to decline. Any competitive advantage they can get, whether it's a free ride on health care or unionizing new national health care workers is a boon for unions, and that's why they're out.
TOBIN SMITH: The real reason they want national health care because they have this gold-plated Cadillac health care plan. They know when the collective bargaining goes away that it's going to be taxed, and they have to have a plan “b”. National health care is the plan b, because they're going to say, we've seen this from a number of our people that are on the hill. The real agenda is to give the unions something to sell when their benefits do become taxable — because the difference between what they get and what everybody else gets is monumental.
PAT DORSEY: Private firms make that choice every day in choosing employment. There are employers that pay higher wages and don't have good benefits. There are employers — and I work for a company that has this kind of medium wages, but I have a pretty gold-plated health plan, frankly. And I made that choice when I chose the job with a firm that I work for right now. People make those choices all the time. And if we're going to tax "gold-plated health care plans" at other private, non-unionized companies, then they should be taxed the same way.
Report: Michael Jackson Was $400 Million In Debt; Did Money Advisers Ruin Him?
TOBIN SMITH: Clearly, not only was he taken advantage of, but how you can tell is that he had hedge funds lending money to him, and every time they would refinance it at a high rate, so he was getting ripped off. Number two, the advisors were getting paid fees to place that money there.
GARY B.: I think he bought the Beatles’ for like $47 million, $50 million, outbidding Paul McCartney. You know, that's basically a big part of the collateral that he used. I think he sold part of it to Sony, but probably worth in the billions now. I think it's just a simple case here of someone could have had just a simple cash flow statement. Look, this is how much you're taking in a month, this is how much you're spending, and just make sure the right hand column, the spending column, is less than the income column.
PAT DORSEY: People like that, they're not used to being told no. They're in that position of power, if you have that much wealth; you're not used to people saying no. You can't do that, because they've been able to do whatever they want. What the balance is between people giving him bad advice, taking advantage of high fees, and I'm sure there was some of that, and to some extent spending like a billionaire, when he's actually just a millionaire, I don't think we'll ever know.
ERIC BOLLING: Well, M.J. is to blame. Look, great artist, fantastic and great entertainer, financial dummy. He spent $20 to $30 million dollars per year more than he was taking in. Bottom line is he put his ex-wife at risk, he put his three children at risk, he put everyone who was bankrolling that new upcoming tour at risk, people who trusted him and believed in him. I got to tell you, great philanthropist, spent a lot of money in charities. The guy put money out there.
$500K a Year Government Pensions; Wasting Tax Payers Cash?
TOBIN SMITH: General Motors went on for 10 years, and they just went bankrupt. In this case, these cities can't go bankrupt. We have to actually pass legislation that brings this to a sustainable number. You have to have the backbone to enforce t. It's time to do it now, because otherwise they're going to be like these cities in California and elsewhere that go totally bankrupt. These guys are going to get zero, which maybe they deserve.
GARY B.: The issue is for these people that already signed these agreements, went through these things, this is just the fruits of their labor. Whether you think it's outrageous or not, that's beside the point. A deal is a deal. They went to work for the government. They probably gave up a lot of other stuff in theory, and they got these hefty pensions. Now, for the future, the governments can decide we don't to want offer these great pensions and they have to weigh that against attracting good people or average people or whatever.
ERIC BOLLING: Let's use California as an example. The state’s pension plan lost 24 percent of the fund with bad stock picks. Now, they have a couple of choices. They can tax, but they already voted that down. They can fix the problem by deferring payments for these pensioner recipients. The problem is they don't want the deferred payment or they can try to wait the whole mess out and hope the market comes back.
STEVE LESER: I don't want to cut anything from a retiree that's 78 or 90 years old that's getting a pension. That's appalling. There are a very small percentage of people that are actually getting the big bucks. Most of them are firemen and police officers. They've got an extra benefit where they can get a higher pension, which I think is totally fine. I think it's appalling to try to take money away.