Congress constructs a future disaster

It’s back! The return of the pension-smoothing gimmickIn Washington, bad ideas have a habit of repeating themselves. “Pension smoothing” is a prime example. That policy allows companies to put less money into their defined-benefit pension plans, allowing them to report higher profits due to their reduced costs, for several years. Of course, to make up for the initial shortfall, the companies have to put more money into the plans, and report lower profits, in later years. Unless, that is, the plan goes belly up in the meantime, leaving the Pension Benefit Guaranty Corporation holding the bag. Pension smoothing is attractive to short-sighted companies who want to postpone their pension funding obligations.
But, it’s even more attractive to short-sighted lawmakers who want to pay for spending increases with budget-timing gimmicks. Companies’ lower initial pension contributions translate into reduced income tax deductions, temporarily increasing corporate income tax revenue. Of course, the revenue gains are fully offset by revenue losses in later years, when companies make up for the initial contribution shortfall. But, pension smoothing looks like a revenue raiser under congressional budget rules – the revenue gains are inside the rules’ 10-year window, while much of the revenue losses are outside the window.

Who is doing this? 
Dave Camp, 4th District Michigan and chairman of the House Ways and Means; a Republican! So for all you bozos who thought Republicans had any sense, look no further than Dave Camp and have your delusion shattered.