Mark your calendars. Next month we might be able to pinpoint the day that big labor unions begin their decline to political irrelevancy.
And no, we're not talking about Election Day, though big Republican victories will undoubtedly help usher unions off the political stage.
On Nov. 1, the Financial Accounting Standards Board (FASB) ceases to take public comment on a new rule requiring that companies more accurately report liabilities they have from participation in multiemployer pension plans. Unless FASB is persuaded otherwise, the rule takes effect Dec. 15.
There are some 1,500 multiemployer pension plans in the United States, which are unique to unions. In these plans, multiple companies pay into the pension plan, but each company assumes the total liability.
Under "last man standing" accounting rules, if five companies are in a plan and four go bankrupt, the fifth company is responsible for meeting the pension obligations for the employees of the other four companies.
What this means is that companies with union labor often have pension liabilities that are several multiples higher than the pension expenditures they report -- the Kroger grocery store chain shocked analysts last year when it disclosed its multiemployer pension liabilities more than doubled in a year to $1.2 billion.
Ratings agencies such as Moody's and Standard and Poor's have been highlighting the lack of transparency in union pension plans. Now Wall Street wants union businesses to be upfront about their liabilities.
FASB's new rule could effectively wipe out the paper worth of many companies, especially in the trucking and construction industries. Once banks and creditors are aware of these staggering pension liabilities, it will make it nearly impossible for union businesses to get loans, credit lines or bonding.
If forced to report their true liabilities, hundreds -- perhaps thousands -- of companies will scramble to get out from under their union obligations.
"The blind panic is un-frickin'-believable. [Unions] are flipping out," says Brett McMahon, a representative of Associated Builders and Contractors and vice president of Miller & Long Concrete Construction.
Multiemployer plans are already on the verge of collapse. A recent Government Accountability Office study looked at multiemployer plans from 1980 to 2006. The study found that the number of people paying into the plans was equal to the number of retirees being paid out in 1998.
Since then, the plans have been unsustainable Ponzi schemes -- the Teamsters union plan alone has some four times number of retirees as employees paying in.
Unions have but one shot to save themselves. They've been agitating for a legislative solution for some time, and unions had some very specific demands in mind when they spent $400 million electing Democrats in 2008.
First, they wanted a "card check" bill that would allow unions to bully employees into creating unions. With new unions, they would use mandatory binding arbitration to force new companies into their failing multiemployer plans.
Legislatively, card check appears dead in the water. Now Democrats are likely to lose control of the House of Representatives in November's election. Not only that, post-census redistricting looks like it could help Republicans retain control of the House for years to come, making it nearly impossible to get legislative favors for unions.
With FASB's new rule starting before year's end, time is running out for unions. If unions end up decimated by collapsing pension plans and the ensuing class-action lawsuits as workers try to recoup their retirement, Democrats will lose millions in political donations.
That's why Democrats have already put together a plan to save unions. And in a lame duck session just after the election, Democrats have nothing to lose.
Get ready for another taxpayer-funded union bailout.
Mark Hemingway is an editorial page staff writer for The Examiner. He can be reached at email@example.com.