Yes, there was a bill (actually a couple) to grant taxpayer-backed guarantee to PBGC. The last one I found was Casey's "Create Jobs & Save Benefits Act of 2010".
While the bill didn't explicitly use the "bail out unions" language, it is quite obviously disproportionately beneficial to unions considering that one of the main things union provides is extremely generous defined benefits (DB) plan.
The bill was introduced by Casey, not Harkin, and is dissected in detail by the National Legal and Policy Center.
Rather than raise employer premiums on sponsor participants, which Congress did four years ago as part of the Pension Protection Act, the new legislation would stick taxpayers with risk in two ways.
First, it would create a "fifth fund" within PBGC. The language of the bill is clear: "(O)bligations of the corporation that are financed by the [fifth fund] shall be obligations of the United States." In other words, the bill would shift the burden of paying orphan fund claims from the sponsor to the general public. And benefit levels would be guaranteed to be no lower than before. The proposed per-retiree ceiling hike from $12,870 to $21,000 would create an additional incentive for individual sponsors to terminate their pensions and hand the ball over to PBGC.
Second, the legislation would allow trustees of union-sponsored multi-employer pension funds to form alliances with trustees of plans in unrelated industries. Currently, multiemployer plans must be in the same industry group. The purpose behind allowing a broader pooling of resources is to enable unions to avoid more easily the "last man standing" rule. This regulation, based on 1980 legislation to amend ERISA, stipulates that if a sponsor pulls out of a multiemployer plan, all remaining firms must cover that employer's liabilities or pay a large exit fee. Unions and union-friendly employers like the arrangement because it gives workers an opportunity to keep their pensions if they change jobs within the same industry. Unfortunately, the rule unwittingly has encouraged plan terminations.
Further, they quote the lead author of the Hudson Institute report, Diana Furchtgott-Roth, who several months ago explained the role of organized labor:
Why the persistent underfunding? Some union leaders like to achieve wage increases and new benefits when they renew collective contracts, in order to make their reelection more likely. Ensuring that pension plans are kept well-funded takes more work for little visible effect - and may well work against winning more benefits by underscoring their cost to the employer.
In other words, union officials and employers under union contract prefer to paint an overly rosy picture to members than jeopardize their confidence. Accentuating the positive keeps members in the fold and contributions coming in. In the meantime, employers continue to scrap their plans because they can't afford to keep them over the long run, especially in the automobile, steel, airline and other union-dominated industries. Given that the Pension Protection Act requires participating employers to be solvent within seven years starting in 2008, more than ever they are facing the choice of going broke or handing over operations to PBGC.
As an additional angle of how this would FURTHER benefit unions indirectly:
Last fall Moody's estimated that multiemployer plans were underfunded by at least $165 billion, and concluded that "The ballooning of the under funded status of these funds has substantially increased the implied liability for contributing companies in the industries affected." Some companies risk having their ratings downgraded, especially if weaker companies become bankrupt and leave the pension plans.
So, in additional to generally helping the pension side, this bill would also provide benefits to heavily unionized companies by letting them avoid credit downgrade risk.
