Budget Deal Leaves Pension Rescue in Limbo
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Budget Deal Leaves Pension Rescue in Limbo

February 10, 2018

By Steve Wishnia

WASHINGTON—The wee-hours budget deal enacted Feb. 9 to avert another shutdown of the federal government doesn’t include legislation to aid the nation’s

Congress had no trouble finding $165 billion more for war; but workers are still left hanging.

endangered multiemployer pension plans. Instead, it will set up a joint House-Senate select committee with instructions to come up with a bill to address the issue by the end of November.

Democrats and a handful of Republicans had hoped that the deal would include the Butch Lewis Act, a bill that would set up a Treasury Department agency to give the troubled plans 30-year low-interest loans, so they could pay full benefits to current retirees without going insolvent.

“We don’t do this often,” Senate Minority Leader Charles Schumer (D-N.Y.) said of the select committee during debate Feb. 7. “We Democrats would have liked to take up and pass the Butch Lewis Act. We couldn’t reach an agreement to do that, but now we have a process and potentially the means and motivation to get it done.”

“This is a positive step toward moving legislation forward that will finally address the pension crisis,” Teamsters General President Jim Hoffa said in a statement. “This committee must put aside partisan politics and advance legislation as quickly as possible that provides a real solution.”

The Senate passed the budget deal at 2 a.m. by a 71-28 vote after Sen. Rand Paul (R-Ky.) delayed it for several hours, objecting that it increased government spending. The House approved it by 240-186 at 5:30 a.m., with 67 mostly far-right Republicans and most of the Democrats voting no—among them Minority Leader Nancy Pelosi (D-Calif.), who had objected that it would not stop protections for undocumented immigrants brought to the U.S. as children from being revoked next month.

The select committee will have 16 members, to be appointed by House and Senate leaders. They will include six Senators and six House members, equally divided between Republicans and Democrats. If at least 10 members endorse the bill they produce, it will be guaranteed an expedited vote in the Senate, with no amendments allowed.

The panel will be required to hold at least five public meetings. Those may include one outside Washington in order to hear directly from retirees, workers, and businesses affected by the pension crisis, according to the office of Sen. Sherrod Brown (D-Ohio), the sponsor of the Butch Lewis Act.

Multiemployer pension funds covering more than 1 million people have fallen into deep financial trouble due to declines in union employment in industries such as mining and trucking, which means that the number of current workers contributing to the plans isn’t enough to pay for benefits due retirees, and the devastation of their investments during the 2008 stock-market crash. Three funds that cover more than 600,000 people among them—the Teamsters Central States Fund, the Bakery and Confectionery Union and Industry International Pension Fund, and the United Mine Workers of America 1974 Pension Plan—have formally notified the Department of Labor that they are in danger of going bust within the next eight years.

Four multiemployer funds have already cut benefits, under a 2014 federal law that lets them do that as part of a Treasury Department-approved plan to avoid insolvency. They include the 35,000-member New York State Teamsters Conference Pension and Retirement Fund, which covers members of Local 812 on Long Island and Local 560 in Union City, N.J.; Ironworkers Local 17 in Cleveland; and the International Association of Machinists’ Motor City Pension Fund in the Detroit area.

“Washington bailed out Wall Street, and Wall Street turned around and stole the pensions Ohioans worked for. Now Congress has responsibility to protect the pensions workers earned before it is too late,” Brown said in a statement. “While it is not the immediate solution we hoped for, this Committee will force Congress to finally treat the pension crisis with the seriousness and urgency American workers deserve.”

February 10, 2018

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