Passage of the act by Congress - which is in no way guaranteed - would appear to be the golden ticket for saving the nation's multiemployer pension plans, many of which are in danger of going belly-up and unable to pay promised benefits to plan participants. The act would allow financially troubled plans to take out low-interest federal loans of up to 30 years to help guarantee full pension payments, as well as make whole plan participants who have already seen their pension payments cut as a result of an act of Congress.
The listening tour included Pelosi, Congresswoman Debbie Dingell (D-Dearborn), Congresswoman Brenda Lawrence (D-Southfield), Congressman Dale Kildee (D-Flint), Teamsters President James Hoffa, and a host of other Democrats from Congress. The tour was fresh from a rally in Columbus, Ohio the week before that attracted about 10,000 union supporters.
"A lot of people say our pensions are
entitlement. Our pensions aren't an entitlement - they're from a lifetime of hard work!" said Kevin Moore, President of host Teamsters Local 299. "We bailed out Wall Street. We're not asking for a bailout - we're asking for a loan to save our pensions."
Detractors in Congress - and there are plenty on the Republican side of the aisle - are calling the loan concept a bailout because it delays solving the issue, may end up putting U.S. taxpayers on the hook, and is a poor example for other pension plans. But proponents say time is exactly what the troubled pension plans need. Millions of union retirees people depend on the full pension payments they were
promised, but risk losing them through no fault of their own after the Great Recession.
"It's just amazing the patience people have with other peoples' suffering," Pelosi told the crowd. "I guarantee you this. We will work very hard to get this bill passed, in as bipartisan a way as possible."
There are several large multiemployer plans — including the Mine Workers and Central States Teamsters, which is facing an unfunded liability of $17.2 billion — that are in danger of insolvency, and an additional 200 multiemployer plans are considered likely to fail in the near future. In general, building trades' plans are in better fiscal shape than most other multiemployer plans.
Congress failed to insert the Butch Lewis Act into a big spending bill earlier this
year, but did agree to create the bipartisan House Joint Select Committee for the Solvency of Multiemployer Pension Plans to study the issue.
A member of that committee is Dingell, who was at the July 20 meeting. "People are getting more anxious," she said. "We thought if you went to work, you played by the rules, you did everything right, you'd have health insurance and a pension, and a safe and secure pension and a safe and secure retirement. And now you're never sure, you're living on the edge."
Failure of a number of multiemployer pension plans would be an economic catastrophe. A National Institute on Retirement Security (NIRS) study found that spending from benefits paid from multiemployer pension plans in 2015 alone produced $83.5 billion in economic output and over $16 billion in federal, state, and local taxes, and supported 510,000 American jobs.
"If these pensions go under, you think we had the Great Recession, this will put this country in a Great Depression, probably worse
that what happened in the 1920s," said John Miller of Iron Workers Local 25, who addressed the members of Congress visiting Detroit. "What will happened if this country goes bankrupt? And it will if these pensions fail."
Bill Boldt, a retiree from Teamsters Local 247, said "the people in this room are just a microcosm of the problem that is nationwide, and it's to the point where if they haven't yet, they're going to have their pensions cut. My pension was cut like 50 percent. So it's an issue that goes much deeper than what we see here. And like the gentlemen over there said, this is going to get really, really ugly if it isn't addressed."
Retired Teamster Fred Moore told the panel and the audience: "I worked all my life I have a house with 24 years of
mortgage. If they take away my pension, what am I going to do?"
Dingell said a number of unions are affected by the nation's multiemployer pension woes. "It's not just Teamsters in this room. We have the AFL-CIO, the MEA, the AFT, the Iron Workers, the Steel Workers, UAW members, utility workers, Communication Workers, UFCW workers, Carpenters, Bricklayers, Building Trades, bakery workers, and I'm missing some. Workers in Michigan are here to talk about their pensions."
John Power of Machinists Local 698 told the attendees that "I made several life choices as a young man to get this pension, and as of Jan. 1 this year, my pension was cut 72 percent. That hurts pretty bad. My savings have gone right down to near nothing. And there are several guys in my union in the same boat. I have already taken a cut, and they said that's still not going to save it. It's happening now. We need help really bad. I didn't plan on this."
Teamsters President James Hoffa told attendees that "one guy walked up to me, a Republican. You know what he said? I think it's time the members sacrificed. Sacrifice? We already did! When we negotiated, we already gave up millions of dollars for that pension fund. We've already given, it's time to save our pension fund. The Butch Lewis Act, that's the answer to our problems. We have to make sure it becomes law. We've got a solution. We don't want a bailout. We want a loan. It's time for justice."
Hoffa said some 50,000 people in Michigan and 70,000 in Ohio are at risk of seeing reduced pensions without the loan package being passed.
Pelosi told the crowd that "you have defined a challenge to our country that we should not be facing," in good part because federal loan money to help the union plans would only amount to a sliver of the amount of the massive tax cut adopted by Republicans last year.
"It's just not fair and it's just not right," Pelosi said. "But it's there and we have to do something about it. And it talks centrally to the financial stability of America's working families.
"As you all talk about this, what you are describing is in the interest of your family, and in the interest of the economy of the United States of America. We will never have a full recovery unless we have a full recovery of America's working families. This is about classic trickle-down economics. Give to the rich, perhaps it will trickle down. If it does, that would be good, if it doesn't, so be it, it's the free market. Those are the words of the speaker of the house (Paul Ryan R-Wisconsin).
"We're not about trickle down, we're about bubble up. And there's no
more clearer demonstration of a difference in values that's directly related to the questions you posed than the tax scam for the rich that the Republicans passed in December. It affects everything that we're talking about. Why would they give a tax break of a trillion and a half dollars with interest and added over $2 trillion to the national debt when we could have devoted just a piece of that to the Butch Lewis bill?"