Key panel in Congress OKs pension rescue bill as GOP opposition looms
Date Posted: July 26 2019
By Mark Gruenberg
PAI Staff Writer
WASHINGTON (PAI)—At a hearing packed with hundreds of workers, lawmakers on the key committee handling pension issues tackled – and approved – legislation to establish federal loans for troubled multi-employer pension plans.
The measure, HR397, named for Ohio unionist Butch Lewis, who died of a stroke four years ago, would set up a bureau in the Treasury Department to judge applications from the troubled plans. Lewis’s multi-employer plan went broke, and his widow’s pension payout collapsed.
Those pension plans which can show federal loans would be used to both become solvent and to keep benefits level for current retirees – or their families and survivors – would get the loan funds, repayable after 30 years. The money would come from selling U.S. Treasury bonds.
“We are in the homestretch” of passing HR397, Teamsters President Jim Hoffa said at an outdoor press conference an hour before the July 12 House Ways and Means Committee work session on it. “This is a battle for dignity and for keeping the promises made” to millions of workers. But workers “have to walk the halls” to ensure it passes, he warned.
The multi-employer pension plan problem now affects more than 100 plans serving one million retirees and survivors. Multi-employer plans cover 10 million people overall, including all those in the building trades. They’re also common in industries such as trucking, bakeries and confectionery firms, food processing and coal mining.
IBEW Local 351 member and Congressman Donald Norcross (D- Folsom, N.J.) and a member of the committee as well as a sponsor of the bill, said, “I know firsthand that workers have earned their pensions and deserve safe, secure retirements." He said the bill is "an important first step in protecting the hard-earned retirement security of hundreds of thousands of working families and retirees across the country. After the financial collapse, Congress acted to take care of Wall Street. If you can save the banks, you can save the people,” he added.
Joint labor-management boards run the multiemployer plans, with all employers contributing to the workers’ pensions. But corporate consolidations, bankruptcies and especially the crash in pension values and investment returns from the 2008 financier-caused Great Recession put multi-employer plans into the “red zone” of financial danger, where they could go broke within months or years.
The Mine Workers’ two pension plans, which the federal government virtually chartered 72 years ago, are in the most immediate danger. The biggest threat is to the Teamsters’ giant Central and Southern States pension plan.
And the federal Pension Benefit Guaranty Corporation’s (PBGC) fund to cover takeovers of broke multi-employer plans – which would pay out far less than workers set aside over the years – is running out of cash, too. The result is huge benefit cuts for workers, like Butch Lewis, who sacrificed pay hikes and lives to ensure pensions, his widow, Rita, said.
“This is a solution for everybody, not just Teamsters. These people worked hard for 30 or 40 years to retire with dignity, and we have to make sure that promise is kept,” Hoffa said.
But many Republicans, both on the Ways and Means panel and overall, call the rescue legislation “a bailout.” And Murray Energy, the nation’s largest coal company, also objects. As a result of mergers and bankruptcies, it would fund 97 percent of one of UMW’s pension funds.
Panel chair Rep. Richard Neal, D-Mass., along with lead co-sponsor Rep. Peter King, R-N.Y., refuted that bailout charge at the outdoor press conference. Another House panel, the Education and Labor Committee, passed HR397 last month on a party-line 26-18 vote. But Ways and Means writes actual pension and tax legislation, so it’s the key House committee in the mix.
“This is not a bailout. What we are proposing is a backstop: The full faith and credit of the U.S. government, which is used every day worldwide,” through the Treasury bonds, Neal explained. “We will construct a structure, a rehabilitation agency, with minimal costs” to run the pension program.
And, addressing defiant Republicans, Neal stated: “I was here for the S&L (savings and loan) crisis. That was a bailout. I was here for” legislation to deal with 'Wall Street' after the 2008 crash. “That was a bailout. They (executives) not only kept their jobs” after tanking the U.S. and world economies “but they got bonuses,” Neal said of the financial finaglers. “That was a bailout.”
“This is not a bailout.”
The IBEW said the bill’s cost is estimated between $7 billion and $34 billion, "but the number is far lower than the $700 billion Troubled Asset Relief Program that bailed out the banks a decade ago or the $135 billion federal bailout of mortgage insurers Fannie Mae and Freddie Mac."
Other unions and unionists joined the Teamsters at the outdoor press conference and in the crowded Ways and Means hearing room.
“We’re up here for those who need the attention,” said Larry Greenhill, political director of Electrical Workers (IBEW) Local 26 in Lanham, Md. Though his union’s multi-employer plan is solvent, the original congressional idea – approved in 2014 at the last minute – to have financially healthy plans “bail the others out” didn’t fly, he explained in an interview. “This is much better.”
According to Norcross's office, among the building trades, only the IBEW, the Teamsters and the International Brotherhood of Boilermakers have endorsed the Butch Lewis Act.
“We’re here for our young brothers’ and sisters’ pensions,” said IBEW Local 26 member Jerry Lozupone. “Should we ever get in trouble, we want this to be there for us.” Added Amber Stevens of United Food and Commercial Workers Local 400: “When one is hurt, we all are hurt.”
PAI Staff Writer
WASHINGTON (PAI)—At a hearing packed with hundreds of workers, lawmakers on the key committee handling pension issues tackled – and approved – legislation to establish federal loans for troubled multi-employer pension plans.
The measure, HR397, named for Ohio unionist Butch Lewis, who died of a stroke four years ago, would set up a bureau in the Treasury Department to judge applications from the troubled plans. Lewis’s multi-employer plan went broke, and his widow’s pension payout collapsed.
Those pension plans which can show federal loans would be used to both become solvent and to keep benefits level for current retirees – or their families and survivors – would get the loan funds, repayable after 30 years. The money would come from selling U.S. Treasury bonds.
“We are in the homestretch” of passing HR397, Teamsters President Jim Hoffa said at an outdoor press conference an hour before the July 12 House Ways and Means Committee work session on it. “This is a battle for dignity and for keeping the promises made” to millions of workers. But workers “have to walk the halls” to ensure it passes, he warned.
The multi-employer pension plan problem now affects more than 100 plans serving one million retirees and survivors. Multi-employer plans cover 10 million people overall, including all those in the building trades. They’re also common in industries such as trucking, bakeries and confectionery firms, food processing and coal mining.
IBEW Local 351 member and Congressman Donald Norcross (D- Folsom, N.J.) and a member of the committee as well as a sponsor of the bill, said, “I know firsthand that workers have earned their pensions and deserve safe, secure retirements." He said the bill is "an important first step in protecting the hard-earned retirement security of hundreds of thousands of working families and retirees across the country. After the financial collapse, Congress acted to take care of Wall Street. If you can save the banks, you can save the people,” he added.
Joint labor-management boards run the multiemployer plans, with all employers contributing to the workers’ pensions. But corporate consolidations, bankruptcies and especially the crash in pension values and investment returns from the 2008 financier-caused Great Recession put multi-employer plans into the “red zone” of financial danger, where they could go broke within months or years.
The Mine Workers’ two pension plans, which the federal government virtually chartered 72 years ago, are in the most immediate danger. The biggest threat is to the Teamsters’ giant Central and Southern States pension plan.
And the federal Pension Benefit Guaranty Corporation’s (PBGC) fund to cover takeovers of broke multi-employer plans – which would pay out far less than workers set aside over the years – is running out of cash, too. The result is huge benefit cuts for workers, like Butch Lewis, who sacrificed pay hikes and lives to ensure pensions, his widow, Rita, said.
“This is a solution for everybody, not just Teamsters. These people worked hard for 30 or 40 years to retire with dignity, and we have to make sure that promise is kept,” Hoffa said.
But many Republicans, both on the Ways and Means panel and overall, call the rescue legislation “a bailout.” And Murray Energy, the nation’s largest coal company, also objects. As a result of mergers and bankruptcies, it would fund 97 percent of one of UMW’s pension funds.
Panel chair Rep. Richard Neal, D-Mass., along with lead co-sponsor Rep. Peter King, R-N.Y., refuted that bailout charge at the outdoor press conference. Another House panel, the Education and Labor Committee, passed HR397 last month on a party-line 26-18 vote. But Ways and Means writes actual pension and tax legislation, so it’s the key House committee in the mix.
“This is not a bailout. What we are proposing is a backstop: The full faith and credit of the U.S. government, which is used every day worldwide,” through the Treasury bonds, Neal explained. “We will construct a structure, a rehabilitation agency, with minimal costs” to run the pension program.
And, addressing defiant Republicans, Neal stated: “I was here for the S&L (savings and loan) crisis. That was a bailout. I was here for” legislation to deal with 'Wall Street' after the 2008 crash. “That was a bailout. They (executives) not only kept their jobs” after tanking the U.S. and world economies “but they got bonuses,” Neal said of the financial finaglers. “That was a bailout.”
“This is not a bailout.”
The IBEW said the bill’s cost is estimated between $7 billion and $34 billion, "but the number is far lower than the $700 billion Troubled Asset Relief Program that bailed out the banks a decade ago or the $135 billion federal bailout of mortgage insurers Fannie Mae and Freddie Mac."
Other unions and unionists joined the Teamsters at the outdoor press conference and in the crowded Ways and Means hearing room.
“We’re up here for those who need the attention,” said Larry Greenhill, political director of Electrical Workers (IBEW) Local 26 in Lanham, Md. Though his union’s multi-employer plan is solvent, the original congressional idea – approved in 2014 at the last minute – to have financially healthy plans “bail the others out” didn’t fly, he explained in an interview. “This is much better.”
According to Norcross's office, among the building trades, only the IBEW, the Teamsters and the International Brotherhood of Boilermakers have endorsed the Butch Lewis Act.
“We’re here for our young brothers’ and sisters’ pensions,” said IBEW Local 26 member Jerry Lozupone. “Should we ever get in trouble, we want this to be there for us.” Added Amber Stevens of United Food and Commercial Workers Local 400: “When one is hurt, we all are hurt.”