Labor Voices: Congress has no time to delay pension fix
Election season is officially over. The bickering and back-biting of candidates will no longer fill the airwaves. For many of us, that brings a sense of relief.
For members of Congress, it is time to get back to work. A top priority must be handling pension reform, which a joint committee was tasked with finding a solution for before Nov. 30. There is not a moment to waste.
The bipartisan House-Senate Joint Select Committee on Solvency of Multiemployer Pension Plans was created earlier this year and ordered to work on a fix to the looming pension crisis. But so far, despite hearings and rallies around the country, there is little to show for their efforts.
Workers and retirees are rightfully concerned about their future. Many worked for decades and contributed to their pensions under the understanding they would be supported in their golden years. That is now being called into question, and it’s not right.
The Teamsters want to remind lawmakers they need to get down to business. So next week, upwards of 150 members from Michigan and elsewhere will head to Capitol Hill to lobby their elected officials to support legislation that would provide a lifeline for faltering multiemployer pensions.
As it stands, there are more than 300 multiemployer plans across the country — including the Teamsters’ Central States Pension Fund — that are in danger of failing. The issue has real implications here in Michigan, where some 43,000 residents could be devastated by pension failures.
The Teamsters are fighting for a legislative solution and working with lawmakers on both sides of the aisle. The union supports the passage of the Butch Lewis Act of 2017 (BLA) which was introduced in Congress in November 2017 by Sen. Sherrod Brown of Ohio and Rep. Richard Neal of Massachusetts and has received bipartisan support.
The BLA would boost financially-troubled multiemployer pensions so they don’t fail. It would create an agency, the Pension Rehabilitation Administration, under the Treasury Department that would sell bonds in the open market to large investors such as financial firms.
Opponents of the bill have attempted to poke holes in it by saying it would cost too much. Some had estimated the 10-year cost would be upwards of $100 billion. However, the Congressional Budget Office in September put the decade-long cost at $34 billion instead. The Teamsters’ own evaluation of the bill places the cost at $30.1 billion.
While that might seem a lot, the cost would be far less than if the Pension Benefit Guaranty Corporation (PBGC), which serves as a backstop for pensions if they go bust, needed to pay out to retirees. In that case, the PBGC would have to pay $58.3 billion over 10 years. It would also result in $7.9 billion in lost federal tax revenue, as well as $137 billion in lost economic activity to cities and towns during the same time.
And if the PBGC were to go bankrupt, as many believe it would if multiple pensions failed? The costs to taxpayers would be far, far worse. The nation’s social safety net would be strained, with hundreds of thousands seeking food stamps, utility subsidies, and for those with dependents, even Medicaid assistance.
There is no more time for delay. Congress, please take action on pension reform now!
James Hoffa is president of the Teamsters.
Labor Voices columns are written on a rotating basis by United Auto Workers President Gary Jones, Teamsters President James Hoffa, Michigan AFL-CIO President Ron Bieber and Michigan Education Association President Paula Herbart.