WASHINGTON (Gray DC) - Hundreds of pension plans may be unable to pay out the hundreds of billions they owe to workers in the near future. On Capitol Hill, the debate over whether the federal government should intervene, and how appears to break along party-lines.
With union workers by their side and in the crowd, Democratic leadership in the House and Senate recently backed a bill to financially-float pensions flooded by debt. House Minority Leader Nancy Pelosi followed the crowd’s lead as it chanted, “no cuts, no cuts,” during her remarks.
Sen. Sherrod Brown (D-Ohio) wrote the bill. He proposes creating a new arm out of the Treasury Department to offer low-interest loans to failing multi-employer pensions – like those of mineworkers.
Brown named the bill the “Butch Lewis Act” in honor of a now-deceased Teamster from Ohio. Brown has the support of Lewis’ widow. “I want my retiree family to have the retirement they worked for, and they dreamed of,” said Rita Lewis.
Brown said workers deserve the retirement they paid for and companies promised. He believes pensions will be able to pay-out with government backing and oversight. “So many people who earned their pension will actually get their pension,” he said.
Experts said many pension funds didn’t collect enough cash from members, and banked on investments performing better than they did. The 2008 recession compounded problems.
Opponents said shafted workers deserve sympathy, but not tax-payer cash. “This is really just a pure bailout, on multiple layers,” said Rachel Greszler, a senior policy analyst at the conservative Heritage Foundation.
Greszler said changes are needed. But, she suggests the government regulate large union plans the same way it would a single company rather than backing loans.
“Essentially, [the current regulations are] allowing the union employers to set their own rules and standards,” she said, “and we’ve seen how that’s worked out.”
Workers should find out if they can count on more government help by the end of the year.
A government agency already insures pensions. But if a plan goes under, it doesn’t pay-out the full loss. The most recent report from that agency suggests it’s in jeopardy as well, and may not be able to meet its obligations beyond 2025.