Bailing Out Multi-Employer Pensions is a Horrible Idea


Monday, September 23, 2019

In the 116th Congress, there have been many ridiculous policies proposed by Democrats. However, out of all the major bills rammed through the House of Representatives by Democrats, one major proposal is going unnoticed. H.R. 397, or the Rehabilitation for Multiemployer Pensions Act of 2019, is a horrendous proposal. 

The Rehabilitation for Multiemployer Pensions Act of 2019, colloquially referred to the Butch Lewis Act after the late former head of Teamsters Local 100, is a mostly partisan bill that would bailout private unionized pensions. This proposal, if enacted, would make taxpayers responsible for propping up failing, mismanaged, union-run pension plans. These taxpayer dollars would be given to private union pensions in the form of loans and taxpayer-subsidized stock market investments to private union pension plans that fit into a certain criteria. 

The criteria would be that the pension “plan must be either in critical and declining status, including any plan with respect to which a suspension of benefits has been approved, have a funded percentage of less than 40%, or if the plan became insolvent after December 16, 2014, and has not been terminated.” The bill also appropriates the funds that are necessary to the Pension Benefit Guaranty Corporation to provide the financial assistance required by this bill.

Speaking of appropriations, the cost of the bill should also be taken into consideration. According to the latest study by the PBGC, the bill would cost over $638 billion. Furthermore, the PBGC itself already has a $53.9 billion deficit and this legislation would only exacerbate this. This is because it would establish a new bureaucracy called the Pension Rehabilitation Administration within the Department of the Treasury. This new wing of the Treasury Department would be responsible for doling out the bonds created by this legislation. 

Furthermore, it also fails to devise a plan to stop the under-funding of pensions in the future. To put the nail in the coffin though, the bill is virtually just giving a blank check to unions to prop up their failing pensions. This comes in how the loans are to be set up by the PBGC. In an adopted amendment to the bill offered by Rep. Bobby Scott (D-VA), the bill lets the loans taken out by the unions to be uncapped and completely forgiven if they are unable to be repaid after 29 years. Therefore it should be no wonder why Congressman Dusty Johnson (R-SD) said that the Rehabilitation for Multiemployer Pensions Act of 2019 should be named the Bailout for Multiemployer Pensions Act of 2019.

This major proposal by Democrats was passed in the House of Representatives on July 24th by a vote of 264-169. Although there were 29 Republicans who joined Democrats and voted for the bill, it will almost certainly die in the Senate. However, the bill didn’t have to be this way. 

In the House Education and Labor Committee, Chairman Bobby Scott told the members of Congress that they were going to have a markup on H.R. 397 just three weekdays days later and only after one hearing. Thus, committee Republicans had very little time to offer amendments on the bill for the Tuesday markup. Nonetheless, Republican legislatures were able to make some reasonable amendments, such as the loan applicant demonstrating how they could be reasonably expected to be able to repay the loan. However, this quickly went downhill as Chairman Scott refused to take a vote on any of the amendments and said he would have a joint committee look at them later. 

To put it simply, all Republican amendments were struck down in the committee markup, which will only increase the time needed to solve this issue as this specific legislation will most definitely fail in the Senate.

Congresswoman Virginia Foxx (R-NC) said on the House floor that H.R. 397 was “a risky, fiscally irresponsible, politically motivated scheme,” and, “[Rep. Scott] said that we have a house on fire, and we must do something about it. What this bill does is it gives more gasoline to the arsonist who started the fire.” This is certainly true, though, with or without the arsonist, there is still a fire. 

Instead of just giving bailouts to unions, Democrats should come across the aisle and work on a comprehensive solution to fixing this problem in a truly bipartisan fashion.

Daniel Elmore is a sophomore at Alexander Central High School in Taylorsville, North Carolina. He is in the top of his class and is very active in local politics as well as his local food pantry.

The views expressed in this article are the opinion of the author and do not necessarily reflect those of Lone Conservative staff.

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About Daniel Elmore

Alexander Central High School

Daniel Elmore is a sophomore at Alexander Central High School in Taylorsville, North Carolina. He is in the top of his class and is very active in local politics as well as his local food pantry.

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