A year ago, Congress created a joint committee of House members and senators to devise a way to rescue the country’s troubled multiemployer pension plans. The bipartisan panel, chaired by U.S. Sens. Sherrod Brown and Orrin Hatch, received a November deadline. That date passed, and so did the congressional session, the committee disbanding without producing a proposal. So the problem remains, 1.3 million retirees, with 60,000 in Ohio, at risk of losing their pensions through no fault of their own.
The loss would not come all at once. It would play out during the coming decade. Yet there is a mounting urgency to addressing the challenge. With each year, the repair work becomes more expensive. The affected workers and retirees deserve better than prolonged uncertainty.
Will Congress do the right thing and finally approve the necessary fix?
Brown, a Cleveland Democrat, sees no higher legislative priority. His Senate colleague, Rob Portman, a Cincinnati Republican and also a committee member, rightly views the collapse of the pension systems as “an unacceptable outcome.” Perhaps the new Democratic majority in the House will advance legislation, presenting a framework with which the Senate could work, a conference committee delivering the final plan. Portman is well placed now as the chairman of the subcommittee on Social Security, pensions and family policy.
For his part, Brown has put forward a solid approach in the form of the Butch Lewis Act, named after the late truck driver and Vietnam veteran who devoted himself to saving the pensions. The legislation calls for a 30-year, low-interest loan that would give the pension systems time to achieve financial stability. That concept has won the support of the U.S. Chamber of Commerce and United Parcel Service. Such backing reinforces the reality that this isn’t just about workers and retirees. Many businesses have a stake in gaining a solution.
Multiemployer pension systems date to the 1940s, conceived as a way for smaller companies in trucking, construction and other sectors with frequent job changes to band together and support pension benefits. More recently, these systems have been battered, in part, by the severe recession yet also by such things as the fallout from trucking deregulation. Today, of the 1,400 plans nationwide, some 200 face financial jeopardy.
Critics have raised the B-word, or “bailout,” hardly a popular concept. In this instance, there is no ideal answer. Each is fraught. A collapse would harm local economies, with jobs eliminated and many retirees in dire circumstances. Would the federal Pension Benefit Guarantee Corp. provide a safety net? It already has financial difficulties, needing at least $78 billion to be whole. At this point, it cannot afford such a rescue.
In September, the Congressional Budget Office projected a cost of $34 billion the next decade for the Butch Lewis Act. That is a large sum. Yet it is preferable to the pensions going under, let alone taking down the Pension Benefit Guarantee Corp., the hardship and expense spreading wider.
The indications were the members of the joint committee moved close to an agreement in December. Then came the partial government shutdown and the start of a new session. With the committee no longer in existence, the matter falls to the Sherrod Browns and Rob Portmans to find a path forward. This question of what to do about the troubled multiemployer pensions has been around for years. What a shame if Congress lets slip whatever momentum the committee gained. The affected workers and retirees are not asking for all that much. They want the federal government to help in preserving what they have earned.