More than 1.3 million retirees face the prospect of losing their pensions. That includes 60,000 in Ohio. The retirees bear no responsibility for the dire shape of many multiemployer pension plans across the country. Thus, they strike a sympathetic profile as they seek help from Congress, something they have done for years. Yet lawmakers still have not pulled together the necessary remedy. Perhaps that will change with the U.S. House approving the Butch Lewis Act last week, 29 Republicans, including Dave Joyce of Bainbridge Township, joining majority Democrats.
The thinking isn’t that Republicans in charge of the Senate will readily concur. There is value in the House sending a bill to the other chamber, challenging the Republican majority to do its part in advancing needed protection for retirees and their communities.
Sherrod Brown long has been pressing his Senate colleagues to act on the Butch Lewis Act, named after a late Teamster and Vietnam veteran devoted to saving the pension plans. The bill creates a loan program in the Treasury Department, from which the plans would borrow to regain financial stability. The loans would be repaid, the pension plans required to show a credible way forward in order to receive financing. Benefit levels would remain the same, neither increased nor reduced.
This isn’t ideal. The framework is better than the alternatives. The federal Pension Benefit Guarantee Corp. traditionally rescues troubled plans. Unfortunately, it already has financial difficulty, needing as much as $80 billion to become whole. Add to the burden, and the PBGC would risk ruin, resulting in much collateral damage.
In the same way, the collapse of multiemployer plans is an unacceptable outcome, and not just for retirees. The communities in which they live would be diminished.
How did the pension plans get here? The multiemployer plan dates to the 1940s, allowing small companies in trucking, construction and other sectors to band together in offering pension benefits. Today, there are roughly 1,400 such plans, with 200 or so facing financial jeopardy. The tough times stem, in part, from the Wall Street calamity of a decade ago, the plans unable to recover. Another factor is deregulation, especially in the trucking industry, surviving companies picking up a larger share of the cost.
The Teamsters Central States Fund is one casualty. Retirees note they agreed to smaller pay increases with the objective of protecting their pensions.
At one point, Sherrod Brown served as co-chairman, and his Senate colleague, Rob Portman, was a member of a joint congressional committee with the task of finding a fix for the multiemployer pension problem. The panel missed its deadline late last year. Yet both the Cleveland Democrat and the Cincinnati Republican reported progress toward a solution. The committee received good news from the Congressional Budget Office, the rescue projected to cost $34 billion for the decade, or less than many expected.
One thought was the momentum of the joint committee would carry into the new congressional session. As it is, too little has happened, beyond both sides reiterating the need for a comprehensive bipartisan solution, even an outcome that addresses larger structural problems with the pension system. With House passage of the Butch Lewis Act, there is an opening for renewed focus, the first task to provide security for retirees, not to mention many businesses that may not survive the failure of the plans.
These retirees have played by the rules. They have paid into their pension plans as required. They are not asking too much from Congress, especially in view of tax cuts routed mostly to the wealthy. It is past time for lawmakers to deliver.