House passes legislation aimed at stabilizing multiemployer pension plans

House passes legislation aimed at stabilizing multiemployer pension plans
© Greg Nash

The House passed legislation Wednesday in a 264-169 vote aimed at helping stabilize multiemployer pension plans in hopes of mitigating the looming pension crisis. 

Twenty-nine Republicans — nine of whom co-sponsored the legislation — joined Democrats in voting for the measure. 

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The Rehabilitation for Multiemployer Pensions Act, also known as the Butch Lewis Act — introduced by House Ways and Means Committee Chairman Richard NealRichard Edmund NealTreasury starts monthly child tax credit payments Progressives ramp up Medicare expansion push in Congress Democrats propose new deadline in Trump tax returns fight MORE (D-Mass.)  — includes provisions that would establish a Pension Rehabilitation Administration within the Department of the Treasury and a trust fund that would provide low-interest government-guaranteed loans that pension plans could pay back over the course of 30 years. The director of the new pension administration would be appointed by the president and would serve for five years.

Plans would only be eligible to receive the loans if they were in critical, declining status or insolvent. 

Proponents argue the bill is necessary as there are 1,400 multiemployer plans covering about 10 million people throughout the United States, with a large number of those facing the threat of running out of money, placing workers' ability to retire — and the overall economy — at risk. 

"This will provide the economic security this body ripped out from under millions of hardworking Americans in past congresses. Across our country, 1.3 million workers, truck drivers, candymakers, coal miners, retirees face serious and significant threats of cuts to their hard-earned, multiemployer pension plans through no fault of their own,"  Rep. Marcy KapturMarcia (Marcy) Carolyn KapturAcquiescing to Berlin, emboldening Moscow and squeezing Kyiv: Biden and Nordstream 2 OVERNIGHT ENERGY: Democrats lay out vision for Civilian Climate Corps | Manchin to back controversial public lands nominee | White House details environmental justice plan Democrats lay out vision for Civilian Climate Corps MORE (D-Ohio) said during debate.

"Several of these plans are large enough to take down the entire Pension Benefit Guarantee Corporation, threatening the security of another 10 million hard-working Americans."

But critics argue the bill would be a taxpayer bailout for private sector multiemployer pension plans, which they feel sets a bad precedent for other private industries and public pension plans.  

“This is a bailout. This is one of the most reckless, fiscally irresponsible pieces of legislation I’ve ever seen. Yes, we need to help those workers, they were the real victims. And the culprits? The unions and the employers for making benefit promises that they knew good and well they couldn’t deliver on. Who’s now going to hold the bag? Our children and grandchildren,” Rep. Jodey ArringtonJodey Cook ArringtonThe case for improving America's research and experimentation tax credit Republicans attack Biden agenda after disappointing jobs report To encourage innovation, Congress should pass two bills protecting important R&D tax provision MORE (R-Texas) said on the floor ahead of the vote.  

“This is a disaster. This is a terrible precedent. This is moral hazard if I’ve ever seen it, because we’ll do this for $100 billion, we won’t fix the problem, we don’t do anything to get at the root cause that brought us here, and there will be a line as long the eye can see to bail out the next $100 billion, and the next $100 billion," he added.

The bill is likely to face an uphill battle in the Republican-controlled upper chamber.