CCAGW Vote Alert: Oppose H.R. 397, the Rehabilitation for Multiemployer Pensions Act | Council For Citizens Against Government Waste

CCAGW Vote Alert: Oppose H.R. 397, the Rehabilitation for Multiemployer Pensions Act

July 24, 2019

U.S. House of Representatives
Washington, D.C. 20515

Dear Representative,

You will soon consider H.R. 397, the Rehabilitation for Multiemployer Pensions Act. On behalf of the more than one million members and supporters of the Council for Citizens Against Government Waste (CCAGW), I urge you to oppose this legislation.

There are about 1,400 multiemployer pension plans across an array of industries such as trucking, manufacturing, construction, and mining. It is currently estimated that of the more than 10 million people in plans, one million participants will not receive their full promised benefits. In total, plans face $638 billion in unfunded liabilities.

The Pension Benefit Guaranty Corporation (PBGC), in charge of insuring these pension benefits, faces a $54 billion deficit for such plans and is projected to be depleted by fiscal year 2025. While the PBGC is currently funded by insurance premiums rather than taxpayer dollars, the deteriorating fiscal situation could force the burden back on taxpayers to pay for the bailout of failing pensions.

Because the multiemployer pensions crisis is difficult and multifaceted, so too are the solutions. Unfortunately, H.R. 397 fails to address the structural changes needed to avoid short-term insolvency and provide long-term stability for multiemployer plans.

This bill ignores PBGC reform and creates a new entity in the Department of the Treasury to make 30-year loans to failing multiemployer plans with no protections for taxpayers. The Congressional Budget Office (CBO) estimates H.R. 397 will cost $64.4 billion, but as is typical of Congress passing out loans, that number could snowball into tens of billions of dollars more. If changes to the bill are not made to address the long-term issues associated with the PBGC and multiemployer plans, H.R. 397 will be nothing more than a taxpayer-funded band-aid.

The longer the funding crisis for multiemployer pension plans remains unaddressed, the greater the likelihood that taxpayers will be left to foot a massive bill. I urge you to vote against H.R. 397 and seek a fair, viable solution that provides long-term reforms rather than a bailout.

All votes for H.R. 397 will be among those considered for CCAGW’s 2019 Congressional Ratings.

Sincerely,

Tom Schatz
President, CCAGW

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