Congressional Democrats are pressing Republicans for quick action to solve a looming pension crisis threatening hundreds of thousands of retirees in the U.S., although Republicans say they already agree with the ideas.
Several senators held a press conference on Wednesday to urge two-track action: first, to save soon-to-expire retirement benefits for miners in the U.S., and second, to rescue a larger, multi-employer pension fund called the Central States Pension Fund that could soon go bankrupt and endanger benefits to 400,000 retirees in 37 states.
The political twist here is that Democrats are directly targeting Senate GOP Leader Mitch McConnell, to force him to speed up action Republicans say is already in the works anyway.
Specifically, Democrats are pushing a Miner Protection Act they first unveiled in March in the Senate Finance Committee. Republican Committee Chairman Orrin Hatch has said he supports the bill, but has not yet scheduled a vote; Democrats say action is necessary before mid-July
— when legislating virtually stops for the year
— because 100,000 retired miners will see their benefit funds run dry at the end of December.
The Miner Protection Act would prevent cuts by using $3.5 billion in unused federal funds in the Abandoned Mine Land program, a trust built from taxes paid by coal companies to reclaim old and abandoned strip mines.
The Democrats used the rare tactic of issuing an open letter directly to Sen. McConnell, highlighting the fact that thousands of coal miners, widows and dependents in his home state of Kentucky would be affected.
“If you can’t be motivated and really concerned about what’s happening to these people who work their entire life building our country in the most back-breaking work that you can imagine
— if you can’t be sympathetic to them, then I don’t think you really have a heart for the middle class,” Sen. Heidi Heitkamp of North Dakota said at a press conference Wednesday.
On Thursday, McConnell himself told AMI Newswire that he is not opposed to the idea, but that it has to go through the same legislative process as other bills.
“As I’ve said repeatedly, it needs to go through regular order and it needs to come up in the Finance Committee – hearings, markups and out onto the floor,” he said. “I think we need to deal with that issue and the way to deal with it is through an open and transparent process.”
— who in March said he supported the Miner Protection Act as “the best option available to us”
— said on Thursday he still supports the bill but didn’t say if he would bring it up for a committee vote.
“I’m not thrilled with it, because they didn’t handle their monies well and now they’re asking for a bailout,” Hatch told AMI Newswire. “But I do think men and women who work in the mines ought to be given some leeway.”
McConnell has been picky about allowing legislation onto the Senate floor this year, as senior GOP aides have said he wants priority given to bills that have sufficient bipartisan support for congressional approval.
That has proven tricky because Congress only works for a handful of weeks the rest of the year due to the political conventions in July, a series of weeks-long recesses, and the November election. House Republicans have also proven recalcitrant to new spending that isn’t offset by spending cuts, even for popular ideas such as fighting the Zika virus.
The larger issue being pushed by Democrats is saving the Central States Pension Fund (CSPF), a 61-year-old mega-fund which manages $2.8 billion in annual benefit payments but was hit hard by the 2008 recession.
Earlier this month, the U.S. Treasury Department rejected a “rescue plan” application it received last September by CSPF administrators, that would have cut benefits for 270,000 retirees in the U.S. to maintain solvency, with some retirees seeing cuts of up to 70 percent.
Although the application was rejected, the Central States fund remains financially unstable, and the senators on Wednesday estimated up to $30 billion in aid may eventually be needed.
“We have to have the political will to save pensions,” said Democrat Claire McCaskill of Missouri, who said 32,000 retirees in her state would be harmed by Central States Pension Fund cuts.
McCaskill said proponents are considering two options for the Central States fund
— simply pouring federal money into the fund to make it stable, or strengthening the Pension Benefit Guaranty Corporation (PBGC), a federal agency created to protect retirees’ benefits.
In March, Hatch noted that taxpayer-funded pension bailouts were first proposed in 2010, when Democrats controlled both houses of Congress and the White House, yet the idea got “absolutely no traction.”
On Thursday, Hatch said Democrats “didn’t lead” at the time, but McCaskill said it was more a matter of prioritizing larger legislative needs.
“I don’t think any of us realized back then it would become such a problem,” she said. “I plead guilty to that. I didn’t realize back in 2010, that in a few years we’d be talking about cutting people’s pensions by 70 percent.”
Despite Hatch’s stated support for the Miner Protection Act, McCaskill said he has been too slow to act.
“He should put it out of the Finance Committee,” she said. “Where’s the vote? We’re ready. Let’s go.”
Other Republicans with retiree-heavy states are staying tuned in on the issue, but like Hatch, aren’t warm to the idea of bailing out troubled pension funds.
GOP Sen. Marco Rubio of Florida, for example, told AMI Newswire he doesn’t like the idea even if it is paid for with spending cuts.
“I don’t want to see people lose their investments, but I’m not sure the federal government’s proper response is to come in with cash and bail them out,” Rubio said.
“A pay-for just means they’re using taxpayer dollars to bail out basically a private endeavor. These are tough issues and it’s unfortunate because people are going to be harmed, but I’m not sure I have a perfect solution for it right now.”