Monday, May 23, 2016

Pensions Are A Promise-- A Promise Republicans Are Always Eager To Break


I was somewhat surprised to see a bunch of fringy right-wing organizations, among them the Institute for Liberty, the Taxpayers Protection Alliance and the Competitive Enterprise Institute, hold Republicans' feet to the fire over Vegas plutocrat and Trumpist Sheldon Adelson over the anti-Internet gambling earmark the GOP gave him in the Appropriations Bill in return for the millions of dollars he's spent on their political campaigns. They sent a letter to crooked Houston Republican John Culberson, chairman of the House Commerce Appropriations Subcommittee that reads, in part, "We, the following free-market, limited-government, and freedom-oriented organizations are asking you to oppose language supporting the 'Restoration of America’s Wire Act' (RAWA) that was inserted into the Senate CJS Appropriations report accompanying the bill. This language benefits a narrow range of special interests and tramples on the Tenth Amendment and the right of states to set their own gambling and lottery laws. If passed, RAWA would potentially affect the ability of millions of Americans to play daily fantasy sports and, perhaps most troubling, opens the door to federal government regulation of guns and ammunition sales-- a long time goal of gun control advocates."

Nice they have something useful, for a change, to occupy themselves with. Progressives, however, always have something useful-- usually a lot more useful-- to occupy themselves with. Let me pick an example out of a Make America Great Again hat. Last year Bernie introduced a bill that Mitch McConnell bottled up in committee, the Keep Our Pension Promises Act (S.1631) and would provide more funding for the Pension Benefit Guaranty Corporation (PBGC), specifically for struggling multi-employer pension plans. Bernie's plan would be paid for by closing a loophole in the estate tax and a tax break on sales of expensive art and other collectibles. McConnell and his Senate leadership team shut that right down.

Their typically high-handed treatment of the legislation and their refusal to even allow it to be debated and voted on, has led to what's developing into an existential crisis for another 400,000 workers, as one of the biggest private pension funds in the country faces imminent insolvency.
The Central States Pension Fund has no new plan to avoid insolvency, fund director Thomas Nyhan said this week. Without government funding, the fund will run out of money in 10 years, he said.

At that time, pension benefits for about 407,000 people could be reduced to "virtually nothing," he told workers and retirees in a letter sent Friday.

In a last-ditch effort, the Central States Pension Plan sought government approval to partially reduce the pensions of 115,000 retirees and the future benefits for 155,000 current workers. The proposed cuts were steep, as much as 60% for some, but it wasn't enough. Earlier this month, the Treasury Department rejected the plan because it found that it would not actually head off insolvency.

The fund could submit a new plan, but decided this week that there's no other way to successfully save the fund and comply with the law. The cuts needed would be too severe.

Normally, when a multi-employer fund like Central States runs out of money, a government insurance fund called the Pension Benefit Guaranty Corporation (PBGC) kicks in so that retirees still receive some kind of benefit.

But that's not a great solution in this case. For one thing, the amount is smaller than what pensioners would have received under the Central States reduction plan, and is based on the number of years a retiree worked. A retiree would receive a maximum $35.75 a month for each year worked, according to the fund's website. (That amounts to $1,072.50 a month for retiree who worked 30 years.)

But there's yet another problem. The PBGC itself is underfunded and isn't expected to be able to cover all the retirees in the Central States Pension Fund.

"The fact that the ... PBGC is also running out of money means our participants may see their pension benefits ultimately reduced to virtually nothing when the fund runs out of money," Nyhan said in his letter.

Only government funding, either to the Central States Fund directly or through the PBGC, can fix the problem, he said.

The Central States Pension Fund covers workers and retirees from more than 1,500 companies across a range of industries, but most of its retirees were truck drivers.

A lot of the fund's companies went bankrupt after the trucking industry was deregulated in the 1980s. That's part of the reason the fund is in trouble now. It's currently paying out $3 for every $1 it takes in.
Bernie's bill has been co-sponsored by both liberals-- Sherrod Brown (D-OH), Tammy Baldwin (D-WI), Al Franken (D-MN), Sheldon Whitehouse (D-RI), and Jack Reed (D-RI)-- moderates-- Debbie Stabenow (D-MI), Amy Klobuchar (D-MN), Gary Peters (D-MI)-- and even conservaDem Claire McCaskill (MO)... but no Republicans. Marcy Kaptur (D-OH) introduced a companion bill in the House (H.R. 2844) which Boehner bottled up in 3 hostile committees. Co-sponsors range from the most progressive House Democrats like Alan Grayson (D-FL), Yvette Clarke (D-NY), Judy Chu (D-CA), Steve Cohen (D-TN), Barbara Lee (D-CA) and Ted Lieu (D-CA) to some of the most conservative, like Collin Peterson (Blue Dog-MN), David Scott (Blue Dog-GA), Filemon Vela (New Dem-TX) and Sanford Bishop (Blue Dog-GA). Again, no Republicans. We reached Ted Lieu yesterday who was adamant that pension obligations must be protected. "Pensions are not only promises," he explained, "they are contracts. Government should not renegade on its promises, and cannot renege on contracts. Same with corporations. The Contracts Clause of the United States Constitution protects contracts and we need to fully fund our pension obligations."

If you'd like to help Ted and some of the other progressives holding the Republicans' feet to the fire on pension obligations, you'll find incumbents worthy of reelection by tapping the thermometer:
Goal Thermometer

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