Published: December 10, 2017 – 8:18 PM
Congress extended federal spending for two weeks. Now it faces a deadline next week for enacting a major spending bill for the fiscal year, the complexity deepened by differences over key policies involving immigration and health care. One item that belongs in the legislation would protect, and secure, the pension plans of Teamsters, miners, ironworkers and many others.
Congressional action is imperative. Ohio is the home of nearly 50,000 retired Teamsters. They are part of the ailing Central States pension plan. They face the prospect of deep reductions in their monthly pension benefits — by as much as two-thirds. That would be ruinous for households, not to mention a blow to local economies.
U.S. Sen. Sherrod Brown, a Cleveland Democrat, has stepped up with a practical proposal to save the pensions. The Butch Lewis Act would create a new federal office, the Pension Rehabilitation Administration in the U.S. Treasury. It would oversee a mechanism allowing the troubled pension funds to borrow money at low interest rates, thus preserving the monthly payments in whole and permitting time for the funds to get on a firm financial track.
Money for the loans would be generated through the sale of Treasury bonds to financial institutions. The loans would be long term, and the pension funds would be required to repay in full.
One worry is that the weakened state of the pension funds means the legislation just postpones an inevitable collapse. Brown stresses that the proposal has received a scrubbing from analysts, who advise that it would work. As it is, the proposal includes guardrails to prevent risky investments. The pensions must submit reports every three years to show compliance.
The proposal makes sense for taxpayers. If the pension funds fail, the federal Pension Benefit Guarantee Corporation would pick up responsibility. That means taxpayers would cover the expense. The Brown legislation avoids that path for the most part, gaining room for the pension plans with a minimum of public money.
The role for the Pension Benefit Guarantee Corporation would involve filling any gaps that may surface between the money borrowed and fulfilling the payment obligation to retirees. More, the bill includes a way to supply those funds to the PBGC, which faces its own financial challenges.
Butch Lewis, a Vietnam War veteran, worked for four decades as a trucker. He also was a devoted advocate of protecting the Teamster pensions. He died two years ago after a stroke. Sherrod Brown recalls Lewis making the point: We didn’t work for 40 years to get 40 percent of our retirement.
That is the simple element of fairness at stake. These retires deserve their full monthly benefit payments. The senator has put forward a smart, more cost-effective way to accomplish the task. The proposal belongs in the comprehensive spending bill, Congress delivering financial security.
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