Democrats want a taxpayer-funded bailout of underfunded union pensions and may cause a government shutdown in the hopes of getting it.
Time is running short for underfunded union pension plans and Democrats may use the federal budget talks as a wedge to try to force a taxpayer-backed bailout of the plans most at risk.
According to PoliticoPro [subscription required], “key Democrats are vowing to fight for a fix as part of any forthcoming deal to fund the government.”
The next potential sleeper cause of a government shutdown? Pensions.
Congress barely averted a shutdown last year amid a fight over miners’ health care. Now the looming collapse of pension plans for the miners — as well as thousands of Teamster truck drivers and food service workers — is fueling another, even more expensive, round of brinkmanship.
Key Democrats are vowing to fight for a fix as part of any forthcoming deal to fund the government. And they warn that if Congress doesn’t step in soon to forestall the insolvency of several key pension plans — including the massive Central States plan, which covers an estimated 400,000 union workers and retirees — taxpayers risk ending up on the hook for an even bigger multi-billion-dollar rescue for the government’s pension guarantee agency.
Although there are more than 100 pension plans currently underfunded, there are three very large ones that, if they are not fixed soon, may cause a collapse of the Pension Benefit Guaranty Corporation–a federal agency created to protect pension benefits in private-sector defined benefit plans.
Less than a week ago, Congress passed a short-term spending bill to keep the federal government running until December 22. However, if there is no deal reached when the funding expires, the government may shut down.
In November, Democrats introduced the “Butch Lewis Act,” which was named after a Teamster who passed away while fighting to save union pensions.
If passed, the bill–which was heartily endorsed by Teamster boss James P. Hoffa–would provide taxpayer-backed loans to to “critical and declining” multiemployer pension funds.
The loan terms, according to the Teamsters, will require plans to make interest payments for 29 years with final interest and principal repayment due in year 30.
While the bill currently has no support among Republicans, Democrats’ using the possibility of a government shut down may cause some Republicans to change their views.