·Vote Alert ·

VOTE ALERT: Vote NO on H.R. 397, the Rehabilitation for Multiemployer Pensions Act  

The R Street Institute urges all members to vote NO on H.R. 397, the Rehabilitation for Multiemployer Pensions Act. If passed, the bill would put taxpayers on the hook for bailing out private multiemployer/union-sponsored pension plans — many of which are hopelessly insolvent and in financial crisis.

The federal government’s program that guarantees pensions, the Pension Benefit Guaranty Corp. (PBGC), is also broke. According to its 2018 annual report, PBGC has $24 in liabilities for every dollar of assets. PBGC estimates the total unfunded pension liabilities of the multiemployer plans at $638 billion.

Under the terms of the Employee Retirement Income Security Act (ERISA), PBGC programs are required to be self-financed and taxpayers are prohibited from bailing these pensions out. However, the House Democrats’ H.R. 397 is simply a bailout by another name.

R Street Distinguished Senior Fellow Alex J. Pollock has proposed numerous ideas to reform the system. For one, if we are going to have a bailout of the insolvent multiemployer pension plans, it should follow the good bank/bad bank structure, which would include a series of reforms to prevent the need for further bailouts.

However, Democrats on the Ways and Means Committee rejected every single reform amendment offered by Republicans in committee deliberations. Not only does H.R. 397 impose a massive bailout on taxpayers, it also includes no meaningful reforms to put the plans on the path to financial solvency and ensure that a bailout won’t happen again in the future.

Please join the R Street Institute in rejecting the taxpayer bailout of insolvent multiemployer pension plans, and vote NO on H.R. 397.

For more information on H.R. 397, see the following op-eds from R Street’s Alex J. Pollock:

Congress Moves to Put Pension Benefit Guaranty Corporation on Taxpayer Dole

Federal Lending to Insolvent Pension Plans is Code for a Bailout

Multiemployer Pension Bailout Needs a Good Bank/Bad Bank Strategy

Cheers,

Caroline

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Caroline Kitchens
Director, Federal Government Affairs
R Street Institute