Rep. Foxx Issues Statement on National Law Enforcement Museum Commemorative Coin Act

WASHINGTON, Dec. 19 -- Rep. Virginia Foxx, R-North Carolina, issued the following statement, which was published in the Congressional Record on Dec. 18, entitled "National Law Enforcement Museum Commemorative Coin Act":

I rise in opposition to the inclusion of S. 2788, a taxpayer bailout of a failing multiemployer pension plan, in the FY 2020 appropriations package.

There is bipartisan consensus that Congress must address the current multiemployer pension crisis, but this particular provision is a fiscally irresponsible and shortsighted approach that sets a dangerous precedent for future attempts to address the dire predicament facing certain multiemployer pension plans.

Unfortunately, the United Mine Workers of America (UMWA) 1974 Pension Plan has failed the hardworking miners, retirees, and their families who sacrificed pay during their working years with the expectation that they would receive a modest retirement income.

The UMWA Pension Plan covers 96,000 participants, the vast majority of whom, 92,500 to be specific, are retired. That leaves a mere 3,500 active participants paying into the plan. What's more, the pension plan is underfunded by $6.5 billion as its liabilities far exceed assets. That's $6.5 billion that the UMWA's Pension Plan trustees, both union and employer officials, promised workers, but will not deliver.

Let me be clear, my opposition to S. 2788 does not diminish my belief that miners and retirees should receive the benefits they were promised and rightfully deserve. Instead, I oppose how these benefits will be paid and administered.

Under current law, when a multiemployer pension plan becomes insolvent, the Pension Benefit Guarantee Corporation (PBGC) provides financial assistance to the plan to pay benefits up to the guaranteed amount. S. 2788 circumvents that process and allows unprecedented federal funding for one specific plan.

S. 2788 is deceptive in its approach. The bill funnels interest earned on the Abandoned Mine Land Reclamation Fund (AML Fund) to the UMWA Pension Plan. If the AML Fund does not sufficiently cover retiree benefits, money from the U.S. Treasury will make up the difference.

Under current law, UMWA retiree health plans already receive funding transfers from interest earned on the AML Fund and Treasury to pay for retiree health benefits. The combined transfers are capped at $490 million annually. S. 2788 makes these transfers available to the UMWA Pension Plan and raises the cap to $750 million. In FY 2019, the UMWA health plans received $54 million from the AML Fund and a whopping $225 million from Treasury.

The AML Fund is insufficient to pay the UMWA retiree health benefits, which it is already obligated to pay. Any additional funding will come from Treasury. To put it simply Madam Speaker, the American people will foot the bill for this bailout. For the first time ever, taxpayer money will be used to prop up a failing, privately-negotiated retirement plan.

As the Republican Leader of the Education and Labor Committee, I would be remiss if I didn't consider S. 2788 in the context of the broader multiemployer pension plan system.

The UMWA Pension Plan is just the tip of the iceberg; it is just one of dozens of ailing multiemployer plans at risk of insolvency and breaking their pension promises. The passage of S. 2788 sets an ill-advised and irreversible precedent for future multiemployer pension plan solutions.

Multiemployer pension plans are currently underfunded by $638 billion; PBGC's multiemployer insurance program is operating with a $65 billion deficit and is expected to become insolvent by the end of FY 2025.

The responsibility for these broken promises lies exclusively with the union and employer representatives who negotiated and managed these plans. The UMWA Pension Plan is no exception.

Plans and trustees promised benefits without putting aside the adequate funds to meet these promises, all to the detriment of workers and retirees.

It should not be the role of Congress to address funding shortfalls one pension plan at a time. That is not responsible legislating. Instead, we should work together to address the faults of the entire multiemployer pension system.

S. 2788 sends the wrong message to other unions and employers who have failed adequately to fund their pension promises. It puts us on a dangerous path that could ultimately result in Congress burdening American taxpayers with billions of dollars in future bailouts, no questions asked.

If Congress is serious about protecting the hard-earned retirement benefits, which are at risk because of failing multiemployer plans, it should address a system that is plagued with chronic underfunding, dependency on rosy economic assumptions and expectations, and passively accepts that plan trustees and actuaries will continue to underestimate pension promises.

TARGETED NEWS SERVICE, Harwood Place, Springfield, Virginia, USA: Myron Struck, editor; 703/304-1897; [email protected]; https://targetednews.com