During a speech on the floor of the United States Senate, Budget Committee Chairman Mike Enzi (R-WY) warned that a House of Representatives-passed bill, the Rehabilitation for Multiemployer Plans Act of 2019, would bail out some of the worst-funded multiemployer pension plans at taxpayers’ expense. The Senator’s comments were reported in a news release from his office.
“My concern with this bill is not just with its immediate costs to taxpayers, but also what it would mean down the road,” said Chairman Enzi. “This bill would send the signal to private pension plans that regardless of how underfunded they are or how risky their investments, the taxpayer will be there to bail them out.”
Enzi noted that according to the Pension Benefit Guaranty Corporation (PBGC), multiemployer pension plans are underfunded by more than $637 billion. Out of the 1,247 multiemployer pension plans included in PBGC data, 1,235 are underfunded. The bill passed by the House would provide a combination of low-interest loans and direct cash payments to private sector multiemployer plans that are currently insolvent or designated as “critical and declining.”
The official Congressional Budget Office cost estimate of the bill says it would increase deficits by $49 billion over the next ten years, but a separate analysis
“This bill is setting up the country for additional bailouts in the future, potentially putting taxpayers on the hook for hundreds of billions of dollars,” Chairman Enzi said. “Only about 12 percent of private sector workers participate in a pension plan, and an even smaller number participate in these multiemployer plans. This bill would put the vast majority of workers who don’t have their own pension plans on the hook for bailing out the small percentage who do participate in multiemployer plans. That hardly seems fair.”