Randy Levine: Trump Can Act on Union Pension Crisis
America’s multiemployer pension plan crisis is well-documented. More than 1.5 million retirees collect payments from multiemployer pension plans that could fail.
Recent Congressional testimony indicates that these pension funds face a $680 billion shortfall, an amount that is rising.
Republican Senator Mike Enzi (R-Wyoming) has predicted as many as 150 million union pension plans are set to become insolvent in the next few years.
President Trump can emerge a hero with union workers all over the nation, especially in key electoral states like Michigan, Pennsylvania, Wisconsin and Ohio.
It is important to remember that the pension funding crisis not only affects millions of retirees and present union members, but their families and communities. As well as employers (who face staggering potential costs for contribution increases and withdrawal liability), and their families and communities.
The ripple effect of a pension collapse could be dangerous to the whole economy. It could lead to the loss of millions of jobs.
Outsourcing of American jobs to places like Mexico and China, have often undermined these pension systems.
In some cases, businesses facing the massive liability of these pensions had to close because no one would buy them.
Former House Speaker John Boehner, a Republican, and former Congressman Joe Crowley, a New York Democrat, have been travelling all around trying to stir up support to resolve this problem.
On July 24, 2019, the House of Representatives passed the Rehabilitation for Multiemployer Pensions Act (also known as the Butch Lewis Act) introduced by House Ways and Means Committee Chairman Richard Neal (D-Mass.) The bill includes provisions that would establish a Pension Rehabilitation Administration within the Department of the Treasury and a trust fund that would provide low-interest government-guaranteed loans that pension plans could pay back over the course of 30 years.
While this will help bolster these pension funds, critics say the costs are not paid for with an offset.
These pension funds are governed by the Pension Benefit Guaranty Committee, which is controlled by the Trump Administration.
President Trump could emerge a savior of these funds, and for their millions of beneficiaries, by backing a sensible plan.
My idea is that the administration allot a portion of the tariffs received from China and other nations, to either backstop or fund reasonable low interest loans to these funds.
President Trump, smartly, did something similar to stabilize farm and agricultural communities hit by the effects of the trade war with China.
If President Trump joined the effort, he would lead a bipartisan effort, score a major win, and give a huge boost to the security of millions of union members, retirees, and their families.
Randy Levine is President of the New York Yankees. He has practiced labor law for over 35 years. His views are his own and do not represent the Yankees organization.