Senate to Deal with Union Pension Crisis After House Passes Butch Lewis Act

Democratic-led bill faces stiff opposition from Republicans.

Out to save the retirement plans of over 1.3 million pensioners, the US House of Representatives passed legislation that seeks to address a nationwide multi-employer pension funding crisis by providing low-interest loans to help fund the institutions.

Called the Butch Lewis Act, named after a Vietnam War veteran and pension activist, the bill seeks to address a situation that advocates say continues to get worse. It would establish a new division in the federal government to monitor and issue low-rate bonds and loan the proceeds to pensions.

“These plans are failing at an alarming rate,” says AARP, an advocate for the bill. “About 12% of workers with vested multiemployer pensions are in plans expected to run dry within 20 years. And the plans’ weak safety net is getting weaker.”

It’s a downward-spiraling issue as union membership numbers decline and contribution rates fall. Union employers in industries vulnerable to non-union competition, such as mining and construction, are losing business and contributing to pensions less as a result.

Some companies such as lollipop maker Spangler Candy have had to shore up additional funds in recent years, nearly doubling its contribution rate, with approximately 54% of its contributions diverted to individuals who’ve never worked for them in the past, said House Ways and Committee Chairman Richard Neal.

The bill passed the House garnering support from every Democrat and 29 Republicans, through a 264-169 vote. The bill faces stiff opposition from Republicans, who’ve been calling the measure a “bail-out” that doesn’t address core issues that brought the problem about in the first place.

“Our pensioners deserve bipartisan legislation that will address the immediate crisis, implement lasting reforms, and protect taxpayer dollars to ensure they and their families are taken care of,” said Republican Rep. Anthony Gonzalez, an opponent of the bill.

The Congressional Budget Office pegs the cost of the legislation at approximately $64.4 billion.

Sen. Sherrod Brown introduced the Senate version of the bill on the same day the House version passed, but he noted it will need amendments to garner support from both Democrats and Republicans.

“Retirees have told us they’re going to lose their houses, they can’t pay their medical bills—and they are panic-stricken. The rug has been pulled out from under them,” said Karen Friedman, executive vice president of the Pension Rights Center.

Related Stories:

CBO Finds Butch Lewis Act Costs Much Less than Expected

House Committee Advances Multiemployer Pension Reform Bill

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