Senate Republicans say they’re close to unveiling a plan to address a $66 billion funding shortfall affecting coal miners’ and other union pension plans, an issue Democrats see as advantageous politically and as a possible bargaining chip in trade talks with the Trump administration.
President Donald Trump championed manufacturing and coal industry jobs during his 2016 campaign, including in critical swing states he won like Pennsylvania and Ohio. In the 2020 campaign, Democrats have been touting “broken promises” to workers in those states and others, including more traditional GOP bastions like Kentucky where Senate Majority Leader Mitch McConnell is up for reelection next year.
Senate Democrats hosted a group of about 150 retired coal miners, teamsters, steel and electrical workers and others this week to press their case that Republicans weren’t doing anything to help.
Democrats sought unanimous consent to bring a pair of pension bills to the floor: The first would help some 86,000 coal miners in danger of pension benefit cuts and also losing health care coverage; and the other is intended to rescue the wider universe of failing union pension plans and their more than 1 million participants with long term, low-interest loans and grants.
Senate Finance Chairman Charles E. Grassley blocked both efforts, saying his committee is “nearing the completion of a comprehensive proposal” that would also provide the targeted fix retired mineworkers are looking for.
The Iowa Republican also criticized the broader bill authored by Sherrod Brown, an Ohio Democrat, which is similar to legislation that passed the House in July with the help of 29 Republicans. In a floor speech Wednesday, Grassley cited a Congressional Budget Office analysis released last month that found most of the faltering plans covered under the legislation wouldn’t be able to repay their loans, and would still become insolvent over the long term despite the upfront relief.
The CBO estimated it would cost $68 billion in the first decade. Grassley also said the measure would do nothing to overhaul the management of troubled pension plans.
Grassley later said Senate backers have “reached a point where we’re going to start sitting down with members of the House and see how they respond to it.” Grassley’s timetable wasn’t clear, however, and he acknowledged the work began under the leadership of former Finance Chairman Orrin G. Hatch, a Republican from Utah, who couldn’t advance a bipartisan solution under a special joint select committee formed to fix the pension problem.
“We are hopeful that we can come up with a sensible comprehensive plan … the question is whether it’s going to be truly bipartisan,” said Republican Sen. Rob Portman of Ohio, a Finance member working with Grassley. “That’s the challenge.”
However, there’s been some discussion among Democrats about potential trade bait to entice the GOP to the table on pensions. A senior House Ways and Means Democrat, John B. Larson of Connecticut, said he thought GOP movement on the pension issue could persuade more Democrats to back the United States-Mexico-Canada trade agreement, a top priority this year for the Trump administration as well as Grassley and GOP leaders on Capitol Hill.
“It’s certainly been an element of discussion,” Larson said. However, he acknowledged the proposal hadn’t yet been put on the table for serious negotiation, and Ways and Means Chairman Richard E. Neal, a Massachusetts Democrat, was noncommittal: “The whole issue of what is going to happen to pensions is wild.”
Given that a bipartisan resolution to the broader pension issue by year-end could prove a heavy lift, some Democrats are seeking to break out a more targeted fix for coal miners to move separately. That’s been done in recent years for miners facing the loss of health benefits due to previous bankruptcies, including in late 2016 and early 2017 .
Brown told Grassley on the floor that “time is of the essence,” particularly for the retired mineworkers who’ve been promised benefits by employers in a sector that’s mostly gone bust in recent years.
Democratic Sen. Joe Manchin III, of West Virginia, on Tuesday tried to bring to the floor his bill, which would make $260 million more per year available from the Treasury to prop up a failing United Mine Workers of America pension plan. The measure would also keep 1,200 miners, including those with black lung disease, and their dependents covered by retiree health plans from losing insurance by the end of year due to Mission Coal Co. and Westmoreland Coal Co. bankruptcies.
While Grassley lodged the formal objection, Manchin placed the blame at McConnell’s feet. “He will not let it come to a vote,” Manchin told the crowd at Tuesday’s rally with retired coal miners and others. West Virginia is home to the largest number of retired mine workers who would benefit from the measure, while Kentucky is in the top five, according to UMWA data.
McConnell’s 2020 challenger, Democrat Amy McGrath, has been questioning McConnell’s commitment to retired coal miners, including in a recent television ad.
Stephanie Penn, a McConnell spokeswoman, said he met with UMWA members earlier this year at the Capitol. McConnell “supports the ongoing process to find a bipartisan solution for pension reform,” she said. Penn added that McConnell “believes this effort must address the challenges facing the UMWA pension plan, which is critical to Kentucky coal miners and their families.“
The chief UMWA pension plan, which pays an average benefit of $596 a month and had $4 billion more in liabilities than assets as of last year, is facing insolvency in 2022 despite being frozen for the last dozen years.
But the last coal company contributing to the plan, Murray Energy Corp., missed debt payments at the end of September and has negotiated agreements putting off payments to other debtors, leading many to fear the company’s bankruptcy.
Rick Ryan, recording secretary for UMWA Local 2286 in Danville, W. Va., said Tuesday he expects Murray Energy to file bankruptcy “any day.” The UMWA says that if Murray stopped making payments into the pension fund, that would speed up its insolvency and lead to “dramatic” benefit cuts by September 2020.
“Manchin’s bill will pass,” Brown, a co-sponsor, told CQ Roll Call. “The consensus has become we do [mineworkers pensions] first. …The path is more certain on them, there’s more empathy for them.”
Coal excise tax
Manchin’s bill would boost the current $490 million a year transferred into the 1974 UMWA Pension Plan to $750 million, as well as pick up the tab for miners’ health coverage if they lose their insurance as a result of 2018 bankruptcies. The bill would be offset in part by reviving a higher excise tax on coal, which lapsed at the end of 2018, for another decade.
Coal companies pay the tax to finance benefits for disabled miners who can’t work due to black lung disease. But the industry opposes the higher tax rates, which dropped substantially on Jan. 1, and Republicans had to remove the extension of higher rates from tax legislation they tried to pass late last year for lack of votes.
Bankruptcies have eroded not only the solvency of the miners pension fund, but also its retiree health plans. Ninety-five percent or more of the UMWA’s pensioners are orphan retirees whose former employers are no longer contributing, Lorraine Lewis, executive director of UMWA Health and Retirement Funds, testified at a July House hearing.
Rep. Dan Kildee, the House’s chief deputy whip, said the pension problems represent a “potentially powerful wedge” issue for Democrats. “And it puts the president in a funny spot, that’s for sure,” the Michigan Democrat said.
“What a lot of the Republican opponents to this don’t want is to have the question before them, because, you know, the president, theoretically, has been standing up for these people. He speaks like he’s for them,” Kildee said.
Portman, who cruised to reelection by 21 points in 2016 in a state Trump won by eight points, said neither party will get credit with coal miners or others who stand to lose pension benefits if Congress fails to act: “If we’re not solving the problem, it doesn’t help anybody.”
Ellyn Ferguson contributed to this report.