Michigan Advance: Stevens trumpets legislation shoring up union pension funds
Freshman U.S. Rep. Haley Stevens (D-Rochester) heard a lot of worries about pensions last year on the campaign trail.
That’s why she couldn’t have been happier on Wednesday, the day after the House Education and Labor Committee passed House Resolution 397. Stevens is one of 173 bipartisan co-sponsors of the measure, known as the “Butch Lewis Act,” which, if enacted, would establish the Pension Rehabilitation Administration (PRA) within the U.S. Department of Treasury and make loans to failing multi-employer pension funds.
Those funds make up the retirement accounts for many of the country’s largest labor unions. There are roughly 1 million people within 100 plans that are projected to be unable to pay the full benefits that have been promised, according to a 2017 report from the American Academy of Actuaries.
The report notes that some pension funds are already insolvent and receiving assistance from the Pension Benefit Guaranty* Corp.
Passage of the legislation “gravely matters,” Stevens told the Advance during a Wednesday morning phone interview, noting the heavy concentration of her constituents that work in organized labor.
“I spent a lot of time with labor unions — labor workers — and we’re seeing this play out in real time,” Stevens said. “Individuals — hard-working men and women — who have paid into their pensions for the entirety of their working career and are now drawing down on that, are not going to be realizing the full pension that they earned.”
Seven other members of Michigan’s U.S. House delegation have joined Stevens as co-sponsors of the measure: They are U.S. Reps. Debbie Dingell (D-Dearborn); Bill Huizenga (R-Zeeland); Dan Kildee (D-Flint); Brenda Lawrence (D-Southfield); Andy Levin (D-Bloomfield Twp.); Elissa Slotkin (D-Holly); and Rashida Tlaib (D-Detroit).
Dingell, in a statement on Tuesday following the committee vote, said she’s been working on the issue since coming to the House in 2015 and cited an estimate that pension cuts could impact more than 43,000 Michigan residents.
“Hard-working men and women worked a lifetime, sometimes forgoing pay raises or other benefits, thinking the pension they paid into would be there for them in retirement,” Dingell said of the bill’s committee passage.
“The pension crisis is causing stress and uncertainty in communities across the country,” she continued. “Congress must take action to bring relief to the tens of thousands of workers and retirees whose lives have been turned upside down by proposed cuts to their pensions.”
The cost of implementing the specific legislation to shore up pensions is unclear, as the nonpartisan Congressional Budget Office has not yet completed its analysis. A memo from the House Education and Labor Committee says that preliminary estimates of similar legislation last year pegged the cost at between $34 billion and $100 billion.
Stevens, however, said the cost of letting multi-employer pension funds run dry would be far greater.
“This is just a classic example of a big piece of legislation where the cost of inaction is much greater than the cost of doing something. So while there is a price tag attached to Butch Lewis … the savings are estimated to be a lot higher than if we just let these pensions become insolvent.”
The conservative Heritage Foundation think tank, however, disputes those numbers, saying in a report last year that the actual cost to shore up pensions could be north of $600 billion.
Now that the measure has passed a key committee hurdle, Stevens said she plans to discuss bringing the resolution for a full House floor vote with Speaker Nancy Pelosi (D-Calif.). How the legislation would fare in the Republican-controlled U.S. Senate, however, is murkier.
U.S. Senate Majority Leader Mitch McConnell (R-Ky.) has brought few Democratic-led House measures for a vote, but Stevens said she’s hopeful Senate Democrats will push for letting it be heard.
“I’m optimistic there will be pressure but I don’t want to paint a false picture,” Stevens said. “The only thing in six months that the Senate has done this year is judicial nominations. We can’t even get the Violence Against Women [Act] reauthorization through. Just let it be heard.”
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