House Speaker Nancy Pelosi’s (D-CA) supposedly worker-friendly coronavirus relief bill has gotten a cold reception from some labor leaders.
A group of unions objected to a part of the sprawling, $3 trillion legislation in a letter to Pelosi last week, saying that it would threaten pensions that protect over 10 million workers, the Washington Examiner reported. The House passed the bill on Friday, but it is unlikely to get very far.
Unions slam stimulus provision
Before the bill passed in the House, a group of unions sent a letter to Pelosi and other congressional leaders on May 12 in which they expressed their concerns.
Pelosi’s HEROES Act legislation contains a section called the Emergency Pension Plan Relief Act (EPPR), which looks to backstop struggling retirement accounts, including multiemployer pension plans that cover more than 10 million U.S. workers. Part of the EPPR bill gives the Pension Benefit Guaranty Corporation (PBGC) the authority to partition troubled plans to keep them solvent for 30 years, with no benefit cuts. The unions delcared that they support the EPPR.
However, they objected to another section of the proposed HEROES Act, called Giving Retirement Options to Workers (GROW), that allows employers to restructure multiemployer pension plans to have features of both defined-benefit and defined-contribution plans. These “deeply flawed” compound plans, the unions said, would let employers off the hook for prior commitments, undermine the solvency of the PBGC, and threaten benefit payments for union workers and their families.
“Composite legislation is deeply flawed because it allows multiemployer plan trustees to ‘refinance’ their obligations to workers and retirees in the existing plan over 25 years instead of 15 years, so they can divert money to start a new composite plan,” they warned, according to Breitbart. “This weakens the existing plan and leaves neither plan — the existing plan nor the composite plan — with enough money to pay promised benefits.”
A summary of the HEROES Act says that if “a composite plan were to become insolvent, it could not obtain financial assistance from PBGC, and its participants and beneficiaries would not be covered by the PBGC guarantee” and that employers “do not have withdrawal liability.”
Pelosi bill faces resistance
Breitbart reported that the list of unions who signed the letter included the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), the International Brotherhood of Boilermakers, the International Assoc. of Machinists & Aerospace Workers, the International Longshore and Warehouse Union (ILWU), the United Food and Commercial Workers International Union (UFCW), the United Steelworkers, and the Western Conference of Teamsters Pension Trust.
This comes as the HEROES Act has faced significant resistance from Republicans, who have vowed to kill it in the Senate. The White House is no more inclined to approve the bill, which Democrats have marketed as a win for workers, although some progressives have said the bill doesn’t go far enough, according to The Hill.
The core of the legislation is a $1 trillion bailout for state and local governments that have struggled to keep budgets funded through the pandemic. Republicans are wary of borrowing trillions of dollars more to stimulate the economy, particularly as the party turns against lockdowns that have crippled the labor market.
The bill also includes stimulus checks for illegal immigrants and protections to shield them from deportations, despite its supposed status as pro-worker legislation, Fox News reported.
Needless to say, there’s a lot more in this bill than meets the eye, and this is just one more reason to reject it.