It’s one thing for the GOP to spend years working to take defined pension benefits away from workers still on the job, but at least those who have already retired should be safe. Only that's not the case.
Some 400,000 retirees who worked in the trucking, parcel delivery and grocery supply industries face drastic pension cuts on July 1 as a result of a little-noticed measure attached to a huge end-of-year spending bill passed in December 2014.
The provision in question goes after those whose retirement is funded through the Central States Pension Fund. That fund is projected to run low in a decade, a situation that would normally be addressed by the government’s Pension Benefit Guarantee Corporation, which acts as an insurance plan for failing pensions. It’s there specifically so that workers don’t suffer when companies fail to make necessary contributions to funds or fund investments turn south. Only in this case, the 2014 bill makes sure that the government won’t step in. Instead, the bill slashes payouts from the fund.
James Lambert, 69, a former trucker, from Randolph, Ohio, was told his $2,200 monthly pension payment would be slashed to $1,200.
Bob Berg, 61 … was informed that his monthly payment would drop from $3,000 to $2,200.
And Judy Weeks, 62, ... would drop from $3,000 to $1,258.
These aren’t exactly princely sums. The highest payout originally meant getting by on $36,000 a year. But if you’ve planned your life around that payment, only to find it cut to $14,000 a year … That’s not just tough, that’s being thrown into poverty. In many cases it probably means being thrown out of a home. So how did such a bill get passed in the first place?
Many members of Congress say they were not given the time to read the provisions or did not grasp the ramifications at the time, and they now say they would not have voted for the legislation. …
Representative Marcy Kaptur, Democrat of Ohio, said, “I can tell you as someone who has served here for over three decades now, it’s not on the level. You should know that when the decision was made to force your pension cuts, that bill did not come up under regular order. It never, ever had its own day in the sun.”
The bill causing the problem, the Kline-Miller Multiemployer Pension Reform Act of 2014, uses the pretense of reducing the cost of the paying out pension insurance by just cutting payment instead. It’s reverse insurance, protecting the fund that’s supposed to help retirees in trouble—by forcing retirees to pay for it. It was written, and slipped into the 2014 budget, by Republicans John Kline of Minnesota and Democratic Congressman George Miller of California.
Rep. Kaptur and Bernie Sanders drafted legislation to address the issue more than a year ago, but Republicans don’t seem interested in bringing up the bill—even though some Republicans in this election year are running against Kline-Miller. It’s convenient to have it there as an example of Terrible Government Actions … especially if you don’t do a damn thing to fix it.
George Miller retired from Congress in 2015. His last big vote in 2014 meant going against Nancy Pelosi and other Democratic leaders to not only chop pension insurance but also weaken both bank regulations and campaign finance laws.
As a result, if one goes under, the PBGC would pay less than $13,000 a year to a retiree with 30 years of work.
About half the retirees would lose 15 percent or more of their pension benefits, the U.S. Government Accountability Office estimates. About one of every five retirees would lose 50 percent or more.
How much does Miller receive in retirement? That would be about $140,000 a year. Plus medical benefits. Thanks goodness his pension is protected by a fund not covered by the legislation that he went around his Democratic colleagues to pass.