6 Things Every American Should Know About Congress’ Bailout for Select Coal Miners’ Pensions

Rachel Greszler / November 08, 2019

Americans lose when Congress is in the business of picking winners and losers.

Just this week, Senate Majority Leader Mitch McConnell signed onto a bill, the Bipartisan American Miners Act of 2019, that would bail out one multiemployer, or union pension plan.

This Senate bill is similar to the combination of two bills in the House—H.R. 934 and H.R. 935, the Health Benefits for Miners Act of 2019 and the Miners Pension Protection Act—that the Energy and Natural Resources Committee recently passed.

There is a lot of misleading and false reporting about what these bills would do.

Here are six things you need to know:

1. This Is a Taxpayer Bailout.  Not one penny will come from the Abandoned Mine Land Reclamation Fund. The United Mine Workers of America already uses up the entirety of the available Abandoned Mine Land Reclamation Fund for its unfunded health benefits. In 2019, the Abandoned Mine Land Reclamation Fund will provide an estimated $68 million for these benefits while taxpayers will pay the remaining $270 million for the United Mine Workers of America’s broken health care promises. Thus, every additional dollar of pension and health benefits provided to the United Mine Workers of America through this measure (up to $750 million annually) would come from taxpayers.
2. This Does Not Fix the Multiemployer Pension Crisis. The United Mine Workers of America pension plan represents less than 1% of multiemployer plans and participants and its $6.5 billion pension shortfall is roughly 1% of the entire system’s $638 billion deficit. Virtually every multiemployer plan is drastically underfunded and at risk of insolvency, but this bill would only protect benefits for one select and politically powerful group.
3. The U.S. Government Did Not Make a Promise to Coal Miners. The United Mine Workers of America and private coal companies made promises to coal miners, not the federal government. Proponents of a bailout point to the 1946 Krug-Lewis Agreement, which was established after the government stepped in to intervene in a coal strike and helped negotiate a deal between the coal companies and the United Mine Workers of America. The Krug-Lewis agreement only covered the temporary period of government control over the mines and ended once control was given back to the private owners in 1947. While the government had a role in facilitating the establishment of the health and pension funds, it did so “in broad outline” only, and specified that “the trustees shall have full authority with respect to questions of coverage and eligibility, priorities among classes of benefits, amounts of benefits, methods of providing or arranging for provisions of benefits and all related matters.”
4. This Could Lead to More Bailouts. Unless Congress wants to pick winners and losers—bailing out coal miners and probably truckers, but not steelworkers, police, or firefighters—this bailout signals what Congress will do for the other nearly 1,400 multiemployer pension plans with $638 billion in underfunding. It also signals what it will do for state and local pension plans that have an estimated $4 trillion to $6 trillion in unfunded pension promises. A comprehensive union pension bailout could cost each household in America up to $52,000.
5. One Bailout Is Never Enough. When the United Mine Workers of America first received financial assistance for its health benefits in 1992, it was temporary and limited to interest on the Abandoned Mine Land Reclamation Fund. But that was not enough, so in 2008, Congress made the assistance open-ended and provided taxpayer funds. Then again, in 2017, Congress doubled the size of the bailout to cover about 45,000 retirees. The current proposals would add at least another 13,000 retirees and add to taxpayer costs, which have already totaled nearly $2 billion for the United Mine Workers of America’s unfunded health care benefits. There is a good chance that the $750 million provided in these bills will not be enough and that this bailout would have to be expanded in the future.
6. This Bailout Does Nothing to Fix the Problem. The problems that led to this crisis are pervasive as 96% of workers with multiemployer pensions are in plans that are less than 60% funded. Yet, this bailout does absolutely nothing to fix the issue and make sure that this never happens again. If policymakers care about workers and think that employers and unions should be held accountable for the compensation they promise to workers, they would address this challenge holistically and in ways that prevent future underfunding. Instead, these pension bailouts encourage even more reckless actions, and make taxpayers liable for them.  

Congress can help coal miners as well as 10 million other workers who are at risk of losing most of their promised pension benefits by: preserving the solvency of the Pension Benefit Guaranty Corp., fixing the rules so that broken promises do not happen again, and providing tools for plans to minimize pension losses across beneficiaries.