“We are here today to say as loudly and clearly as we can, that we will not allow the earned pension benefits of up to 10 million workers to be cut by as much as 60 percent,” Sanders said. “Ain’t gonna happen.”
Sanders’ bill, titled the Keep Our Pension Promises Act, would reverse a provision tucked into a 2014 spending bill signed by former President Barack Obama. That amendment allowed multi-employer pension plans — those offered by multiple companies within the same industry or labor union — to be cut, subject to the approval of the Treasury Department.
Before the 2014 amendment was ratified, employers were not allowed to cut pension benefits earned by retirees. This statute was set forth in the 1974 Employee Retirement Income Security Act, which set consumer standards and protections for pension and health care plans.
Currently 150 or so plans are in financial trouble, though only one restructuring plan, affecting members of an iron workers union, has received Treasury Department approval for cuts.
Daniel Wargo, a retired iron worker from Cleveland, spoke Tuesday about how the curbed benefit plan had affected his life. After constructing bridges and buildings throughout the city for 45 years, Wargo said, his monthly pension check was recently cut in half, from $2,600 to $1,100.
“If you think of losing 60 percent of your monthly income, it’s startling, it really is. And it does happen,” Wargo said. “Our lives, our health, our homes, somewhat — you could say — flushed away.”
Companies have struggled to keep pension plans solvent amid an aging workforce and huge investment losses brought on by the 2008 financial crash. The Pension Benefit Guaranty Corp., a government agency that insures pension plans and makes payments, is also on shaky financial footing.
“The reason that many of these pension plans are in trouble today is because of the Wall Street crash of 2008, which was caused by the greed, recklessness and illegal behavior of some of the largest financial institutions in this country,” Sanders declared during the Tuesday news conference.
He added that it was not fair for Wall Street to be bailed out by the government while middle-class Americans suffered.
“If we bail out the guys who cause the crisis, we damn well protect the workers who were impacted by that,” he said.
Sanders’ plan would establish a new fund within the Pension Benefit Guaranty Corp. to shore up financial reserves. That money would come from closing two tax loopholes that benefit wealthier Americans. One of the tax provisions Sanders targets currently shields any financial gains made through the transfer of certain types of property, like artwork, from taxation.
Sanders’ bill would also ensure that pension obligations are prioritized should large companies declare bankruptcy.
Sanders’ legislation is co-sponsored by a handful of liberal senators, including Tammy Baldwin, D-Wis., Sherrod Brown, D-Ohio, and Al Franken, D-Minn. Companion legislation has been introduced in the House by Rep. Marcy Kaptur, D-Ohio.
In her remarks Tuesday, Baldwin said that last year the Treasury Department rejected a proposal to slash pension payouts to 400,000 workers represented by the Teamsters Union.
And while Baldwin applauded the 2016 decision as a win for workers, she added that “we still have to make sure that Washington starts respecting work, not just wealth.”
While the bill has not attracted any Republican co-sponsors, it has the support of a flurry of large unions and the AARP. In his remarks Tuesday, Franken sarcastically said President Donald Trump would surely support the bill, as his campaign rhetoric featured promises to protect workers.
“This is about the middle class, and I know the president will support this because he talked about workers, so this is right down his alley,” said Franken as workers in the audience snickered.
Sanders said he is optimistic about the bill’s passage.
“Brothers and sisters, this is a fight we can win,” he said. “Our job is to rally the American people around an issue of enormous consequence, all around this country. Older people are worried about what is going to happen to them when they retire. We have the people on our side — let’s bring them together, let’s win this.”
