U.S. House Passes Pension Bailout as Democrats Eye Union-Heavy States for 2020

(Bloomberg) -- The U.S. House on Wednesday night passed legislation to bolster failing pension funds, an issue that Democrats are hoping will help win over voters in the Midwest’s union-heavy states for the 2020 presidential election.

The bill would bail out multi-employer pension plans that are on the verge of collapse. The measure would help pension plans sponsored by several employers and managed by a collective bargaining agreement by giving loans to insolvent plans so they can continue to distribute the promised retirement benefits. The legislation passed 264-169, with bipartisan support.

The legislation (H.R. 397) is a top priority for Ways and Means Chairman Richard Neal, a Massachusetts Democrat who has been anxious to address pension security since he took over the committee this year. More than 10% of the 10 million beneficiaries of these plans won’t receive their full benefits, according to the American Academy of Actuaries.

The bill, which would aid truck drivers, iron welders, construction workers and other industries, helps bolster Democrats’ case as they look to win back Pennsylvania, Wisconsin and Michigan -- states Trump won in 2016 -- in the 2020 presidential election.

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“You need those areas to win the presidency,” said Brad Bannon, a Democratic political consultant. “There is a cloud of uncertainty hanging over blue collar, non-educated workers in those states. They are worried about the cost of health care, pensions and economic security.”

Earned Pensions

Democrats are hoping to repeat their successful 2018 midterm strategy of focusing on health care and worker benefits. By addressing pension insolvency, lawmakers are helping a group that easily draws sympathy: workers whose benefits are cut after they’ve retired.

“Who doesn’t want to protect the pensions of those who have earned them?” said Karen Friedman, the policy director at the Pension Rights Center.

Senator Elizabeth Warren of Massachusetts has made pension security a key issue in her presidential campaign. She released a plan last week that would more stringently regulate the private equity industry, requiring such firms to be responsible for the pension obligations of the companies they buy.

The legislation will now go the Senate, where Senate Majority Leader Mitch McConnell has not yet committed to addressing the bill this year.

To contact the reporter on this story: Laura Davison in Washington at ldavison4@bloomberg.net

To contact the editors responsible for this story: Wendy Benjaminson at wbenjaminson@bloomberg.net, Anna Edgerton, John Harney

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