Supporters of H.R. 397, the “Rehabilitation for Multiemployer Pensions Act of 2019″ bill, may have attracted enough Republican support for the bill to give the bill some hope in the Senate.
Members of the House voted 264-169 Wednesday on final passage of H.R. 397.
Democrats voted 235-0 in favor of the bill.
Republicans voted 29-168 against the bill.
If H.R. 397 becomes law and is implemented as written, it could provide about $70 billion in loans for struggling multiemployer plans over the next 10 years. Plan sponsors could use the loans to transfer responsibility for the pension obligations to private life insurers, by buying group annuities.
Sponsors of single-employer U.S. defined benefit pension plans made about $26 billion in group annuity-based pension risk transfer deals in 2018, according to the LIMRA Secure Retirement Institute.
H.R. 397 Background
House Ways and Means Chairman Richard Neal, a Democrat from Massachusetts, introduced H.R. 397 in January.
The bill, which is often called the Butch Lewis Act bill, has attracted 209 cosponsors, including nine Republicans.
The bill lets plans use the new loans to build their own plan funding portfolios but gives the sponsors strong incentives to transfer risk by buying group annuities. If eligible sponsors used most of the pension rehabilitation loans to buy group annuities, the bill could lead to private life insurers taking responsibility for providing the promised pension benefits for about 1 million plan participants and dependents.
House members hold many “procedural votes” on a major bill before actually voting on the bill.
House members voted entirely, or almost entirely, along party lines for many of the procedural votes that led up to the final vote on H.R. 397.
On the first vote, on whether to bring up the bill for debate on the House floor, Democrats voted 234-0 to bring up the bill for consideration.
Republicans voted 0-197 against bringing the bill up for discussion.
But, on the vote on final passage, about 15% of House Republicans crossed party lines to vote for the bill.
Supporters of an ordinary bill need 60 votes to bring the bill up for a vote on the Senate.
The Republicans hold 53 seats in the Senate, and the Democrats hold 47 seats. If 15% of Republicans crossed party lines to support H.R. 397, or a similar bill, in the Senate, then the bill would get 55 votes in Senate.
House Floor Debate
The House streamed video of the H.R. 397 floor debate on the web.
Democrats who talked about H.R. 397, including Rep. Frederica Wilson, D-Fla., focused mainly on the need to help people who might be hurt by the failure of multiemployer pension plans.
“This issue has no party, no race, no religion,” Wilson said. “We are all in the same boat, and we are running out of time.”
Republicans who spoke in opposition to the bill blamed the problems in the multiemployer plans on union and employer negligence.
Rep. Virginia Foxx, R-N.C., the highest ranking Republican on the House Education and the Workforce Committee, may have given bill supporters some ideas about ways the bill could be made more likely to pass.
Foxx said one big problem with the current version of H.R. 397 is that the bill sets no limits on pension risk transfer loans.
“We’re giving failed union pensions a blank check,” Foxx said.
The current version of the bill also lacks on provisions designed to improve future multiemployer plan pension funding levels, Foxx said.
Foxx also called for H.R. 397 supporters to be more open about what the bill would really cost.
The bill seems, on the surface, to be likely to add $48 billion to the federal budget deficit over 10 years, but a closer look shows it could have a price tag of hundreds of billions of dollars over 30 years, Foxx said.
The House Rules Committee site for its H.R. 397 meeting, which includes links to several versions of the bill, is available here.
The latest CBO analysis of the bill is available here.
— Read PBGC Multiemployer Pension Guarantees Are Lousy: Hearing Witness, on ThinkAdvisor.