Congress Considers a Pension Bailout
A new effort in Congress would bail out the woefully underfunded pension plan of the United Mine Workers of America (UMWA).
Over the years, UMWA negotiated bigger raises for its miners instead of demanding that firms properly fund their pensions. Not all mining companies followed the UMWA approach – and as a result, those other firm’s plans are very well-funded today.
The Congressional effort would redirect $490 million from mine reclamation funds to UMWA pensions. However, as noted by Diana Furchtgott-Roth in the Wall Street Journal, the law authorizing federal mine reclamation would remain on the books.
If the federal government truly wants to mend the pension funds of American miners, ending the Obama administration’s war on coal would be a good start. Through rounds of onerous regulations, the administration has driven coal-related firms out of business – costing roughly 50,000 jobs from 2008 through 2012. When mining itself goes down, the funding levels of miners’ pensions will naturally follow.
Before any kind of relief is given, Congress should insist that firms meaningfully reform their pension systems. Otherwise, a federal bailout would embolden not only private firms but state governments, cities and school districts to lobby for similar aid – further straining U.S. taxpayers, while incentivizing even more irresponsible pension fund management nationwide.