Joe Biden’s multiemployer pension plan rescue is turning into a political disaster
Programme to provide money for bailouts will start a generational war between active workers and retireesOne of the most touted components of the Biden administration’s $1.9tn American Rescue Plan was a provision to rescue “multiemployer” blue collar union-sponsored pension plans from threatened insolvency. There are about 1,400 of these plans in the US, which cover the retirement benefits for about 10.8m workers.
Now the rescue is turning into a political and financial disaster. It had been known for years that hundreds of these plans have been struggling to meet their obligations to their beneficiaries. The largest of the troubled multiemployer plans, the Teamsters union Central States Pension Fund, covers nearly 400,000 workers and retirees.
It was a case of overpromising and not delivering at all. President Joe Biden and Democratic leaders in Congress vowed to pass the Build Back Better Act (BBB), the administration’s long-stalled signature legislation, by Christmas. Instead they spent December scrambling to salvage it from complete collapse. On December 19th, Senator Joe Manchin, a Democrat from West Virginia and the crucial holdout vote, announced on television that after months of negotiation, “I cannot vote to continue with this piece of legislation… I’ve tried everything humanly possible; I can’t get there.” Whether this is a death knell for the president’s legislative agenda or just a serious setback is still to be litigated. But it is hardly the Christmas present Mr Biden wanted.