WASHINGTON — The sprawling agreement to boost government spending reached by Republicans and Democrats this month quietly included a step toward defusing what could be a financial time bomb for 1.5 million retirees and hundreds of companies in the industrial Midwest and the South.
The deal creates a select congressional committee to craft what could effectively be a federal rescue of as many as 200 so-called “multiemployer” pension plans — in which employers and labor unions band together to provide retirement benefits to employees.
Many of these plans are hurtling toward insolvency in the coming decade, with benefits owed to retirees projected to swamp what the plans can afford to pay. The 16-member, bipartisan committee will have to come up with a solution and legislation by the end of November, which the full Senate would need to vote on by the end of the year.
Select congressional committees have long struggled to produce results, like one during the Barack Obama administration meant to reduce the growth of the national debt. This committee’s work will be complicated by disagreements over whether companies, retirees or taxpayers should bear the brunt of the cost for shoring up pension plans that would otherwise run out of money.
“A solution that works is going to be challenging for all parties, and that’s going to make it hard to get political buy-in,” said Aliya Wong, the executive director of retirement policy at the U.S. Chamber of Commerce, which has pushed Congress to solve the multiemployer pension problem. “The biggest issue is, where do you get the money from? Every source seems to be tapped out.”
