Retired Coal Miners on Capitol Hill Push for a Fix to Pension System
A rush of retired coal miners and advocates were in Washington this week, pushing members of Congress to protect their pensions.
About 40 members of the United Mine Workers of America (UMWA) arrived on Capitol Hill Tuesday, July 23, to meet with lawmakers and voice their concerns during a congressional hearing Wednesday.
The UMWA’s pension fund is headed towards insolvency, with almost all of the coal companies that paid into the fund now bankrupt.
UMWA came to Washington to demand action and to support a bill sponsored by Rep. David McKinley of West Virginia’s 1st District, H.R. 935 – Miners Pension Protection Act.
McKinley’s bill is designed to move funds from the Abandoned Mine Reclamation Fund to the 1974 United Mine Workers of America Pension Plan in order to “pay pension benefits required under that plan if the annual limit on transfers under the Surface Mining Control and Reclamation Act of 1977 exceeds the amount required to be transferred for existing obligations.”
Levi Allen, UMWA’s Secretary-Treasurer, said the pension security for his union’s members was the result of hard bargain between coal companies and miners and involved sacrifices on part of the workers. According to Allen, miners’ pensions are not a handout, but a hard earned right.
“They gave up money on their paychecks every single payday to ensure that retirement security,” Allen said.
Rep. McKinley said during a hearing in front of the House Subcommittee on Energy and Mineral Resources Wednesday the insolvency of the pension fund was not caused by the miners, or the union, but by the government’s overreach and regulations.
Lorraine Lewis, executive director of the UMWA Health and Retirement Fund, reiterated in her testimony that the fund was and still is well managed and said that up until 2008, it was well on its way to being fully solvent.
But the country’s 2008 financial crisis paired with coal company bankruptcies that followed caused the fund’s financial struggle.
McKinley’s proposed legislation was met with some indirect opposition from the Republican party leadership.
According to earlier reporting by the Pittsburgh Post-Gazette, Republican leadership wanted to pass much broader legislation that would include other worker pension funds risking insolvency.
But apart from leaving the UMWA miners without the retirement pensions they bargained for, if not resolved immediately, the insolvency of UMWA pension fund could be the first domino to bring down others.
“Government has decided that as a backstop to failed pension plans, workers need the protection of the government, and that’s the Pension Benefit Guaranty Corporation. If the United Mine Workers fails … and we go into the Pension Benefit Guaranty fund, they [Pension Benefit Guaranty Corporation – ed.] have stated in their testimony before Congress, that they will fail. When that collapses, there is no more backstop for any other group,” Dave Hadley, a 69-yearold retired miner from Indiana, said.
When asked about why the GOP signaled an unwillingness to vote in Senate on the legislation in its proposed shape Allen said that it’s guided by ideology. “And it’s absolutely wrong,” he added.
The most common pushback takes the form of a bailout argument. Both Allen and Hadley agreed that that’s the one argument that boils the blood of any retired miner who hears it.
“If part of your paycheck is to set money aside for your pension in your older age, and you’ll forego that money today so you have it when you retire. And all you’re asking for with this legislation is just continue paying us what we were owed, what we earned, what we worked for, what we died for, and pay us back – to call that a bailout … you’re totally misrepresenting the work that we lived with and died with,” Hadley said.
The bailout argument was immediately presented to the Subcommittee by Rachel Greszler, a Research Fellow in Economics, Budget, and Entitlements at the Heritage Foundation and a minority witness.
She called the proposed legislation an “open-ended bailout without reform” to the system that, according to her, is failing due to mismanagement by the UMWA.
According to UMWA’s Allen, the fundamental injustice of the situation resides in the fact that, while retired miners are left without recourse, with the bankruptcy of their pension fund on the horizon, mining companies were saved by the bankruptcy courts.
“These bankruptcy laws, these broken laws … that were built allowed the continued extraction of that resource, and allowed the corporations who now own and mine that resource to continue making money to it,” he said of the loopholes that allowed for over $4 billion of collective debt forgiven to the coal companies that went bankrupt.
Some of the 81,500 retirees depending on the UMWA fund, like Sam Ball, a retired miner from Virginia who came up to D.C. to testify, can barely break even every month with their current benefits. He told the committee that any reduction in his income could force him to sell his house.
“I think really what it boils down to is the size of the pocketbooks and people involved, if you’re helping people with small pocketbooks, we have a whole bunch of people out there that want to call that socialism. But if you’re helping people with big pocketbooks, they call that capitalism for some reason,” said Allen.
The bill will now be scheduled for committee markups, but a date has not yet been announced.