Senate Republicans need to take the lead on an issue that impacts millions of retirees, businesses teetering on bankruptcy, and the economy as a whole. Right now, there is a crisis in the solvency of multi-employer pensions that fund the retirement of America’s truckers, retail employees, miners, manufacturers and service industry employees. This issue might also determine the future composition of the United States Senate and the 2021 occupant of the White House.
A multi-employer pension plan consists of the pooled assets from employees, from a variety of companies, being used to provide a defined pension plan for retirees. These plans are jointly run by unions and employers who have to comply with federal funding requirements when engaging in collective bargaining. This is a system with 10.8 million participants – all of whom are likely to vote. Their plans are now severely underfunded, and these employees and retirees are looking at Republicans and Democrats in Congress to see which party tries to solve the problem.
We have both run campaigns in swing states and understand that one issue can tip an election. The pension issue is front and center for elderly voters and may very well determine control of the Senate. Conservative Sen. Rob Portman (R-Ohio) recognizes this significance and took to the chamber floor last week to argue that Republicans are being proactive. Specifically, he talked about proposals coming from both the House and Senate, calling for his colleagues to unite around this issue: “Let’s build upon those as Republicans and Democrats to ensure we can get our multi-employer pension system back in working order.” Voters are not looking for hearings or posturing, and they will reward politicians who figure out a real solution to the issue. That problem solving may be a deciding factor this fall in who the voters in swing states trust to serve another term in the U.S. Senate.
A survey was conducted by the Retirement Security Coalition, which asked swing state voters how they feel about the issue. Pennsylvania has 493,959 multi-employer pension plan participants and 70% believe Congress must act now to ensure these plans survive. Michigan has 440,406 participants and 70% agree that multi-employer pensions are in crisis, with 72% agreeing that having a financially secure retirement is a concern. Similar numbers come from swing states with contested Senate races that may determine control of the chamber, such as Iowa, North Carolina and Georgia. In Florida, 73% of Democratic survey participants are more likely to vote for a senator who prioritizes this issue, and 57% of Republican participants feel the same way. The group also polled Kentucky, Minnesota, Ohio, and Wisconsin with similar results. After seeing this data, our conclusion is that politicians who ignore this issue do so at their own risk.
Senate Majority Leader Mitch McConnell (R-Ky.) can both save his majority and billions in taxpayer cash by addressing this issue before the elections. On Nov. 18, 2019, the Pension Benefit Guaranty Corporation (PBGC), the federal backstop for covered pension plans, put out a report that showed a “record deficit of $65.2 billion in its Multiemployer Insurance Program at the end of FY 2019.” That was before the COVID-19 crisis compromised every aspect of the economy, including the stability of retirement plans. This is an issue that makes voters nervous, and nervous voters are dangerous for the party that ignores the reason for nervousness.
Senate Republicans need to be problem solvers, because Democrats have already proposed a solution in the House-passed HEROES Act. If Senate Republicans are perceived as not engaging in this debate, the consequence may ultimately be losing control of the chamber.