An effort to shore up troubled pension plans for many middle-class workers comes with a squishy price tag.
A bill (S 2147) by Sen. Sherrod Brown, D-Ohio, would create a Pension Rehabilitation Administration within the Treasury Department that could make loans to multiemployer pension plans for union workers. Those plans have been estimated to be underfunded by about $65 billion, endangering the retirements of about 1.5 million residents nationwide.
The Congressional Budget Office had provided a preliminary estimate several months ago saying the bill could increase deficits by more than $100 billion over the coming decade. But in a letter issued Monday, the agency walked back from that estimate a bit.
“The estimated budgetary effects are highly uncertain because several key aspects of the legislation are broadly described, making it difficult to project how the proposal would be implemented,” the CBO said in the letter to Sen. Orrin G. Hatch, R-Utah, chairman of the Joint Select Committee on Solvency of Multiemployer Pension Plans, which was created in February to recommend a solution.
Under some interpretations of bill language, the CBO said, “few plans would qualify for loans and assistance, resulting in federal costs that would be substantially less than $100 billion.”
And the bill, co-sponsored only by Democrats, leaves too many questions unanswered for a more precise budget estimate, the CBO said, including how loans would be evaluated, when financial aid payments would be made, and what interest rates would be charged. “The results of a formal cost estimate could differ substantially in either direction based on further clarification,” the agency said.
The joint select committee, which Brown co-chairs, has until Nov. 30 to come up with a recommendation on how to assist pension plans.
Democrats and labor leaders are calling attention to the pension shortfall outside the Beltway. On Friday, House Minority Leader Nancy Pelosi, D-Calif., and Rep. Debbie Dingell, D-Mich., will join Teamsters President Jimmy Hoffa in Detroit at a town hall dedicated to the topic.