FARGO – Before an audience of appreciative retired truck drivers, Sen. Heidi Heitkamp, D-N.D., said Tuesday, April 3, that if their pension funds were allowed to collapse, the ripple effects could “take down our economy.”
She told the group of mostly union members at Marlin’s, a restaurant at north Fargo’s Stamart Travel Center, that she said the same thing to a congressional committee addressing the pension crisis.
Part of the reason for her warning has to do with the economic impact of millions of retirees losing their livelihoods. But small businesses are threatened also, she told The Forum, because of a rule called “last man standing” that can require them to pay so much into the pension funds that they can no longer stay in business.
Heitkamp is one of the authors of a bill called the Butch Lewis Act, named after a retired union member and Vietnam vet, that would guarantee pensioners are paid what they’re owed and provide financial stability for the pensions.
The truck drivers are among 2,000 North Dakotans and more than 400,000 Americans who have paid into the Central States Pension Fund and are worried about losing their pensions. The fund is one of the many multiemployer pension funds, which are run jointly by unions and employers.
Many of the funds are in dire financial health because they’re earning less money than they’re paying out.
Central States said on its website that deregulation of the trucking industry in the 1980s led thousands of its employers to go out of business. Federal laws require employers that remain to pay the rest of the pension obligations, meaning they must pay more, or pay a penalty to exit the fund, which many small businesses can’t afford. This is the “last man standing” rule.
Central States added that even as the number of retirees increases as baby boomers reach retirement age, the number of union members has shrunk. The recession of the late 2000s also drove down the value of the fund’s investments.
Heitkamp said that under Butch Lewis, the federal government would infuse troubled pension funds with cash and guarantee loans the funds would seek from the private sector.
Unlike a previous plan to save the pension funds, which was rejected by the Treasury Department because it would’ve slashed pension payments to retirees by half, Butch Lewis would keep payments the same.
Democrats and their union allies pushed but failed to get Butch Lewis on the 2018 omnibus spending bill, but did get a concession in the form of the House and Senate Joint Select Committee on Pensions to address the crisis.
Heitkamp is one of eight Democrats on the committee, which also includes Sen. Tina Smith, D-Minn. The other eight members are Republicans.
She told the retired truckers at Tuesday’s gathering that she will take a hard line on Butch Lewis in the committee and challenged Republicans, who have said her bill would cost too much, to come up with their own plan. She also asked the truckers to continue putting pressure on Congress to take action.
Pension reform isn’t just an “economic imperative,” she said, but a “moral imperative” for workers who worked hard, saved money and played by the rules. She said Wall Street didn’t have to stand in the back of the line to get federal help in the recession, and pensions shouldn’t either.
“I’m saying right now we're not going to nickel and dime all of you when we threw money at Wall Street,” she said.