Biden travels to Ohio to highlight $86 billion for troubled retirement plans
The American Rescue Plan is best known for its $1,400 stimulus checks, expanding the Child Tax Credit, aid to local governments, and more recently, possibly contributing to inflation.
But a lesser known portion of the massive bill sent $86 billion to help many financially troubled retirement plans.
President Biden is attempting to highlight that controversial provision Wednesday, appearing at a Cleveland high school to tout the American Rescue Plan’s Special Financial Assistance program, which is meant to shore up troubled multi-employer pension plans across the country, including Ohio, where many unionized workers entered into the plans only to see them quickly veer towards insolvency.
Secretary of Labor Marty Walsh is accompanying the president and said in a tweet that the law “will protect millions of workers in multi-employer pension plans.”
A White House official noted that 2 million to 3 million workers and retirees will be spared “dramatic cuts” and that “every multi-employer pension plan that faced near-term insolvency and benefit cuts ... is projected to remain solvent through 2051, and many of them for much longer.”
Biden will speak at 3:15 p.m. E.T. and be joined by Sen. Sherrod Brown (D-OH) and Rep. Marcy Kaptur (D-OH), among others. The president is set to discuss the Department of Labor's recently announced final rule for the program which will clear the way for the program to begin in earnest.
Shoring up the funds, which were set up decades ago to support workers in specific industries like trucking or food processing to allow them have unified retirement plans that would follow them from job to job within their industries, has been a long-time priority for lawmakers like Brown.
'We’re going to be focusing on the trip that we have planned'
A 2017 report found that there were 1,400 multi-employer pension plans in the U.S., covering 10 million people, with around 100 of the plans in "critical and declining" status.
Perhaps the most prominent of the distressed plans is the Central States Pension Fund, a Midwest-based fund that covers around 400,000 Americans. The administrators of the plan formally put in their application for relief earlier this year and say the infusion will “allow Central States to remain solvent” in the years ahead. Analysts have predicted that somewhere between 1.5 million and 3 million workers may end up benefiting from the aid in total.
According to a tracker for the program, it has already doled out money to save over 127,000 pensions.
In a 2021 interview with Yahoo Finance, Sen. Brown predicted it would help “probably 100,000 people in my state.” Others, including Sen. Chuck Grassley (R-IA), have blasted the provisions as a “just a blank check, with no measures to hold mismanaged plans accountable.”
The new law, which had bounced around Congress for years as a bill called the Butch Lewis Act, has also been criticized for its inclusion in the American Rescue Plan since it had little to do with the coronavirus pandemic.
Biden’s trip is a bid to shore up support among blue-collar union workers. While Biden lost Ohio in 2020, he flipped nearby union-heavy states such as Michigan, Pennsylvania, and Wisconsin to defeat Donald Trump and reclaim the White House for Democrats.
In Ohio, Biden's overall economic development efforts suffered a blow recently when Intel delayed the formal unveiling of for $20 billion semiconductor factory in Ohio as legislation in Washington to investment more than $52 billion in the semiconductor industry stalled in Congress.
Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.
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