The American Rescue Plan is known for its $1,400 stimulus checks, expansion of the child tax credit, aid to local governments and, most recently, possible inflation.
But the little-known portion of the huge bill provides $86 billion to help many financially troubled retirement plans.
President Biden sought to highlight that controversial provision Wednesday when he appeared at a Cleveland high school to tout a special financial assistance package from the American Rescue Plan, which is designed to support troubled multi-employer pension plans across the country, including Ohio, many of which joined unionized workers who entered the plans only to see them quickly turn to bankruptcy.
Labor Secretary Marty Walsh accompanied 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 between 2 million and 3 million workers and retirees would be spared “significant cuts” and that “every multi-employer pension plan facing recent bankruptcies and benefit cuts …… is expected to remain solvent through 2051. and many of them have lasted longer.”
Biden will speak at 3:15 p.m. ET and will be joined by Sen. Sherrod Brown (D-OH) and Rep. Marcy Kaptur (D-OH), among others. The president will discuss the Department of Labor’s recently announced final rule for the program, which will clear the way for the program’s official launch.
Supporting a fund set up decades ago to support workers in specific industries like trucking or food processing so they can develop a uniform retirement plan to move from job to job within their industry has been a longtime priority for lawmakers like Brown.
“We’re going to focus on our plan’s travel.”
A 2017 report found that there are 1,400 multi-employer pension plans in the U.S. covering 10 million people, with about 100 of those plans in “critical and declining” status.
Perhaps the most troubled plan is the Central States Pension Fund, a Midwest-based fund that covers about 400,000 Americans. Plan administrators formally filed for relief earlier this year and said the infusion would “keep Central States solvent for years to come. Analysts have predicted that about 1.5 million to 3 million workers could eventually benefit from the assistance.
According to a program tracker, it has already disbursed more than 127,000 pensions.
In a 2021 Yahoo Finance interview, Senator Brown predicted that this would help “probably 100,000 people in my state. Others, including Sen. Chuck Grassley (R-IA), blasted the provision as “just a blank check with no measures to hold mismanaged plans accountable.”
The new law has repeatedly appeared in Congress over the years as a bill called the “Butch Lewis Act,” but it has also been criticized for being included in the U.S. rescue plan because it is not related to the coronavirus pandemic.
Biden’s trip was designed to bolster support among blue-collar union workers. While Biden lost Ohio in 2020, he toppled nearby union-heavy states like Michigan, Pennsylvania and Wisconsin, defeating Donald Trump and taking back the White House for the Democrats.
In Ohio, Biden’s overall economic development efforts took a recent hit when Intel delayed the official unveiling of a $20 billion semiconductor plant in Ohio due to legislation in Washington about investing more than $52 billion in the semiconductor industry that has stalled in Congress.