Photo credit: Jane McDonald

Here is what is happening in Congress and at the AFL-CIO regarding the connection between the United States-Mexico-Canada Agreement (USMCA) and pension legislation.

The idea of attaching the Butch Lewis Act to the USMCA was first floated by Rep. Richard Neal (D-MA), Chair of the House Ways and Means Committee, using the trade agreement as a possible “must pass” vehicle. However, there are complications with this proposal.

It should be made clear that House Speaker Nancy Pelosi, Mr. Neal, and Mr. Scott, chair of the House Education and Labor Committee, are listening closely to labor on the multiemployer pension issue. They are not moving forward with Senate proposals unless labor is satisfied, regardless of what comes to fruition after the Senate proposal is reconciled with the House bill.

A Senate White Paper, Multiemployer Pension Recapitalization And Reform Plan, authored by Senators Charles Grassley (R-IA) and Lamar Alexander (R-TN), was released on Wednesday, November 20, along with a 77-page Technical Explanation. Legal and actuarial experts at the AFM-EPF and the AFL-CIO have begun evaluating details of the plan.

Attaching the pension bill to the trade bill is problematic for several reasons. Brett Gibson, the AFL-CIO legislative representative, notes the following:

2015 Fast Track Authority requires provisions contained in the trade implementation bill . . . to include ‘only such provisions as are strictly necessary or appropriate.’
So it would be a stretch to say that Butch Lewis or any pension bill could be included in the actual implementing legislation, as they are not strictly necessary or appropriate to the trade agreement.
Another path would be to have Congress pass a pension bill, and to have the president sign it, with an agreement that once this was done, NAFTA 2.0 would be brought up for a vote. (Note: NAFTA 2.0 refers to the USMCA, which is a renegotiation of the NAFTA treaty.) This seems unlikely, as the President would have to take it on faith that the House Democrats would pass NAFTA 2.0 after he signs the pension bill.
Finally, a third option (seems the most realistic) would be for the House to vote to strip Fast Track Authority from the NAFTA implementing legislation, attach the pension bill to the implementing bill, then vote on the combined bills under regular order and send it to the Senate.

Brett notes, “I still think it was an odd connection to make and is unlikely to happen . . . but you never know in [Washington].”

In order to earn labor movement support, it is vitally important that both of the two bills have appropriate labor protections and other key factors. Speaker Pelosi is depending on our input and seal of approval on the pension legislation. Union leadership seems unwilling to sign off on one bill solely for the sake of getting another implemented; each piece of legislation must pass muster on its own merits.

It should be noted that despite that creation of a Joint Select Committee last year to work cooperatively on a solution, the pension issue has now become a highly partisan one where Republicans continue to blame union trustees for mismanaging the funds, often saying that fund trustees and administrations have broken promises to participants and retirees, and that the public should not be responsible for “bailing out” these funds because of what Republicans claim to be union malfeasance.

Republicans continue to say that the Butch Lewis Act is not the answer, because it only throws good money after bad and does not create a solution that solves the investment problem. They also believe that tying it to USMCA would make Butch Lewis a poison pill that would defeat USMCA and allegedly harm US trade. For its part, organized labor does not see USMCA in its current form as a successful trade bill without strong labor, copyright, and patent protections. Republicans have opined, using this Congressional Budget Office report as backup, that pension funds receiving loans, except for the AFM fund, would not break even nor would they ultimately be able to pay back these 30-year Treasury loans.

At this point, the ultimate success of getting Butch Lewis passed by the stratagem of tying it to trade legislation is uncertain. We at the AFM will continue to strive to obtain legislative relief, to ensure the longevity of the AFM-EPF without resorting to cuts in benefits.

Note: the author is AFM Legislative-Political Director.