Congress Hashes Out $1 Trillion Spending Bill at Expense of Pensioners

Pension Cuts of Retirees
A program assistant at an adult care center helps her elderly patient. Cuts in cost-of-living adjustments impact retirees, making it more of a challenge to pay for health care services. (Justin Sullivan/Getty Images)

Congress may have a $1 trillion spending bill to keep the government funded before Thursday's deadline, but there is a controversial provision in the bill that could derail its passage and shut the government down.

House and Senate negotiators reached a deal on the $1 trillion spending package that would fund the government for the full fiscal year except for the Department of Homeland Security, which will be funded through early next year, according to Susan Davis of USA Today. However, Michael Fletcher of The Washington Post reported that there was a measure in the bill that would alter 40 years of federal law and could affect millions of workers.

"If passed, the change would apply to multi-employer pensions, where a group of businesses in the same industry join forces with unions to provide pension coverage for employees," Fletcher wrote. "The plans cover some 10 million U.S. workers."

Fletcher wrote that there are about 1,400 multi-employer plans, many of which remain in good fiscal health. However, as many as 200 multiemployer plans covering 1.5 million workers are in danger of running out of money in the next two decades, with some of those plans in such bad shape that they might reduce pensions for retirees.

"We have to do something to allow these plans to make the corrections and adjustments they need to keep these plans viable," said Rep. George Miller (D-Calif.).

According to Michael Hiltzik of the Los Angeles Times, the congressional proposal allows trustees of those plans to slash benefits sharply for retirees to give the plans a longer lease on life. Active workers and retirees would have to conduct a vote of approval first before that could be done.

Retirement security advocates such as AARP are outraged by the proposal. They argue that allowing cuts to plans paves the way to trims for other retirees later along with pitting workers against retirees.

"After a lifetime of hard work to earn their pensions, retirees don't deserve to receive a bad deal, in which they have had no say, cut behind closed doors and secluding the very people who would be impacted the most," said Joyce Rogers, a senior vice president for AARP.

However, some unions and retirement fund managers reluctantly supported the idea of cutting benefits, noting that it was the only way to save pensions in plans that could run out of money. Randy G. DeFrehene, executive director of the National Coordinating Committee for Multiemployer Plans, released a statement defending the agreement hashed out by Congress.

"This bipartisan agreement gives pension trustees the tools they need to maintain plan solvency, preserves benefits for the long haul, and protects the 10.5 million multiemployer participants," DeFrehne said. "With time running out on the retirement security of millions of Americans, moving this bipartisan proposal forward now is not only timely, but necessary."

Rep. John Kline (R-Minn.) argued that many of the affected pension plans are within a few years of insolvency.

"We could push now and get this done," Kline said, "or kick the can down the road and lose weeks and months. For some plans, their financial situation gets worse constantly."

Both Kline and Miller argued that there would be protections for retirees who are disabled or older than 75. However, the Los Angeles Times noted that both congressmen offered few specifics beyond a "sketchy fact sheet."

According to the Washington Post, retired Ohio trucker Whitlow Wyatt, 70, had a $3,300-a-month pension in 2000 after working more than 33 years as a long-haul driver. His pension could face reductions of 30 percent or more if Congress passes this provision.

"We thought our pension was secure," Whitlow said. "That was always the word. Now they are changing that."

The Los Angeles Times reported that the pressure for the last-minute provision apparently came from the trustees of some plans. Under ERISA, the 1974 law that governs private sector pensions, benefits already earned by a worker cannot be cut.

    Most Popular
  • Is 'The Last Supper' worth watching? Audience and critics weigh in

    Is 'The Last Supper' worth watching? Audience and critics weigh in

    Faith-based films often receive mixed reactions, and The Last Supper is no exception. The movie attempts to bring a fresh perspective to one of the most iconic moments in Christian history, but does it succeed? Some reviews from critics and audiences provide insight into its strengths and shortcomings.

  • ‘The Chosen’ Season 5: The darkest season yet—What to know before watching

    The wait is over—The Chosen is back with its fifth season, and this time, things are getting intense. The new episodes dive straight into the final days of Jesus’ life, covering some of the most emotional and dramatic moments in the Bible. If you’ve been following the series, you already know that The Chosen isn’t just about retelling familiar stories—it’s about bringing them to life in a way that feels real.

  • Massacres in Syria: Over 1,000 dead, including Christians and Alawites

    Syria’s coastal regions have been devastated by a series of massacres, with reports indicating that over 1,000 people—many from Christian and Alawite communities—have been killed in brutal attacks. Entire families have been wiped out, and survivors are fleeing in search of safety as sectarian violence escalates.

  • Kim Sae-ron and Wheesung: The tragic irony of Korean society and the principles of happiness

    Not long ago, the media was in an uproar over actress Kim Sae-ron’s passing. Just months before, the same people who had relentlessly criticized her for her DUI incident were now expressing sympathy, saying, "The world was too harsh on her." The irony is impossible to ignore.

  • Newsboys move forward as a quartet after Michael Tait’s departure

    After more than a decade as the lead singer of the Newsboys, Michael Tait has officially parted ways with the band, marking a significant shift in the Christian rock group’s lineup. The remaining members—Jeff Frankenstein, Jody Davis, Duncan Phillips, and Adam Agee—have assured fans that they will continue forward, embracing a new season of music and ministry.