Will President Trump put together a stimulus-bill deal with House Speaker Pelosi before the election? Whose fault is the impasse? I’ll pass on discussing the stimulus checks or even trying to decipher whether either the President or the Speaker is a brilliant strategist or a fool, or whether either is pursuing partisan politics or looking out for the common good – because it’s the entire legislative process that is failing those who urgently need help, not just the multiemployer pension plan participants of my title, whose woes I’ve been writing about repeatedly, but in the bigger picture, too.
Which means that, before I address pensions specifically, I’ll need to talk (sorry!) about the “stimulus bill”: Democrats criticize the liability protections of the Senate version, while Republicans complain that the House version spends far too much and has far too many unrelated provisions — and, indeed, scrolling through that bill, one’s eyes glaze over at the number of zeros and the number of entities to which money is allocated with the justification that it is to “offset the costs of the pandemic,” down to the Large Synoptic Survey Telescope Camera (p. 37), but it also includes $257 billion for state, territory, and tribal governments, as well as $179 billion for local governments, $208 billion for states specifically for education spending, and $32 billion for mass transit entities — a total of $676 billion for state and local governments. (Other totals I’ve seen are lower, presumably because they exclude education spending, but anyone who’s ever gotten a property tax bill — at least here in Illinois — knows that’s a massive portion of state and local government spending.)
The bill also includes $12 billion for Wi-fi hotspots and other internet connectivity tech for schools and libraries (p. 62), $15 billion for the Postal Service, $14 billion for the CDC (including $1 billion for a public awareness campaign on the importance of vaccines, p. 98), $9 billion for public health programs for substance abuse and mental health, $7 billion to states for child care programs. Public health spending includes $20 billion for vaccine research and manufacturing/purchase, $50 billion for the Health Care Provider Relief Fund, $75 billion for testing and contact tracing, $14 billion for airports, and countless other grants and appropriations.
But this is only the first Division of the bill, reaching page 264.
Are you ready for the rest? Yes, I read (OK, skimmed) through the entire text of the bill, and if you think the next paragraph is long, just try to imagine over 2,000 pages! Of course, you can just scroll through the text that follows, but even just doing this will give you some impression of just how monstrously massive this bill is.
Division B includes provisions related to student financial aid, including various program requirement waivers, student loan deferral and changes to public service loan forgiveness programs. Division C extends the CARES Act emergency leave provisions, removes its 500-employee maximum, and adds more eligibility categories and reasons, but also adds OSHA worker protection requirements, and specific worker’s compensation provisions for longshoremen and federal and post office workers. Division D revises regulations and provisions related to child abuse prevention programs, as well as providing grant money for the purpose, as well as expanding school meal programs and providing flexibility in the WIC program — plus making provisions for a study of home delivery of WIC program foods. Division E provides for additional small business funding, including more PPP loan funds and microloans. Division F is where all the money is allocated to individual Americans; of course, this includes the $1,200 per adult, $500 per child checks (that’s page 725 if you’re following along); but the bill also adds additional Earned Income Tax Credit by reducing the minimum and increasing the maximum age, and increasing the phase-out amounts for childless workers; creates an advance-payment program for the Child Tax Credit; and temporarily increases the child care tax credit to 50% of costs and increasing eligibility to higher income levels vs. prior requirements; enables full deductibility of state and local taxes from federal income tax, specifically for the year 2020; as well as provisions regarding the definition of “large employer” and other technical details. Division G (page 811!) is a series of retirement-related provisions (I’ll come back to that), and Division H are the provisions of the GROW Act for composite plans (I’ll come back to that too). Division I is the extension of the special $600 per week unemployment benefit ‘til March 31, 2021, as well as additional “clarifications and improvements” including the eligibility of parents whose children’s schools are only partially re-opened; extension of federal funding of state unemployment benefits with a requirement that states report on their backlogs; and an additional $125 per week for workers who had moonlighted as “gig” workers. Division J provides for “emergency assistance, elder justice, and child and family support” through Social Services block grants for the purpose of emergency services for the disadvantaged, including home visiting programs; elder abuse prevention programs; increased funding for foster care programs, including funds for young adults who would have otherwise aged-out of foster care assistance; the elimination of work requirements for TANF welfare programs; and the elimination of welfare penalties for failing to cooperate with establishing paternity for child support purposes, through January 31, 2021. Division K provides for increasing/extending federal Medicaid money to states, provides for covid vaccines and treatment without cost-sharing via Medicaid, Medicare and private health insurance, as well as other provisions, especially related to long-term care facilities, supply chain improvements, and testing infrastructure improvements, plus the implementation of a nationwide testing and contact tracing initiative and additional public health programs. Division L consists of veterans and servicemembers provisions, such as VA healthcare and its provision for unemployed veterans. Division M calls itself the “COVID-19 Price Gouging Prevention Act,” and prohibits prices that are “unconscionably excessive” or based on the “unreasonable” increase in prices due to the pandemic, as well as subsidizing internet service and prohibiting service cut-offs, late fees, or data limits, repealing the T-band spectrum auction, requiring “just and reasonable” phone service rates at jails and prisons. Division N contains agriculture provisions, including compensation for losses when farmers were obliged to kill their livestock due to lack of access to processing plants, funds for a “dairy direct donation” program, additional assistance for farmers, as well as increases in SNAP/food stamp benefits. Division O is the “Covid-19 HERO Act” (the all-caps is intentional; it’s Housing Economic Relief and Oversight, and you know how I feel about acronyms), which intends to provide medical equipment for “first responders and essential workers” and seems to want to improve the supply chain but, let’s face it, the text all starts to look the same at this point (page 1530) so I could be mistaken, and wasn’t this in some prior division already?; subsequently, there are rental assistance, mortgage payment , and utility payment programs, a 12-month eviction moratorium and mortgage forbearance, and grants for the homeless; as well the prohibition of reporting negative credit information to credit bureaus during the pandemic and the retroactive deletion of previously-reported items, and the prohibition of debt collection on consumer debt, including the imposition of penalty interest rates or interest on accrued interest added to the balance, for both individuals as well as small businesses and nonprofits; as well as student loan forgiveness of $10,000 for private-lender borrowers; as well as access to banking for pot-related businesses where pot has been legalized; as well as, tucked away on page 1715, in section 605, the “Real Economic Support That Acknowledges Unique Restaurant Assistance Needed to Survive Act of 2020,” in which $120 billion is appropriated to provide grant money to restaurants; plus the codification of the Minority Business Development Administration, along with $3 billion in grant money appropriated; plus the creation of new and enhancement of existing lending and community banking programs for minority communities, with $13 billion appropriated for the former purpose; plus (yes, I started this summary with one sentence per division but this is getting ridiculous) a directive for the Federal Reserve to purchase state and local bonds and extend the Municipal Liquidity Facility; plus a directive for the U.S. to vote, at any international financial institution (e.g., IMF/World Bank), in support of the suspension of debt service by any debtor nation, and in support of the issuance of $2 trillion (yes, I double-checked the number of zeroes) of further IMF lending. Whew! Next up: Division P, the American Coronavirus/COVID-19 Election Safety and Security Act, which requires each state/jurisdiction to produce a contingency plan for voting during emergencies; mandates that states permit early voting for at least 15 days; mandates absentee voting for any reason without ID or notarization/witness signature requirements, the right to contest signature discrepancy rulings or missing signatures, a guaranteed ballot if the request is made 5 days prior, the acceptance of any postmarked ballot that arrives within 10 days after the election, the establishment of ballot drop-off sites including polling places themselves, “ballot harvesting” in which an individual collects an unlimited number of voters’ ballots to drop off, and absentee ballot tracking by internet or phone; as well as prohibiting voter ID by requiring the acceptance of a sworn written statement of identity instead; mandates that all voting materials be prepaid and that voters be able to register online or on a same-day basis. Division Q gets us to airlines, or, rather, payroll support for workers, so long as the airline neither furloughs employees nor cuts their pay; in addition, this division provides for FEMA funding/benefits, and modifies/waives some graduation requirements for the United States Merchant Marine Academy and the state maritime academies. Division R is about “accountability and government operations,” the Inspector General, and the modification of census deadlines; it mandates that any federal worker or contractor employee who can telecommute, must do so until December 31, 2020; authorizes borrowing by the District of Columbia through the Municipal Liquidity Facility of the Federal Reserve Board; requires that, when the Bureau of Economic Analysis calculates the GDP, they also analyze the effect with respect to each decile income group and the top 1%. Division S includes provisions to assist overseas voting; as well as the Global Health Security Act of 2020, which includes the establishment of the Global Health Security Agenda Interagency Review Council, to promote global health security, as well as the position of United States Coordinator for Global Health Security; as well as the Securing America from Epidemics Act, which implements American involvement in the Coalition for Epidemic Preparedness Innovations. Division T addresses “judiciary matters” including filing extensions for immigration petitions as well as extensions of temporary legal status, the implementation of virtual naturalization oath ceremonies; authorization to employ individuals not otherwise legally authorized to work if their employment is deemed “critical infrastructure labor or services” such as healthcare workers, school employees, food production workers, and the like; expedited processing of healthcare green card applicants and other changes increasing immigration levels of healthcare workers; the release of individuals currently being detained by ICE “unless the individual is a threat to public safety or national security”; it requires the release of all federal prisoners above age 50, within 12 months of release, or with a covered health condition, unless they are determined to pose a specific risk of violence upon release, prohibits the use of bond for pre-trial detainees, and requires the release of juvenile offenders to guardians unless deemed likely to be violent against a specific individual; in addition, it establishes grants for states to prevent or reduce the spread of covid in jails and prisons, by releasing detainees and inmates who are not likely to target a specific person for violence or are old, young, or have health conditions, in order to bring down the size of the prison population, as well as to fund rapid covid testing and other mitigation measures; it also encourages “cite-and-release” programs for those who wouldn’t endanger some specific individual if released; further, it includes the “Jabara-Heyer National Opposition to Hate, Assaults, and Threats to Equality Act of 2020,” which would provide grants to states and cities to implement the National Incident-Based Reporting System for hate crimes and to run hate crime hotlines; and it would expand eligibility for Chapter 13 bankruptcy by more than tripling the eligible debt levels to up to $2.6 million. Finally, Division U is “other matters” and includes the presumption that any service member who becomes ill with covid will be presumed to have done so in a “service-connected” manner; the requirement that only recognized Tribal governments are eligible for Tribal-specific funds; the requirement that any entity receiving any funds in the act must ensure that energy and water service is maintained to residential customers; additional subsidies to reduce the costs for water and wastewater services for low income households; and the authorization of the prohibition of the import of additional species beyond those already listed, if it poses a risk to health. And that gets us to page 2154 and the end of the bill.
Yes, it was perhaps folly to squeeze this into a single paragraph, but that simply illustrates the madness of the bill itself.
But I promised more on the retirement components. I had written about the provisions for multiemployer plans back in May; it included a bailout for multi-employer pension plans which, while it had moved past the failed Butch Lewis Act model of low-interest loans, was still unlikely to be acceptable to Senate Republicans due to its lack of shared sacrifice. The text is exactly the same now, with no revisions to reflect those concerns. And recall that the multiemployer PBGC continues to be on track for insolvency in 2026. (Yes, the date was moved from 2025 to 2026 because of the rescue of the United Mine Workers plan in last year’s budget deal, but this has not helped other troubled plans.) The bill also would extend single-employer plans’ shortfall amortization period from 7 to 15 years (possibly not as important now that the stock market has recovered, unless it crashes again) and extend “segment rate stabilization” and add a new rate floor that mitigates the impact of today’s extremely low corporate bond rates on pension funding requirements. It would expand the RMD waivers of the CARES Act, provide special funding provisions for “community newspaper plans,” and modify regulations around whole life insurance interest rates. Plus, Division H adds the GROW Act which I’ve described in the past — an alternate means of providing multiemployer pension benefits with more flexibility.
Do you perhaps see by now why this is so maddening to me?
Let me remind readers as well of the SECURE Act, which had broad bipartisan support, but sat for more than half a year, until it was finally placed into the December 2019 budget bill and passed as a part of this bill. At the time, Sen. Mike Lee called this sort of monstrous spending bill a “dumpster fire,” and this remains true of the HEROES Act.
Whether or not you think the federal government should cut $1,200-per-citizen-adult checks, is beside the point. Are Pelosi and Treasury Secretary Mnuchin going toe-to-toe on the provisions in the bill requiring the release of federal prisoners, or the voting provisions, or the allocation of state and local money by poverty level/unemployment rather than in proportion to population? Or is this all conceded already? Heck if I know.
But — again — “second stimulus” discussions are half a year old at this point, given that the CARES Act was signed into law on March 27. The need to resolve endangered multiemployer pensions is a much older issue: I have been writing about multiemployer pensions nearly since I started writing at Forbes, and at the time, in 2018, everyone concerned about the issue was waiting for the outcome of a special congressional committee on the subject. It is now two years later; one of the most endangered plans, the miners’, was given its own special bailout but the larger problem remains the same: Republicans and Democrats are unable or unwilling to work together to find solutions broadly acceptable to all.
Again, the multi-employer pension provisions in the stimulus bill do not reflect a bipartisan agreement. And even if I’m wrong on this point and Senate Republicans do not have a strong objection, it is a failure of our system that these sorts of bills are cobbled together into this gargantuan legislation.
Perhaps at this point Democrats are waiting until January, expecting to gain more leverage to push through their plans without compromising. Again, I don’t know. All I know is that it is offensive to the 10 million participants in those plans, and the 1.3 million in “critical and declining” status plans, who risk massive cuts to their pensions, for Congress to hold them hostage, holding out for a better deal or using them for horse-trading purposes.
And the same is true, of course, for every other worthy provision being used as a bargaining chip for provisions that would otherwise be unacceptable.
As always, you’re invited to comment at JaneTheActuary.com!