Bill to restore Delphi pensions cruises to passage in US House
The U.S. House of Representatives has green-lit a bill that fully restores the lost pensions to some 20,000 salaried retirees of former auto parts supplier Delphi onto the Senate, where it could be considered as soon as today.
With Wednesday’s approval of the Susan Muffley Act — the bipartisan-backed bill that’s also received the endorsement of the White House, United Auto Workers, AFL-CIO and AARP — U.S. Sen. Sherrod Brown said he plans to move quickly to get the legislation on the Senate floor to try for unanimous consent, a process that fast-tracks the bill to the president’s desk.
“That’s our hope … that is the most direct way to get it into law and the quickest way,” said Brown, D-Ohio, ahead of Wednesday’s vote in the House. “That is what we hope for.”
That would happen, however, only if no other senator objects to expediting the proceeding, which would then cause the bill to follow the routine, slower route to a floor vote. In that case, 60 votes are needed for passage.
If there are no objections, the bill would move on in its House-approved form to President Joe Biden.
Brown said he would try to bring the bill to the floor today if floor time is available. If not, then early next week, he said.
One potential obstacle — a senator objecting to the concept of the government helping a private pension fund.
“There is a philosophical belief from some, and I respect that, that the government should not involve itself in things like this, but I look at what has happened in the past 15 years and the government didn’t mind stepping up on the auto bailout, didn’t mind stepping up to protect the banks, the companies themselves, but so often not the workers and not the retirees,” Brown said. “To me, this is just fair play.”
The bill would require the Pension Benefit Guaranty Corporation – the insurer of last resort for the nation’s private retirement plants – to make up the difference between the partial retirement benefits PBGC has already paid retirees and what they originally were due in one lump sum, plus 6 percent interest on the retroactive pay. The interest is to help reduce the tax burden on the lump sum.
Moving forward then, the pensioners would receive their full pension as if it were never disrupted.
House lawmakers voted 254-175 on Wednesday to approve the bill.
“Dephi salaried retirees deserve to have their pensions made whole because it was the federal government that singled these workers out. It was the federal government that stepped in to rescue General Motors, but decided to treat these workers differently and cut their earned pensions,” said bill sponsor, U.S. Rep. Dan Kildee, D-Flint, Mich. “It was the federal government, not General Motors, that directly negotiated with the PBGC. What happened to these hard-working retirees was wrong and now it’s the federal government who has the responsibility to fix the mess that itself created.”
U.S. Rep. Tim Ryan, D-Howland, also was among several Democratic, and a few Republican, lawmakers who testified in support of the bill.
“Our job here is pretty simple. We look at the field and see what is happening in the country and if some person or group of people is being wronged unfairly, it is our job to fix it,” Ryan said. “It’s not a Democrat thing, it’s not a Republican thing, not a left (or) right thing, not a free market thing or socialist thing. It’s about people. It’s about American citizens who did everything right and they showed up one day in the middle of a bankruptcy ….”
Republicans who oppose the bill called it a bailout and poor fiscal policy that sets a bad precedent. It’s reported to cost $800 million over the next 10 years and $1.3 billion over its lifetime.
Republican Congresswoman Virginia Foxx from North Carolina led the opposition, calling the bill, which, she said, did not get the consideration and scrutiny it was due without hearings or markups, “a slap in the face of fiscal responsibility.”
It could lead to pressure, she said, on Congress to top-up the remaining 5,000 terminated pension plans within the PBGC and all future terminated plans. Right now, she said, the PBGC insures more than 23,000 single-payer employer plans.
“What’s next on the docket? Should Congress roll up its sleeves and make whole every American’s 401k plan that took a few hits? Again, how about Americans who do not have a pension plan? There are many of those,” Foxx said. “Imagine the hairbrained schemes Congress could start pulling out of its hat if given this encouragement. We should be protecting taxpayers, not feeding them to the wolves. This bill is a slap in the face to fiscal responsibility.”
Ryan and the two Republican lawmakers who represent Trumbull and Mahoning counties, Dave Joyce of Bainbridge and Bill Johnson of Marietta, voted yes on the bill.
Getting even this far has been a long road for this group of Delphi retirees who’ve spent the past 13 years in a legal battle with the PBGC to try to win back the involuntarily terminated pensions when the U.S. Supreme Court declined to hear the case in January.
Delphi, formerly Packard Electric that at one time was part of General Motors’ parts division, filed for bankruptcy in October 2005 and emerged four years later. While Delphi was in bankruptcy protection in 2009, it relinquished responsibility for all its employee pensions to PBGC.
In its own government-planned bankruptcy in 2009, it was determined GM would fund fully union pensions for Delphi employees. The salaried retirees weren’t as fortunate and have argued their pensions should have been covered as well.
Some retirees lost as much as 70 percent of their pensions.