Delphi pension bill stumbles
Senate objects to attempt at swift passage
Legislation that fully restores the lost pensions to some 20,000 salaried retirees of former auto parts supplier Delphi hit a Republican stumbling block Thursday in the U.S. Senate.
But the objection to U.S. Sen. Sherrod Brown’s attempt at unanimous consent — a process that expedites the course of legislation — doesn’t mean the Susan Muffley Act is dead.
Instead, it means the bill must now follow the routine, slower route to a floor vote.
And there appears to be a willingness on the part of Mike Crapo, R-Idaho, the top Republican on the Senate’s finance committee to work with fellow committee members Brown, D-Ohio, and Sen. Rob Portman, R-Ohio, toward a resolution.
What’s next, according to Brown’s office, is to find a way with Republicans to pass the bill before the end of the year.
“We’ve worked for more than a decade to restore the pensions of retired Delphi salaried workers who lost their retirement after their company went bankrupt during the Great Recession — a time when Washington bailed out Wall Street, but left too many Americans on their own. I won’t stop fighting for these Ohio workers,” Brown said.
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. PBGC took over the pensions in 2009.
The retirees also would receive 6 percent interest on the retroactive pay to help ease the tax burden.
Then, moving forward, the retirees would receive their full pensions as if they were never disrupted.
The legislation won approval in the U.S. House on July 27 by a 254-175 vote. Thirty-six House Republicans voted in its favor.
The White House also has signaled its support of the bill, as have United Auto Workers, AFL-CIO and AARP. Republican Sen. Todd Young of Indiana and Portman are the Republican co-sponsors in the Senate.
Crapo, who objected to Brown’s unanimous consent offer, and other GOP lawmakers who oppose the bill say, in part, it’s because it creates a bad precedent.
Supporters, meanwhile, say the bill is about fairness and restoring the retirement benefits the salaried retirees, including about 5,000 in Ohio, rightfully earned.
Retroactively reinstating the pension benefits for a group whose pensions have already been taken over by the PBGC “would create a bad precedent that other plans would follow,” Crapo said.
“The PBGC exists specifically to cover pension benefits if a plan is terminated, so we should let the system work. This system does not require taxpayer dollars for a bailout or whatever one would like to call it, that is part of the reason for the objection,” Crapo said.
Lawmakers, he said, also have an obligation to be deliberate on how taxpayers’ dollars are spent.
“Before we inject more money into the system, we should explore the implications of this bill … (the) finance committee has not held a hearing, not a single hearing, let alone a markup on this bill,” Crapo said. “The finance committee exists to examine proposals such as this and to provide all senators an opportunity to weigh in.”
For the group of Delphi retirees, it’s 13-year legal battle with the PBGC to try to win back the involuntarily terminated pensions ended in January when the U.S. Supreme Court declined to consider their case.
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 hourly employees. The salaried retirees weren’t as fortunate and have argued their pensions should have been covered as well.
“These people had followed the rules, they had earned their pensions the American way, through hard work and dedication and contribution,” said Portman. “But instead of honoring the promises that had been made to those salaried employees after 30, 40 years of service, the administration terminated their pensions. People who had worked hard their entire lives and played by the rules saw benefits cut by as much as 70 percent. It’s just not fair.”