In “No ‘tooth fairy’ for pension fund bailout” (May 18), the Star Tribune Editorial Board raised a number of issues requiring a response:
• The supposed “strong leadership” of Reps. John Kline, R-Minn., and George Miller, D-Calif.
• The supposed political fecklessness of the Treasury Department.
• The identification of Josh Gotbaum as a pension expert.
• The Pension Benefit Guaranty Corp. (PBGC) as a supposed federal safety net program.
• The previously proposed 23 percent average benefit cut in fund pensions.
• Most egregiously, the Editorial Board audaciously felt the need to inform retirees who have worked their whole careers doing physically damaging, dangerous jobs that there are no “tooth fairies.” We have become accustomed to being just so much collateral damage in this economy. But this kind of arrogance befits these decisionmakers.
On the subject of John Kline: His Multiemployer Pension Reform Act (MPRA) was literally written in the dark of night and inserted as a rider in a must-pass budget bill. It had never been debated, and almost no one knew its contents when it passed. When asked by a reporter why he had handled it that way, Kline replied: “It was the only way it would pass.” Does that reflect the standard of “strong leadership”? Kline’s leadership was strong when voting to bail out banks. Ironically, the original name of his MPRA bill was “Solutions not Bailouts.” Bank bailouts good; worker bailouts bad.
It is breathtaking how adroitly the Star Tribune has relegated Kenneth Feinberg’s decision for Treasury on the legality of the Central States plan as just so much political posturing — Feinberg being the premier mediator presently in the U.S. Feinberg presided over such mundane problems as the Gulf oil spill, TARP, 9/11, and the list goes on and on. It is hard to imagine Feinberg doing all those town-hall meetings and conference calls only to camouflage his political agenda. He does, after all, have a valuable reputation.
Tom Nyhan, director of the Central States Pension Fund, has complained that Treasury never offered to bargain over his submitted plan; perhaps Nyhan had confused a pension with a used car. When determining the fate of retirees’ economic security, one might have expected his first and best work.
Sen. Deborah Stabenow, D-Mich., has introduced the “Pension Fund Integrity Act of 2016.” It is clearly aimed at Nyhan. The bill would cut salaries of plan leaders who cut retiree benefits. Sen. Amy Klobuchar, D-Minn., is a cosponsor. These senators join a growing list of people critical of Nyhan’s leadership.
The average 23 percent benefit cut, in real terms, in our estimation is roughly 45 percent. I will not try to force you to endure the complexities. I don’t know who originally said “there are lies, damn lies and statistics,” but he must have been receiving mail from the Central States Pension Fund.
Finally, Josh Gotbaum held the top position at the PBGC until about a month before the MPRA was passed. He resigned, and then reappeared about a week after the bill’s passage at the Brookings Institution. Gotbaum has subsequently been tirelessly promoting anything that might forestall the conclusion that the private PBGC, for the purposes of multi-employer plans, has been collecting very small premiums and promising very small payouts for decades, and yet it is unable to ever begin to cover the unfunded liabilities it faces. As you might imagine, he has shown “strong leadership” in advocating that retirees should be impoverished to help make up the shortfall.
These pension problems have a long and complex history. Let’s show some leadership and resist being simplistic.
Our grass-roots pension protection groups in Minnesota have enjoyed healthy support from Democratic Sens. Klobuchar and Al Franken, as well as Reps. Rick Nolan, Betty McCollum, Keith Ellison, and Collin Peterson. They have co-sponsored legislation that seriously confronts this problem. We are optimistic that there will be an authentic debate.
Jeffrey Brooks, of Minneapolis, is a retired truck driver and chair of Minnesota Defend Our Pensions.