The Congressional Budget Office (CBO) is a federal agency within the legislative branch of the U.S. government that provides budget and economic information to Congress. The CBO was created as a nonpartisan agency by the “Congressional Budget and Impoundment Control Act of 1974” (Wikipedia).
There is a consensus among economists that “the CBO has historically issued credible forecasts of the potential impact of both Democratic and Republican legislative proposals.” The mission of the CBO is to produce “independent analyses of budgetary and economic issues to support the Congressional budget process.” Each year, the agency releases reports and cost estimates for proposed legislation, without issuing any policy recommendations. If true, why is the latest estimate of the cost of the Butch Lewis Act not being accepted as a realistic estimate?
Senator Sherrod Brown (D-OH) and Representative Richard Neal (D-MA) have said that the U.S. Congressional Budget Office (CBO) has estimated that the pension reform legislation known as the Butch Lewis Act would cost only $34 billion over the next 10 years, roughly one-third of the $100-billion figure cited in its preliminary analysis earlier this year.
This news should have inspired immediate action on the part of the members of the Joint Select Committee on Solvency of Multiemployer Pension Plans (JSC) to come to some agreement/resolution on legislation to protect these critically important pension plans. Yet, members are questioning the analysis and no legislation has been forthcoming as the time to do something is running out for the JSC.
Are our “leaders” really willing to jeopardize the retirements (and financial freedom) of so many American workers over $34 billion? The Butch Lewis Act is the only proposed legislation that provides loans, protects the PBGC, employers, and plan participants. The issuance of low-interest rate loans provides a 30-year (there may be a provision to begin repayment in year 20) lifeline to these struggling plans. The analysis by Cheiron has determined that 111 of 114 critical and declining plans will not need any PBGC support and can pay back the loan using a more modest return on asset (ROA) assumption of only 6.5%.
Without government help, these plans are doomed to failure and the social and economic toll will be startling. Can we finally stop playing politics and make saving the financial health of these participants the priority?