Ranking Member Scott Applauds Biden Administration for Continued Responsible Stewardship of the Historic Special Financial Assistance Program
“This announcement shows the Biden Administration’s continued commitment to strengthening the Special Financial Assistance program (SFA) and safeguarding taxpayer dollars.”
WASHINGTON – Robert C. “Bobby” Scott (VA-03), Ranking Member of the House Committee on Education and the Workforce, issued the following statement after the Department of Labor (DOL) announced a policy to ensure that excess Special Financial Assistance (SFA) program payments can be refunded to the U.S. government. Last month, the Central States, Southeast, Southwest Areas Pension Fund (Central States) wrote to the Biden Administration and requested guidance on whether the excess payment in the amount of $127 million it received could be returned. The announced policy is intended to clear the legal pathway for Central States to return the excess payment.
“President Biden and Congressional Democrats recognized the urgency and magnitude of the multiemployer pension crisis and took historic action in the American Rescue Plan Act to solve it. The Pension Benefit Guaranty Corporation (PBGC) expeditiously and effectively implemented the Special Financial Assistance (SFA) program and took steps to improve how it was administered. This announcement shows the Biden Administration’s continued commitment to strengthening the SFA program and safeguarding taxpayer dollars.”
“Given that impacted workers, retirees, and employers reside in states represented by both political parties, one might reasonably think Congressional Republicans would have joined the effort to save constituents’ pensions and protect local businesses. Unfortunately, that did not happen. Zero Congressional Republicans voted for the American Rescue Plan Act – and some Republicans continue to criticize the SFA program even though it has saved about 775,000 pensions and approximately 3,000 businesses to date.”
BACKGROUND: When President Biden took office in 2021, the multiemployer pension system was on the verge of collapse. Many multiemployer plans were at imminent risk of failing. Making matters worse, the PBGC’s multiemployer program was projected to run out of money in just a few years. If plans failed and the PBGC’s multiemployer program became insolvent, workers and retirees would have lost nearly all their hard-earned pensions.
Unless addressed, the multiemployer pension crisis also could have dealt a serious blow to the economy as tens of thousands of participating businesses likely would have had to close or cut jobs. Further, taxpayers would have borne enormous costs as impacted retirees would have had to rely on federal assistance.
According to one estimate, the collapse of the multiemployer pension system would have cost the federal government at least $170 billion over ten years in lost tax revenue and increased spending on social programs.
In 2021, Ranking Member Scott proudly co-authored provisions in the American Rescue Plan Act– which passed without the support of a single Republican– to establish the SFA program, which to date has saved over 775,000 pensions and protected approximately 3,000 businesses.
To see the impact of the SFA program in your community, click here and here.
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