House Education & Workforce Committee
Walberg Statement: Hearing on "The Administration's Overtime Rule and its Consequences for Workers, Students, Nonprofits, and Small Businesses"
With this shift, workers will have fewer opportunities for on-the-job-training and career advancement. Last year, we heard from Eric Williams, who started his career working on the line at a fast-food restaurant and then climbed the ranks to become an industry executive. He testified how the department’s action will limit the ability of hardworking men and women to achieve the same success.
Younger Americans in particular will be hurt. At a time when rising college costs and student debt are a national concern, the administration is pushing a rule that will make matters even worse. Colleges and universities nationwide—including the University of Michigan in my home state—have warned this rule will force them to raise tuition or reduce services. This rule will make it harder for young people to pursue their education, and adding insult to injury, it will be even harder for them to begin their careers.
Nonprofit organizations with tight budgets face similar challenges. Every day, in each of our districts, these organizations are making a difference in countless lives, whether helping underprivileged youth, building good homes for low-income families, or serving the needs of individuals with disabilities. We should do everything we can to support and encourage these crucial services, but as one of our witnesses will testify today, this rule will do the exact opposite.
Finally, as is often the case with the administration, this rule creates new hurdles for startups and small businesses. Many won’t be able to afford this mandate, even if they wanted to. Some will have no choice but to hold back on hiring, lay off workers, or cut back hours. To make matters worse, they’ll continue to confront a confusing regulatory maze that encourages costly litigation.The bottom line is that this rule hurts the very individuals the administration claims it will help. That’s why I introduced legislation earlier this year, along with Senator Tim Scott, to protect workers, students, nonprofits, and small businesses from the rule’s harmful consequences. Today’s hearing is the next step in our efforts.
“The answer to the welfare crisis is work, jobs, self-sufficiency, and family integrity; not a massive new extension of welfare.” Those aren’t the words of a southern, conservative Republican in 2016. Instead, those are the words of liberal, former New York Sen. Robert F. Kennedy in 1968.
Far too often when someone proposes strategies to combat poverty, they get labeled as cold-heartened or cruel. But that could not be further from the truth. Reforming our welfare programs and combatting poverty is actually about lifting people up and helping our friends and neighbors.
What is cruel is to continue the same poverty fighting strategies that have failed over the last fifty years. In 1966, the poverty rate was 14.7% percent. In 2014, after spending billions of dollars a year on a myriad of poverty programs, the poverty rate sat at 14.8%. We keep throwing more and more money at the problem but get the same results.
You see, for far too long we have treated poverty as a chronic disease that cannot be cured. We focus on ways to help people cope with poverty instead of guiding them toward a better life. In many ways, our country’s welfare programs disincentivize work and actually punish Americans who find work by immediately halting many of their benefits.
Given these challenges, I joined House Speaker Paul Ryan and some of my House colleagues in crafting a “Better Way” agenda that directly addresses poverty in the United States. This agenda attempts to get at the heart of what causes poverty and offers real policy solutions to make a difference.
My focus during the discussion was on education and helping Americans obtain the skills they need to obtain high-paying jobs they want. Education has always been the great equalizer, and it is one of the best tools we have to fight poverty.
Before coming to Congress, I was chancellor of Alabama’s two-year college system. In this role, I saw firsthand the remarkable success that can be achieved through our two-year colleges and technical schools.
There is probably no better example of how powerful job training programs are than looking at what we accomplished in our prison system. These are difficult students who face a range of challenges, but 100% of the inmates who completed our training program got a job. Even more, the recidivism rate was less than 3%. Skills training makes all the difference.
So that is at the heart of our plan: giving people the tools they need to live the lives they want to live instead of just giving them another government program.
To read more, click here.
A relentless grievance on the right is that House and Senate Republicans do zilch to rein in the Obama Administration, so it’s ironic that almost no one notices when they try. Congress recently moved to block a billion-dollar Labor Department rule, which was one of the GOP’s promises during the 2014 election campaign.
Last week the Senate voted 56-41 to prevent Labor’s fiduciary rule, which will run up the cost of financial planning by requiring brokers to act in a client’s “best interest.” Millions of low- and middle-earners with IRAs will be priced out of services except automated advice, and bad robot counsel could cost American savers $80 billion in a downturn, according to economists Hal Singer and Robert Litan.
Three Democratic Senators voted with Republicans to defend your 401(k): Indiana’s Joe Donnelly, North Dakota’s Heidi Heitkamp and Montana’s Jon Tester. Companion legislation breezed through the House last month.
The measure now goes to President Obama’s desk thanks to the Congressional Review Act, which allows the legislature 60 days to block a final rule with simple majorities in the House and Senate. The law has been getting a workout: The 114th Congress has disapproved of the Clean Power Plan; a Clean Water Act diktat; a union rule at the National Labor Relations Board; and now Labor’s fiduciary regulation. These efforts hold Democrats politically accountable for a rule’s consequences.
But President Obama promises to veto the fiduciary repeal bill, as he’s rejected every such measure. Senate Republicans won’t be able to muster a two-thirds super majority to override the President, and the fiduciary rule will likely hit this summer. Conservative muscle groups could educate their networks about this—though that would interfere with their fund-raising line that Republicans are sellouts to Mr. Obama.
To read online, click here.
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Walberg Statement: Hearing on "Promoting Safe Workplaces Through Effective and Responsible Recordkeeping Standards"
As I said at a hearing last month, we all agree that hardworking men and women should be able to earn a paycheck without risking a serious injury or being exposed to a deadly disease, and every family deserves the peace of mind that their loved ones are safe on the job. There is no one in this room who doubts the need for strong health and safety protections, or that OSHA has a role to play in promoting safe workplaces. Reducing occupational injuries, illnesses, and fatalities is a priority that crosses party lines, and stretches from the White House to the halls of Congress.
However, there are times when we share a difference of opinion in how to reach that goal. One illness, one injury, or one fatality in the workplace is one too many. That’s why, as a committee, we believe bad actors who cut corners and put workers in harm’s way must be held accountable. At the same time, the administration should work with employers to address gaps in safety in order to prevent injuries and illnesses before they occur.
We also believe health and safety policies should be created with input from the public. Employers and their employees know better than most the unique safety challenges facing their workplaces. If rules coming out of Washington fail to account for those unique challenges, or if they’re too complex and confusing to understand, they won’t deliver the protections workers need. That’s why the rulemaking process should be transparent and allow for public feedback.
Unfortunately, time and again, the Obama administration has pursued a different, more punitive approach. The majority of employers want to do the right thing. But instead of working with those employers to develop proactive safety measures, the agency is focused more on punishing everyone for the actions of a few.
As I said, employers who jeopardize the safety of workers must be held accountable. But the agency’s reactive approach does nothing to help employers understand complicated regulations, and it does nothing to achieve our common goal of preventing tragedies from occurring in the first place.
Several recent changes to OSHA’s injury and illness reporting standards are the latest example of this flawed approach, and the focus of our hearing. These new requirements significantly change who the standards apply to, what needs to be reported, and how and when OSHA must be notified. As is often the case, these changes will create additional layers of red tape—especially for small businesses with limited resources to fully understand complex safety standards. And to make matters worse, the administration has advanced these expansive changes despite broad, public concerns.
One of the most concerning requirements calls for public posting of injury and illness records online without corresponding context. This regulatory scheme designed to shame employers will do little—if anything—to advance the cause of worker safety. What it will do is make it easier for Big Labor to organize, and for trial lawyers to bring frivolous lawsuits. The agency will need to spend millions of dollars on this special interest tool, which will shift scarce resources away from proactive policies to improve safety, such as inspections and compliance assistance programs. And in the process, the agency is jeopardizing the privacy of workers’ personal information. This rule isn’t about serving the best interests of workers—it’s about serving powerful special interests at the expense of workers.
We owe it to working families to hold the administration accountable for its misguided policies and to call on OSHA to take a more responsible, effective, and collaborative approach. This oversight hearing is an important part of that effort and our commitment to protecting the health and safety of America’s workers.
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Foxx Statement: Hearing on “Demanding Accountability at the Corporation for National and Community Service”
As the head of the corporation, Ms. Spencer, you have a responsibility to ensure the federal funds you receive—which is no small sum—are being spent in full compliance with federal law. That includes policies that prohibit the use of taxpayer dollars to fund abortion activities. We’re here today because the office of your Inspector General has reported one AmeriCorps grantee, the National Association of Community Health Centers, violated the law. As of today, this organization is still receiving taxpayer funds.
More specifically, this organization—one of the largest to participate in the AmeriCorps program—allowed AmeriCorps members to engage in illegal activity by providing support services during abortion procedures. Regardless of your position on the issue of abortion, the law is the law, and it must be followed. The most recent law reauthorizing CNCS programs explicitly prohibits the use of AmeriCorps resources to “provide abortion services or referrals for receipt of such services.”
For two years, these illegal activities were allowed to continue, completely undetected by the very agency meant to oversee these programs. The investigation that began when you finally did become aware of what had happened confirmed that taxpayer funds were used to support unlawful activities, but it also revealed much more.
The Inspector General also found that several AmeriCorps members were regularly tasked with conducting work performed by employees of the centers they supported. This activity is also against the law, but the grantee failed to stop or even report it. AmeriCorps members are to serve strictly in volunteer roles and should never preform the same tasks as employees. But, again, that’s not the end of it.
It was also discovered that the grantee’s senior management chose not to inform the corporation of instances of waste, fraud, and abuse, choosing instead to undermine transparency and avoid reporting information that would make them look bad.
This disturbing list of unlawful and dishonest practices really makes you wonder: How on earth was this allowed to happen? How were these activities allowed to go on for so long? And, why is the National Association of Community Health Centers still a grantee?
When the committee learned about this unlawful activity last month, Chairman Kline immediately called on the corporation to cease all future funding of this organization. On behalf of the committee, I am renewing that call today, Ms. Spencer. I sincerely hope that you will be able to provide us with a plan of action and describe steps you are taking to address this situation.
Revoking this grant would be a good start, but it’s also important to recognize that this is not an isolated incident. In fact, I chaired a hearing back in 2011 examining reports that AmeriCorps members had engaged in other unlawful activity. In response to questioning, the head of CNCS assured us the corporation would be diligent in educating grantees, “helping them to understand the rules,” and would require “all AmeriCorps grantees to annually assure compliance with regulations on prohibited activities.” It seems that neither strategy has solved the problem.
That’s why today I am also calling on the corporation to conduct a comprehensive review to ensure all other grantees in the program are complying with the law. Enough is enough. The corporation needs to be held accountable for the way it spends taxpayer dollars, and that’s why we are here today.
As a country, we have long worked to ensure all individuals have an equal opportunity to achieve success. A quality education is one of the best paths to a brighter future, but students cannot learn and succeed in class if they are hungry or lack proper nutrition. That’s why ensuring all kids have access to nutritious meals has long been a national priority, and why I am leading an effort in Congress to help do just that.
For years, a number of programs have helped states, schools and other institutions serve children and families in need. These programs and the services they offer play an important role in the lives of millions of low-income Americans, helping to deliver healthy meals to kids who might not have them otherwise. Then, in 2010, Washington got in the way — as it constantly does in so many areas of our lives.
Rather than heed calls to continue and improve these services, a Democrat-led Congress significantly expanded the federal role in child nutrition. The result? A wave of federal rules and mandates that made it harder for schools to meet the nutritional needs of children.
These heavy-handed reforms are expected to increase school costs by more than $3 billion — an enormous amount of money that schools simply cannot afford. At the same time, overall student participation has declined more rapidly than any other time in the past 30 years. Equally troubling are concerns from nonpartisan government watchdogs regarding the waste, fraud and abuse in these programs.
As chairman of the congressional subcommittee that oversees these programs, I’ve seen firsthand the effects of these consequences in our schools, and I’ve heard from school food directors and administrators who say federal rules prevent them from providing the assistance their students need.
I’ve also worked to develop a solution that will strengthen nutrition assistance for children, families and taxpayers. This proposal—the Improving Child Nutrition and Education Act—will reform federal policies to give states, schools and local providers the flexibility they need to provide children access to healthy meals.
The bill will ensure nutrition standards reflect the input of school leaders, meet the needs of all students, and do not add new costs for schools. It will enhance the verification process to increase accountability and rein in waste, fraud and abuse. The proposal will provide states more flexibility to serve nutritious meals during the summer, especially to children in rural and low-income areas.
These are just some of the bill’s positive reforms, aimed at improving support for kids and families in need. Another example is a change to the Community Eligibility Provision. This provision allows schools to provide free meals to all students if 40percent or more of students are, among other factors, homeless, in foster care or in a family eligible for welfare assistance.
Created in 2010, this provision has provided some help to schools administering these programs, but it has also allowed taxpayer dollars to subsidize students who are not eligible for free school meals. That’s something Congress has tried to avoid since these programs were first created.
That is why my proposal would increase the threshold to 60 percent, making this provision of the law consistent with other policies affecting the school lunch program.
By improving community eligibility, we can increase the reimbursement schools receive for providing low-income children breakfast. This is the first time in more than 20 years schools would get additional assistance for serving students breakfast, and we do this at no additional cost to taxpayers.
While there is always room for disagreement, this should not be a partisan issue. Unfortunately, as is often the case when you try to change the status quo, partisan attacks are underway.
To be clear: Every child who is eligible to receive assistance today will still be eligible for assistance under our child nutrition bill. The legislation simply enables us to more effectively use taxpayer dollars and provide more help to those who need it most.
We, as Americans, have a responsibility to promote policies that spend taxpayer dollars wisely and a moral responsibility to look out for our most vulnerable children and families. The Improving Child Nutrition and Education Act helps us do both.
To read online, click here.
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Minnesota Republican Rep. John Kline and former California Rep. George Miller, a Democrat, knew there’d be blowback as architects of a controversial 2014 reform allowing failing pension funds to cut accrued benefits. To their credit, the duo plowed forward with the legislation anyway, recognizing that some hardened problems have no good or easy solutions, and that in such situations, strong leadership means identifying the least bad option.
There are few better illustrations of this than the Kline-Miller Multiemployer Pension Reform Act, a painful but necessary measure that acknowledged federal bailouts for severely underfunded pension funds are unlikely and gave unprecedented flexibility to pension funds to restructure on their own to avoid insolvency.
Unfortunately, a recent U.S. Treasury Department decision undermined the law, leaving pensioners in the sprawling Central States retirement fund for Teamsters potentially facing even more dire cuts than they would have under the Kline-Miller law. That’s a truth those celebrating the Treasury decision as a reprieve, such as Teamsters General President Jim Hoffa, need to publicly acknowledge more honestly than they have.
The Central States pension holds retirement funds for 407,000 trucking industry workers and retirees. The fund faces insolvency in 10 years. Its struggles include a shrinking trucking industry, reduced numbers of contributing younger workers, the 2008 stock market crash gutting investment income and the exit of major employers (among them: the Star Tribune, as part of its 2009 bankruptcy reorganization) that left too few employers contributing to the fund to cover its obligations.
Anger predictably ensued when Central States administrators proposed cuts for 270,000 drivers and retirees as part of their rescue plan. The average cut would have been 23 percent, though some would have been much higher. But the Treasury Department rejected the Central States restructuring and benefit cuts earlier this month, a dubious decision that seems more rooted in election year politics than the restructuring details.
Following the decision, union leaders bashed the Kline-Miller law, while Hoffa exulted about no cuts for the “foreseeable future” and promised to find a solution. The reality, however, is that rejecting the least bad option simply means that the other solutions are worse. The plan’s dire finances have not changed. And without reform, pensioners’ cuts eventually may be even deeper. If the plan does run out of cash, there is a federal safety net program called the Pension Benefit Guaranty Corp. But the PBGC has an annual payment cap of $12,870 — a sum less than the Central States fund’s average annual payout. The PBGC’s finances are also so precarious that absorbing Central States could jeopardize the PBGC itself, potentially result in this program paying out even less to all retirees depending on it.
A congressional bailout for the Central States fund, which carries the price tag of $11 billion, is an obvious way to stave off cuts. But Josh Gotbaum, a Brookings Institution pension expert, likened this strategy to believing in the “tooth fairy.’’ He said that a Democratic-controlled Congress had a chance to bail out the fund in 2010, and did not. With both chambers now controlled by Republicans, a financial rescue is even more remote. The Star Tribune Editorial Board also notes that there are dozens of other severely underfunded pension funds, and the federal government can’t afford to help them all. The debate going forward needs to honestly acknowledge the long odds of a congressional bailout for the Central States fund and what can realistically be done to preserve pensions. Anything else, Gotbaum said, is “keeping people from facing the choices they actually have.”
To read online, click here.
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Instead of focusing on ways to grow the economy and empower more Americans with opportunities to move up the economic ladder, the administration has been working around the clock to check off their Big Labor wish list. The latest example is the Department of Labor’s “persuader” rule, which radically alters long-standing policies employers must follow when communicating with their employees about union-related issues. The well-established “advice” exemption of the Labor Management Reporting and Disclosure Act has been in effect during the Kennedy administration, the Johnson administration, the Carter administration, and the Clinton administration. But now, decades later, the Obama administration is working around Congress and unilaterally rewriting the law.
As someone who has practiced labor law, I know firsthand how complicated and confusing federal labor policies are. I’m from Southwest Alabama, where we don’t have many large employers, but we have many small businesses. When faced with a union-organizing campaign, most of these small companies don’t have HR departments or in-house attorneys to turn to for advice, so they find someone like me to help them understand what the law is.
However, the invasive and costly requirements under this new rule will severely limit the ability of small businesses in Alabama and across the country to get the legal advice they need. They’ll be stripped of their confidential attorney-client relationship and lose their fundamental right to counsel, and as a result, they’ll be forced to fend for themselves. Many small businesses, despite their best efforts, will inadvertently get tripped up while trying to navigate a maze of labor rules on their own—I’ve seen this with many clients over the years who are simply trying to understand and follow the law.
If employers cannot obtain basic legal advice during union elections, many will reluctantly choose to not say anything at all to their employees. And that’s exactly what unions and the administration want under this extreme and partisan rule—to silence employers. But who loses in this environment? America’s workers do. They’ll be deprived of the information they need before they cast an important vote on whether or not to join a union. Workers will hear from union organizers, but they won’t hear the other side of the story—how this vote will impact their paychecks, benefits, and other personal matters. And again, that’s precisely what the administration and their labor allies want. They aren’t interested in fair and democratic union elections. Instead, they are interested in tilting the balance of power toward union bosses.
As Members of Congress, we don’t have to sit back while the administration tramples on the rights of employers and employees. We have the power, and the responsibility, to block this harmful rule under the Congressional Review Act. And we have a choice, to stand with Big Labor or to stand with America’s workers. I urge my colleagues to stand with America’s workers today and support this resolution.
First, we will consider a resolution to promote fair union elections by blocking the Department of Labor’s “persuader” rule. Over the years, I have often described federal labor policies as a pendulum that swings back and forth each time there is a change in political leadership in the White House. However, few could have anticipated the radical swing that has taken place under this administration.
In recent years, the administration has adopted ambush union elections that stifle employer free speech and worker free choice, rolled back disclosure rules that promote union transparency and accountability, restricted workers’ access to secret ballot elections, encouraged the spread of micro unions, and threatened to upend countless small businesses through an expansive new joint employer standard.
We are told time and again this extreme agenda will spur the economy and grow the middle class. Yet despite all the significant changes that have been imposed on our workplaces, wages remain stagnant and good-paying, full-time jobs are still hard to come by. Unfortunately, as President Reagan once said, the more the plans fail, the more the planners plan.
The latest scheme concocted by the Department of Labor is the persuader rule. This new rule abandons nearly 60 years of settled labor policies by forcing employers to disclose virtually any contact with outside legal advisors on union-related matters. This is not a minor change to federal policies, nor is it meant to provide greater transparency. The goal is to chill the right of employers to seek legal counsel, and in the process, chill their right to speak to employees on union matters.
Small businesses will bear the brunt of this regulation. They will have less access to the advice they need to navigate a host of complex labor rules and less opportunity to communicate with employees on issues facing their workplaces. But make no mistake, it’s workers who stand to lose the most. This rule will make it harder for workers to make informed decisions on issues that directly impact the health and economic well-being of their families.
I want to thank Representative Byrne for introducing this resolution. As an attorney who spent years practicing labor law, he knows better than most the challenges this rule will create for employers and employees. I’ve said repeatedly Congress should not stand by while the administration wreaks havoc on working families and small businesses, and this resolution is an appropriate response to a rule that would do just that.
The second proposal we will consider today will help improve child nutrition assistance. A lot has changed since these programs were last reauthorized in December 2010. Those who were here then will recall that a massive expansion of the federal role in child nutrition was jammed through Congress in the final days of the Democrat Majority. What had always been a bipartisan issue, descended into a partisan one.
At the time, state and school leaders warned about the negative consequences this expansive approach would inflict on their communities and schools, and those warnings have come true. The rules stemming from the 2010 law have resulted in billions of dollars in new costs while student participation has declined dramatically. The vast majority of schools may be in compliance with these new rules, but that doesn’t mean it’s been easy or without cost or that it’s having its desired effect.
This legislation promises a more responsible approach. The bill includes reforms that will strengthen the WIC program, help rein in waste, fraud, and abuse, and provide more flexibility to states to better serve families during the summer months. I want to applaud Representative Rokita, the chairman of the K-12 subcommittee, for introducing the legislation. I know he will describe in greater detail the reforms in the bill; however, I want to discuss two important areas.
The first area is standards. The legislation requires the Department of Agriculture to review every three years federal meal pattern and nutrition standards. This review must be based on sound science and include the participation of school leaders. Any resulting standards must reflect the needs of all students and not result in higher costs or fewer students being served.
The health and science communities are constantly expanding—and changing—our understanding of nutrition. In fact, Politico recently reviewed the “shifting science on sodium,” and highlighted a study published in the Journal of the American Medical Association that found the government’s recommended sodium levels may increase the risk of death. If experts in the field are changing their views on nutrition, federal standards should change as well.
The second area I want to touch on is community eligibility, which allows federal dollars to subsidize students who are not eligible for assistance. When that happens, we have fewer resources for those who truly need help. That’s why the bill makes a modest change to this provision to better target taxpayer resources, while ensuring every child who is eligible for assistance can receive assistance.
Because of this and other commonsense reforms, we are able to increase the federal reimbursement in the breakfast program. This is the first time in more than 25 years schools will receive a greater reimbursement in the breakfast program—making sure the neediest kids don’t start their day hungry—and we do it at no additional cost to taxpayers. That’s what’s possible when we make smart investments in these programs.
I challenge my colleagues to ask your school leaders if they would welcome greater flexibility in these programs; ask them whether they would welcome a seat at the table when it comes to the standards imposed on their schools; and ask them if they would welcome more federal support in serving a healthy breakfast to their students. Providing all children access to healthy meals is a vital priority of both Republicans and Democrats. Children cannot succeed in the classroom if they are hungry or malnourished. That’s why I urge my colleagues to help improve our investment in child nutrition assistance by supporting this legislation.
Kline Statement: Hearing on “Helping Students Succeed by Strengthening the Carl D. Perkins Career and Technical Education Act”
This is an important conversation to have now because an anemic economy has made good-paying jobs hard to come by. In fact, today, millions of Americans are struggling to find employment, and millions of others who need full-time jobs can only find part-time work. For young people entering this kind of job market, having the right skills and experience is essential.
Career and technical education programs can provide these critical tools, and we have to ensure federal support for these programs is delivered in the most efficient and effective manner possible. As we have learned in recent years—through hearings and other activities—there are certainly opportunities to improve the law. This is an important area where Republicans and Democrats should work together to deliver reforms that will strengthen support for all Americans, but particularly young Americans.
That collaboration is exactly what happened in 2014 with the bipartisan Workforce Innovation and Opportunity Act. We worked together to help put Americans back to work by improving an outdated and inefficient job training system. Last year, a similar commitment to finding common ground guided our efforts to improve K-12 education. The result was the Every Student Succeeds Act, a law that empowers parents, teachers, and state and local leaders to deliver the quality education every child deserves.
It’s time we applied the same approach to strengthening career and technical education. But more importantly, we need to apply many of the same principles reflected in our efforts to improve K-12 education and workforce development. What does that mean in practical terms?
It means empowering state and local leaders to innovate and respond to the unique economic and education needs in their communities. They know better than anyone—certainly better than any of us in Washington—what it takes to meet the needs of their students, workers, and employers.
It means equipping students with the skills they need for today’s in-demand jobs—not the skills that were needed in yesterday’s workforce. We have to make sure federal resources are aligned with the needs of the local workforce and the demands of new and emerging businesses.
It also means strengthening transparency and accountability, providing parents, students, business leaders, community stakeholders, and taxpayers the information they need to hold their programs accountable. It isn’t good enough for students to simply complete a program; once they’ve done so, they should be ready to further their education or pursue a good-paying job.
Finally, it means ensuring a limited federal role. Restricting the federal government’s ability to intervene in matters that should be left up to the states will enable state and local leaders to spend less time meeting the demands of Washington and more time meeting the needs of people in their local communities.
These are the kinds of reforms that we know work; the kinds of reforms that will help students succeed in the classroom and in the future. For many individuals, entering the workforce can be scary enough on its own. For the young men and women entering today’s workforce, a slew of technological advances, global changes, and economic challenges make finding a good job even more daunting.That’s why it’s so important for us to continue working together to ensure students have what they need to achieve success. Strengthening career and technical education should be the next step in that important effort.
"In sum, the Obama Administration is flouting a law that President Obama signed in a way that jeopardizes worker pensions while dumping the problem on taxpayers."
Congress passed legislation in 2014 to help insolvent multi-employer pension plans save themselves. But now the Obama Administration and Teamsters are enabling a giant taxpayer bailout that Congress sought to prevent.
This month Treasury Department Special Master Kenneth Feinberg blocked the Central States Pension Fund’s plan to use a 2014 law that allows declining multi-employer pension plans to cut benefits within limits. Mr. Feinberg cited technical shortcomings in the Central States plan, but the rejection defies Congressional intent and will put pensioners at greater risk.
Central States, which covers about 400,000 Teamsters workers and retirees, is paying $3.46 in benefits for every dollar the fund takes in due to employer withdrawals and aging demographics. Under optimistic actuarial assumptions, the plan will go broke in the next decade and take down the Pension Benefit Guaranty Corporation with it. The PBGC’s multi-employer program is already running a $52 billion deficit.
The PBGC insures about 1,400 multi-employer pension plans for 10 million workers. Hundreds of thousands of retirees who draw pensions from the PBGC would then receive less than 10 cents on the dollar. The maximum PBGC annual guarantee for retirees who have worked 30 years is $12,870, so most pensioners would get less than $1,000 a year.
The 2014 law gave endangered pension plans broad discretion to pare benefits so long as retirees wouldn’t get less than 110% of their PBGC guarantee. Retirees over the age of 80 and disabled pensioners must be held harmless. The law also protects employers like UPS that paid their withdrawal liability and agreed to offset future benefit reductions for their workers.
The average pension reduction would be about 22.6% under the Central States rehab plan. However, nearly half of plan participants, including 12% who are covered by the UPS “make-whole” agreement, wouldn’t be affected. Active-worker accruals would be reduced by 25%. Benefit cuts would be capped at 50% for all members and 40% for a protected UPS class.
Treasury is required to approve benefits cuts if the plan sponsor’s assumptions aren’t “clearly erroneous.” Yet Mr. Feinberg quibbles that the Central States actuarial assumptions, including its 7.5% projected investment return, are too optimistic. This may be true, but a lower rate would require much larger benefit cuts. Mr. Feinberg also complains that cuts aren’t “equitably distributed” since UPS beneficiaries not covered by a make-whole provision in a 2007 collective-bargaining pact get worse treatment than those who are. But this is allowed under the law.
The nit-picking suggests that Treasury was looking for a pretext to reject the Central States plan. Mr. Feinberg insists he came to “the right result under the law.” But he adds that 137 Congress Members—many of whom voted for the law—exhorted him to reject the plan. They warned him “that if I follow the clear requirement of the law and go through with the cuts, this would be an outrage.”
Mr. Feinberg further argues that it’s likely too late to save Central States without much larger cuts that may violate the law and would cause a political ruckus—namely for Democrats. The Obama Administration doesn’t want to be blamed for allowing benefit cuts. So Treasury is punting the multi-employer pension crisis to the next Administration and Congress, which it hopes will supply a bailout.
Treasury Secretary Jack Lew gave the bailout game away when he told Congress in a letter this month that, “Central States may choose to reapply and propose even larger cuts” but “we urge Congress to consider carefully the issues” and “work together to preserve the promise of retirement security.” Saving Central States with benefit cuts becomes harder each day, so Mr. Lew is trying to make a taxpayer rescue a fait accompli.
Central States has already asked Congress to cover its $11 billion shortfall. Bernie Sanders has sponsored a bill to bail out the fund and other insolvent multi-employer plans. In sum, the Obama Administration is flouting a law that President Obama signed in a way that jeopardizes worker pensions while dumping the problem on taxpayers.
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This crisis has led to a number of painful consequences for individuals and families across the country, but few are as tragic as those suffered by infants born to parents struggling with an opioid addiction.
As is often the case with addiction, the parents’ struggle affects those around them, including their newborns. In fact, according to a recent Reuters investigation, more than 130,000 babies born in the United States in the last decade entered the world addicted to drugs.
The Reuters report described the pain suffered by newborns going through withdrawal and told the stories of infants who actually lost their lives because of a terrible addiction.
Many of the stories are too disturbing to even mention, but perhaps even more disturbing than the details is the fact that these deaths should have been prevented.
Current policies—including the Child Abuse Prevention and Treatment Act—are meant to prevent these tragedies from ever happening. The law is simple: if a state wants to receive federal funding, then the state has to provide some basic assurances about their child welfare policies, and the Department of Health and Human Services has a responsibility to ensure those policies are actually in place.
But as we now know all too well, this important federal law is not being properly followed and enforced.
Earlier this year, I sent a letter to the Department of Health and Human Services to better understand how it works with states to ensure they are meeting current child welfare requirements.
Not surprisingly, the department passed the buck and suggested recent changes to the law somehow absolve them from their enforcement responsibilities—a disappointing response, to say the least.
Fortunately, thanks to the work of Representatives Barletta and Clark, we’re here today to consider our response to this preventable problem: the Infant Plan of Safe Care Improvement Act.
I appreciate their leadership in developing a bipartisan bill that will require the department to do its job and assist states in their efforts to prevent and respond to child abuse and neglect.
I urge my colleagues to support this important legislation and to help ensure the most vulnerable victims of the opioid epidemic receive the help and care they desperately need.
These are the victims the Infant Plan of Safe Care Improvement Act will help protect.
Federal policies—including the Child Abuse Prevention and Treatment Act, or CAPTA—have long supported state efforts to identify, assess, and treat children who are victims of abuse and neglect.
The law provides states with resources to improve their child protective services systems if they assure the Department of Health and Human Services that they have put in place certain child welfare policies. For example, requiring health care providers to notify child protective services agencies when a child is born with prenatal illegal substance exposure and requiring the development of something known as a “safe care plan” to keep these newborns and their caregivers healthy and safe.
Last year, a Reuters investigation examined the care infants receive when they are born to parents struggling with opioid addiction. The investigation detailed the heartbreaking consequences those infants had to endure—consequences like suffering through the physical pain of withdrawal, and in the most shocking cases, terrible deaths.
It’s hard to imagine stories like these could be any more tragic. Unfortunately, they are—because they should have, and in many cases, could have been prevented. As Reuters revealed, HHS is providing federal funds to states that do not have the necessary child welfare policies in place. In short: the law is not being properly followed and enforced, and some of our most vulnerable children and families are slipping through the cracks.
That’s why Representative Clark and I worked with a number of our colleagues on both sides of the aisle and introduced the legislation before us today. This bill requires HHS to better ensure states are meeting their legal responsibilities when it comes to preventing and responding to child abuse and neglect.
Through a number of commonsense measures, it strengthens protections for infants born with illegal substance exposure, improves accountability related to the care of infants and their families, and ensures states will have best practices for developing plans to keep infants and their caregivers healthy and safe.
As the House works this week to fight the opioid epidemic destroying communities and lives across the country, these are commonsense reforms we should all embrace. By working together and advancing this legislation, we can help ensure these children, mothers, and their families have the help they need and the care they deserve.