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Hearing to Examine IANA Transition to Global Multistakeholder Community

The hearing will examine the proposed transition of oversight of the Internet Assigned Numbers Authority (IANA), a department of the Internet Corporation for Assigned Names and Numbers (ICANN) that allocates Internet IP addresses and domain names, to the global multistakeholder community.

Byrne Statement: Markup of H. J. Res. 87

Education & the Workforce Committee - Wed, 05/18/2016 - 11:10am
This resolution is about standing up for the rights of workers and employers. The Obama administration has continually put the interests of union leaders ahead of what’s best for hardworking Americans. It’s disappointing, because working families are struggling in today’s economy, which we recently heard is growing at an anemic rate of only 0.5 percent.
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.

Kline Statement: Markup of H. J. Res. 87 and H.R. 5003

Education & the Workforce Committee - Wed, 05/18/2016 - 11:00am
Today, the committee will consider two proposals as part of our ongoing efforts to promote responsible solutions to the challenges facing the American people.
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.

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"Good morning.  Welcome to today’s hearing on the Telephone Consumer Protection Act (TCPA).

"When passing TCPA nearly 25 years ago, Congress expressly sought a balanced approach that “protects the privacy of individuals and permits legitimate telemarketing practices.” 

"As a result of TCPA, a number of abusive and disruptive telemarketing practices have been significantly reduced or eliminated.  For example, companies have to maintain “do-not-call” lists and cannot make solicitation calls before 8:00 a.m. or after 9:00 p.m.

"But, TCPA is also showing its age, and there are opportunities to build on its consumer benefits while also ensuring consumers fully benefit from modern communications. "Consumers should be able to take advantage of new technologies that help them avoid falling victim to unscrupulous actors and those callers who ignore “do not call” requirements.  I doubt there is a person in this room who has not received a recorded voice on their mobile phone telling them they have won a cruise.

"We should also ensure that the FCC continues to take action against abusive and harassing practices, and has the tools it needs to bring bad actors to justice, including those operating from overseas.  We recently took a step in this direction by unanimously approving Ranking Member Nelson and Senator Fischer’s anti-spoofing legislation as part of the FCC Reauthorization Act.

"But, our discussion today is not only about policing abusive and harassing practices and stopping bad actors.  We must also acknowledge that most businesses are trying to do the right thing and play by the rules, and we need to understand whether TCPA is inadvertently hurting the good actors and consumers.

"When Congress passed TCPA, cell phones were uncommon and mobile telephone service was extremely expensive.  It made sense to have particularly strict rules about contacting people on their mobile phones. 

"Today, however, mobile phones are not only ubiquitous, they are actually smart devices that do much more than just send and receive phone calls. 

"Consumer behavior is also far different today than in 1991.  In fact, today’s consumer expectations about communications connectivity and the benefits of better contact with their doctors, schools, favorite charities, and – yes – even their lenders would be unrecognizable to Congress 25 years ago.

"More than 90 percent of Americans now have a mobile phone, and nearly half of all households in the United States are mobile-only.  These percentages are even higher for young adults.  Simply put, if you can’t reach these people on their mobile phones, you are going to have a hard time reaching them at all. 

"The balance forged decades ago may now be missing the mark, and consumers may be missing the benefits of otherwise reasonable and legitimate business practices. 

"The Federal Communications Commission (FCC) was tasked by Congress with assuring a balanced application of TCPA.  The Commission, however, has struggled to apply TCPA to a changing communications marketplace, and the agency actually seems to be creating more imbalances and more uncertainty.

"The Commission’s rules have created new questions rather than answers. 

"For example, what is an auto-dialer?  The Commission will not answer that clearly, and instead only says it is something other than a rotary-dialed telephone. 

"The FCC declared last year that it would not “address the exact contours of the ‘auto-dialer’ definition or seek to determine comprehensively each type of equipment that falls within that definition.”  Hospitals, charities, utilities, banks, and restaurants should not have to engage engineers and telecommunications attorneys in order to know if they can call their customers without being sued.

"Another example is what to do if a customer’s number has been reassigned?  While the FCC claims to have addressed this issue, companies say there is still no way to know with certainty.  What is certain, however, is that if a phone number has been reassigned and you call it more than once, you could be liable for $500 per call, even if the new party never answers. 

"TCPA litigation has also become a booming business.  TCPA cases are the second most-filed type of case in federal courts, with 3,710 filed last year alone.  That represents a 45 percent increase over 2014. 

"And the companies affected by an unbalanced TCPA may surprise you.  For example, Twitter stated the following in a filing at the FCC:

“As a result of this hyper-litigious environment, innovative companies increasingly must choose between denying consumers information that they have requested or being targeted by TCPA plaintiffs’ attorneys filing shake-down suits.  No company should be put to such a choice.”

"The cost of getting the balance wrong isn’t just burdensome litigation, it is also the cost to consumers—and to the economy—of the important consumer contact that is not being made for fear of running afoul of an ill-defined rule: 

"Text messages to let parents know about weather-related cancellations; calls to let struggling low-income households know how to keep the heat from getting cut off; calls to alert borrowers that they are at risk of defaulting on their debts and ruining their credit ratings; and follow-up calls to patients to make sure they understand their post-discharge treatment plans.

"Another specific matter that will be discussed today is the Obama Administration’s carve out to allow robocalls to mobile phones to collect debts owed to or guaranteed by the federal government. 

"The Administration used last year’s must-pass Bipartisan Budget Act as a vehicle to achieve its robocall carve out.  The Committee reached out to the Office of Management and Budget, the Department of the Treasury, and the Department of Education to testify about why the Administration has prioritized this robocall carve-out for years.  Unfortunately, the Obama Administration is not represented before us today, but we will continue to seek its input as its robocall carve-out is implemented by the FCC and as the Committee continues its oversight of TCPA.

"Ultimately, finding the right balance is essential to protecting the privacy of consumers while making sure they have reasonable access to the information they want and need, and making sure good faith business actors can reasonably assess the cost of doing business.

"We have a variety of perspectives with the panel before us and I look forward to hearing your testimony and appreciate your participation today."

Ranking Member Bill Nelson Opening Statement

Mr. Chairman, today we’re going to hear a lot about the Telephone Consumer Protection Act – and what some say needs to be changed about that law.                                   

This law is one of the preeminent and most loved consumer protection statutes we have.  And protecting consumers will be my focus here today.

There are few things that unite Americans more than their visceral dislike of robocalls.

Go anywhere in this country and ask the average consumer:  Do you want to receive more unwanted robocalls?  How about more robocalls on your mobile phone?

You may just get a mobile phone thrown at you. 

In fact, I’m quite sure most folks would love to give unwanted telemarketers a taste of their own medicine, if given the chance.

I know that I do not want any more robocalls – especially on my cell phone.

It is a sentiment that nearly all of us share.  That is why, for the past 25 years, our nation’s laws have sided firmly with consumers on this issue.

And it’s no wonder.

The number of consumer complaints about robocalls continues to increase.  The FCC receives tens of thousands of robocall complaints per month.  The FTC receives hundreds of thousands per month.

And we all have stories close to home.

One of my staff members signed up for land line service one morning, and by the afternoon – before he had even given his new number to family and friends – his phone was being flooded by robocalls.  He soon gave up the land line.

In fact, many of my friends have abandoned their land line phones for wireless only phones, in part, in order to escape the incessant robocalls. 

For most of us, our cell phone is our lifeline and our haven.  If we allow those annoying robocalls to begin freely bombarding folks’ mobile phones, where do those people go to escape the harassment? 

What happens when people start to ignore calls to their mobile phones from unknown numbers so they don’t have to hear another recording, only to miss an important call about a loved one or friend?

What about elderly and low-income Americans? Many of these consumers still subscribe to cell phone calling plans that are restricted in the number of minutes they can use per month.

Opening the flood gates to wireless robocalls to those individuals would have an immediate adverse impact, jeopardizing the lifeline those phones represent.

What about trying to drive down the road with your mobile phone ringing incessantly with robocalls?  Talk about distracted driving.  And where would it all end?

Let me, of course, acknowledge that much of Americans’ frustration with robocalls are because of fraudulent callers.  Scammers will always be a problem.  That’s why, for example, Senator Fischer and I teamed up on our bill to combat spoofing.  That’s why I also would like to see a revamped and improved Do-Not-Call list.

At the same time, I appreciate that there are legitimate business – or other – reasons to call consumers on their wireless phones.

But there is already an answer to that – just get the consumer’s consent first as businesses have been able to do since the law was passed in 1991. 

In the bubble of Washington, policy makers are often in danger of losing sight of what is in the actual best interests of consumers. 

But make no mistake:  outside this hearing room, outside the corporate boardrooms, outside the offices of defense counsel or debt collectors, the idea of allowing greater access for robocalls to consumers’ cell phones without their consent is an idea that is dead on arrival with the American people.

I want to welcome our panel for appearing before us today and look forward to your testimony.

"Job-Killer" : Chairman Chabot Pans DOL’s Final Overtime Rule

House Small Business Committee News - Wed, 05/18/2016 - 12:00am

Says Rule Threatens Success of Small Businesses and their Employees

WASHINGTON - House Small Business Chairman Steve Chabot (R-OH) made the following statement after the Department of Labor announced its final overtime rule, which will hurt small employers and their employees:

“Yet again, President Obama has chosen to ignore desperate pleas from millions of America’s small businesses and whack them with a new regulation that will result in job losses, demotions, less flexibility, lower wages, and reduced benefits for their workers. I find it particularly insulting that the Obama Administration chose to unroll this new spool of job-killing government red tape in my home state of Ohio. Small businesses in our state have been a success story and this new rule threatens that success. America’s small businesses do not want this rule and once again they will be hit worst and first to pay for Obama’s liberal legacy.”

The new rule will increase the salary threshold for federally-mandated overtime requirements for white collar workers by over 100 percent, which means that small businesses with thin margins will be forced to make hard choices – such as shifting salaried workers to hourly status, reducing hiring, and cutting workers hours – to remain economically viable. The harmful effects of the rule will hit small employers and their employees the hardest and DOL plans to update the salary threshold every three years.

The Small Business Committee has vigorously opposed the DOL overtime rule for months. The Committee has held numerous hearings and roundtables and sent multiple letters explaining to the administration the damage that will be done to America’s 28 million small businesses and other small employers as a result of the rule. Chairman Chabot is also co-chairing a special House task force on reducing regulatory burdens.


Kline Statement: Hearing on “Helping Students Succeed by Strengthening the Carl D. Perkins Career and Technical Education Act”

Education & the Workforce Committee - Tue, 05/17/2016 - 10:00am
Through the Carl D. Perkins Career and Technical Education Act, the federal government supports state and local programs designed to prepare high school and community college students for technical careers. These programs offer students the knowledge and training they need to compete in the workforce and hold jobs in a wide range of fields. In other words, they offer opportunities for young men and women to pursue a lifetime of success.

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.

GSA Introduces New Web-based Leasing Tool in Philadelphia

GSA news releases - Tue, 05/17/2016 - 12:00am
GSA Introduces New Web-based Leasing Tool in Philadelphia

GSA Announces 2nd Opportunity to Tour Sugar Grove Station

GSA news releases - Tue, 05/17/2016 - 12:00am
GSA Announces 2nd Opportunity to Tour Sugar Grove Station

Utah Federal District Court Lights Alternative Paths to Impossibility Preemption

WLF Legal Pulse - Mon, 05/16/2016 - 9:00am
Guest Commentary By Matthew A. Reed, Sedgwick LLP “Impossibility preemption,” the US Supreme Court has warned, “is a demanding defense” to a state tort claim for failure to warn about the risks of a prescription drug.  Wyeth v. Levine, 555 U.S. 555, 573 (2009).  It is not, however, impossible to prove.  Indeed, the Utah federal […]
Categories: Latest News

GSA Awards Human Capital and Training Solutions Multiple-Award Contracts

GSA news releases - Mon, 05/16/2016 - 12:00am
GSA Awards Human Capital and Training Solutions Multiple-Award Contracts

Chairman Chabot in Defense News: Look to US Small Businesses to Supply War Fighters

House Small Business Committee News - Mon, 05/16/2016 - 12:00am
Look to US Small Businesses to Supply War Fighters

By Chairman Steve Chabot (R-OH)
Defense News
May 16, 2016

For 55 years, the National Defense Authorization Act (NDAA) has been the primary way Congress meets its constitutional responsibility to “provide for the common defense.”

As a vital national security policy bill, the NDAA has always provided our war fighters with the resources they need to defend the United States from the great and varied threats we face from adversaries around the word.

However, in the face of recent drastic defense cuts, known in Washington as “sequestration,” policymakers have had to look for new ways to meet our national security needs.

As chairman of the House Small Business Committee, I firmly believe that our nation’s 28 million small businesses can play a key role in meeting these needs in this era of declining defense resources.

Very often, small companies can provide better products and services to our military, faster and at lower costs.

Congress’ ongoing effort to improve acquisition and modernize procurement at the Pentagon is particularly important to small companies because it will enable them to deliver real benefits to our war fighters.  

At a recent Small Business Committee hearing, we heard from a top official at the Office of Naval Research about two examples of life-saving technology developed by American small businesses that are now used by the US military.

“The Emergency Integrated Lifesaving Lanyard — called EMILY — is a robotic lifeguard deployed worldwide by Hydronalix, a rural Arizona company,” Robert Smith explained to our committee. “The tracking system, reconfigured as the Silver Fox Unmanned Air Vehicle (UAV), was deployed in 2007 to provide convoy protection to Marines in Iraq, saving three lives. The same basic technology package, reconfigured as EMILY, is supporting first responders throughout the US and other nations, and saving lives today in the Mediterranean Sea refugee crisis.”

Smith also pointed to Trek Enterprises’ Automated Celestial Navigation (ASN) system as another example of technology developed by a small company now used by the military.

“(ASN) provides a solution in GPS-denied environments through a fully automated star tracker for imaging individual stars both day and night to enhance navigation capability,” Smith testified. “Initially focused on Navy challenges, ASN attracted attention across the government: The result being a fellow agency ordering 15 systems, with applications in crime fighting and drug interdiction."

Success stories like these are a big part of the reason why promoting competition has been the guiding principle for defense acquisition and procurement policy.

We must allow companies of all sizes and expertise to compete for defense contracts in order to get the best possible products to the war fighter.

Contracting reforms such as those included in this year’s NDAA help us achieve this important goal for our military. They also benefit the taxpayers footing the bill, making sure they get more bang for their buck.

You don’t need to be an economist to understand that when the Defense Department has fewer offers, there is less competition, costs go up and choices are limited.

Unfortunately, we continue to see the number of companies competing for federal contracts declining, which threatens innovation and harms readiness.

Within the last three years, we have lost over 25 percent of the small firms registered to do business with the federal government.

Within the Department of Defense, the number of small business contract actions fell 47 percent from 2011, but the size of the average individual small business contract action more than doubled.

Not surprisingly, during the same period, the percentage of taxpayer dollars spent without competition has increased.

With this thought in mind, members of our committee introduced a series of bipartisan contracting bills this year.

Our committee approved these measures unanimously and we are pleased they were incorporated in this year’s NDAA, which was approved by the House Armed Services Committee by a bipartisan vote of 60 to 2 last month.

Specifically, here are five ways this NDAA helps small contractors compete:

First, it modernizes the Small Business Act to ensure clear and consistent language is used in federal procurement programs.

Second, it strengthens the small business advocates within SBA, DoD and other federal agencies, to promote competition and make sure the laws on the books, including the NDAA, are followed.

Third, it improves opportunities for small businesses to compete for subcontracts, and then to build on that experience to compete as prime contractors.

Fourth, it improves coordination between the SBA and DoD mentor-protégé programs, which help small businesses better serve our military.

Finally, this NDAA implements reforms to promote integrity and accountability in small-business programs, such as veterans contracting programs and contracting officer training programs.

This NDAA gives our troops the resources they need to defend the United States while providing meaningful contracting reforms that help our small businesses and our national security.

Rep. Steve Chabot represents Ohio's 1st Congressional District in the U.S. House where he is chairman of the Small Business Committee. He is also a senior member of the Judiciary and Foreign Affairs committees. You can follow him on Twitter @HouseSmallBiz.

Treasury's Teamsters Bailout Ploy

Education & the Workforce Committee - Mon, 05/16/2016 - 12:00am

"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.

# # #

Hearing to Examine Effects of 25-Year-Old Robocall Law on Modern Consumers and Businesses

The Senate Committee on Commerce, Science, and Transportation will convene a full committee hearing titled “The Telephone Consumer Protection Act at 25: Effects on Consumers and Business” on Wednesday, May 18, 2016, at 10:00 a.m.


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