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Multiemployer pension deal yields hope for bipartisanship

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Just as it appeared that congressional Republicans and Democrats had given up on working together, last month's approval of legislation to prevent the certain collapse of the federal insurance system protecting benefits of millions of multiemployer pension plan participants gives hope that bipartisanship is not dead in Washington.

Rep. John Kline, R-Minn., the conservative chairman of the House Education and the Workforce Committee, and Rep. George Miller, D-Calif., the committee's ranking minority member and one of House of Representatives' more liberal members, put their differences aside to fashion a multiemployer pension plan insurance agreement that was included in a broader spending bill that lawmakers passed last month.

The catalyst for that bipartisanship was a November report by the Pension Benefit Guaranty Corp. that the agency's deficit in its multiemployer insurance program leaped five-fold in just one year to more than $42 billion.

The situation was so bleak that the PBGC projected a 90% certainty that in a little more than a decade its multiemployer insurance program agency would run out of money and be unable to pay guaranteed benefits to participants in insolvent plans.

Plan trustees will be allowed to cut participants' benefits if plans' ratio of retirees to active participants hit certain levels or if a plan becomes significantly underfunded.

But, participants will not be left high and dry. Benefits for participants age 80 and older cannot be cut.

And no matter what, benefits earned by participants in financially troubled plans cannot be reduced to less than 110% of the amount — currently about $13,000 — guaranteed by the PBGC.

To be sure, some participants could see their benefits cut due to the new law. But had Congress done nothing, more plans surely would have gone broke, with that huge benefit burden ultimately bankrupting the PBGC and resulting in participants receiving a lot less.

We hope that lawmakers' bipartisanship to prevent a disaster in the multiemployer pension plan benefit arena is just the start of a new congressional efforts to work together to fashion agreements on other needed legislation, such as changes to the health care reform law.

Given that neither party has a monopoly on good or, for that matter, bad ideas, we believe that the best legislative results can be achieved when Republicans and Democrats bridge differences and find that elusive middle ground.