The state of Ohio doesn’t have enough money to fund its approximately 60,000 retired union workers’ pensions, WVXU-FM reported.
Democratic Sen. Sherrod Brown believes the solution is to create loans using treasury bonds to fund the pensions, but his midterm opponent, Republican Rep. Jim Renacci, said that solution is not only costly to taxpayers, but has little chance of passing Congress.
The issue could define the Ohio Senate race, and Renacci may need to present a strong solution in order to unseat his incumbent opponent in November.
What’s the problem?
The pension problem can be traced back to the economic collapse in 2007-08 that led to the Great Recession, which bankrupted numerous companies that pension funds relied on.
Nationally, the collapse negatively impacted the pension funds of more than 1.3 million people.
Now, the pension system relies heavily on the Pension Benefit Guaranty Corp., which, according to the Columbus Dispatch, is the “only thing keeping many pensions afloat.” That leaves the financial security for many retirees on relatively shaky ground.
“I heard the PBGC director say, ‘If we don’t do something, there are serious problems with PBGC overall,'” Brown said, the Dispatch reported. “That’s going to undermine pensions across the board.”
What to do?
Brown supports the Butch Lewis Act, which he introduced in the Senate in November.
The bill would “amend the Internal Revenue Code of 1986 to create a Pension Rehabilitation Trust Fund, to establish a Pension Rehabilitation Administration within the Department of the Treasury to make loans to multi-employer defined benefit plans.”
Brown tried to assure constituents that the bill “is not a handout.”
Renacci, on the other hand, is skeptical of the bill. For one thing, he doesn’t think it has a chance to get through Congress. And since the cost of the plan is unknown, that could be an issue for taxpayers.
Brittany Martinez, communications director for the Renacci campaign, issued a statement to TheBlaze on Wednesday:
Jim has met with retirees, active employees, and businesses who all want to see a lasting solution to the pending insolvency of Central States. He is committed to finding a solution to prevent insolvency that can pass Congress while protecting taxpayer dollars. Simply put, the Butch Lewis Act would not pass Congress and potentially comes at a tremendous cost to the U.S. taxpayer.