Biggest Pension Rescue Plan in US History

Happy almost Friday! WNBA star Brittney Griner is on her way back to the United States after President Joe Biden approved a prisoner swap for convicted Russian arms dealer Viktor Bout, nicknamed the “Merchant of Death,” who had served 10 years of a 25-year prison sentence. And there’s a new royal documentary series that’s garnering lots of attention. Something something Harry. Something something Meghan. Honestly, we’re doing our best to avoid it — but, hey, that just means you’re guaranteed there won’t be any spoilers below.

Here's what we’re watching instead.

Another ‘Unnecessary, Manufactured’ Budget Crisis?

The House passed a pair of big bills today, but bipartisan talks on funding the government through the rest of fiscal year 2023 remain at an impasse, with Democrats and Republicans billions apart on proposed domestic spending. As lawmakers scramble to try to break the gridlock ahead of a December 16 deadline, when current funding will expire, Democrats are preparing to release their own spending package for 2023 on Monday in a bid to turn up the pressure on the GOP.

“Today, we are careening toward another unnecessary, manufactured crisis with current government funding set to expire in eight days,” Senate Appropriations Committee Chairman Patrick Leahy (D-VT) warned.

A brief overview of what got done Thursday and what’s still ahead:

A landmark marriage rights law: House lawmakers approved the Respect for Marriage Act, which protects same-sex and interracial marriages. All 219 Democrats were joined by 39 Republicans in supporting the landmark legislation, which now heads to President Joe Biden’s desk.

A record sum for defense: In a broadly bipartisan 350-80 vote, the House also cleared the $858 billion National Defense Authorization Act for fiscal year 2023, including a provision rescinding the Pentagon’s Covid vaccine mandate for active duty servicemembers. The massive defense policy bill now goes to the Senate, and while the White House and Pentagon have publicly opposed ending the vaccine mandate — and some military officers are privately fuming about it — there are some indications that Biden will sign it once it reaches his desk.

Democrats prepare a government funding plan: Democrats are pressing for an increase in non-defense spending in line with the big bump being provided for the military and national security. Republicans have opposed such an increase, citing the money Democrats have provided for domestic priorities through partisan reconciliation bills. Democrats counter that those bills were passed to address the pandemic and other needs, not basic annual funding for federal programs.

“Democrats agree with our Republican colleagues that inflation threatens our national security,” Leahy said Thursday. “However, non-defense programs face an equal threat and demand an equal response, and Republican inaction threatens bipartisan priorities and programs. Without an omnibus, the bipartisan CHIPS law, which will help our country compete with China, will languish. Our promise to our veterans will be broken as the bipartisan PACT Act would go underfunded and VA medical care would fall at least $7.5 billion short.”

The two sides are about $25 billion apart on non-defense funding — a small sum relative to what could be a $1.7 trillion discretionary budget. But they’ve made precious little progress in recent days.

As talks have floundered, Democrats led by Leahy and Rep. Rosa DeLauro (D-CT), chair of the House Appropriations Committee, have been drafting their own omnibus spending package to cover the full fiscal year 2023. It will provide the full $858 billion for defense called for by the NDAA. Leahy called it “fair and bipartisan,” adding that Democrats have eliminated poison pills that Republicans have found objectionable. “We firmly believe that this bill can and should earn the votes of at least 10 Republican senators,” he said.

That seems unlikely. “Our Commander-in-Chief and his party have spent huge sums on domestic priorities outside the normal appropriations process without a penny for the Defense Department,” Senate Minority Leader Mitch McConnell (R-KY) said after Leahy’s remarks. “Obviously, we won’t allow them to now hijack the government funding process, too, and take our troops hostage for even more liberal spending.”

Once Republicans reject Democrats’ proposal, Leahy said his party would then turn to a full-year continuing resolution funding the government at last year’s levels “with no adjustments for inflation and the real life consequences that entails” — an outcome that Pentagon leaders and lawmakers alike have warned would represent a blow to military readiness and aid to Ukraine.

The bottom line: Congress has until December 16 — next Friday — to pass a full-year spending plan or a stopgap extension of federal funding. Neither side wants a government shutdown. “Congress should have the ingredients for an easy year-end legislative deal,” The Washington Post’s Tony Romm reports. “But in a Capitol where nothing has been simple recently — and partisan tensions still run high — there’s a growing fear that even the politically achievable is going to be anything but.”

A short-term funding patch has long appeared to be necessary, but even that may be the subject of dispute, given that Democrats aren’t likely to go along with an extension into next year, when Republicans will control the House. Next week will be critical.

Lawmakers Still Finalizing Key Leadership Posts (Besides Speaker) for 118th Congress

Senate Majority Leader Chuck Schumer (D-NY) was formally reelected Thursday as leader of the Democratic caucus for the new Congress set to convene next month.

On the House side, Rep. Pramila Jayapal (D-WA) was reelected as chair of the Congressional Progressive Caucus. And earlier this week, Rep. Brendan Boyle was elected by House Democrats to serve as the ranking member of the House Budget Committee for the 118th Congress.

Meanwhile, House Republicans, facing some internal turmoil over Rep. Kevin McCarthy’s bid to become speaker, reportedly aren’t expected to pick the committee’s chairman until next week at the earliest, or possibly until after the January 3 vote for speaker. Three GOP contenders are also still vying to lead the powerful House Ways and Means Committee in a race that could affect the Budget leadership slot.

Biggest Pension Rescue Plan in US History

President Biden on Thursday announced the largest rescue package for a pension plan in U.S. history. The nearly $36 billion infusion for the Central States Pension Fund will mostly benefit members of the International Brotherhood of Teamsters.

“Thanks to today's announcement, tens of thousands of union retirees and workers in states like Ohio, Michigan, Texas, Minnesota, Wisconsin, Missouri, can go to bed tonight knowing their pension they worked so damn hard for is going to be there for them when they need it,” Biden said at an event attended by Teamsters President Sean O’Brien and Labor Secretary Marty Walsh.

Biden said the cash infusion would “prevent drastic cuts to workers’ hard-earned pension benefits, cuts that have been scheduled to occur within the next few years.” Analysts have projected benefit cuts as high as 60% for some participants.

Funding for the rescue plan, which the White House said will ultimately help 350,000 union workers and retirees, will come from the Special Financial Assistance Program, which was created by the $1.9 trillion American Rescue Plan Act signed into law in 2021. The program targets financially struggling multiemployer pension plans that have applied to the Pension Benefit Guaranty Corporation for assistance. Prior to the passage of the America Rescue Plan, the PBGC, a federally chartered corporation that insures pension plans, was facing insolvency as soon as 2026.

“Over the years due to changing economic trends, persistent attacks on unions, over 200 of these multi-employer plans were facing potential insolvency,” Biden said. “That meant 2 to 3 million workers, through no fault of their own — they kept their end of the bargain — faced painful cuts to the benefits they were counting on retirement.”

The new program expects to spend between $74 billion and $91 billion overall.

Republicans have criticized Biden’s efforts to boost union pension plans, charging that Democrats are simply bailing out their political allies. “PBGC’s $35.8 billion bailout of Central States, Southeast & Southwest Areas Pension Plan is a reckless use of taxpayer dollars,” Rep. Virginia Foxx (R-NC), the ranking member on the House Education and Labor Committee, said in a statement. “Throwing money at a sinking ship saves no one. Chronically underfunded multiemployer pensions have cracks in their foundations—bailing these programs out without requiring drastic reforms is irrational and irresponsible.”

• White House Warns Against ‘Disastrous Consequences’ as Congress Barrels Toward Government Funding Deadline – CNN
• Democrats in U.S. Congress Aim to Pressure Republicans With Go-It-Alone Funding Bill – Reuters
• Dems Plot Their Own Government Funding Plan as Talks Stall – Politico
• Flanked by Union Allies, Biden Touts $36 Billion Pension Bailout – Bloomberg
• House Passes Massive $858 Billion Defense Bill That Would Scrap Military Covid Vaccine Mandate – CNBC
• U.S. House Overwhelmingly Approves Bill Backing Record Military Spending – Reuters
• Rollback of Covid Vaccine Mandate Met With Furor at Pentagon – Washington Post
• Frustration Swirls in House GOP Over McCarthy Speakership Opposition – The Hill
• Ways and Means Chair Contenders Hone Closing Arguments – Roll Call
• Five Ways the Biden DOE Is Spending Big on Nuclear Energy – The Hill
• Puerto Rico Was Promised Billions for Safe Water. Taps Are Still Running Dry – Washington Post
• Yellen Unveils US Banknotes That Mark Two Historic Firsts – Bloomberg
• CDC Director Calls for Overhaul of Public Health Data Collection – Bloomberg
• FDA Approves Updated Coronavirus Shots for Young Children – Washington Post
• Face Masks May Return Amid Holiday ‘Tripledemic’ of Covid, Flu and RSV – Washington Post