Renacci bill aims to end budgetary illusion
Bipartisan legislation introduced by U.S. Rep. Jim Renacci (R-OH) on Friday would institute clearer federal budget policies for employer-paid pension insurance premiums to the Pension Benefit Guaranty Corporation (PBGC).
Pension insurance premiums are currently included in the federal budget and are considered “on-budget,” creating the illusion that these revenues can be used for general government spending even though premiums can’t be used outside of PBGC.
Congress has increased the PBGC premiums several times in recent years, however, to offset other spending increases in the budget. In the Bipartisan Budget Act of 2015, premiums were increased through 2025 by $7.65 billion.
“We need to improve our country’s fiscal health by balancing the federal budget, and it cannot be done with accounting gimmicks,” Renacci said. “In this case, the pension premiums are being raised in order to pay for our federal programs, but in reality that revenue will only be allotted to PBGC plans. Budget gimmicks only result in contributing to our nation’s growing debt. Our commonsense, bipartisan bill promotes sound budgetary policy and helps protect the PBGC from losing vital premium contributors.”
Under the bipartisan Pension and Budget Integrity Act, H.R. 4955, which was cosponsored by U.S. Rep. Mark Pocan (D-WI), pension insurance premiums would be moved to “off-budget” to ensure that Congress only raises premiums when appropriate.
“For too long, Congress has raised pension premiums as a gimmick to balance the budget on the backs of working class Americans,” Pocan said. “This legislation will ensure that when Congress chooses to increase these premiums, it does so for the benefit of the PBGC and pension beneficiaries.”
U.S. Rep. Daniel Webster (R-FL), another cosponsor of the bill, said that technical maneuvering has been used to sway public perception of the federal budgeting process.
“Over the past few years, the PBGC has fallen victim to this distorted practice,” Webster said. “I applaud Rep. Renacci for his bipartisan legislation to eliminate this budget gimmick and join his efforts to make the federal government more transparent and accountable in their spending.”
Cosponsor U.S. Rep. John Carney (D-DE) said that the measure would protect retirement income from “congressional budget tricks.”
“Over the years, Congress has used this stunt instead of working on bipartisan solutions that would honestly deal with our spending,” Carney said. “This bill is a step in the right direction towards a more responsible way of spending.”
U.S. Rep. Derek Kilmer (D-WA), who also cosponsored the legislation, said that Americans deserve to know their retirement savings are safe.
“For too long pension premiums paid by employers have been at risk from congressional budget stunts,” Kilmer said. “Our bipartisan bill ensures that Pension Benefit Guaranty Corporation funds are not subjected to the congressional budget making process so workers can have peace of mind and we can focus on actually balancing our budget.”
Source: The Ripon Advance