Cantwell: Americans are frustrated ‘because we bailed out the Big Banks and everyone’s 401K and pension took it on the chin’

Senator calls for solutions for the pensions Americans depend on for retirement security

WASHINGTON, D.C.  – In a hearing of the Senate Committee on Finance, U.S. Senator Maria Cantwell (D-WA) today called out the fact that the federal government spent billions to bail out Wall Street while leaving millions of pensioners with the prospect of unprecedented and huge cuts to their benefits. The hearing examined the challenges faced by workers, retirees, employers, unions and taxpayers as multiemployer pension systems and the Pension Benefit Guaranty Corporation’s strive to remain solvent.

“People want to know why there’s frustration in America now and I can tell you why: because when the recession hit we bailed out the Big Banks and everyone’s 401(k) and pension took it on the chin,” said Senator Cantwell in today’s hearing. “Now people are left with long term retirement instability and yet we gave billions to [the Big Banks] and now they are making billions. So people want to know what are we going to do to make sure that Americans who lost their retirement security are secure for the future. We owe it to retirees to correct this and not just leave Wall Street with all the cash.”

Earlier today, Cantwell, joined by her democratic colleagues on the Committee, sent a letter to Finance Committee Chairman Hatch calling for bipartisan action to help ensure hard working Americans can count on the pensions they have earned for economic security in retirement.  

The multiemployer pension system is in a state of crisis as hundreds of plans are dramatically underfunded and others are looking to cut pensions for retirees and current employees.  The largest of the underfunded plans, the Teamsters Central States Pension Fund, filed an application under the Multiemployer Pension Reform Act to cut the pensions of approximately 300,000 retirees and terminated employees, and future pensions of almost 70,000 current employees.   

Witnesses at today’s hearing included:

  • The Honorable Joshua Gotbaum, Guest Scholar, Economic Studies Program, the Brookings Institution, Washington, D.C.
  • Dr. Andrew G. Biggs, Residential Scholar, American Enterprise Institute, Washington, D.C.
  • Cecil E. Roberts, Jr., International President, United Mine Workers of America, Triangle, VA
  • Rita Lewis, Beneficiary, Central States Pension Plan, West Chester, OH

Earlier this year Cantwell introduced the Encouraging Americans to Save Acta bill aimed at enhancing the saver’s credit, a non-refundable tax credit for eligible taxpayers who make contributions to IRAs or employer-sponsored retirement plans, by making it refundable so those without a tax liability also benefit.

Cantwell has also repeatedly fought for the 21st Century Glass-Steagall Act, a bill that would separate traditional banks that have savings and checking accounts and are insured by the Federal Deposit Insurance Corporation from riskier financial institutions that offer services such as investment banking, insurance, swaps dealing, and hedge fund and private equity activities. The bill would clarify regulatory interpretations of banking law provisions that undermined the protections under the original Glass-Steagall and would make "Too Big to Fail" institutions smaller and safer, minimizing the likelihood of a government bailout.