Once again, there is a chance Congress could ride to the much-belated rescue of the surviving non-union retirees of Delphi Corp. − a once-giant Michigan-based auto supplier created by General Motors who have been arguing since 2009 they were unfairly cut out when then-President Obama staved off disaster for the automaker and the industry.
On Wednesday, June 24, President Donald Trump’s Office of Management and Budget sent a letter to House Speaker Mike Johnson, R-Louisiana, outlining a supplemental budget request for $87.6 billion, most of which it says is needed to pay for military operations in the war against Iran.
But one line item, for the Pension Benefit Guaranty Corporation, or PBGC, which insures some private pension plans, paying out a portion of the benefit if they go bankrupt or are otherwise terminated, asked Congress for $1 billion, “to increase the benefit levels for participants of certain pension plans that were sponsored by Delphi Corporation and terminated as a result of General Motors’ bankruptcy.”
And just like that, new life was given to the long-simmering question of whether up to 20,000 non-union retirees who say they saw their benefits cut, some by as much as 30%-70% initially after the Obama administration ran GM through a structured bankruptcy to prevent its financial ruin, might be made whole at last.
That 2009 arrangement saw support secured for union retirees at Delphi, which GM had spun off in the late 1990s, since GM had previously promised to back those workers’ pensions (and UAW support was key to Obama’s effort to rescue GM and what was then-Chrysler).
But no such promise or support was forthcoming for non-union Delphi workers, who have been lobbying administrations and Congress and fighting in court pretty much ever since.
“We feel like what happened was unfair, that it was done arbitrarily,” Ron Beeber, a former lobbyist who worked for Delphi and is a board member for the Delphi Salaried Retirees Association told the Free Press back in 2021. “A lot of people say you guys just got screwed.”
It’s still far from clear, however, whether this latest attempt to restore the lost pensions will succeed where others have failed. An effort in court claiming the PBGC didn’t have authority to take over the salaried retirees’ pension plan (which the workers said was adequately funded) and reduce benefits ended when the U.S. Court of Appeals for the Sixth Circuit disagreed and the U.S. Supreme Court declined to take up the question in 2022.
Various legislative efforts to restore the benefits, too, have failed or stalled, despite bipartisan support. Perhaps knowing it’s a potentially powerful issue in the Midwest, Trump (and President Joe Biden before him) has signaled his support of the workers in politically sensitive moments (such as just before the 2020 election, which he lost to Biden) to no avail as yet. (This time, it comes just ahead of midterm elections where Republicans could lose control of one or both chambers of Congress and as Trump deals with high inflation and an unpopular war.)
Could this time be different? Sure. Would it be politically difficult for even Midwestern Democrats to vote against the supplemental funding bill if it includes the Delphi restoration? Maybe. (But then they’d likely argue that it was no more than a ploy to use against them politically, since their voting for the war funding en masse was highly unlikely, if not out of the question.)
And some of the same headwinds are still there regarding the restoration of benefits, namely the questions other members of Congress will raise, first about other terminated or troubled pensions plans in their own areas that have seen benefits cut, second, whether the government should be protecting pensions anyway and, third, how’s it being paid for?
Four year ago, when the House was debating a bill to restore the benefits proposed by then-Rep. Dan Kildee, D-Flint, U.S. Rep. Virginia Foxx, R-North Carolina, said, “Once again, the federal government is offering a pension bailout. Hardworking taxpayers who have their own retirements to worry about cannot continue to shoulder this burden. We cannot set this kind of precedent for a single-employer (pension) system. If Congress gives special treatment to this plan covered by today’s bill, the other 5,000 single-employer plans also managed by PBGC will pressure Congress to do the same for all.”
That bill passed in the House 254-175 and was sent to the Senate, where it never received a vote.
Contact Todd Spangler: tspangler@freepress.com. Follow him on Twitter@tsspangler.
This article originally appeared on Detroit Free Press: Trump wants $1 billion for Delphi retirees. Will it work this time?
Reporting by Todd Spangler, Detroit Free Press / Detroit Free Press
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By Todd Spangler, Detroit Free Press | USA TODAY Network
