US capitol building Sen. SherrodBrown, D-OH, and Rep. Richard Neal, D-MA, ranking member of theHouse Ways and Means Committee, recently released news of the lowerfigure. (Photo: Shutterstock)

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The Butch Lewis Act, a bill that would rescue more than 100multiemployer pensions that are projected to go insolvent, that cover atotal of 1.3 million workers and retirees, would add $34 billion tothe U.S. debt over ten years, according to the Congressional BudgetOffice.

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That's considerably less than a previous provisional score ofthe bill, which CBO put at more than $100 billion.

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The score has not been released by the CBO. Sen. Sherrod Brown,D-OH, and Rep. Richard Neal, D-MA, ranking member of the House Waysand Means Committee, recently released news of the lower figure.Brown co-chairs the Joint Select Committee on Solvency ofMultiemployer Plans. Neal is also on the 16-member bipartisancommittee.

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The Butch Lewis Act, originally introduced in theSenate by Brown, would establish the Pension Rehabilitation Administration withinthe Treasury Department. The PRA would issue bonds for sale toinstitutional investors, the proceeds of which would be channeledto plans in critical and declining status in 30-year,low-interest-rate loans. Principal would be paid back after 30years, but a provision of the bill as it was originally writtenrelieves pensions of loan obligations if they can't be paidback.

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CBO scores, or estimates the cost of bills after Congressionalcommittees have ordered legislation to be reported for a full floorvote. The Butch Lewis Act has not advanced out of committee– theJoint Select Committee has until the end of November to report abill for a floor vote.

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But CBO also provides technical assistance to Congressionalstaffers on thousands of proposed pieces of legislation each year.While that informal information is subject to the full CBO reviewprocess, it is not considered an official score.

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In a memorandum to media, Brown and Neal described the $34billion price tag as CBO's “finalized” estimate of the Butch LewisAct.

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In July, CBO wrote Sen. Orrin Hatch, R-UT, co-chair of theJoint Select Committee, explaining its original $101 billionestimate.

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“The estimated budgetary effects are highly uncertain becauseseveral key aspects of the legislation are broadly described,making it difficult to project how the proposal would beimplemented,” CBO director Keith Hall wrote.

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Specifically, the original version of Butch Lewis was unclear onwhether loans would be issued inside or outside the 10-year budgetwindow. Nor did the bill set a specific interest rate for the30-year loans, or define under what circumstances a loan could beforgiven.

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Presumably, staffers have clarified the bill, which explains howCBO came to the lower $34 billion tab in its recent technicalassistance.

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Inquiries to Sen. Brown's staff were not returned before presstime.

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READ MORE on BenefitsPRO:

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Composite plans re-emerge as an alternative formultiemployer plans

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Flailing multiemployer pension plans need “tens ofbillions” in cash

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Multiemployer pension committee pledges to bebipartisan

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PBGC issues guidance on alternative withdrawalstrategies from multiemployer plans

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.