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1 Potential Effects of H.R. 397, the Rehabilitation for Multiemployer Pensions Act of 2019 1 (September 6, 2019)

handle is hein.congrec/cbopoteff0001 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE Phillip L. Swagel, Director U.S. Congress Washington, DC 20515 September 6, 2019 Honorable Mike Enzi Chairman Committee on the Budget United States Senate Washington, DC 20510 Re: Potential Effects of H.R. 397, the Rehabilitation for Multiemployer Pensions Act of 2019 Dear Mr. Chairman: I am writing in response to your request for additional analysis of H.R. 397, the Rehabilitation for Multiemployer Pensions Act of 2019. On July 23, 2019, the Congressional Budget Office transmitted a cost estimate of that legislation, as published in Rules Committee Print 116-24 on July 19, 2019. The House of Representatives passed the legislation on July 24, 2019. Specifically, you asked CBO to provide three pieces of information: a calculation of the subsidy cost of the act's loan provisions using a fair-value approach, which accounts for market risk; a description of changes in the act's estimated budgetary effects that would occur if H.R. 1994, the SECURE Act of 2019, was enacted prior to this act's enactment; and further explanation of CBO's analysis of pension plans' ability to repay their loans as well as the long-term solvency of affected plans. CBO's analysis supports the following conclusions: The estimated subsidy cost under a fair-value approach is higher than that calculated using rules in the Federal Credit Reform Act of 1990 (FCRA). If H.R. 1994 was enacted, the estimated increase in budget deficits from enacting H.R. 397 would be higher. About one-quarter of the affected pension plans would be unable to repay their loans in full and most of the remaining plans would probably become insolvent in the decade after they repay their loans.

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