COVID-19 relief bill passes House; includes aid for pension plans

Final passage of a massive COVID-19 relief bill came Wednesday with House approval, along a 220-211 mostly party-line vote. The $1.9 trillion American Rescue Plan legislation is expected to be quickly signed by President Joe Biden, with White House Press Secretary Jen Psaki calling it the first phase of "an aggressive, two-step plan for rescue from the depths of this crisis, and recovery."

The 628-page package covers a wide range of goals, from funding vaccinations to providing immediate relief to people and communities impacted by the pandemic and rebuilding the U.S. economy.

The fiscal stimulus package will help boost global growth and add 3 percentage points to U.S. growth this year, the Organization for Economic Cooperation and Development said Tuesday. The OECD report said that global gross domestic product growth is now expected at 5.6% this year, 1 percentage point higher than its December forecast, thanks to the stimulus measure and rollout of COVID-19 vaccines. OECD projected that the U.S. economy would expand by 6.5% this year, China by 7.8% and the eurozone by 3.9%.

The bill's legislative journey highlighted a partisan divide in Congress, where Republicans opposed its price tag and many provisions, including one creating a federal assistance program for struggling multiemployer pension funds. Sen. Chuck Grassley, R-Iowa, called that part "an $86 billion bailout with no strings attached" instead of some structural reforms sought by Republicans to avert future plan insolvencies.

Financial assistance received by plans must be segregated from other plan assets and invested in investment-grade bonds. The bill also increases PBGC multiemployer premiums starting in calendar year 2031.

David Brenner, national director of multiemployer consulting and senior vice president of The Segal Group, said that about 280 multiemployer plans covering 3.5 million participants technically qualify for the relief. "That's a big number. However, it's most likely that fewer than half will actually be eligible to receive the financial assistance," he said in an interview.

Michael D. Scott, executive director of the National Coordinating Committee for Multiemployer Plans, said the pandemic exacerbated the multiemployer pension crisis, "and this bill will save the pensions of more than 1.3 million hard-working Americans, thousands of employers and the jobs of their active workers."

Addressing Republican concerns over the price tag, Mr. Scott said, "Ironically, while a significant investment, this is actually a fiscally conservative approach that will save the U.S. taxpayer money over the alternative of plan insolvencies and the insolvency of the PBGC."

The package also has some funding relief for single-employer plans, through extended amortization periods and pension interest rate smoothing changes.

State and local governments are slated to receive $350 billion in direct aid, but are prohibited from spending it on public pension costs or local tax relief.

Mr. Biden is scheduled to tout the American Rescue Plan in his first prime-time address Thursday, commemorating the one-year anniversary of the COVID-19 shutdown. Ms. Psaki downplayed the partisan fallout from its passage, and said during a Monday press briefing that Mr. Biden has held several bipartisan meetings in recent weeks on topics with broad support, including infrastructure. "There's been historic bipartisan support for that," but the White House has not decided whether any infrastructure bill would be structured to gain Republican support or to go for a more sweeping plan, she said.