A looming retirement crisis is facing the U.S. taxpayer that will become an economic tsunami if Congress doesn’t act. The pensions of 1.3 million workers in certain multiemployer pension plans and the federal government’s Pension Benefit Guaranty Corporation (PBGC) are set to collapse. Only Congress can prevent this from cascading throughout the economy, to taxpayers and into healthy pension plans and their employers.

How things spiraled into this crisis is complicated, but important to understand. Some say it’s a multiemployer problem, but it’s more than that, and the U.S. taxpayer is ultimately on the hook. The broad reasons for this crisis and the consequences of failure came about not because of financial mismanagement or irresponsible actions of the management and labor trustees of these plans, but because of government actions and inaction.

The government’s list of self-inflicted errors is as diverse as it is long. It ranges from ill-conceived provisions within ERISA (the Employee Retirement Income Security Act of 1974) and the tax code. Also involved is trucking deregulation, trade and other policies that decimated domestic industries, the failure to regulate financial derivatives and housing policies that led to the financial market crisis and the Great Recession, and the monetary policy of the Federal Reserve, which artificially crushed short and long term Treasury rates.

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