Miners lose in court, stall in Senate

By CARL GREEN

Correspondent

St. Louis ­– Retired coal miners, many of them battling work-related health issues, have got to be wondering if anybody is on their side anymore.

A federal bankruptcy judge in St. Louis has ruled that Peabody Energy could spend up to $3.24 million on bonuses averaging $65,000 a person to salaried office employees in an effort to keep them on the job. Attorneys for retired miners had opposed the bonuses, saying they would come out of the money available for pensions and health care.

Meanwhile in Washington, the Senate was dawdling on advancing a simple plan that would go a long way toward keeping the miners’ pension plan solvent and heading off a much more expensive public bailout.

“What do they want these people to do? Get out of their wheelchairs and go back to the mines?” railed United Mine Workers President Cecil Roberts at a June 14 rally of 3,500 members in Lexington, KY.

“We have stood up for America, and it’s time America stood up for us!” he said. “America still owes us, and we will collect on that debt.”

BRAIN DRAIN

Peabody filed for bankruptcy April 11, blaming its high debt and low demand for coal, and it has not yet presented a restructuring plan. But the company said it has seen a steady drain of professional workers, so it drafted the bonus plan to try to keep them on the job.

The 42 eligible workers are in the human resources, information technology, finance, legal, sales and marketing departments. They are not considered executives.

Lawyers representing the miners’ health and pension funds argued that now is no time to be giving away money that will be needed for the pension and health funds.

Their filing stated: “By seeking to secure generous payments for a selection of their employees – and to enrich payment terms in their discretion – the debtors are acting prematurely to provide material benefits to a small constituency while many others face a daunting and uncertain future.”

UMWA joined in the argument with a filing that said, “Slashing the health benefits of aged and medically vulnerable retirees with extremely limited resources, while lavishly rewarding white-collar employees, is neither fair nor reasonable.”

Peabody called the program “broad-based” and “egalitarian” even though it serves only about 42 people. The bonuses would be payable after Peabody emerges from bankruptcy. Of the total, $500,000 would be reserved for additional workers who might at some point be designated “key employees.”

On Thursday, Judge Barry Schermer sided with Peabody, saying the bonus recipients will be needed as the company moves through the bankruptcy process.

SENATE BLOCK

In Washington, Senate Majority Leader Mitch McConnell, who as a Kentuckian should know something about coal mining, has personally held proceedings on the pension relief plan, even though it has bipartisan support and would not require any new taxes or funding sources.

The UMWA pension fund, created in 1974, was healthy until the George W. Bush recession that began in 2007 and it now is in danger of failing. Meanwhile, the coal industry pays $490 million a year into the Abandoned Mine Reclamation Fund to help the miners’ health care fund, but not all of that money is used.

So the current bill would transfer $155 million a year to the pension fund, enough to make it solvent in 15 years. If, instead, the pension fund were allowed to fail, it would cost the taxpayer-funded Pension Benefit Guaranty Corp. some $4.6 billion, and miners’ pensions would be reduced.

A Republican House member, Andy Barr of Lexington, KY, is a co-sponsor of the bill and spoke at the June 14 rally. The Senate bill is co-sponsored by a Democrat and a Republican.

In an editorial, the Lexington Herald-Leader said it was baffled that McConnell has blocked the win-win legislation in the Senate Finance Committee.

It states: “Coal miners, who earned their benefits in one of this country’s most dangerous and vital jobs, are asking only for what they are owed. Surely, they too deserve Congress’ consideration – especially when the proposed solution is so easy and so much cheaper to taxpayers than allowing the (pension) plan to go under would be.”

70-YEAR PROMISE

Roberts reported that contributions to the 1974 Pension Fund are down by two-thirds over last year.

“More and more companies are receiving approval from bankruptcy courts to stop paying into the 1974 fund, which will cause that situation only to get worse,” he said. “The 1974 fund pays out over $600 million per year to 89,000 retired coal miners and widows – an average benefit of $560 per month. Cutting those benefits won’t save the pension fund. Only Congress can do that – by living up to our nation’s 70-year promise to these retired miners and widows.

“These miners worked for 25, 30, 40 or more years, always believing that the federal government would live up to the obligation it made to them in the White House in 1946 to guarantee retirement benefits,” Roberts added. “But they are now confronted with the very real possibility that this will be the first Congress in 70 years to abandon that obligation, making them feel as if they’ve been kicked to the curb.”