"A new report from the U.S. Government Accountability Office revealed that shoddy government enforcement has allowed coal companies to transfer $865 million of disability liabilities to taxpayers during bankruptcies in recent years," Will Wright reports for the Lexington Herald-Leader. "The issue revolves around the Black Lung Disability Trust Fund, which exists to ensure that black lung victims receive workers’ compensation payments if their employer becomes insolvent or otherwise fails to provide those payments."
Some coal companies buy insurance to cover such claims, but other companies post collateral with the federal government to show that they have the means to cover the claims. But the report showed that the collateral is often far short of what's needed. "With several more-recent coal company bankruptcies looming in Eastern Kentucky, West Virginia and elsewhere, it is unclear how many millions of dollars of liabilities those companies may soon transfer to taxpayers," Wright reports.
"Coal companies pay into the fund via a tax on the coal they produce, but the fund also borrows billions of dollars from the U.S. Treasury. In fiscal year 2019, it borrowed about $1.9 billion, according to the GAO report," Wright reports. And when coal companies declare bankruptcy and their collateral doesn't cover its black-lung claims, the cost for those claims is shifted to taxpayers.
The GAO report shows that the Labor Department has failed to take steps to prevent this liability shift over the years. According to the report, "the department declined to use enforcement tools to force the company to post adequate collateral, failed to regularly review the financial condition of the coal companies, and did not factor in the companies’ future benefit liability amounts, Wright reports.
Last week the House Subcommittee on Workforce Protection held a hearing on the GAO findings. Labor Department officials said they have strengthened their policies and will take stronger action against companies that don't post adequate collateral, Wright reports.
Some coal companies buy insurance to cover such claims, but other companies post collateral with the federal government to show that they have the means to cover the claims. But the report showed that the collateral is often far short of what's needed. "With several more-recent coal company bankruptcies looming in Eastern Kentucky, West Virginia and elsewhere, it is unclear how many millions of dollars of liabilities those companies may soon transfer to taxpayers," Wright reports.
"Coal companies pay into the fund via a tax on the coal they produce, but the fund also borrows billions of dollars from the U.S. Treasury. In fiscal year 2019, it borrowed about $1.9 billion, according to the GAO report," Wright reports. And when coal companies declare bankruptcy and their collateral doesn't cover its black-lung claims, the cost for those claims is shifted to taxpayers.
The GAO report shows that the Labor Department has failed to take steps to prevent this liability shift over the years. According to the report, "the department declined to use enforcement tools to force the company to post adequate collateral, failed to regularly review the financial condition of the coal companies, and did not factor in the companies’ future benefit liability amounts, Wright reports.
Last week the House Subcommittee on Workforce Protection held a hearing on the GAO findings. Labor Department officials said they have strengthened their policies and will take stronger action against companies that don't post adequate collateral, Wright reports.
No comments:
Post a Comment