June 4, 2018
…UNLESS CONGRESS ACTS TO PROTECT COAL MINERS AND WIDOWS
WHITESBURG, KY — Unless Congress takes action before the end of 2018, major financial problems face the public fund that provides black lung benefits to coal miners and their surviving dependents in cases where the miners’ employer has gone bankrupt, according to a Government Accountability Office (GAO) report released today.[1] In short, the safety net meant to help alleviate the harm from black lung when coal companies go bankrupt is itself in danger of insolvency.
“What’s unfolding across Appalachia right now is a national disgrace,” said Appalachian Citizens’ Law Center attorney Wes Addington. “Black lung is completely preventable, yet the disease is now afflicting an astounding 1 in 5 miners in Appalachia. The coal industry’s unconscionable response to the black lung epidemic has been that coal miners get black lung disease—and nothing else.”
Nearly 20,000 families across all 50 states depend on the Trust Fund, including more than 4,000 in Kentucky.[2] Dewanna Logan from Harrodsburg, Kentucky explains, “My husband Roy died from black lung when he was 55 after working as a coal miner for 20 years. The company where he worked went bankrupt, so I rely on the Black Lung Trust Fund for the little bit of benefits I get each month. Without the Trust Fund, I would be left with nothing from the disease that Roy suffered from.”
The Black Lung Disability Trust Fund is in dire need of protection for two reasons. First, we are in the midst of a sharp resurgence of black lung among coal miners—recent government data shows that rates of black lung have doubled since 2000.[3] Second, a wave of bankruptcies in the coal industry is putting increased pressure on the Trust Fund as the safety net for miners disabled by black lung. In 2017 alone, more than 2,500 black lung claims were transferred to the Trust Fund due to coal company bankruptcies.[4]
As attorney Evan Smith explains, “Coal miners are facing a one-two punch: black lung is worse than ever before and at the same time, the coal industry’s big players are filing for bankruptcy. The Black Lung Trust Fund is all that many coal families have left.”
The Trust Fund is financed by the Black Lung excise tax on coal operators. Today’s report found that increasing the tax by 25% would enable the Trust Fund to pay off its debt by 2050. Appalachian Citizens’ Law Center and other black lung advocates call on Congress to protect the Black Lung Disability Trust Fund by increasing the black lung excise tax by 25% or, at the bare minimum, maintaining the current rate on coal companies that has been in place for the last several decades.
If Congress does not act by the end of 2018, the tax rate will be reduced by more than half to 1978 levels, which previous Congresses have repeatedly recognized as insufficient to pay for the actual costs of black lung benefits. As today’s report says, if the scheduled coal tax decrease goes into effect, then in 2050 the Trust Fund will be $15.4 billion in debt. (GAO Report, at 19)
Donald R. Brown of Whitesburg, Kentucky worked as an underground coal miner for 26 years before he got black lung and eventually benefits from the Trust Fund. “I can’t do very much at all, but I couldn’t do without my medical benefits. I used to have to pay out of my pocket for my breathing treatments, and I couldn’t pay for it.”
“We appreciate Representative Bobby Scott’s leadership in protecting the benefits of miners battling black lung disease. With the facts of this report on the table, the time has come for Chairman Kevin Brady, House Speaker Paul Ryan, and Senate Majority Leader Mitch McConnell to take immediate action on the black lung excise tax,” said Steve Sanders, Director of Appalachian Citizens’ Law Center.
Extending the black lung tax rate also provides an opportunity to invest in the economic future of communities racked by the decline in coal jobs. While every dime of the revenue raised by the tax would continue to go to the Black Lung Disability Trust Fund, under Congressional budgetary rules extending the tax would also enable Congress to spend a separate pot of existing money on the RECLAIM Act, H.R. 1731, which would create new jobs reclaiming abandoned coal mines. Appalachian Citizens’ Law Center considers pairing legislation that protects the Black Lung Disability Trust Fund with the RECLAIM Act the clear solution for struggling coal miners and their communities.
Main findings from the GAO report include:
If Congress does not act, the Trust Fund’s debt will increase by $11.3 billion (to $15.4 billion) by 2050. (GAO Report, at 19)
Without action, revenue to the Trust Fund may not be enough to cover benefits and administrative costs for 2020 through 2050 (GAO report, at 15)
Current black lung benefits are not the source of the Trust Fund’s problems. The Trust Fund is saddled with mountains of debt from the 70s and 80s. Even completely eliminating black lung benefits would still lead to a $6.4 billion debt. (GAO Report, at 22)
If current tax rates are maintained, the Trust Fund’s debt would only increase slightly by 2050. (GAO Report, at 19)
To balance the Trust Fund without a public bailout, coal tax rates need to increase by 25% (that is, an increase of 28¢ per ton on underground coal and 14¢ per ton on surface-mined coal). (GAO Report, at 25)
[1] Black Lung Benefits Program: Options for Improving Trust Fund Finances (2018), https://www.gao.gov/products/GAO-18-351
[2] Black Lung Program Statistics, FY2017. Division of Coal Mine Workers’ Compensation, Department of Labor. https://www.dol.gov/owcp/dcmwc/statistics/bls2017/DistributionOfClaimsByState2017.htm
[3] Berkes, Howard. “New Studies Confirm a Surge in Coal Miners’ Disease.” NPR. May 23, 2018. https://www.npr.org/2018/05/22/613400710/new-studies-confirm-a-surge-in-coal-miners-disease
[4] Volcovici, Valerie. “U.S. Coal lobby fights black lung as disease rates surge.” Reuters. June 1, 2018. https://www.reuters.com/article/us-usa-coal-blacklung-insight/u-s-coal-lobby-fights-black-lung-tax-as-disease-rates-surge-idUSKCN1IX4EG
