A recent report released by the United States Government Accountability Office (GAO) shows that the Black Lung Benefits Program is more than $4 billion dollars in debt. Further, the report also states that the Black Lung debt could increase even more because of a 55 percent reduction scheduled at the end of 2018 in the production tax paid by coal companies. The GAO warns the tax decrease will cause that deficit to nearly quadruple over the next 30 years.
Coal companies pay $1.10 per ton of coal mined underground and $0.55 per ton of surface-mined coal into the Black Lung Benefits Program, which is administered by the Department of Labor. Those amounts were set by law in 1981, but are scheduled to drop at the end of 2018 to $0.50 per ton for coal produced underground and $0.25 for surface-mined coal.
According to the GAO, the Black Lung Disability Trust Fund has come under pressure for two reasons. First, the industry is 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. 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.
The GAO offered three options to improve the solvency of the fund: extend the current excise tax rate to reduce the debt to $4.5 billion debt by 2050, increase the current tax rate by approximately 25 percent to eliminate the debt entirely by 2050, or allow the tax rate to sunset as scheduled, cancel the current debt, and appropriate $7.8 billion to the fund.
The coal industry has been lobbying hard against the tax, arguing its payments have already been too high at a difficult time for mining companies and that the fund has been abused by undeserving applicants, such as smokers. Ashley Burke, spokeswoman for the National Mining Association, rejected the idea the tax should be increased. “There is no need for a tax increase on the coal industry. The only reason borrowing has been necessary is for the government to essentially repay itself for accumulated interest payments on legacy debt from the 70s and 80s,” she said.
Meanwhile, the United Mineworkers Union of America, the coal miners’ trade union, has called on Congress to ensure that the excise tax coal companies now pay remains at current levels, “This is a problem that has been created by the coal industry, there is a system to help the victims of this disease already in place that the coal industry pays for, and I see no reason why we would put the taxpayers on the hook instead,” said Cecil Roberts, president of the UMWA.
A bipartisan effort by lawmakers to extend the current coal tax failed earlier this year under opposition from the coal industry. However Congress likely to act on the issue before the end of the year.Go back to previous page