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 Coal companies are currently required to pay a $1.10 per ton tax on
underground coal production to finance the federal Black Lung
Disability Trust Fund, which pays medical and living expenses for
eligible miners, but that amount is scheduled to revert to the 1977
level of 50 cents.
"With the scheduled 2019 tax rate decrease, our moderate case
simulation suggests that expected revenue will likely be
insufficient to cover combined black lung benefit payments and
administrative costs, as well as debt repayment expenditures,"
according to the report from the non-partisan Government
Accountability Office.
Cases of black lung, an incurable illness caused by inhaling coal
dust, are rising to levels not seen in decades as miners plumb the
depths of played-out coal seams using heavy blasting equipment,
according to government health officials.
The fund that helps them is already roughly $6 billion in debt, as
revenue since it was created in the 1970s has failed to keep up with
outflows. That debt could balloon to $15 billion by 2050 without
congressional action, the GAO report said.
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.
That third option would amount to a multibillion-dollar transfer of
liability for black lung victims from coal companies to taxpayers.
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.
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A bipartisan effort by lawmakers to extend the current coal tax
failed earlier this year after the coal industry lobbied Republican
House leadership not to take it up.
Democratic Representatives Bobby Scott of Virginia and Sander Levin
of Michigan requested the GAO study in 2016 to clarify the fund's
financial condition.
Scott told Reuters the report should compel Congress to take action
to extend or increase the coal excise tax.
"The existing black lung excise tax rate on coal companies is
imperative to the long-term solvency of the trust fund," Scott said
in a statement.
The fund currently provides medical coverage and monthly payments
for living expenses to more than 25,000 people.
The Trump administration has not yet weighed in on the potential
insolvency of the fund, making future policy options to address the
debt uncertain, Scott said.
The United Mineworkers Union of America, the coal miners' trade
union, called on Congress to ensure that the excise tax coal
companies now pay remains at current levels, especially as the
incidence of the disease continues to rise and affect younger
miners.
“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.
(Editing by Richard Valdmanis, Susan Thomas and Steve Orlofsky)
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