CNN obtains report showing fund for sick coal miners is in trouble

A federal fund that helps coal miners sickened with black lung disease is beset by billions of dollars in debt, according to a government watchdog report.

Posted: Jun 4, 2018 3:19 PM
Updated: Jun 4, 2018 3:19 PM

A US government fund that helps coal miners sickened with black lung disease is beset by billions of dollars in debt, according to a government watchdog report obtained by CNN. Now, some congressional leaders worry the miners could lose their benefits.

More than 14,000 miners depend on the Black Lung Disability Trust Fund to pay their medical bills and help with other expenses when they're too sick to work.

The report from the US Government Accountability Office finds that by 2050, the trust fund might have to borrow more than $15 billion to stay afloat.

CNN obtained the report before its official release at noon Monday.

"If we do nothing, the debt will explode," said Rep. Bobby Scott, D-Virginia, one of the members of Congress who requested the report from the accountability office. "Once [the fund] becomes clearly unsustainable, there will be pressure to cut benefits."

The Black Lung Disability Trust Fund is supposed to be funded by a tax on coal companies, but in its nearly 40-year history, that tax has almost never been enough to cover the fund's expenditures, according to the GAO report.

The fund has had to borrow from American taxpayers to make up the shortfall. In fiscal year 2017 alone, the trust fund borrowed about $1.3 billion from the US Department of the Treasury. Overall, the fund is currently $4.3 billion in debt to taxpayers.

The fund has not always paid back what it owes taxpayers.

In 2008, the government forgave $6.5 billion in debt, or more than half of what was owed, and refinanced the rest of the debt at favorable interest rates.

According to the GAO report, the fund's financial situation is expected to get worse for two major reasons.

First, black lung beneficiaries could increase in the near future because more and more miners are being diagnosed with black lung disease. Doctors recently identified the largest cluster ever: 416 cases of advanced black lung disease at three clinics in Virginia.

Second, the tax on coal companies is scheduled to be cut by 55% at the end of this year, a long-planned reduction. President Trump's budget does not call for the cut to be canceled. Congress hasn't taken any action to address the cut, either.

The 'vicious toll' of black lung disease

All of this has Kenny Fleming very worried.

Fleming was a coal miner in Kentucky for 35 years, sometimes working from 5 in the morning until 7 at night.

Three years ago, he was diagnosed with black lung disease, which turns miners' lungs black and stiff with coal dust. The process is usually relatively slow, but in the past 20 years or so, miners have developed aggressive cases. Their lungs scar up more quickly, and many miners develop large masses of scar tissue and nodules, according to Dr. Robert Cohen, professor of pulmonary and critical care medicine at Northwestern University at the Feinberg School of Medicine and medical director of the Black Lung Clinics Coalition.

The Black Lung Disability Trust Fund pays for Fleming's medical bills and sends him a $970 disability check every month to help support him and his wife, now that he's too sick to work.

The check doesn't come close to making up for the six-figure income Fleming had as a miner.

Fleming, 59, says that sometimes, black lung disease makes him feel like he's drowning. He often has to take in supplemental oxygen through a tube in his nose.

Black lung disease "takes a vicious toll on a person's body," he said.

"Coal miners are dedicated, hard-working, great people. It's a dangerous job. It's a hard job," he added. "It just seems like coal miners are used for what they're worth, and when it's time to compensate them for their hard work and their dedication, they're forgotten sometimes."

He said he would feel "betrayed" if his benefits were ever cut.

"Supposedly, [Trump] is for the forgotten man and woman. If this isn't addressed, then that's a bunch of people that are forgotten," he said.

Possible solutions

The GAO report proposed several options to address the trust fund's spiraling debt.

One option is to increase the tax on coal companies by 25% from its current levels. The authors noted that this option would place the entire burden on coal companies at a time when coal production has been declining.

Another option the authors presented includes keeping the tax on coal companies at its current level and forgiving about $2.4 billion in debt to taxpayers.

Other options include decreasing the tax on coal companies and forgiving even larger amounts of debt to the taxpayers.

The Trump administration says that if in the future, the trust fund can't pay the miners' benefits, the fund can continue to borrow money from the Treasury.

"Miners (and their qualified survivors) who are entitled to federal black lung benefits from the Black Lung Disability Trust Fund, will continue to receive those benefits regardless of the Fund's financial condition," the Department of Labor said in a statement.

But Scott, the Virginia congressman, doesn't think that's the right approach.

He supports increasing the tax on coal companies to make the fund more financially sound, or at the very least making sure that it's not cut by 55% at the end of this year.

"We can solve the problem with a modest increase," he said. "The last option -- the last thing we ought to consider -- is letting the tax expire and letting the problem get worse."

A spokeswoman for the National Mining Association, the trade organization for the mining industry, disagrees.

Ashley Burke said the fund went into debt because Congress "liberalize[d]" the medical criteria used to determine eligibility for receiving benefits, resulting in a "precipitous increase in the approval rate of claims."

"Industry should not be subjected to a tax increase due to government mismanagement of a program," she wrote in an email to CNN.

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