Coal industry fought black lung tax as disease rates rose
Coal companies and industry groups lobbied against extending a tax program that provides a lifeline for sufferers and their families
While cases of black lung disease among miners were on the rise last year, coal companies and industry groups lobbied lawmakers against extending a tax program that provides a lifeline for sufferers and their families.
Mandatory disclosures show the coal lobby spent some of its influence money on discussions with lawmakers regarding the Black Lung Excise Tax and the trust fund that helps pay for the health and living benefits of sick coal workers whose employers have gone bankrupt, and their beneficiaries.
Industry efforts appear to have paid off as Congress did not act by Dec. 31 to extend the higher excise tax on coal companies, the primary source of money for the Black Lung Disability Trust Fund, which was established in 1977.
Because of Congress’ inaction, the tax rate dropped at the beginning of this year to 50 cents per ton of underground-mined coal from $1.10 per ton last year, putting the fund at risk for insolvency. The 55-cents-per-ton tax on of surface coal also dropped to 25 cents per ton.
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The Government Accountability Office reported in May 2018 that allowing the tax to drop would add to the troubles of the already financially beleaguered Black Lung Disability Trust Fund, which has struggled from the beginning. Because its expenditures have “consistently” exceeded its revenue, the fund has borrowed almost every year since 1979, the GAO report said.
Eric Dixon, senior coordinator of policy and community engagement at the Whitesburg, Ky.-based Appalachian Citizens’ Law Center, said it’s a “disgrace” that Congress let the tax increase expire.The center spent about $40,000 on lobbying for an extension of the tax, up from $30,00 in 2017.
“In so doing they handed a big tax break to coal entities,” he said. “You have to wonder what happened. … I think that the coal industry was on the Hill and this was a priority for them … and I think that played a role in Congress’ inaction.”
The National Mining Association and coal companies like Consol Energy Inc., Cloud Peak and Peabody Energy were among those that mentioned the black lung tax or its fund in their disclosures. None of the companies responded to a request for comment. Because the mining group and companies lobbied on different issues, it is hard to quantify how much was directly spent on the black lung issue.
The coal industry argues the higher tax rate puts pressure on an industry already in distress from years of decline in demand and prices that have seen several companies go bankrupt.
Conor Bernstein, a spokesman for the National Mining Association, told CQ the group does not comment on its lobbying activity, but he said the lower tax is sufficient to cover monthly benefit costs for the fund. The trade group, which represents mining companies, increased its spending to about $439,000 on lobbying in the fourth quarter of last year, from about $366,000 the prior quarter. Overall, the mining group spent $1.58 million last year, compared to $1.9 million in 2017.
“Efforts to increase taxes on the coal industry were misguided, especially now, when industry is working to stabilize after years of decline,” he said. “Raising the tax rates is not only unwarranted, but it would further disadvantage coal against competing energy sources, likely leading to additional coal job losses.”
Former House Ways and Means Chairman Kevin Brady, R-Texas last year attempted to push a tax bill that included a provision to extend the black lung tax increase for a year but received push back from fellow Republicans and eventually dropped it from the measure.
“There’s obviously different views on that provision and so I think it’s really important to find a good solution to make sure that coal companies are paying the appropriate amounts to help those who are victims of the illness and need the healthcare long-term,” Brady told CQ. “I’m hopeful we can find people, get them in the room together and solve it,”
But he said he would defer to new committee Chairman Richard E. Neal, D-Mass., on the issue this year. Neal did not immediately respond to a request for comment.
Sufferers of pneumoconiosis or black lung disease get it after prolonged inhalation of coal dust, which leads to lung problems, disability and premature death, according to the Centers for Disease Control.
“It’s very important that those who have the disease continue to receive the medical and living expenses that they’re entitled to,” Dixon, of the Appalachian Citizens’ Law Center, said. “When you have black lung, the disease slowly suffocates you; it smothers you.” The tax helps sufferers pay for life-saving breathing equipment, pay for medical expenses and living expenses for survivors of deceased sufferers.
Another advocacy group, Blue Green Alliance, spent $40,000 last year trying to get lawmakers to extend the tax rate.
As the clock ticked toward the expiration of the higher tax rate, government data showed a resurgence of black lung cases. The CDC’s National Institute for Occupational Safety and Health in July reported that the disease is more prevalent than previously thought, especially in Appalachia where as many as one in five miners show evidence of black lung disease, the highest rate recorded in 25 years. Nationally the portion of miners with the disease now exceeds 10 percent among those who worked 25 years or more in mines.
“Every day that a coal miner or a widow wakes up without that being passed, they have to wonder whether there’s long-term security for those medical reimbursements or living benefits,” Dixon said.
Advocates are now placing their hopes on a bill introduced by Senate Energy and Natural Resources ranking member Joe Manchin III, D-W.Va., to rescue the fund.
Manchin’s bill would address other concerns of the coal communities, including retiree pensions and extending the tax that provides money for the trust fund at 2018 levels for 10 years.
“Our coal miners made a commitment to provide our nation with the energy we needed to power our nation to prosperity. They did so time and time again even when it risked their health and their lives,” Manchin said on Jan. 3, when he introduced his bill. “It is our turn now to keep our promise to them and ensure that we secure their hard-earned pensions and their promised healthcare and black lung benefits.”