How Mitch McConnell engineered a sweet deal for the coal industry

Kentucky coal miners—along with the rest of us—will be paying the price to keep the government running next year. And we can thank Kentucky’s senior senator, Senate Majority Leader Mitch McConnell, for the sellout.

Buried in the giant $1.4 trillion government spending package that McConnell ushered through the Senate last week was a relatively modest $15 billion, 30-year payout to sustain the Black Lung Disability Trust Fund—a boon to the majority leader’s home state coal miners.  As many as 1 in 5 of coal miners suffer from black lung.

But here’s the kicker: What McConnell had removed from the must-pass funding legislation. In order to keep the government running, McConnell threw out provisions that would have forced coal companies to commit to higher payments toward the health-care costs of their employees and retirees, nixing requirements to extend the commitment period and modestly increase the tax on coal mining companies that are supposed to support the trust fund.

McConnell threw out provisions that would have forced coal companies to commit to higher payments toward the health-care costs of their employees and retirees.

In short, McConnell let the coal industry skip out and leave the $15 billion black lung tab for everyone else to pay.

The move was mind-boggling, considering McConnell is already under scrutiny and criticism for partnering with a previously sanctioned Russian businessman, Oleg Deripaska, who McConnell voted to de-sanction. Deripaska, who owns Rusal, a Russian-owned coal company, joined McConnell in a project that his home state of Kentucky voted in 2017 to invest $15M of taxpayer money.

'A Handout'

“This is a handout. This is a giveaway,” Jim Waters of the Bluegrass Institute for Public Policy Solutions, told WaPo in August. Waters reasoned that judgment might have been clouded by the possible thousands of area jobs that could be added. “I think the excitement of that overrode some of the due diligence.”

McConnell's strange allegiances to influences domestic and foreign have clearly reached the grassroots level. As Mikaela Curry, a community organizer and member of Kentuckians for the Commonwealth, wrote in an op-ed in the Courier-Journal, Feb. 22, entitled, "Mitch McConnell is silent on coal while Kentucky miners suffer and die":  "When McConnell speaks up for coal, it always seems to align with the people profiting in the fossil fuel industry and not the hard-working people he is supposed to represent."

Disabled Miners

Most poignant are the call outs to McConnell from those suffering physically as well as financially from his unwillingness to make the coal companies own up to their responsibility to their current and retired workers and their families. Patty Amburgey, now secretary of the local black lung association in Letcher County, is the widow of a coal miner who died of Black Lung Disease after leaving mining, "blind, unable to feel his legs or arms, and constantly short of breath," according to his obit.

"I’m asking [Mr. McConnell] to please remember that East Kentucky is a mining area," his widow wrote in Kentuckians for the Commonwealth. "And we do have a lot of miners and the election is coming up. I want him to understand that.” Obviously, Mr. McConnell is betting his Appropriations Bill will heal these sores and smooth his way to re-election.

But that may not be so easy in practice. Instead of increasing the excise tax rate in effect in 2018, which sunset on Jan. 1, 2019, Congress failed to act, which allowed the tax for coal companies to reset to 1985 rates, lowering contributions by 55% (from $1.10 per ton of coal from subsurface mines to $.50 and from $0.55 per ton for coal from surface mines to just $0.25), which many in Congress had contested.

Companies Protected

After congressional wrangling, the 2020 tax rate will revert to 2018 rates of $1.10 and $0.55 per ton, respectively. But those prices will sunset again on Dec. 31, 2020, and if not renewed will revert to the 1978 rate of $0.50 and $0.25 per ton. The companies also are protected from market price rises by a ceiling cap on the tax of 4.4% of its coal selling price.

In June, the House Ways and Means Committee approved a 10-year extension as part of a broader package. Rep. Bobby Scott (D-Va.) proposed the rate be renewed at a higher rate through 2029. He and co-sponsors want to see the Trust Fund fully funded with no sunsets.

While Moscow Mitch steers millions toward business ventures with oligarchs, many in Appalachia want lawmakers to realize that a hike in the excise tax of $0.14 per ton for surface-mined coal and $0.28 per ton for underground-mined coal would eliminate the debt in the Fund completely by 2050, according to the General Accounting Office.