Six years after the financial crisis, the economic aftershocks are still rattling the halls of Congress -- this time in a debate over an esoteric pension provision tucked into an end-of-year budget bill. Though that legislation, known as the “cromnibus,” is supposed to be about annual appropriations for government agencies, lawmakers have inserted language that would give private pension plans the power to cut benefits to thousands of current retirees whose pension savings were decimated by investment losses from the financial collapse of 2008.

If the initiative is enacted, experts say, it would be the most consequential change to retirement policy in the United States since the passage of landmark pension legislation 40 years ago. Altering the 1974 Employee Retirement Income Security Act to permit benefit cuts could prompt a slew of efforts to chip away at formerly untouchable guarantees of income to millions of retirees.

The $1.1 trillion spending bill that includes the pension provision was made public Tuesday night and a vote is expected on Thursday. Lawmakers are under pressure to pass the cromnibus by Thursday at midnight to avoid a government shutdown, so there is little time for further changes or negotiations.

The debate over the bill's pension language centers around multiemployer retirement plans -- the large, union-backed funds created in the explosion of labor unions after the Great Depression. The government-insured plans cover an estimated 10 million Americans from the private sector workforce. Many of those funds now face unfunded liabilities.

Lawmakers pushing to allow benefit cuts are citing the example of the $18.7 billion Teamsters' Central States Fund, which has 410,000 members and is the nation’s second-largest multiemployer pension plan. There’s an estimated $22 billion gap between assets in the Central States Fund and promised benefits to the system’s current and future retirees -- a shortfall that legislators point to as a rationale to pass a new law permitting multiemployer plans to slash promised retirement benefits.

“We have to do something to allow these plans to make the corrections and adjustments they need to keep these plans viable,” said Democratic Rep. George Miller in pushing the plan.

But critics of the provisions say the plight of the Central States Fund is not a cautionary tale about unsustainable benefits but an example of Wall Street mismanagement. They note that Central States is the only major private pension fund where all the discretionary investment decisions are made by financial firms rather than by the fund’s board. Roughly a third of the pension system’s shortfalls -- or almost $9 billion -- can be traced to investment losses accrued during the financial industry’s 2008 collapse. Those losses were in addition to more than $250 million in fees paid by the plan to financial firms in just the last 5 years.

Many pension funds followed strategies that involved high fees for Wall Street companies while producing “financial returns that trailed plain vanilla investment strategies,” said Jay Youngdahl, a fellow with the Initiative for Responsible Investment at Harvard University. Central States appears to be a prime example, he said. “Before cutting benefits, we need to examine what exactly has happened.”

Financial firms came to manage the Central States Fund thanks to a 1982 federal consent decree that stripped the Teamsters of its power to oversee retirees’ money. In recent years, the decree divided a portion of the pension assets into low-cost index funds, and gave the rest of the fund’s assets to firms including Morgan Stanley, Northern Trust, JPMorgan Chase and Goldman Sachs.

From 2009 to 2013, Goldman Sachs and Northern Trust collected over $31 million in fees from the fund. In all, the fund paid more than a quarter-billion dollars in fees during that period. At the same time, firms like Goldman Sachs and Northern Trust have delivered investment returns that dragged down the fund’s performance.

“The 1982 consent decree created what is arguably the clearest conflict of interest in an industry that is riddled with them,” said Edward Siedle, a former SEC attorney and a leading expert on pensions. “The Wall Street fiduciaries have a clear interest in pursuing investment strategies that will generate fees for themselves.”

As with many cash-strapped pension systems, 2008 was the moment the Central States Fund found itself in crisis. That year, the fund’s portfolio dropped by more than 29 percent -- a bigger decline than the median large pension fund, and one that effectively converted a stable system into one on the brink of insolvency. In total, the fund lost more than $8.8 billion during the 2008 financial crisis.

The decline was fueled by huge losses in the assets managed by the financial industry at the center of that crisis. For example, the holdings managed by Goldman Sachs and Northern Trust lost more than a third of their value. Had the accounts controlled by Goldman Sachs and Northern Trust delivered returns similar to the median for large pension plans from 2008 to 2012, there would be at least $500 million more in the system.

Goldman Sachs and Northern Trust did not respond to IBTimes request for comment.

“The extreme underperformance of the Goldman and Northern Trust portfolios in 2008 alone has had a major negative impact on the plan that continues to this day,” said Chris Tobe, an investment consultant and a former pension trustee in Kentucky.

The financial firms that managed the Central States Fund not only raked in management fees from the fund, they also invested retiree money in their own companies.

In 2009, for example, the Central States Fund had purchased $20 million of Goldman securities, when Goldman shared in the running of the fund with Northern Trust. By 2010, Goldman’s last year as a named fiduciary, the Fund owned $43 million in Goldman stocks and bonds. Similarly, this past year, Northern Trust directed the Central States Fund to purchase $400,000 in Northern Trust corporate bonds.

While Congress responded to the 2008 financial crisis by rescuing the banking industry with an $700 billion bailout, there's no rescue on the way for retirees. Lawmakers are offering no bailout to close multiemployer plans’ aggregate $42 billion deficit. Instead, sponsors of the legislation want to empower pension trustees to make pension funds whole exclusively by cutting promised retirement benefits. Retirees and members would lose their right to contest such cuts in court. Though the proposed language in the cromnibus bill would give retirees the right to vote on any reductions in benefits, it would empower the Secretary of the Treasury to overrule them and to slash benefits if the secretary deems the plan to be “systemically important.”

The original consent decree that removed Teamsters representatives from the Central States Fund’s board came in the wake of corruption allegations, and was supposed to rid the pension system of self dealing. But Greg Smith, a Teamsters retiree who has analyzed the Central States Fund, said the opposite has happened.

“The fund pays out over $60 million a year in fees,” he told IBTimes. “The Justice Department seems only concerned about whether or not the pension fund is caught up in casino investments, like in the '70s. The Justice Department doesn’t seem interested in looking into whether or not Wall Street is on the take.”

Ken Paff, the national organizer for Teamsters for a Democratic Union, which has been pressuring the Teamsters union for a more aggressive stance against the “cromnibus” changes, says attaching the pension provision to a larger must-pass bill is an underhanded way to harm retirees.

“We regard this as a sneak attack for a major change to pension laws,” Paff told IBTimes. “The problems of the pension funds should not be solved on the backs of people who worked their whole life and earned these pensions.”

Democratic Sen. Tom Harkin, the chairman of the Senate Health, Education, Labor and Pensions Committee, issued a statement Tuesday opposing the pension language.

“More than one million people could see their pensions cut,” Harkin said. The legislation “asks retirees to take potentially enormous cuts to benefits that were earned and promised, without effectively preserving the pension system going forward.”