The Liberal Patriot

Damn the America Worker and Making it Law

J. G. Schwam -December 18, 2005

Back in the day, not to long ago the members of the House of Representatives on both sides of the aisle were presumed at least for the most part to represent the interests of the people that elected them. They at least cared to listen to their constituents. It is no longer necessary for them to do so. So they don’t. Not at least on the GOP side of the aisle. While there are to be fair Democrats as well that have given up representing the real interests of their home district as well. They can do this because the corporate interest lobbies have become so huge and so extraordinarily well funded that the numerous small donations from their constituents are no longer important or significant when tens and hundreds of thousands of dollars flow into their offices daily from industry group bag men and lobbyists. Many, especially Republicans can and do turn their backs on the folks at home because they can. No doubt many Representatives will dispute this claim. But their actions consistently tell another story.

Take note of the recently introduced and still in rancorous and well deserved debate, the Pension Preservation and Portability Act of 2005, House Resolution 2380 introduced in closed session as an amendment to Senate bill 1783, the Pension Security and Transparency Act of 2005. Introduced by Rep. John Boehner (R-8^th district OH) HR 2380 like most has a positive sounding name that by name alone most would be inclined to support. The language, underlying goal and the likely outcome of this bill, should it become law is another matter entirely. It allows companies with employees pension plans to freeze them, effectively locking employees out of accruals of benefits over many years as they contribute to them. Simply put it means you can end up with a retirement benefit that more resembles the starting pay you received as much as thirty five years before you retire. It also allows employers and in fact appears to encourage employers to purposefully under fund defined benefit plans such as pensions with the purpose of claiming them insolvent many years later and cut or dissolve altogether their pension plans years later. Only to get out of paying them at all or at a greatly reduced amount than the employee was promised.

When requested to do so by S 1783 sponsor on October 11, 2005 Senator Judd Gregg (R-NH), Chairman of the Senate Committee on the Budget the Congressional Budget Office wrote;

The largest source of difference is that our estimate of net costs includes two items that are not included in the budget estimate: the cost of market risk and the present value of benefit payments outside the budget window for plans terminated in the next 10 years. As explained more fully in our recent report, The Risk Exposure of the Pension Benefit Guaranty Corporation, net costs are the estimated market price of insurance for net claims expected to occur over this period.

By that measure, S. 1783 would increase PBGC's (Pension Benefit Guaranty Corporation-a tax payer funded agency) 10-year net costs by $9 billion, or by about 15 percent compared with what it would be under current policy. That increase is the result of a $9 billion reduction in net costs from terminations of pension plans by below investment-grade sponsors investment-grade sponsors and an $18 billion increase in net costs from plans terminated by below investment-grade sponsors.

The bill allows single payer defined benefit plans, like most medium sized manufacturers still operating in the USA to amortize retirement plan funding short falls. This creates a clear incentive for employers and to deliberately under fund its workers retirements, by creating a write off as capital depreciation when they do. In time becoming like an old truck, worn out, no longer running, junked. In this case junking a retirement plan means foisting off the responsibility for it’s future solvency on the PBGC. Since the PBGC is an agency funded the tax payers this means that workers taxes and government debt will reward and in fact promote the effective de-funding of Americans pension plans. It is also likely that future tax increases will come out of the pockets of the very workers who will collect their pensions when these chickens come home to roost.

The bill also allows employers to freeze benefits at current levels. What good will a living wage benefit today be twenty or more years from now when the cost of living and the effects of slow steady inflation will make it many multiples higher than today?

This bill cows to not just the interests of greed of the giant employers in trouble today, such as GM and Kodak but gives all business the incentive to break promises to workers, under fund those promises and leave the taxpayer holding the bag for their broken promises; and gives them the legal standing, without consequence to do so.

Like the underlying but unspoken policy of today’s neo-con controlled GOP this is more fast buck profit taking without regard for fiscal rationality today or responsible planning for the future. Pocket it now, the heck with then.

The PBGC was set up to protect workers pensions under Employee Retirement Income Security Act of 1974. It was designed as a last resort for the unavoidable pension default fund for unforeseen corporate bankruptcies, so that retired and soon to retire workers were not left destitute after a lifetime of labor. It was not designed to be a dumping ground for legalized and promoted corporate irresponsibility. The Federal government is not supposed to be private enterprises stupid banker.

Like, however much of the other policies of the Bush White House and its willing spendthrift Congress, this bill promotes further piling up mountains of debt that under the weight of which future generations will suffer, it is not prudent use of the credit of the United States today and it will be worse tomorrow.

The true crime of this bill that legalizes, discarding and squandering the retirement plans of tens of millions of hard working American’s that their progeny for the first time in our nation’s history will be less well off than their parents. No longer will millions of the next generation now moving into middle age be able to look forward a proud middle class America.

In age when the President of the United States of America refers to the Constitution of the same he is sworn to uphold as just “god damned piece of paper”, why should we expect the elected members of this party to feel otherwise? As the old saying says; the fish rots from the head. As such the capitol today is a polluted of an ocean of rotten fish with a stinking rotten hammerhead floating bloated and aimless in the White House.

It is bills like this that reinforce the belief that this White House and majority party are bankrupt of ideas and a commitment to move our future away from a petroleum based economy, the basis of which will surely begin dwindle away before the middle of this century, the effects which we begin to see today as a tightening of the supply of oil, a situation certain to continue to quickly worsen.

Instead of solutions they engage in the most cynical of solutions. That is shore up the rich, so they can keep themselves in power, thus becoming along with their wealthy corporate financiers, Congress will be as Jared Diamond says in “Collapse”, the last to starve in a dying economy. While the rest of us, must fend for ourselves in changing economy that is beyond the capacity of the mooncalf’s at our nation’s helm to ponder much less comprehend and address the challenges ahead.

Vote them out, before they count you out. Especially if you expect your pension to be sound and provide a benefit on which you can live when you need it. Perhaps they already have.

To view the text of the bills visit http://thomas.loc.gov/ and type HR 2380 or S 1783 Search Bill Text box.

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