BROKEN PENSION SYSTEM -- (House of Representatives - November 15, 2005)
The SPEAKER pro tempore. Under a previous order of the House, the gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.
Ms. KAPTUR. Mr. Speaker, USA Today on the front of the business page has a major story: `` `Fundamentally broken' pension system in `crying need' of a fix: Even companies that play by the rules face shortfalls.'' It goes on to say that David Walker, the chief of Congress's nonpartisan Government Accountability Office, describes the pension system as ``fundamentally broken.''
Mr. Speaker, workers who dedicate years of service to a company should be able to count on a decent retirement and a measure of economic security. Yet in this time when more and more companies are reducing or dropping their defined benefit pension plans and retiree health coverage, worker earned benefits are often not guaranteed. This Congress must step up with meaningful pension reform to help shore up pension plans and encourage companies to continue providing them.
Unfortunately, a bill authored by the gentleman from Ohio (Mr. Boehner), who chairs the committee here in the House, is not that needed legislation.
It pays lip service to pension reform for workers, but continues to protect big corporate interests and executives at the expense of workers. It is my sincere hope that this Congress will produce legislation that is truly needed by America and by America's workers. Private pension plans are supposed to be one leg of a three-legged stool of retirement security for all American workers, along with Social Security. However, we live in an era when personal savings are virtually nonexistent, and Social Security's future is menaced by the specter of Republican plans to privatize Social Security. Therefore, workers have to try even harder to shore up increasingly fragile private pension plans.
Unfortunately, the Republican leaders in this Congress want to pass legislation which would actually further destabilize and underfund private pension plans. How in the world can they defend that approach?
Doehler-Jarvis, a company in my district, several years ago was the victim of a takeover where they had to cancel retiree health benefits, and they just did it over one weekend. They never even told the workers they were going to do it. When they filed liquidation bankruptcy, they pushed their obligations onto the Pension Benefit Guaranty Corporation, which is going further and further into the red as I speak here this evening.
Though that was not a perfect solution, that was the only one that existed at that time. Recently, we have heard the announcement by Delphi, the largest U.S. automotive manufacturer, that they are going to declare bankruptcy; and that it is the largest filing of bankruptcy ever in the history of the automotive industry. It will have a significant impact on thousands and thousands of workers. And under the terms of their bankruptcy filing, Delphi is attempting to require its employees to take pay cuts as high as 63 percent and benefit cuts of up to 77 percent just, they say, to keep a few of their U.S. plants open.
The current Pension Benefit Guaranty Corporation has a several billion dollar shortfall already. How in the world are they going to be able to try to hold things together without that fund being shored up, whether it is to help Delphi or anyone else. Frankly, this Congress should have legislation passed that would disallow the bankruptcy system to be used by companies to abdicate their pension and health responsibilities.
However, given the recent flood of companies that have experienced pension problems or breakdowns, the Pension Benefit Guaranty Corporation is no longer as fail-safe as it used to be. It had a $23 billion deficit last year, and since the time of President Clinton has continued to fall from a position of surplus to greater and greater deficit. The chairman of the committee, Mr. Boehner, dubs his plan the Pension Protection Plan; but it does nothing to prevent runaway pension plan terminations, nothing to provide meaningful disclosure and transparency, or ensure fairness to workers, while rewarding corporate executives. And it does nothing to adequately protect the workers pension plans.
Mr. Speaker, true pension reform legislation would repeal special protections for executives where they can receive these so-called golden parachutes while employees suffer deep cuts in their promised benefits. And the bill currently authored here says if an employer does not fund its pension plan above 80 percent, then workers cannot receive any increases in benefits or take a lump sum at retirement. No similar restriction is placed on executives.
And as the amount of guaranteed benefit goes down, for example if the employer does not fund above 60 percent, the workers' plan must be frozen with no new benefits allowed.
Mr. Speaker, America can do better than this. We ought to deep six the Boehner bill and allow the workers of this country to be able to receive the deferred compensation that was part of the contract that they signed when they went to work for America's largest corporations.
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