Introduction of the "Department of Energy Contractor Employee Equitable Treatment Act of 2006"

INTRODUCTION OF THE ``DEPARTMENT OF ENERGY CONTRACTOR EMPLOYEE EQUITABLE TREATMENT ACT OF 2006'' -- (Extensions of Remarks - May 12, 2006)

* Mr. GEORGE MILLER of California. Mr. Speaker, the Department of Energy, DOE, recently announced that it will no longer reimburse its contractors for the cost of providing defined benefit pensions for new employees. Beginning in March 2007, contractors will only be reimbursed for defined contribution, 401 (k)-type plans. Furthermore, DOE will only reimburse for a ``market-based medical benefit plan,'' thus encouraging contractors who provide comprehensive medical coverage for their employees to drop or reduce that coverage. In short, the DOE's action is a direct threat to workers' retirement and health care security.

* That is why I rise today to introduce legislation to put an immediate halt to this policy. At a time when even well-funded companies are choosing to terminate their pension plans and Congress is struggling to find ways to encourage employers to provide meaningful health and retirement benefits to workers, penalizing federal contractors for offering guaranteed retirement benefits and quality health insurance is hypocritical and counterproductive. This bill, ``the Department of Energy Contractor Employee Equitable Treatment Act of 2006,'' will simply prevent DOE from using its funds to implement this wrong-headed proposal.

* According to a Department press release, the purpose of the new policy is ``based on sound business practices and market-based benchmarks for cost management.'' However, at a speech at the National Press Club in January of last year, Labor Secretary Elaine Chao claimed that ``President Bush has made retirement security one of the highest priorities of his second term. A critical component of his agenda is ensuring that the defined benefit pension system is viable and that the promises made to the workers enrolled in these plans are kept.'' This new DOE policy, particularly after the President's effort to privatize Social Security, contradicts that statement and reveals a true agenda of undermining guaranteed retirement benefits.

* The DOE rationale--that defined benefit pension plans are too volatile--is particularly ironic given the pressure the Bush Administration is pushing for a House-Senate pension conference bill to change pension law in ways that will make the cost of a pension plan higher and less predictable.

* Moreover, by tying reimbursement to a ``market based medical benefit plan,'' the DOE encourages contractors who provide comprehensive medical coverage to reduce such coverage and to further shift health care cost burdens onto employees, rather than addressing rising health care costs. The DOE directive requires all contractors to make clear that they can ``unilaterally change, suspend, or terminate any medical plan, coverage or contribution at any time.'' It further limits the conditions under which retirees may receive retiree health benefit coverage. Encouraging the loss or reduction of health benefits of any workers or retirees, including workers and retirees serving our country at nuclear facilities, is just plain wrong.

* I encourage my colleagues to join me in support of this legislation.

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