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Transportation, Treasury, and Independent Agencies Appropriations Act, 2004

Location: Washington, DC


Mr. KENNEDY. Mr. President, it is a privilege to join Senator Harkin on this amendment to protect workers' retirement.

We know that for millions of American workers, their pension benefits are in danger. The continuing weak economy and rising health costs are pressuring thousands of employers to reduce or terminate their traditional defined benefit pension plans.

One way that companies are slashing costs is by converting traditional pension plans to cash balance plans. Older employees are the hardest hit by these conversions. According to the General Accounting Office, annual pension benefits of older employees can drop as much as 50 percent after a company converts to a cash balance plan.

Companies are doing it to save hundreds of millions of dollars in pension costs. But those savings are being taken out of the retirement security of American workers.

These proposed Treasury regulations would give companies legal protection against claims of age discrimination by older employees. Thousands of companies would have a strong incentive to convert to cash balance plans. Millions of workers could lose huge chunks of the pensions they have been promised.

Cash balance pension plans do have some advantages for some workers. Increased portability of pensions is important. So is providing pension benefits for parents, particularly women, who move in and out of the workforce. We support greater benefits for younger workers, who are more likely than ever to have several employers throughout their careers. But Treasury can and must do more to protect the workers who are hurt by these conversions.

The Harkin amendment would halt Treasury's proposed regulations. Workers should have choice about benefits under their pension plans, and they deserve protections when their company converts to a cash balance plan. It is wrong to let companies freeze the benefits for older workers, or reduce future benefits, when these workers have already contributed so many years of service to their companies.

I urge my colleagues to support this amendment, and do the right thing to protect the retirement of our Nation's workers.


Mr. KENNEDY. I thank the Senator from Alabama. In the time agreement that they have, I will be glad to yield and cooperate.

I rise to bring to the attention of my colleagues the result of the existing OMB outsourcing proposals which have really had a very adverse impact on one of the great institutions of our Government, which is the National Institutes of Health. I will relate to that in just a moment.

I commend Senator Mikulski, Senator Landrieu, Senator Sarbanes, and others who have raised this issue. I am mindful at this time that one out of every four of those who serve in the Federal Government are veterans. More than 11,000 of our activated reservists are now on active duty over in Iraq.

I am very mindful, having watched the agencies over a period of time, that there is some opportunity to get greater efficiency and better productivity. Excellence is demanded by many of the agencies, as well as expertise which so many of our Federal employees bring to these agencies. We are a very gifted and fortunate Nation.

The case that comes to mind and pops right out is just a recent example of these current regulations and what it is doing at the National Institutes of Health. NIH is the premier, the gold watch, in terms of basic research all over the world. They are the envy of the world at the NIH. We constantly are facing different challenges of getting the youngest, most talented, most creative, most innovative, most committed, and most hard-working researchers in the world to go to the NIH.

We have had Dr. Zerhouni, who has appeared before our HELP Committee, with Dr. Varmus and others talking about the new paths and opportunities that are out there in terms of the NIH, which are enormously exciting and challenging.

Then, what happened later this last spring? Well, there was a challenge that involved some 677 employees who were grant managers. Grant managers are the ones who review the various research possibilities that are being collected. In many instances, they have the most sensitive kinds of jobs at the NIH because we know that only about 30 to 35 percent of all of the qualified applications actually get funded. We are actually going to see a reduction this year, at a time when we have the greatest opportunities in any time in the history of the world for breakthroughs in all kinds of drugs that affect families, whether talking about cancer, about heart, or Alzheimer's. We would empty the nursing homes in this country if we had a breakthrough as a result of trying to find a prescription drug for Alzheimer's.

The grant managers are the ones who help make the judgments and the decisions in terms of prioritizing these various grants which are really the heart of the NIH programs, and they were challenged.

We had some 677 employees working for a period of weeks because the estimate that was given by OMB was that this would result in significant savings. The employees got together, they made an application, and they won the contract. They won it hands down. And it cost them $7 million. Overall, competitions at NIH will exceed $15 million.

Not only that, but the signal that it sent on through this blue ribbon agency-sure, there may be important changes that ought to be made out at the NIH; sure there may be different changes in terms of direction and what they ought to be doing on clinical trials; sure there could be better utilization of different kinds of reviews, but the fact that we are going to fine the agency which has this degree of expertise and can make the difference in terms of people's lives, being subjected to this, what I think is effectively, harassment.

As I understand the amendment of the Senator from Maryland, it is to assure that we are going to find a common playing field, and the basic rules for competition will be the standards which have been reviewed and recommended and are not the ones which have been embraced by this administration.

I know others have pointed this out. But when we see that, we are going to have competition between some contractors who are not providing the kind of protections or benefits, health benefits, when we know the benefits that exist under the Federal contractors, so that they will be able to continue the slide, in terms of meaning that more and more people are going to lose their benefits, when we find out effectively there is no opportunity for appealing the decision, not for the Federal employees, although there are appeal decisions available to contractors, when we look at the no review and following the cost and the quality of the work performed by the contractors, we have seen time in and time out-and all of us have these examples in our own States-where people bid in and they bid in cheap, they try to add onto the costs of various proposals, which then results in the work not being done, and too often the Federal Government gets stuck holding the bag.

The kinds of unfair competitions which have been reviewed to date, in terms of current conditions, I find so compelling and so unfair. What the Mikulski amendment will ensure is that we are really going to have a system that will be respected, that will be supported by those in all agencies as well as the private sector, and as a result of which we will be able to ensure greater productivity and the savings of taxpayers' money. That is the way to go, not the skewed way which is currently, I think, working to the great disadvantage of hard-working, skilled, dedicated, and committed Americans who are doing a job. Whether they are trying to work out in the immigration process with all the implications that has in homeland security, whether they are border guards trying to guard our borders, whether they are in the Customs Service and dealing with all the challenges they are facing out there, day in and day out-people who join those services need to be highly skilled and highly competent.

Maybe there are better ways of doing it, but the current proposal is not the way to go. The Mikulski amendment will change and alter that. I hope it will be accepted.

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