Pension Funding Equity Act of 2003-Continued
PENSION FUNDING EQUITY ACT OF 2003-CONTINUED
Mr. GRASSLEY. Mr. President, I move to reconsider the vote.
Mr. KENNEDY. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KENNEDY. Mr. President, could I have the attention of the chairman of the Finance Committee? Would the Senator enlighten us as to what he expects as far as when we are going to complete this legislation? As the Senator well knows, we have been on it Wednesday, Wednesday afternoon, Thursday afternoon, Friday, Monday, and today. We have had one amendment. I know we are going to run into all kinds of problems later on in the session about time, and I was just wondering what the leadership intended to do on this bill.
Mr. GRASSLEY. We hope to work out agreements on all of the remaining amendments yet today and then have a vote tomorrow and close down very shortly because of weather.
Mr. KENNEDY. Fine. I do not believe there are any amendments on this side.
Mr. GRASSLEY. There is one more on this side.
Mr. KENNEDY. Fine. I look forward to working with the chairman. We are together on this.
Mr. GRASSLEY. Yes.
Mr. KENNEDY. As a matter of interest, Members on our side have inquired about how we were going to proceed on the legislation. I wanted to give them some opportunity. I thank the Senator.
The PRESIDING OFFICER (Mr. CHAFEE). The Senator from Massachusetts.
Mr. KENNEDY. Mr. President, over the past few days we have had a good debate and discussion of the challenges facing the defined benefit pension plan system. I thank my colleagues for engaging with us on these issues that are so vital to the well-being of American workers and their families.
As I and others have mentioned, defined benefit pension plans provide a greater certainty and greater security to retirees. Every American deserves this kind of security in his or her old age in terms of retirement. There are savings, which are so important, Social Security and pensions. We have seen savings reduced significantly with our economic downturn and we have also seen the pensions of so many of our citizens threatened.
This legislation is designed, as pointed out earlier, to try to deal with a particular challenge in a temporary way until we can reach a final determination on how we are going to proceed. But it is absolutely essential.
This week we have taken the first important step to stabilizing our Nation's pension plans, which have been battered by a perfect storm of economic conditions over the last 3 years.
I again thank Chairman Grassley, the ranking minority member, Senator Baucus, as well as our HELP committee chairman, Senator Gregg, for working with all of us to develop a moderate bipartisan measure to address the pension system's short-term problems. This amendment does not weaken the existing funding bill. It simply provides temporary, moderate relief to give companies and workers the breathing room needed to take steps to further protect these pension plans. We must take advantage of this time to improve and expand our pension system.
More and more American workers are finding themselves without a pension. Since 2000, 3.3 million Americans have lost their pension coverage. In 2002, only 53 percent of our Nation's workers were participating in retirement plans-the lowest level in over a decade. Only one in five workers today has a secure defined benefit plan.
This drop in pension coverage is part of an overall decline in the quality of jobs and the quality of benefits that American
workers are receiving. American workers are working harder than ever, but they are getting less and less for their effort.
I want to take a few moments here on the floor of the Senate to remind our friends and colleagues what the real state of the union is with regard to workers in our country at this time.
As recently as today, there were statements and comments by the chairman of the Federal Reserve. On CNN, they asked the question: Do you agree with Federal Reserve Chairman Alan Greenspan's comment that new jobs will replace old jobs as they always have?
We could ask that in this Chamber. I wonder what the answer would be. The American people get it-certainly the viewers of CNN do. This is nonscientific, but it is a reaction. Those who believe Mr. Greenspan was right were 11, and those who believe he was wrong were 89 percent.
Americans are getting it. They are understanding it.
The Federal Reserve Bank publication Economics and Finance, last summer said-I will include the appropriate references-that the downward turn in the mid-1970s and early 1980s shows an even mix of cyclical and structural adjustments-those who lost their jobs as temporary workers and who lost their jobs which are more permanent in nature. During these episodes, half the unemployment was structural and half was cyclical. The pattern changed in the early 1990s when industry was undergoing structural adjustments and increased its share of total employment to 57 percent.
The greatest change, however, is apparent. In the 2001 downturn, 79 percent of the employees worked in industries affected more by structural shifts than by cyclical shifts. That means, in simple language, those who responded to the CNN poll understand that 80 percent of the jobs that are lost today are permanently lost. This has to be a major concern.
This chart indicates that the Federal Reserve reports the Bush job loss is permanent. In the 1950s, the permanent job loss was 51 percent; in the 1980s, again 51 percent; and, early 1990s, only 57 percent. Now, there is an 80 percent permanent job loss-the first time in the history of this country.
There is a report from the Department of Labor which shows that 36 States have lost jobs since President Bush took office, and 27 States lost more jobs in the last month alone. The rate of job loss in my State of Massachusetts since President Bush took office is higher than in any other State.
I say to the Chair, my friend and colleague from Rhode Island, I doubt if Rhode Island is very far behind. Over the last 3 years, 193,000 jobs disappeared, and 200,000 Massachusetts residents are currently unemployed. In Massachusetts, 2,500 workers a week are running out of benefits because our Republican friends and the Bush administration refuse to extend the unemployment compensation temporarily for 13 weeks to permit these families to pay a mortgage and to put food on the table. These workers have paid into the fund. The fund has $17 billion in surplus. The cost of this legislation for 13 weeks is $7 billion. But no.
Look at what the President of the United States said at the time of his State of the Union. He said, "This economy is strong and growing stronger." Applause. And then he said, "Jobs are on the rise." Applause.
That really defies the facts and reality in terms of what is happening across the United States in terms of real jobs.
I referred previously to the excellent article and report of just last Friday. This information is current. These figures are current with regard to my own State of Massachusetts. The statement of the chairman of the Federal Reserve is current.
The study of the Federal Reserve is current.
Here is the Wall Street Journal pointing out that the gap in wages and equality is growing for U.S. workers. The gap between the highest and lowest earners in America is widening again, with election year ramifications. The trend is a reflection of the job market. The exceptionally weak response to the current economic recovery as well as the long-term technological and economic changes have eroded the bargaining power of America's lowest paid workers. Data show that younger workers, who currently have fewer job prospects than a few years ago, in particular are bearing the brunt. The numbers indicate a movement to greater wage inequality around the time President Bush succeeded President Clinton.
This is the Wall Street Journal. This is not a Democratic organ I am quoting.
The disparity started under President Bush with the economic slide into recession 3 years ago. The trend represents a reversal of the late 1990s when the lowest rates in a generation enabled the lowest paid workers to keep pace with those at the top. Mr. President, we will look at the jobs referred to in the President's State of the Union. He talked about these jobs as being on the rise.
Look at this chart. This refers to what is happening in the job market.
The late 1990s, 1998 to 2000, all the fourth quarter-the same quarter we were coming out of the recession-for every job that paid $16.31, the new job paid $18.32, a $2 bonus. Lost your job? Get a new job and get better pay. This is the average of all the new jobs.
What is it today? Under the Bush recovery, for every job that was paying $16.92, the replacement job is $15.65-22 percent nationwide; 35 percent in the State of New Hampshire where so many of our friends and colleagues are today. No wonder the citizens of New Hampshire are concerned about the state of the economy, the cost of tuition, and the cost of health care.
Look what is happening in the industries across the country at the point of hiring. We find workers are working harder, working longer, and they are making less. This is the real state of the Union.
This chart shows nationwide only two States-Nebraska and Nevada-have actually increased employment and had a pay increase over the employment figures when the President took office. Every other State has seen a decline.
How does the recovery stack up with other recoveries, the last nine recoveries, going back to 1949? This chart compares the constant quarter used when the recession ended. What happened to wages? Going back to 1949, they went up 16 percent; 10 percent in 1954; 10 percent again in 1958; in 1961, 7.9 percent; 9.2 percent in 1982; 1991, 6.1 percent; and 2001, 1.58.
That is what is happening out here among workers in the workplace. No wonder, as CNN reported last week, that American workers are finding themselves competing with cheap foreign labor just to hold on to their jobs. They are overwhelmed because they feel as if forces way beyond their control are making decisions that affect their lives. They are exhausted because they are working harder and longer and faster just to stand still.
Who is making out with this recovery? This chart compares the recovery in the 1990s and the recovery today. In the Bush economy, corporate profits ballooned compared to workers' wages. With the recovery in the early 1990s, 60 percent of the new economic activity was reflected with 60 percent going to the workers' wages; with the recovery in the 1990s, 40 percent went to corporate profits. With today's recovery, 86 percent goes to corporate profits and 13 percent goes to the workers in this country.
Talk about disparity. Talk about fairness. What is going on is the most dramatic change and shift in recent history in terms of the relationship between the profits and what the workers are earning.
That is absolutely wrong. The results are dramatic. In the year 2000, there were 31 million Americans living in poverty. Today, there are 34 million Americans living in poverty, according to the Department of Commerce.
It is not just what is happening in the job markets; it is happening in health care costs. We see this in the most recent Time magazine, February 2, "Why Your Drugs Cost So Much More." The report shows Americans spent $162 billion on prescription drugs in 2002, up from less than $100 billion a decade ago.
Health care spending continues to rise; 9.3 percent in 2002, according to the trade journal Health Affairs. That is the largest increase in 11 years. Employers tighten coverage to cut costs; consumers are more resentful of what they are paying at the drugstore. While prescriptions represented only 10 percent of the total health care costs in the United States in 2002, they amount to 23 percent of the out-of-pocket costs for the consumer.
We passed a drug bill last fall. One would think we would look at coverage and try to do something about costs. No way. Written into that, behind closed doors, were the provisions that this Bush administration and the Republicans prohibited the Secretary of HHS to be able to bargain with the drug companies in order to see some reduction. The Secretary for Veterans Affairs can do it and it means a 47-percent reduction for veterans' prescription drugs. But this was prohibited in the legislation.
Hopefully in this Congress under the leadership of TOM DASCHLE and Congresswoman Pelosi, we will address what is happening with health care costs. Prescription drug costs are a special problem because the cost of prescription drugs is out of control. We have to do something for our fellow Americans, primarily our seniors but for others as well, and about the costs of health care generally.
Workers are working harder, longer, and for less. They are worried about their health care. The costs are going through the roof, with very little insight to get a handle on that cost.
We look not only at what workers are looking for in terms of their costs for health care and the costs of health care for their parents. Look at the costs of college education. This chart is a comparison of tuition at a 4-year public university: it was $3,700 in 2001-2002; now it is $4,700. That's a 26-percent increase since 2001.
How can average working families afford to send their child to school? How do they afford their health care costs, their prescription drug costs, their tuition?
Look what has happened to wages-nothing. That is the real state of the Union, not this "jobs are on the rise, and the economy is strong and getting stronger."
This is the description of what is happening out there to American workers. What is the answer of this administration? We
say, with regard to the lowest workers, let's see an increase in the minimum wage.
The minimum wage has not been increased in 7 years. By the end of this year it will be at its lowest purchasing power, in real terms, in the history of the minimum wage. We say: Let's get an increase. There is a majority of the Members in this body who would vote for an increase in the minimum wage, and we have been prohibited from getting it because the Republican leadership will not let us get a vote on the issue.
Seven million Americans are entitled, when they are working 40 hours a week, 52 weeks a year, not to have to live in poverty. That is what we believe on this side. We challenge the other side to give us an opportunity to let the Senate express itself.
We have the second issue that I have mentioned, unemployment compensation. Mr. President, 90,000-think of that number of people-90,000 individuals a week are losing their unemployment compensation. I do not know how those families do it. How does a father and mother come back and look into the eyes of their children when they lose that unemployment compensation, having worked hard all of their lives, paid into the fund, and it is suddenly gone? And they cannot find a job because we are in a jobless recovery. As the figures show, in the last month, this administration said there would be 300,000 jobs. There have been 1,000 jobs created. It is a jobless recovery.
How do those parents deal with it? How do those children react? That is what is happening. Now we cut away their lifeline, the temporary unemployment compensation. No, you cannot have it. You cannot have an increase in the minimum wage to provide some relief. And that is a family value issue because most of those who work for the minimum wage are women, and many of the women have children. It is a family issue, a children's issue, a women's issue, a civil rights issue, a
fairness issue. Yet we cannot have a raise in the minimum wage. We cannot have an extension of unemployment benefits.
Beyond that, we are going to stick it to 8 million Americans in denying them overtime. We had the debate on that earlier, that proposed regulation by the administration to restrict overtime coverage for 8 million Americans. It was rejected here under the leadership of my friend and colleague, Senator Harkin. It came up in the House of Representatives. It was rejected there. Then those provisions rejecting this regulation were stripped out of the omnibus bill behind closed doors in the middle of the night.
That is unfair to a number of different professions. It is unfair to nurses, firefighters, and police officers. They are the backbone of homeland security. But it is unfair to others as well, including many professions which have predominantly women in them. It is very unfair to working women.
The cruelest part of this whole proposal was the part of the regulations that said if service men and women, when they are over in Iraq defending this country, and Afghanistan or other parts of the world, got a little specialized training, when they come back and take a job, if they had that specialized training, they would not be eligible for overtime.
Can you imagine that? We use these training programs as an incentive for people to go into these services. I have asked on the floor and would love to see the exchange of information between the Secretaries of Labor and Defense on that issue because this is a major incentive-training programs, education-for young people who perhaps do not have the resources to be able to go on to college and do not want to be a burden on their parents. They go into the service-proudly go into the service-and wear the uniform of our country, and defend our country, but they also try to get that help and assistance in the form of training and education.
I will end on this issue with this letter from Randy Fleming, a veteran, and what this proposal would mean to veterans. He is a Boeing employee worried about losing his overtime. This is what his letter says:
My name is Randy Fleming. I live in Haysville, Kansas-outside Wichita-and I work as an Engineering Technician in Boeing's Metrology Lab.
I'm also proud to say that I'm a military veteran. I served in the U.S. Air Force from August 1973 until February 1979.
I've worked for Boeing for 23 years. During that time I've been able to build a good, solid life for my family and I've raised a son who now has a good career and children of his own. There are two things that helped make that possible.
First, the training I received in the Air Force made me qualified for a good civilian job. That was one of the main attractions when I enlisted as a young man back in Iowa. I think it's still one of the main reasons young people today decide to enlist. Military training opens up better job opportunities-and if you don't believe me, just look at the recruiting ads on TV.
The second thing is overtime pay. That's how I was able to give my son the college education that has opened doors for him. Some years, when the company was busy and I had those college bills to pay, overtime pay was probably 10% or more of my income. My daughter is next. Danielle is only 8, but we'll be counting on my overtime to help her get her college degree, too, when that time comes. For my family overtime pay has made all the difference.
That's where I'm coming from. Why did I come to Washington? I came to talk about an issue that is very important back home and to me personally as a working man, a family man, and a veteran. That issue is overtime rights.
The changes that this administration is trying to make in the overtime regulations would break the government's bargain with the men and women in the military and would close down opportunities that working vets and their families thought they could count on.
When I signed up back in 1973, the Air Force and I made a deal that I thought was fair. They got a chunk of my time and I got training to help me build the rest of my life. There was no part of that deal that said I would have to give up my right to overtime pay. You've heard of the marriage penalty? Well I think that what these new rules do is to create a military penalty. If you got your training in the military, no matter what your white collar profession is, your employer can make you work as many hours as they want and not pay you a dime extra.
If that's not bait and switch, I don't know what is.
And I don't have any doubt that employers will take advantage of this new opportunity to cut our overtime pay. They'll tell us they have to in order to compete. They'll say if they can't take our overtime pay, they'll have to eliminate our jobs.
It won't be just the bad employers, either-because these rules will make it very hard for companies to do the right thing. If they can get as many overtime hours as they want for free instead of paying us time-and-a-half, they'll say they owe it to the stockholders. And the veterans and other working people will be stuck with less time, less money, and a broken deal.
I'm luckier than some other veterans because I have a union contract that will protect my rights for a while anyway. But we know the pressure will be on, because my employer is one that pushed for these new rules and they've been trying hard to get rid of our union.
And for all those who want to let these military penalty rules go through, I have a deal I'd like to propose. If you think it's okay for the government to renege on its deals, I think it should be your job to tell our military men and women in Iraq that when they come home, their service of their country will be used as a way to cut their overtime pay.
You can't say it any better than that. And the cruelest part of it all is that the Labor Department puts out a publication to show employers how to go about cutting his overtime pay.
Mr. President, just finally, I want to make mention of something we ought to be concerned with-and we ought to be concerned about all workers-but it just came to my attention that the administration's overtime proposal will affect the U.S. Capitol Police.
The Capitol Police was first created in 1828 with the sole mission of providing security for the U.S. Capitol Building. These dedicated officers protect our lives, the lives of our staff, and the security of the Nation's Capitol every single day.
Nearly 2,000 officers are responsible for these duties, and hundreds of them could lose their overtime pay under the Bush plan.
After September 11, many of these officers worked around the clock to secure our safety. During the anthrax attacks, the officers dedicated hours and hours away from their families to secure the Capitol against further biochemical attacks.
If you walk through these halls, you can hear the buzz among these officers: Are we going to be affected by this overtime proposal? How could they do this to us?
Not every officer would be affected, but many with the specific duties listed in the Bush proposal could lose their overtime protections. Denying overtime protections to even one Capitol Police officer is too much.
Sergeants and other officers who spend most of their time on nonmanagerial activities but who supervise two other officers could lose their overtime protection.
And for the first time in the history of the Fair Labor Standards Act, nearly 40 percent of the Capitol Police force-those earning above a certain amount who meet just one of the exemption criteria-will not have access to overtime protections.
Well, this is where we are. We want to give the assurance to the American workers, to their families, to parents and their children that we are going to battle.
We are going to battle to make sure this administration doesn't implement those overtime rules. We are going to battle every moment we have, every opportunity we have, to extend unemployment compensation. And we are going to battle time and time again to increase the minimum wage. Let there be no mistake about it. It is going to come up in the Senate time and time and time and time again, until we provide some justice for workers in America.