President Bush may or may not go to war against Iraq, but we do know that he has already declared war against the economic well-being of the middle class and working families of this country.
While he cuts back on Medicare and the needs of veterans, he wants even more tax breaks for the very richest people in this country. While he pushes efforts to privatize Social Security, there is no attempt to raise the minimum wage above its paltry $5.15 an hour. While he expands disastrous trade policies that have already cost us millions of decent-paying manufacturing jobs, he is proposing to slash the pay and benefits of federal employees through a massive and dangerous outsourcing scheme. While our health care system disintegrates and prescription drug costs soar, his administration proposes legislation written by and for the pharmaceutical industry.
And now, in the midst of all this, there is a new economic assault being waged by the Bush administration against older American workers. The White House has recently proposed IRS regulations that would allow corporations to undertake a major raid on the pension benefits that older workers have accumulated. These new proposals, if adopted, would allow companies to avoid federal anti-age-discrimination laws and convert traditional defined-benefit pension plans into “cash-balance” plans. Under the Bush proposal, the promises made to older workers about pension plans that increase retirement benefits based on longevity would be undermined. While corporations would save billions in pension expenditures, some 8 million older workers could see their benefits reduced by 30 to 50 percent.
Cash-balance payment plans have rightfully been condemned by a variety of groups — including the AARP, the Pension Rights Center and the AFL-CIO — because they target the benefits of older workers in violation of current federal law. The Equal Employment Opportunity Commission (EEOC) has received more than 800 complaints related to cash-balance conversions. And since September 1999, the IRS has withheld approval of these plans because of concern about their age-discriminatory effect. Now, however, the Bush administration wants to allow these conversions.
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Enter John W. Snow, President Bush’s nominee for treasury secretary. Snow would be the most important pension policy-maker in the country. Will he stand up for the pensions of millions of Americans, or will he continue the administration’s green-lighting of corporate America’s pension raids?
If Snow’s conduct as CEO of CSX Corporation is any indication, employees across the nation should be very concerned about their long-term financial security. Under his leadership, CSX cut the retiree health-benefit package for most of its employees while Snow benefited from an outrageously inflated pension scheme.
According to published reports, Snow is receiving a $2.47 million per year retirement benefit for life. This amount was calculated through gimmicks that give him credit for working 44 years — when he really only worked 25 years — and by factoring in stock benefits he received as regular income (instead of just salary, as is common practice). At the same time, CSX is cutting the health benefits of its future retirees. If these are the types of policies that will serve as a road map for how he would handle pension policy, then Snow’s fitness to be treasury secretary must be called into question.
American employees don’t need the fox guarding the hen house. To show he deserves to be confirmed, Snow needs to distance himself from the corporate excesses that have cost investors and employees of major American companies billions of dollars — excesses that include his own exorbitant retirement deal at CSX.
An important and necessary first step would be a commitment on his part to withdraw the proposed IRS regulations that would allow companies to get tax-favored status for their age-discriminatory cash-balance plans. This would at least signify a recognition on his part that American workers are suffering as a result of unfair and illegal pension cuts that take place when companies convert to cash-balance plans.
If Snow does not take even this small step, it will be clear that he cannot provide the leadership the nation’s economy and working families so desperately need. In that case, given Snow’s own questionable conduct as CEO of CSX, the Senate should refuse to confirm him as treasury secretary.