Bushs Attack on Older Workers

Bernie Sanders

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. 

Bernie Sanders (I‑Vt.) was elect­ed to the U.S. Sen­ate in 2006 after serv­ing 16 years in the House of Rep­re­sen­ta­tives. He is the longest serv­ing inde­pen­dent mem­ber of Con­gress in Amer­i­can his­to­ry. Elect­ed May­or of Burling­ton, Vt., by 10 votes in 1981, he served four terms. Before his 1990 elec­tion as Ver­mon­t’s at-large mem­ber in Con­gress, Sanders lec­tured at the John F. Kennedy School of Gov­ern­ment at Har­vard and at Hamil­ton Col­lege in upstate New York. Read more at his web­site.
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