Share this article

print logo

Flawed 'rescue' bill may not save pensions

A supporter of the pension bill that passed the House last week, Rep. Thomas M. Reynolds, R-Clarence, issued a cautiously worded press release on how the legislation might affect workers at the threatened Delphi plant in Lockport.

The bill is "a step in the right direction," said Reynolds, a member of the Ways and Means Committee.

"We have taken a step toward reassuring our current Delphi workers and retirees that their pensions will be funded," he said.

If everything works out as well as its sponsors say, then Delphi pensioners may escape the fate of retirees of two big steel companies that once operated in Buffalo Niagara but went belly up.

Because those companies didn't adequately pay into their pension trusts any better than Delphi does, their obligations to workers became burdens of the government. The U.S. Pension Benefit Guaranty Corp. paid them only a percentage of what they had coming.

Promised security got replaced by embarrassment and anxiety.

Some retirees suddenly found themselves Wal-Marted: Becoming dependent on the kindness of welfare-based health, food and housing programs.

A lot of these folks live in the district of Rep. Brian Higgins, D-Buffalo. His press secretary, Suzanne Anziska, said Higgins fears "this bill might make the situation worse, and lead to more pension plans being frozen."

"What he heard from workers in his district confirmed his suspicion that this bill could do them more harm than good," Anziska said. So Higgins voted against it.

Rep. Louise M. Slaughter, D-Fairport, said the bill will "worsen the pension crisis."

The pension bill passed 294-132. Republicans found themselves in an unusual place: Citing support of the United Auto Workers as reason to vote for the bill.

With reports circulating that GM is fighting off bankruptcy, there was an ominous note in the GOP's announcement that the union backed the bill. The UAW, the Republicans said, liked the provisions on "shutdown benefits."

This House bill will be blended with the Senate-passed version by GOP staff working with corporate lawyers behind closed doors over the next month or so.

In the meantime, it's useful to cite concerns voiced by critics who maintain they understand this huge, exotic bill.

Rep. Charles B. Rangel, D-Manhattan, said the legislation doesn't close loopholes that let bankrupt companies dump their pension plans on the government.

Rep. George Miller, D-Calif., said the bill increases the deficit of the stressed-out Pension Benefit Guaranty Corp. by $9 billion over 10 years.

The corporation is already dealing with 250 pension plans in bankruptcy, including Delphi's.

Miller cited a corporate survey showing that 60 percent of the companies polled would freeze or end their pension programs if the bill became law.

It fails to restore the pensions of 120,000 United Airlines workers, he said.

Miller said the bill permits CEOs to get "executive golden parachutes" while failing to protect workers against deep cuts in their benefits.

The bill dilutes existing sanctions against self-dealing and conflict of interest by fund managers, according to William D. Novelli, head of AARP. Meaning, he and others think the bill helps crooks in the security business.

Finally, in an act of rare courage for an administration bureaucrat, Bradley D. Belt, head of the Pension Benefit Guaranty Corp., a week ago said the Senate and House bills are "a step back from current law."

This flawed "rescue" bill will emerge from a Senate-House conference during the winter for a take-it-or-leave-it vote in both houses. It bears very close watching.

e-mail: dturner@buffnews.com

There are no comments - be the first to comment