Date: 2006-07-28
Speaker: GEORGE MILLER (democrat)
Chamber: H
State: California

Mr. Speaker. I yield myself such time as I may consume. Mr. Speaker and Members of the House. this is a complicated piece of legislation and Members of the House and Members of the Senate have struggled with it for some period of time. That struggle really hasnt been completed yet because this legislation was taken from the conference committee and it is here tonight to be passed unilaterally within the House and be presented to the Senate in the future. It is difficult to understand all of the things that have been done in this legislation. certainly for the Democratic Members of the House since we were not included in this conference committee. We were not invited into any of the sessions. nor was the information shared with us as it was developed during the conference committee because they chose to run it simply on a partisan basis among the House conferees. But I think it is clear to understand also that this legislation does. in fact. as my colleague from Massachusetts said. miss a number of opportunities. And that is why we are concerned with it tonight. We understand the changes that have been made that allow companies to continue to underfund those pension plans and then increase the contributions that those plans will have to make in later years. and it is pretty clear that as businesses sit down and make the decisions about the allocation of resources and they look at those increased contributions. the burden will really push them in the direction of freezing or terminating their plans. That is why we see the quote that was given this last day or so. "We will see an unprecedented number of companies freezing -their plans in 2007 because they will recognize the difficulties of the new pension regime." That comes from the American Benefits Council. which deals with so many of these plans. because this tilts the table toward the decisions by companies to terminate or to freeze those plans. And if that happens. of course. we have been warned now. under this legislation by the Pension Benefit Guaranty Corporation that as they contribute less to those plans and then make that decision. -it also heightens the likelihood that these underfunding problems will become worse. according to this legislation as represented to us by the Pension Benefit Guaranty Corporation. And they also make it clear the Pension Benefit Guaranty Corporation that absorbs these plans on behalf of a safety net paid for by other plans that as they suffer from a huge deficit. a $23 billion deficit. they expect that this legislation that is before us tonight will add some $2 billion to that deficit over the next 10 years. But there are other decisions that the conferees could have made or that you could have made in drafting this bill as you brought it to the floor. You could have erred on the side of working people. You could have made a decision that in these plans that are distressed and underfunded that we would. in fact. treat the employees and the executives alike. But we set two different standards. We said that if your plan is not 80 percent funded. then the employees can get no additional benefits in terms of their retirement out of that plan. But if a plan is only 60 percent funded. executives can continue to draw and add on and accrue pension benefits. So we have set two different standards here. Both people. I assume. are working very hard for the success of that corporation. One is just going to get treated entirely differently than the other. It is a matter of simple fairness. A matter of simple equity. But when we see the greatest disparities in the history of this country for a long time now. when we see these disparities. this bill increases those disparities between the executives and the employees. You could have made a decision not to harm the pilots that were harmed after 9/11 because they were forced to retire early. Federal law made. them retire at 60. Then 9/11 and the high fuel costs come along. and that drives United Airlines into bankruptcy. a bankruptcy I didnt agree with. but they went into bankruptcy. so you lost 40 percent of your pension. PBGC took over their plan. but you lost an additional amount because you retired at 60. Those pilots had no chance. We could have taken care of them in this bill. One would have thought that that was somewhat of a humane thing to do. a compassionate thing to do. They were victims of 9/11. They were victimsof the downturn in the travel economy after 9/11. They were victims of high fuel costs. They did not do anything wrong. and Federal law forced them to retire. But we just blew off their cause in this legislation. The issue of older workers. a missed opportunity there. to make sure. as we transition from defined benefits plans to cash balance plans. that we would protect the oldest of those workers. the closest to retirement. that we would make sure that they would be taken care of because. as we know. people who are 55. 60 years old. 5 years from retirement. have very little opportunity to accumulate the kind of economic resources that are necessary to match the retirement that they were expecting. You didnt have to do it. It was recommended by the administration. The Secretary of Treasury. former Secretary Mr. Snow. said it should be done. He said he did it in his corporation at CSX. He voted to do it as a member of the board of Verizon. It was done by Honeywell. It was doneby Wells Fargo Bank. It was a compassionate thing to do. They still realized the savings that they wanted by changing their pension plans. and I do not object to their doing that. I just thought that we could make an effort to try to protect those people who the GAO tells us would lose almost half of their benefits with those kinds of conversions. But that was not done in this legislation. So I really think that we ought to understand that those kinds of decisions really do harm a number of people that could have been helped in this legislation. a significant number of people that could have been helped in this legislation. And we could have done some more to try to help keep these plans out of the PBGC. We could have also made sure that before people went to bankruptcy in the Manner in which United did. that they would have made the last ditch effort. the kind of effort that we just talked about earlier. where airlines made these kinds of efforts to freeze their plans. but they did not. But I think before we rush to bankruptcy and then we. turn these plans over to the PBGC and maybe ultimately to the taxpayer that there ought to be a burden. there ought to be a showing. there ought to be evidence that. in fact. you made every effort. I am not asking you to destroy the company. I am asking you to make the kind of effort that we saw others make but they chose not to make it at United. and as a result of that. those machinists. those flight attendants. the pilots. the ramp workers. and so many others have taken such a serious hit on their pension benefits with no ability to recover. So those are my objections to this legislation. We started this session with an unprecedented attack on Social Security. And as people started to look at that attack. and they saw the Federal privatization of Social Security. they started to look at their own pension plans. and they realized. as what we are doing with here today. that their own pension plans are very insecure. There is probably no employer in this country that can tell you that that pension plan will be there for their employees 75 years from now. 65. years from now. and be paying out 80 percent of the benefits. So people have come to realize that they need retirement security. And I do not believe that this legislation provides that kind of security that individuals need. I recognize the transitions in pension plans. I recognize the changes in pension plans. But I really think that this legislation. in many ways. was drafted looking in the rearview mirror as opposed to the future of these plans and how we encourage savings and how we encourage participation. . There is no question this legislation deals with some of those issues. but I do not believe that we did the kind of job that will serve us well in the future. And I would encourage Members to oppose this legislation. We will have a motion to recommit. a motion that will protect those older workers. a motion that will treat those airlines the same. If they all freeze their plans. they should get the same number of years to do that. and we think it will provide them a greater margin of safety if they do that. and provide for that kind of transition and the protection of those pension plans as they originally requested. as the Senate originally voted to do. But the conferees didnt go there. and certainly this legislation being offered in the House tonight didnt go there. But that will be offered in a few minutes. I urge opposition to this legislation. Mr. Speaker. I yield back the balance of my time.