Taking One For The Team

When a corporation's pension plan "fails",
the Pension Benefit Guarantee Corp (PBGC)
steps in and assures payments to retirees --
generally at a much reduced level and without
health benefits. Naturally you would think
that Congress would be eager to prevent
this from happening, especially because
PBGC is a government agency with a deficit
of $350 BILLION that will likely require
a bailout similar to the S&L crisis (created
by Congress...)

http://quote.bloomberg.com/apps/news?pid=10000103&sid=akpUvkbWjU6k&refer=news_index

But actually, the precise OPPOSITE is happening
in Congress. For the last two years, (and likely
again for two more years if the legislation
passes), Congress has allowed corporations to
use an extra-lenient formula in calculating their
future obligations. This has meant tens of
billions of dollars in savings to the corporations,
many of whom, by the way, continue to use
wildly unrealistic formulas that enable them
to falsely report "income" from pension plans
that are actually deficient. So instead of
requiring corporations to fully fund their
obligations, Congress is giving them a
hand-out knowing that the taxpayer will
pick up the tab. This is supposed to be
good for the economy...

According to Bill Fleckenstein:
http://moneycentral.msn.com/content/p90638.asp

"Of course, corporate America doesn't really worry about this because they know they've got the Pension Benefit Guaranty Corp. as a backstop. The PBGC is supposed to step in when pension plans fail, but it encourages a company to swing for the fences because, if the play works, it lowers the company's pension costs. If it doesn’t work, taxpayers pick up the tab. It's a heads-they-win-tails-we-lose problem."

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Both the Dems and the Repugs are in on this one.
And both retirees and taxpayers will "take one
for team".

Here is the proud presentation from the Dems
for their plan in 2002:

H.R. 3108, the Pension Funding Equity Act
http://democrats.senate.gov/~dpc/pubs/108-2-018.html


And here is what's happening in 2004:

Congress takes action to save companies billions in pension payments
By Jim Abrams � The Associated Press
http://www.thebatt.com/news/2004/01/26/News/Congress.Takes.Action.To.Save.Companies.Billions.In.Pension.Payments-587613.shtml

* * *

Essentially what this all boils down to is
siphoning the public treasury and the bank
accounts of citizens and mainlining the
juice into the bottom (lines) of campaign
contributors -- the very same corporados
who are busily sending American jobs overseas...

http://www.cnn.com/CNN/Programs/lou.dobbs.tonight/

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