"Last-Ditch, Desperate Push"
The head of the Air Line Pilots
Association Friday blasted what it called "an administration
attempt to gut the pension bill" now in the Senate.
"They are making a last-ditch, desperate push to torpedo the
short-term relief provisions in the Senate bill for pension reform.
They've sent a letter to the Senate leadership, packed with
mischaracterization and outright falsehoods," said Capt. Duane E.
Woerth, ALPA president.
The letter was signed by the three cabinet secretaries
comprising the governing board of the Pension Benefits Guaranty
Corporation and sent to the Senate majority and minority leaders,
plus the chairman and ranking member of the Senate Finance
"These members of the administration's inner circle continue to
grossly distort the facts about what actually is proposed in the
Grassley-Baucus bill. For example, PBGC claims that the proposed
pension changes would result in an additional $40 billion in
pension under funding. This is patently false and the PBGC and the
administration know it," Woerth said.
"The Grassley-Baucus bill does not
waive all pension contributions for three years. On the contrary,
it still would require the normal funding of active employees'
accrued benefits during that period. All we are talking about is a
short deferral of 'catch up' amounts that are required when a
plan's funding falls behind. In terms of the PBGC's funds, it is a
drop in the bucket; but for airlines struggling to emerge from, or
avoid bankruptcy, this could be the difference between survival and
failure," Woerth said.
The irony is that the PBGC's stated goal is to avoid getting
stuck with obligations that might be incurred, somewhere down the
road, if maybe a company fails and terminates its defined benefit
pension plan. However, by failing to give companies this short-term
relief on deficit reduction contributions, they are greatly
increasing the near-term probability of company failures, in which
case PBGC will be stuck with exactly what it's trying to avoid.
"We will be working closely with Senators Grassley, Baucus,
Frist, Daschle and others to support their ongoing bipartisan
efforts to help American workers save their pension plans --
despite the objections and obstacles imposed by the Bush
administration through the PBGC," Woerth said.