A contributor to my blog, Amendment Nine, posted a run-down on the pension situation. His message to Democrats is for us to make this a loud issue, and implicitly he argues that the frame should be about Higher Taxes, instead of promises broken. I think thats a good point. Most of the article is re-posted below and the entire post can be
viewed here as well.
The FT today though points out that state pensions are in just as bad a shape as corporate plans. Or at least, state pensions are as bad off as everyone thinks corporate pensions are, and corporate pensions are worse off! PBG has already warned that with more corporate 11s taking the pension nosedive and coming back up with the lighter load, it may need a taxpayer bailout. But with state pension plans, there are only two ways to bridge the gulf between promise made and promise kept, benefit cuts or higher taxes. You see that, higher taxes on both ends? State pension bailouts, and corporate pension bailouts.
Now let me tell you what this looks like to me. Basically the business roundtable folks have given the nod to shedding pension plans from the corporate america labor force once and for all. They would never publicly say this of course, but when United does it, and when GM says it might have to do it ("it" meaning die a corporate death in C. 11 and rise again w/out a pension obligation), the word is, pensions are history. The implicit bargain is, "if you let us do this without first going into 11, we can save jobs". This is a bunch of bullshit! These guys have run most of these companies like their own personal castles for the last twenty years. They've been underfunding and raiding their pension plans while simulataneously increasing their bonuses and stock buyback plans. You trust them to save jobs? Maybe their own, but not mine. I'd much rather have these dinosaur companies go through C.11 so we can restructure them, kick management in the balls a little, and teach them how to keep their balance sheet clean again. My advice to Democrats, make this a big issue and don't give into the whining of billionaire CEOs about saving jobs, cause when they're threw running great companies into the ground, the only job left will be that of undertaker.
Full Article available here at Amendment Nine.