“The corporations take care of the top guys,” [former GST Steel company employee David] Young said. “We lost everything.…”Given the continuous claims that businesses must be allowed to shake off the shackles of government regulation in order to fully utilize the free-market system, it is interesting how many of them now look to shake off their responsibility to fulfill their bargain onto the government. At the same time they reward those who lead the companies as they take their step into the void.
After bankruptcies that swept through the steel industry and more recently at United Airlines and US Airways, Congress is taking a closer look at pension issues and disparities in the treatment of executives and workers. Lawmakers also are concerned that more companies like GST, United and US Airways will dump millions of dollars in underfunded pension plans on the federal agency that takes over such plans and pays retirees.
The problem is that the Pension Benefit Guaranty Corp. already is $23 billion in the red and could go broke in 2021, long before the Social Security system faces insolvency. Experts predict that if the pension agency goes broke, it may need the biggest taxpayer bailout since the savings and loan disaster of the 1980s and ’90s.
As part of pension reform, Republicans and Democrats are looking at bills that would restrict companies that try to give executives pension increases while their retirement plans for workers are significantly underfunded.