Energy Department Workers: Target of Another Bush Attack on Retirement Security

by Mike Hall, May 2, 2006

The Bush administration’s latest attack on retirement security—who can forget President George W. Bush’s huge, but failed, attempt to privatize Social Security?—is aimed at traditional pension plans.

Last week, the U.S. Department of Energy announced it would no longer reimburse contractors for the cost of their employees’ defined-benefit plans—plans that pay a guaranteed benefit at retirement. Instead, Bush’s Energy Department will pay only contractors’ cost of 401(k)-type programs. Traditional pension plans provide greater retirement benefits to workers.

While the department said the changes only apply to new contracts, it will encourage existing contractors to dump their traditional pensions in favor of 401(k)-type plans.

Why is the Bush administration forcing private employers that do work for the government to dump their traditional pension plans? According to the nonprofit Economic Policy Institute:

Part of the story is patronage. The same investment companies that would have benefited from Social Security privatization will earn big fees handling the individual accounts of employees who would otherwise belong to pension plans. The other part is ideology. Bush dislikes collective solutions and would rather see every worker fending for himself.

Rep. George Miller (D-Calif.) says the Bush administration’s action is hastening the demise of traditional pension plans:

It shows that the Bush administration is not only acquiescing in the idea that the days of the traditional pension are over, but is actively supporting that result. The Bush administration wants to encourage companies to dump their traditional pension plans and privatize Social Security, and then tell workers that they are on their own.

While working families face an uncertain retirement security future, we all can peer through the candy store window and see how the upper crust will do in their golden years. Take a look at the AFL-CIO’s Executive PayWatch site to check out CEOs’ retirement nest eggs. If you really want to get your blood boiling, read about Exxon Mobil CEO Lee Raymond’s tidy little retirement package. Remember, he’s the guy who helped bring us the $3-plus a gallon gas.

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