Bush Energy Dept. Backs Off Plan to Dump Pensions

by Mike Hall, Jun 20, 2006

The Bush administration’s Department of Energy has backed off attempts to dump traditional pensions and gut health care benefits for workers hired by department contractors. After workers whose pensions were threatened joined with their unions to demand Congress take action and stop the pension-gutting plan, the department announced yesterday it had withdrawn the proposal for further study and comment.

Sen. Edward Kennedy (D-Mass.), who was set to offer an amendment to the Defense Authorization bill to stop the Energy Department attack on pensions and health care, said he was pleased by the decision:

This harmful policy would have stripped workers of the secure pensions they deserve and undercut good healthcare. The administration should be working to strengthen pensions for all Americans rather than moving in the wrong direction with politic that unfairly penalize working men and women.

Sens. Jeff Bingaman (D-N.M.) and Pete Domenici (R-N.M.) also were key in negotiations with Energy Secretary Samuel Bodman.

In April, the department announced it no longer would reimburse contractors for the cost of workers’ defined benefit pensions—plans that pay a guaranteed benefit. The department said it only would pay contractors for the costs of 401(k)–style plans. In addition, the Bush administration said it would stop reimbursing contractors for their comprehensive health care plans. Instead, only so-called “market-based” health plans that typically offer fewer benefits at higher costs to workers would be eligible for reimbursement.

When the Energy Department’s attack on pensions was made public, department officials said the changes only would apply to new contracts, but they would encourage existing contractors to dump their traditional pensions in favor of 401(k)-type plans. Yesterday’s announcement did not say if the department would continue to “encourage” pension dumping.

When the Bush administration’s attack on Energy Department pensions came to light, the Economic Policy Institute noted it fell right in step with President Bush’s drive to privatize Social Security and turn workers’ retirement security over to Wall Street.

Don’t think Bush has backed off Social Security privatization despite the public’s rejection and his failure to win congressional approval of the scheme. Earlier this month, a key Republican House leader said Social Security privatization is at the top of the agenda if Republicans hold on to their congressional majority.    

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