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DukeEmployees.com - Duke Energy Employee Advocate

Washington - Page 31


"We're outraged. We think it's been conclusively determined that this is an age discrimination practice
(cash balance plans) and they are allowing it to go on.'' - Joel Barkin, Rep. Bernard Sanders’ spokesman


Sanders Bashes Bush on Class Warfare

Congressman Sanders – http://bernie.house.gov – December 27, 2002

Sanders to Bush: Reverse Your Policies Towards Working Class Americans

Rep. Bernie Sanders (I-VT) called on the Bush Administration today to stop waging its war on working class Americans. Sanders pointed to an editorial in the Minneapolis Star Tribune as further proof that more must be done to help the working class of this country. The editorial illustrates how Bush's economic policies have been working against the interest’s of working class Americans.

Sanders said, "For the last two years President Bush has been waging a war against working class Americans. In the past few months alone, Bush has told federal workers that he would be cutting their annual pay increase, lifted the moratorium on cash balance pensions, which will hurt millions of workers, and sat idly by while millions of Americans were unable to afford prescriptions drugs. At the same time, President Bush has been pushing to make tax cuts for the richest 1% of Americans permanent. Does this sound like a President who is concerned for the neediest among us? ”



The Bush Class Warfare

Minneapolis Star Tribune – December 27, 2002

(12/20/02) - "Waging class warfare" is an accusation often and easily thrown at people who object to federal tax and spending policies that favor the wealthy. Sometimes that accusation has the ring of truth, but sometimes it better fits those who make it than those it is meant to describe. Now is one of those times. Consider these recent developments and then decide: Who is waging class warfare on whom?

• President Bush recently informed federal workers that waging the war on terrorism would mean they couldn't have their 4.1 percent wage increase next year and would have to settle for 3.1 percent. Bush also reinstated annual bonuses of up to $25,000 for political appointees in the federal government. The bonuses had been scrapped by President Bill Clinton, who concluded they were used mostly to benefit political cronies of the White House.

• Last week the Treasury Department proposed new rules for pensions that would protect employers from claims of age discrimination in converting traditional pension programs into a new type. Those new pensions would mean reduced benefits for many older workers and reduced costs for companies.

This week it was disclosed that the man Bush has chosen to implement those rules, John Snow, will enjoy a pension of $2.47 million per year from CSX Corp. until he dies. In computing Snow's pension, CSX will credit him with 44 years of service, though he has been with the company just 25 years. The pension also will be paid not just on his salary, but also on bonuses and the value of 250,000 shares of stock the CSX board gave him. Snow is hardly alone among American CEOs in these pension arrangements.

• Did we mention that Snow's total compensation rose 69 percent between 1997 and 2001, while the value of his company's stock was losing 53 percent of its value?

Snow's not alone in that, either. Executive compensation has been going through the roof, especially in troubled firms. This week, in fact, a bankruptcy court rejected a $50 million compensation package for a new CEO for WorldCom, where thousands have lost their jobs and investors have lost billions.

What has happened to average workers? Not much. A 2001 study by the National Bureau of Economics Research -- a group with a sterling nonpartisan reputation -- found that between 1970 and 1999, an average American worker's salary increased just $3,342 in 1998 dollars, to $35,864. During that same period, the average total compensation of the 100 top American CEOs increased 2,800 percent, to $37.5 million per year.

To put it another way, Graef Crystal, a watcher of compensation trends, found that in 1973, major CEOs were earning about 45 times what their average workers earned. By 2002, CEOs were getting almost 500 times what their workers were earning.

• The White House is floating trial balloons on a new approach to tax cuts for next year which would argue that the affluent bear too much of the federal burden and low-income Americans too little. In order to make this argument, the White House focuses exclusively on the income tax. It argues that payroll taxes -- paid to finance Social Security and Medicare -- are not taxes at all, but fees. This, of course, would skew the tax picture dramatically because the payroll taxes take an especially big bite out of the incomes of less-wealthy Americans.

That argument is going to be a hard sell, a devious word game. What should make it even more difficult are the statistics on wealth accumulation in the United States, which belie the notion that onerous tax burdens are impeding the wealthy.

Statistics developed by the Federal Reserve show that between 1993 and 1998, the net worth of households declined 76 percent for the bottom 40 percent of households. Net worth of all other segments grew, and for the top 1 percent, the growth in wealth was 42.2 percent.

The results of that growth are stunning. Fed figures show that in 1998, the top 1 percent of wealthiest Americans held 38.1 percent of the nation's net worth. The top 10 percent held 70.9 percent. The bottom 40 percent held not even one-quarter of 1 percent.

This is not an argument for soaking the wealthy, nor for paying CEOs peanuts. The accumulation of wealth serves very important social and economic purposes in this nation. And all workers benefit from having talented, well-compensated CEOs at the helm of their companies.

But aren't things getting more than a bit out of hand when a CEO earns 500 times what an average worker gets, and when the Bush administration is talking about shifting the tax burden down the income scale?

Again, just who is waging class warfare on whom?



Cass Ballenger Joins Lott in Hot Water

USA Today – by Richard Benedetto – December 27, 2002

Some politicians never learn.

They continued to make verbal missteps on race, even after Mississippi Republican Sen. Trent Lott got into so much trouble earlier this month for sounding nostalgic for the days of segregation.

A congressman from North Carolina, a New York state Senate leader, a U.S. senator from Alabama and a county executive in Upstate New York, Republicans all, found themselves in varying degrees of difficulty after remarks interpreted by many as racially insensitive at best and racist at worst.

So far, however, none has attracted as much attention or suffered as much as Lott, who bowed to intense pressure from inside and outside his party and gave up his position as incoming Senate majority leader a week ago.

''In a way, I guess the Lott situation might be teasing out all the slow learners,'' says Merle Black, a political scientist at Emory University in Atlanta who has written extensively on racial politics in the South.

Among the comments that generated local controversies:

* In North Carolina, just as Lott was announcing that he was stepping down from his leadership post, Republican Rep. Cass Ballenger was forced on the defensive after calling outgoing Rep. Cynthia McKinney, D-Ga., a ''bitch.''

Ballenger also told The Charlotte Observer that the liberal politics and acerbic personality of McKinney, who is black, had so provoked him that ''I must admit I had segregationist feelings.'' He quickly apologized for the remarks, but it didn't stop Democrats from bashing him.

''I wonder if somebody white did and said the same things that Cynthia McKinney is saying, it would even become a part of his discussion,'' said Rep. Melvin Watt, a black Democrat from North Carolina.

* In Rochester, N.Y., Monroe County Executive Jack Doyle, a white Republican, drew fire for his comments about his strained relations with Rochester Mayor William Johnson Jr., a black Democrat.

''If there was a mayor that looked like me, it would be a whole different landscape,'' Doyle said in an interview with a local reporter.

When pressed to elaborate, Doyle said his comments were aimed at political affiliation, not as a racial slur. ''Do you know what this city needs?'' he said. ''It needs a Republican mayor to go in there and clean the bureaucrats out and straighten this city out.''

Johnson, however, refused to buy the explanation and said he viewed the comment as a racial reference. ''There is no other conclusion that I can draw,'' he said. ''What does a Republican look like?''

* In Albany, N.Y., state Senate GOP leader Joe Bruno was forced last week to defend as a ''poor choice of words'' his use of a lynching metaphor.

Bruno urged critics of Lott to ''cut him some slack'' after the Mississippi senator apologized but still had not stepped down as GOP leader. ''What else do you want to do? You want to hang him up from an oak tree?''

At about the same time, Sen. Richard Shelby, R-Ala., said on CNN about the Lott controversy: ''I think we should not lynch him.''

In both remarks, Bruno and Shelby appeared to equate the attacks on Lott with the brutal murders of more than 3,000 blacks by white mobs from 1882 to 1968.

Trying to quell a firestorm that quickly flared, a contrite Bruno said a day later, ''I used a metaphor that was admittedly a poor choice of words and inappropriate given the increased tensions generated by Sen. Lott's comments.''

Some critics called for Bruno's resignation from his leadership post, but the uproar seems to have subsided. Shelby was the target of some initial criticism but little more.

Political scientist Black says these less prominent politicians might be able to survive in part because Lott paid a heavy price and in part because the publicity surrounding their comments was not nearly as heavy as that which dogged the Mississippi senator. Lott's remarks, captured on camera at the 100th birthday celebration for Sen. Strom Thurmond, R-S.C., dominated national news coverage for nearly two weeks.

In Maine, the state's two Republican U.S. senators, Olympia Snowe and Susan Collins, have drawn fire not for remarks they made, but for comments they did not make.

Maine NAACP leaders said that Snowe and Collins should have taken stronger public stands against the Lott remarks and called for his resignation. The two moderate senators did not ask that Lott vacate his Senate leadership job, but they both praised his decision to step down after he made it.

Their reluctance to speak out is not expected to inflict serious political damage. Blacks make up less than 1% of Maine's electorate.

Previous Cass Ballenger article:

Is Rep. Ballenger on the ‘Lott Track’?



Formal SEC Halliburton Investigation

Houston Business Journal – December 24, 2002

(12/23/02) - The Securities and Exchange Commission has upgraded to a formal investigation its inquiry into Houston-based energy services and construction giant Halliburton Co.

The SEC has been looking into issues of disclosure and the accounting of cost overruns on construction jobs the company did while Vice President Dick Cheney was CEO.

Halliburton has acknowledged that it altered accounting practices and reported revenue from disputed cost overruns on big construction projects. In an official change of policy, the company began booking revenue on the assumption that its customers would pay at least part of the cost overruns.

Previously, the company booked revenue from overruns only after settling with customers.

The change in its accounting practices was acknowledged by Halliburton's chief financial officer, Doug Foshee, in May when the SEC began an informal probe. He would not say how much in disputed costs the company booked and later had to remove from revenue.

Halliburton says it believes accounting for construction claims and change orders is in accordance with generally accepted accounting principles applicable to the construction industry.

With a formal investigation, the SEC can now subpoena documents. The company says it "intends to continue cooperating with the SEC staff."



Is Rep. Ballenger on the ‘Lott Track’?

Employee Advocate – DukeEmployees.com – December 22, 2002

Ballenger openly stated that a war was needed to change the subject!

North Carolina Republican Representatives Sue Myrick and Cass Ballenger have tried to make political hay by calling for Senator Lott to give up his leadership position, according to recent articles in The Charlotte Observer.

In trying to make hay, Cass Ballenger seems to have been caught up in the bailing machine. He removed any speculation that he is a silver-tongued devil with his own comments about black Representative Cynthia McKinney.

Cass Ballenger was quoted as saying: "If I had to listen to her, I probably would have developed a little bit of a segregationist feeling. But I think everybody can look at my life and what I've done and say that's not true. ... I mean, she was such a bitch."

Ballenger, predictably, blamed Lott’s problems on the media and the Democrats. He was also a little more blunt than G. W. Bush about his “wag the dog” sentiments. Ballenger openly stated that a war was needed to change the subject!

Cass Ballenger said: "The news media has worked this thing over. The Democrats aren't going to let it die, and I doubt the news media will let it die. What we need is to go to war somewhere, and then you'd have something else to write about."

This whole matter is better than any soap opera! And, there is plenty more.

After Ballenger’s comments, he went on the apologizing circuit. He apologized for admitting "segregationist feelings" toward a black colleague.

In a statement, Ballenger said: "My choice of words to express distaste for a divisive member of Congress was a mistake and was wrong. It was not what I intended and, if I had been more thoughtful, I wouldn't have said it."

You know, Trent Lott, is probably thinking the very same thing. Senator Lott repeatedly vowed that he would not give up his leadership role in the Senate. But with knives in his back from G. W. Bush and fellow Republican senators, Lott resigned as Senate majority leader.

In his statement, Ballenger said: "My intent was to prove that someone can push you so hard that sometimes it causes you to think and speak in ways you wouldn't otherwise. This is true whether someone is a Republican or Democrat, liberal or conservative, black or white."

We have to agree 100% with that statement. When stressed, one will usually speak the truth. They would not otherwise say it because they wish to keep their true feelings hidden, particularly if they hold public office.

Ballenger's office was flooded with calls from major newspapers and television networks about his comments.

One has to give Cass Ballenger credit for showing just how easy it is for one to put one’s foot into one’s mouth! We just hope that he does not teach any firearm safety classes. His demonstrations could be dangerous!

Barbara Allen, Chair of the North Carolina Democratic Party stated: "It's beyond insensitive for Cass Ballenger, a sitting member of Congress, to hearken back to the days of segregation when he finds himself at odds with an African-American colleague. African-Americans should not be threatened with our nation's inglorious, brutal history every time Cass Ballenger disagrees with them."

Continuing on the apologizing circuit, Ballenger went on WBT Radio. He said that his comments were "pretty stupid on my part" and "I talk too much."

To savor the full flavor of this episode, consider that Cass Ballenger was not in any political hot water. His problems started, well, when he opened his mouth. In demanding that Trent Lott resign his post for making inappropriate comments, Ballenger made a few of his own! And, his apologies only sunk him deeper and deeper. It was not mentioned if Cass Ballenger will apologize on Black Entertainment Tonight, as Senator Lott did. Then again, Ballenger’s material may be better suited for the Comedy Channel.

Cass Ballenger was asked if he thought that Trent Lott was a segregationist. Ballenger replied: "I'd have a hard time saying he wasn't. Basically in some areas of the South, in Charlotte and everywhere else, there are people who get rubbed the wrong way `We've got to bend over backwards; we've got to integrate' and things like that."

Somehow, Ballenger has managed to become a senior member of the House Committee on Education. There is no word if Senator Lott has called for Ballenger to resign from the committee for his own comments.

This story is not over yet. It seems that Cass Ballenger has a 3 1/2-foot, cast-iron, black jockey statue at his home. Black leaders have complained about it for two decades, but Ballenger has refused to remove it. Get this – while Ballenger was on the apologizing circuit, one of his aides was painting the black jockey’s face white! Whee! This gives literal meaning to “whitewashing” and “cover ups.”

Ballenger’s aide, Tommy Luckadoo, even compared the black lawn jockey to Trent Lott and the Republican Party, according to Ballenger.

Ballenger explained it all: "(Luckadoo) was saying it was sort of like Trent Lott being the image of the Republican Party. That little black jockey could be the image of the Republican Party here, and he didn't want that to happen. I didn't care ... Now he's a little white jockey.

"My wife said I was a coward. I said it was removing something that Democrats could use as an image to attack Republicans here..."

Shouldn’t there be some sort of test that one must pass to be in Congress?

Trent Lott has been referred to as a “walking piñata” and the “Groveler-in-chief.” Maybe Ballenger’s strategy was to get Lott off the front page by replacing him as a target. One thing is for sure, Ballenger has clearly demonstrated that Trent Lott is not the only buffoon in Congress.

Now that Sue Myrick and Cass Ballenger have the Trent Lott matter settled, what about their voting record regarding labor issues?

The International Brotherhood of Electrical Workers rates politicians from 0 to 100%, based on their labor issue votes. 100% is the best rating for a politician. Cass Ballenger rated a sorry 10%.

Sue Myrick rated even worse. She had the very lowest score of any North Carolina Representative. Her ranking for voting favorably on labor issues was a despicable 5%!



Bush Wants the Poor Taxed More

Washington Post – Jonathan Weisman – December 22, 2002

Monday, December 16, 2002; Page A03

As the Bush administration draws up plans to simplify the tax system, it is also refining arguments for why it may be necessary to shift more of the tax load onto lower-income workers.

Economists at the Treasury Department are drafting new ways to calculate the distribution of tax burdens among different income classes, which are expected to highlight what administration officials see as a rising tax burden on the rich and a declining burden on the poor. The White House Council of Economic Advisers is also preparing a report detailing the concentration of the tax burden on the affluent and highlighting problems with the way tax burdens are calculated for the poor.

The efforts would thrust the administration into a debate that until now has lingered on the fringes of economic policy: Are too few wealthy Americans paying too much in taxes for too many, and should the working poor and middle class be shouldering more of the tax burden?

"The increasing reliance on taxing higher-income households and targeted social preferences at lower incomes stands in the way of moving to a simpler, flatter tax system," R. Glenn Hubbard, chairman of the Council of Economic Advisers, warned at a tax forum at the American Enterprise Institute on Tuesday.

The Council of Economic Advisers' "Economic Report to the President," scheduled for release late next month or in early February, is to include a section arguing for new methods to calculate the distribution of tax burdens on various income groups.

The Treasury Department is working up more sophisticated distribution tables that are expected to make the poor appear to be paying less in taxes and the rich to be paying more.

Answering critics who say the working poor do face high taxes because they pay high Social Security payroll taxes, outgoing White House economic adviser Lawrence B. Lindsey told the AEI tax forum that the 12.4 percent Social Security levy should not be considered when tax burdens are calculated. Lindsey said the Social Security tax is ultimately returned to the taxpayer as a benefit.

Lindsey compared the Social Security tax to a deposit in a neighborhood bank's Christmas Club. In such clubs, periodic deposits are returned in a lump sum during the holiday season, and Lindsey said no one would consider such deposits a tax.

Early this month, J.T. Young, the deputy assistant treasury secretary for legislative affairs, lamented in a Washington Times opinion article: "[Higher] earners cannot produce the level of revenues needed to sustain the liberals' increasingly costly spending programs over the long-term. . . . If federal government spending is not controlled, then the tax burden will have to begin extending backward down the income ladder."

The tenor of the administration's policy discussions marks a dramatic shift from early in 2001, when Bush sold his 10-year, $1.35 trillion tax cut as a tool to "take down the tollgate on the road to the middle class," emphasizing its beneficial impact on workers "on the outskirts of poverty." At that time, the administration fretted over the tax burden on the working poor, which the White House calculated to include federal income taxes, state taxes and the Social Security tax.

When administration officials pushed the need to create private investment accounts to supplement Social Security, they specifically warned that taxes paid into Social Security would not necessarily be returned unless the system was reformed.

William W. Beach, an economist at the Heritage Foundation think tank, said he was sympathetic to Lindsey's argument that the Social Security tax is not really a tax. But, he said, it was a dangerous argument for a Republican to make.

"Do I allow defense spending to offset my income taxes since I like to be defended? Do I allow road taxes to offset my profits taxes because I use the roads?" he asked. "If you do start down that road, it's hard to see anything as taxes."

But for the purposes of a tax reform debate, removing Social Security taxes from consideration could have a sizable impact. The top 5 percent of the nation's taxpayers paid 41 percent of all federal taxes, a hefty share, according to the Joint Committee on Taxation. But that same group paid from 56 to 59 percent of all income taxes, an even more impressive burden.

"If we take out Social Security, the poor will look very lightly taxed," said Robert S. McIntyre, of Citizens for Tax Justice, a tax research group backed by organized labor.

Democrats say the shift could prove ominous for lower-income Americans. And they appear eager for the fight.

"These people are setting the tone in saying the poor really are not being taxed enough and that the burden is too high on the rich," said New York Rep. Charles B. Rangel, the ranking Democrat on the House Ways and Means Committee. "We're going back some 70 years."

Rep. Robert T. Matsui (D-Calif.), a member of the committee, said: "I don't think there's any question you have a number of extremists in the Republican ranks that would like to see the wealthy do very well. They're going to try to make the case that the average American is overtaxed and subsidizing the poor."

But to some conservatives, the shift is long overdue. Rep. Jim DeMint (R-S.C.) has argued for two years that the nation is entering a dangerous period in which the burden of financing government is falling on too few people. In such an environment, the masses will always vote for politicians promising ever-more-generous social programs, knowing they will not have to pay for such programs, DeMint warned.

"This issue is coming to a head," DeMint said earlier this month, just minutes after making his pitch to outgoing Treasury Secretary Paul H. O'Neill. "You can't maintain a democracy if the people who are voting don't care what their government costs."

DeMint and his allies have called for a national sales tax to replace the income tax. For those below the federal poverty line, sales taxes paid would be refunded, but under the system, at least they will have seen the cost of government, he said. The working poor would accept a higher tax burden because they would be relieved of the need to file a tax return.

DeMint called his ideas "the duck's feet under the water," propelling his proposals forward invisibly. Conservative thinkers at the Heritage Foundation and other think tanks have begun expressing similar opinions. Last month, the Wall Street Journal editorial page made waves with an article titled, "The Non-Taxpaying Class."

"Workers who pay little or no taxes can hardly be expected to care about tax relief for everybody else," the editorial stated. "They are also that much more detached from recognizing the costs of government."

But advocates of this new line can expect a furious backlash. Liberal commentators have already reduced the argument to an appeal to tax the poor, and even conservatives worry that the label will stick.

"It's hard to conclude it's anything else," said the Heritage Foundation's Beach.

Michael J. Graetz, a Yale University law professor and tax reform expert, said he could not figure out where the administration's arguments are supposed to lead.

"I would be very surprised if the agenda is to put more people on the tax rolls," he said. "That doesn't seem like a good political agenda."

But Democrats say that is exactly where the administration is heading. Matsui said he sees the seeds of a disastrous Republican overreach.

"The president is making the case that people who earn between $50 [thousand] and $75,000 a year should be paying a third more taxes," Matsui said. "I'd love to debate him on that."

But McIntyre worried that in the marketplace of ideas, the new argument could carry the day.

"I would hope the public would find it repugnant," he said, "but I suppose you never know."



Pension Fund Is About to Go

L. A. Times – by John Balzar – December 21, 2002

Bush administration is helping to replace nest eggs with lumps of coal.

(12/18/02) - It's the holiday season, boom time for pickpockets. We're busy, we're distracted and we're in a mood to think about fellowship, not felonies. Everything's right for Light-Fingered Louie making his move in Washington. We barely notice until later that we've been robbed.

Merry Christmas.

The Bush administration and its pals in the corporate suites are pulling off just such a filch right now. In a truly mean-spirited retreat from the principles of hard work and loyalty, they're setting up a raid on middle-class pensions.

"Radical. Anti-worker," fumed Rep. Bernard Sanders (I-Vt.). He calls it another assault by "Enron culture" CEOs whose campaign contributions hold sway in the administration. "It is going to cost employees dearly," warned his California Democrat colleague Rep. George Miller.

Indeed, the General Accounting Office projected that workers could wind up with reductions of 20% to 50% in the monthly pensions they worked for and planned for.

At stake are the futures of millions of American families and billions of dollars they thought they earned. But unless they are attentive, they might not notice what's missing for a few years. By then the perpetrators would be lounging at their private yacht clubs and island resorts. Because you can bet that executives are licking their chops this holiday for the chance to inflate their own bonuses by trimming the "expense" of retirement payments for their workforce.

Business executives call their dodge the "cash-balance" pension. It works something like this: They get the cash, and we get the balance.

Hundreds of companies are expected to begin converting their traditional, fixed-benefit retirement plans to these "cash-balance" alternatives as soon as the proposed regulations take effect, after a three-month comment period.

A few years back, the idea of doing away with traditional retirement plans in favor of cash-balance pensions caught on in a big way, and as many as 700 companies imposed the switch on their 8 million or so workers. But they ran into trouble. Employees began to understand what was happening: Older, long-term workers realized that they were the targets. And why not? They were the ones about to retire and put a drain on company profits. They began filing lawsuits and complaints, and the Clinton administration imposed a moratorium on the swindle.

Now the Bush administration has called for an end to the moratorium and, further, is offering corporations a shield against worker challenges.

Proponents of the cash-balance idea would have us believe that it would modernize the pension system for the benefit of younger workers who no longer make a career at a single company. They would be allowed to carry the accumulated cash balance of their pensions from job to job.

In fact, however, employees still must work at a company for five years before vesting, meaning that many highly mobile young people wouldn't receive any benefit after all. Besides, the logic of business suddenly developing a soft spot for its newest employees is transparently bogus. Why in the world would companies want to favor workers who have proved no loyalty over those who have? Simple: Promising the world to 25-year-olds defers costs into the future. Then, who cares? Someone else would have to worry about quarterly profits, bonuses and devising some new pension "reform" to renege on those obligations.

Right now, it's the 40- to 55-year-old workers who companies must deal with. And cash-balance pensions as allowed by the Bush administration would do a nasty job of it. First, companies would be given wide latitude in determining the cash value of pensions earned thus far by their long-term workers. Then companies could sharply reduce gains to this value and legally claim that they are not discriminating by age -- even though the intended outcome would only be to reduce benefits for older workers.

Basically, employers would not have to honor their promise to the baby boomer generation. During the switch from one type of plan to another, employers could wriggle out of their commitment to base roughly one-third of worker pensions on wages earned in the first half of employment and two-thirds earned during the second half. That was envisioned as the means to reward loyalty and service. But now at mid-career, when steadfast employees should be earning the most toward their eventual pensions, they could find themselves gaining nothing for years to come, and then no faster than the newest employee on the payroll.

The net effect, depending on how hard-headed companies choose to be, could reduce a $2,000 traditional pension to $1,000 monthly, according to congressional investigators.

Karen Friedman, policy director of the independent Pension Rights Center, says the effect of the regulations would be to force more businesses, even those not inclined to punish their loyal workers, into cash-balance conversions just to keep up with cutthroat competitors. "They are encouraging companies to do the wrong thing."

There was a time, and it wasn't so long ago, when conservatives voiced the idea that American values meant keeping faith with those who, as Ronald Reagan put it, "worked hard and played by the rules." Makes you nostalgic, doesn't it?



Cities Stand Up to Bush

San Francisco Chronicle – by Janine DeFao – December 20, 2002

(12/16/02) - Saying the federal government's war on terrorism threatens the freedoms of its residents, the Oakland City Council is set to become the largest city in California to condemn the USA Patriot Act.

The resolution, expected to be approved Tuesday, would bar city employees --

from police officers to librarians -- from cooperating with investigations that violate residents' civil liberties. It also calls for city leaders to pressure federal elected representatives to repeal controversial parts of the act.

"I think it's important for us to maintain our freedoms and not give them up in the name of said City Councilwoman Nancy Nadel, who sponsored the measure with Council President Ignacio De La Fuente.

The Patriot Act, passed with little debate six weeks after the Sept. 11 attacks, and subsequent presidential executive orders expanded the federal government's surveillance and search powers and its ability to detain non- citizens.

The measures made it easier to wiretap phones, track Internet use, search computer documents and even seize library and bookstore records.

Oakland would be the 19th city in the nation to adopt such a resolution as part of a nationwide campaign by civil libertarians. Berkeley, Santa Cruz and Sebastopol already have passed resolutions, as have Denver and Santa Fe.

De La Fuente says he is particularly concerned about the impact on immigrants and minorities, who make up 76 percent of Oakland's population.

"This (President) Bush campaign to use Sept. 11 to have the ability to get into people's private lives will have a tremendous impact and create an environment of discrimination against people of color, especially immigrants, and will do nothing to protect against terrorists," De La Fuente said.

The resolution says that the Patriot Act "does little to increase public safety" and that the federal government "has particularly target(ed) Muslims and people of Middle Eastern and South Asian descent," encouraging racial profiling and hate crimes.

Dick Spees, the lone Republican on the nonpartisan council, says he thinks the resolution "needs to be modified."

"Some of the language is overblown and can be detrimental to our security," said Spees, who added that the city's large shipping port could make it a potential target for terrorists. "On the other hand, I do think we need to be very vigilant not to do permanent damage to our civil liberties."

The resolution says that, "to the extent legally possible," no city employee or department will assist or cooperate "with investigations, interrogations or arrest procedures . . . that are in violation of individuals' civil rights or civil liberties."

Sgt. Paul Figueroa, chief of staff to Police Chief Richard Word, says the Police Department supports the resolution.

"We don't think any residents should have their civil rights violated," he said.

Federal agents have not asked Oakland police for help investigating any cases, Figueroa said, and added: "I don't expect that. We have our hands full trying to drop our crime rate."

But should such a request come, "the chief would have to evaluate whatever they ask us to do and see if it falls within this resolution," he said.

While neighboring Berkeley is better known for weighing in on national and international affairs, this is not the first time Oakland has ventured into global issues.

In 1985, the city passed a South Africa divestment measure then believed to the country's strongest, and in 1993 it approved a measure that prohibits the city from doing business with companies that make nuclear weapons.

Oakland resident and peace activist Judy Haney brought the anti-Patriot Act resolution to Nadel after hearing about another city passing one.

"I was just appalled that our government now has the power to pretty much, without any judicial review, dig into every aspect of our lives," Haney said. "In particular, it was targeting (immigrant) individuals and putting them in a position that if they spoke out, they could be deported. It works to silence any dissent, which is an essential part of living in America."

Sanjeev Bery, an advocate with the ACLU of Northern California in San Francisco, said several cities, including San Francisco, Sacramento and Petaluma, were expected to consider similar resolutions.

"The practical impact is that elected officials in Washington, D.C., from the White House to Congress, will see local constituents are taking steps to oppose what they're doing at the federal level, and they'll stand up and start paying attention," Bery said.



Bush Defies Judicial Ruling

Public Citizen - www.Citizen.org – December 20, 2002

Bush Administration Defies Judicial Ruling, Fails to Appoint Environmentalist to Key Trade Committee

WASHINGTON, D.C. - As part of what appears to be a continuing effort to eliminate civil society representatives from trade policymaking, the Bush administration is refusing to abide by a court order and appoint an environmentalist to a key trade advisory committee. Under a court settlement, the administration is required to include an environmental representative on its Chemical Trade Advisory Committee. The Bush administration rejected the nominee of the environmental community, instead choosing an academic with deep industry ties.

Attorneys at Earthjustice, representing Public Citizen, the Washington Toxics Coalition and the Asia Pacific Environmental Exchange, sent a letter on Dec. 18 to the Department of Justice protesting the appointment of Brian Mannix. The groups urged the Bush administration to follow through on its commitment to appoint an environmentalist to the 23-member committee, which is already packed with chemical industry executives. Mannix is a fellow at the Mercatus Center, a conservative research center at George Mason University, where noted conservative Wendy Gramm, wife of former U.S. Sen. Phil Gramm of Texas, is director of regulatory studies.

"This appointment is another slap in the face to the environmental community from the Bush administration," said Earthjustice attorney Patti Goldman. "International commercial agreements like NAFTA and the WTO have significant impacts on public health and the environment. When U.S. trade policy is dictated by an advisory board dominated by industry, those issues get short shrift."

The appointment of Mannix also comes on the heels of the Bush administration's Dec. 9 purge of the Advisory Committee for Trade Policy and Negotiations (ACTPN). The committee, which formerly included representatives of such groups as Consumers Union and the AFL-CIO, is now comprised solely of industry representatives, including the CEOs of Sony, eBay and IBM, with not a single public health, labor or environmental advocate.

The new ACTPN appointments also appear to be rewards to major supporters of Republican candidates in the 2002 mid-term election, reported Inside U.S. Trade (Dec. 13), after analyzing Federal Election Commission reports. Among the new appointments to the committee, which holds quarterly meetings attended by U.S. Trade Representative (USTR) Robert Zoellick, is Steven Rollie Rogel, CEO of Weyerhaeuser ($244,750 to GOP candidates); Wythe Willey, president of the National Cattlemen's Beef Association ($298,878 to GOP candidates); and Grace Nichols, CEO of Victoria's Secret (parent company Limited Inc., which gave $100,500 to GOP candidates).

"The Bush administration is shameless - seeking credit for an open, inclusive trade debate while purging civil society representatives from trade advisory groups," said Lori Wallach, director of Public Citizen's Global Trade Watch. "Given what a close call the administration just had to get Congress to pass Fast Track trade authority, you'd think they would have learned…"



Treasury Nominee to Get Big Pension

New York Times - by David Cay Johnston - December 18, 2002

(12/17/02) - When the CSX Corporation calculates pension benefits for its chief executive, John W. Snow, nominated by President Bush last week to be Treasury secretary, he will receive credit for 44 years of service to the company, though he has worked there just 25.

Moreover, Mr. Snow's benefits will be based not just on his salary, or even his salary and bonus, but also the value of 250,000 shares of stock the CSX board gave him.

Getting credit for years not worked, and having virtually all compensation counted toward pension benefits, are two of the newest trends in pay for senior executives, said Judith Fischer, managing director of Executive Compensation Advisory Services. She calls such deals "the eternal wealth syndrome."

Though he has renounced his claim to about $15 million in severance benefits, Mr. Snow's pension improvements mean he will collect $2.47 million a year from CSX until he dies, according to company disclosures. If confirmed as Treasury secretary, he will be paid $161,200 annually.

Among the chief executives receiving pension extras are Gordon M. Bethune of Continental Airlines and Donald J. Carty of American Airlines. So is Terrence Murray, chairman of Fleet Boston, the nation's seventh-largest bank.

As Treasury secretary, Mr. Snow would be in the middle of pension policy-making as the subject heats up in Washington. He would oversee new pension rules announced by the Bush administration last week that experts say can be expected to strip benefits from older workers while benefiting younger workers and saving companies money.

The new rules will make it easier for companies with traditional defined-benefit pensions, which pay a monthly sum to retirees for life, to shift to so-called cash balance plans. Under the traditional plans, pension benefits are primarily based on a worker's final, and often highest-paid, years of employment. The new plans, by contrast, build benefits evenly over the course of a worker's career. Cash balance plans are a boon to younger workers, but critics say older workers could lose as much a third of their benefits.

As a matter of principle, President Bush declared at a conference on retirement savings earlier this year, "What's fair on the top floor should be fair on the shop floor." But an array of rules and customs have put a distance between the retirement benefits of average workers and those of top executives.

Most rank-and-file workers with traditional pensions receive one year of credit for each year of service, and only their salary counts in determining benefits. Many executives, including Mr. Snow, can also count their annual bonuses.

More unusual, according to Ms. Fischer, is the provision in Mr. Snow's pension arrangement that takes into account the value of 250,000 shares of stock he received from the company. That was intended to match his purchase of an equal number of shares with his own money since 1999.

Mr. Snow declined comment on his pension arrangements. In securities filings, CSX has said that the enhanced benefits — which it extends to fewer than two dozen executives — are intended to ensure that they "exert maximum efforts for the company's success" and remain with CSX until retirement.

Experts say that in recent years, executives have sought to increase their pensions in part to balance the risk that they will go unpaid in a corporate failure. Unlike pensions for ordinary workers, executive plans are not guaranteed by the government.

At CSX, Mr. Snow's pay and benefits have substantially increased over the last five years, even though the performance of the company's stock has trailed market indexes and other companies in the transportation industry. According to CSX disclosures, his total compensation rose 69 percent, to $10.1 million last year from just under $6 million in 1997. The shares have fallen 53 percent from their 1997 high.

Meanwhile, some CSX retirees complain that their benefits have been cut back. The company is being sued by 41 retired workers at the railroad's Greenbrier hotel and country club in West Virginia, who say they have been deprived of life insurance benefits.

James Hilton, a retired food storage supervisor, said that the life insurance benefit was routinely paid until October 2001. Then, he said, "out of the blue, CSX sent us this self-contradictory letter that says `we know you thought you had this life insurance benefit, but really you did not.' "

The company maintains that the employees were mistaken and that no such benefit ever existed.

In addition, CSX changed its policies, effective this coming Jan. 1, so that newly hired employees will no longer be promised lifetime health care benefits unless they work under a union contract providing such benefits. Many companies have reduced or eliminated retiree health benefits as profits shrink and health costs escalate.

Other companies have cited a variety of reasons in enhancing their top executives' pension benefits.

Continental Airlines says that it is giving its chairman and chief executive, Mr. Bethune, five years of pension credit for each year he works from 2000 through 2004 to compensate for the fact that he joined the company in 1994, late in his airline career. Mr. Carty of American Airlines received one and a half years of pension credit for each year of work until 2000, when he traded a raise for two years of credit for each year on the job.

Mr. Murray, the Fleet Boston chairman, will receive a pension based on every dollar he earned during his three highest-paid years, including stock, exercised stock options and $1.4 million in deferred compensation he cashed out last year. Other Fleet executives have pensions based on salary and bonus only. The bank's directors said they improved Mr. Murray's benefits to reward him for Fleet Boston's growth under his leadership.

Too Much Pension Irony!



Bush Worried Wealthy Pay Too Much Tax

The Washington Post – by Jonathan Weisman - December 18, 2002

WASHINGTON — As the Bush administration draws up plans to simplify the tax system, it is also refining arguments for why it may be necessary to shift more of the tax load from wealthier taxpayers onto lower-income workers.

Economists at the Treasury Department are drafting new ways to calculate the distribution of tax burdens among different income classes, which are expected to highlight what administration officials see as a rising tax burden on the rich and a declining burden on the working poor and middle class. The White House Council of Economic Advisers is also preparing a report detailing the concentration of the tax burden on the affluent and highlighting problems with the way tax burdens are calculated for the poor.

The efforts would thrust the administration into a debate that until now has lingered on the fringes of economic policy: Are too few wealthy Americans paying too much in taxes for too many, and should the working poor and middle class be shouldering more of the tax burden?

The top 5 percent of the nation's taxpayers paid 41 percent of all federal taxes, according to the Joint Committee on Taxation. But that same group paid from 56 to 59 percent of all income taxes.

"The increasing reliance on taxing higher-income households and targeted social preferences at lower incomes stands in the way of moving to a simpler, flatter tax system," Glenn Hubbard, chairman of the Council of Economic Advisers, told the American Enterprise Institute (AEI) recently.

The Council of Economic Advisers' "Economic Report to the President," scheduled for release late next month or in early February, is to include a section arguing for new methods of calculating the distribution of tax burdens on various income groups. And the Treasury Department is working up distribution tables that are expected to make the poor appear to be paying less in taxes and the rich to be paying more.

Answering critics who say the working poor bear a heavy tax burden because they pay high Social Security payroll taxes, outgoing White House economic adviser Lawrence Lindsey told the AEI that the 12.4 percent Social Security levy should not be considered when tax burdens are calculated. Lindsey said the Social Security tax is ultimately returned to the taxpayer as a benefit.

Lindsey compared the Social Security tax to a deposit in a neighborhood bank's Christmas Club. In such clubs, periodic deposits are returned in a lump sum during the holiday season, and Lindsey said no one would consider such deposits a tax.

Early this month, J.T. Young, the deputy assistant Treasury secretary for legislative affairs, lamented in a Washington Times opinion article: "(Higher) earners cannot produce the level of revenues needed to sustain the liberals' increasingly costly spending programs over the long term. ... If federal government spending is not controlled, then the tax burden will have to begin extending backward down the income ladder."

The tenor of the administration's policy discussions marks a shift from early in 2001, when Bush sold his 10-year, $1.35 trillion tax cut as a tool to "take down the tollgate on the road to the middle class," emphasizing its beneficial impact on workers "on the outskirts of poverty." At that time, the administration fretted over the tax burden on the working poor, which the White House calculated to include federal income taxes, state taxes and the Social Security tax.

When administration officials pushed the need to create private investment accounts to supplement Social Security, they specifically warned that taxes paid into Social Security would not necessarily be returned unless the system was reformed.

William Beach, an economist at the Heritage Foundation think tank, said he was sympathetic to Lindsey's argument that the Social Security tax is not really a tax. But he said it was a dangerous argument for a Republican to make.

"Do I allow defense spending to offset my income taxes since I like to be defended? Do I allow road taxes to offset my profits taxes because I use the roads?" he asked. "If you do start down that road, it's hard to see anything as taxes."

But for the purposes of a tax-reform debate, removing Social Security taxes from consideration could have a sizable impact. "If we take out Social Security, the poor will look very lightly taxed," said Robert McIntyre of Citizens for Tax Justice, a tax research group backed by organized labor.

Democrats say the shift could prove ominous for lower-income Americans. And they appear eager for the fight.

"These people are setting the tone in saying the poor really are not being taxed enough and that the burden is too high on the rich," said New York Rep. Charles Rangel, ranking Democrat on the House Ways and Means Committee. "We're going back some 70 years."

Rep. Robert Matsui, D-Calif., a member of the committee, said: "I don't think there's any question you have a number of extremists in the Republican ranks that would like to see the wealthy do very well. They're going to try to make the case that the average American is overtaxed and subsidizing the poor."

But to some conservatives, the shift is long overdue. Rep. Jim DeMint, R-S.C., has argued for two years that the nation is entering a dangerous period in which the burden of financing government is falling on too few people. In such an environment, the masses will always vote for politicians promising ever-more-generous social programs, knowing they will not have to pay for such programs, he warned. "You can't maintain a democracy if the people who are voting don't care what their government costs," he said.

DeMint and his allies have called for a national sales tax to replace the income tax. For those below the federal poverty line, sales taxes paid would be refunded, but at least they will have seen the cost of government, he said. The working poor would accept a higher tax burden because they would be relieved of the need to file an income-tax return, he said.

Advocates of this new line can expect a furious backlash. Liberal commentators have already reduced the argument to an appeal to tax the poor, and even conservatives worry that the label will stick.

Michael Graetz, a Yale University law professor and tax-reform expert, said he could not figure out where the administration's arguments are supposed to lead.

"I would be very surprised if the agenda is to put more people on the tax rolls," he said. "That doesn't seem like a good political agenda."


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