Mr. Speaker, I want to thank the ranking member, the gentleman from California (Mr. George Miller), and thank the gentlewoman from Illinois (Ms. Schakowsky) as well for your leadership on this issue, and for convening this e-hearing and…
Mr. Speaker, I want to thank the ranking member, the gentleman from California (Mr. George Miller), and thank the gentlewoman from Illinois (Ms. Schakowsky) as well for your leadership on this issue, and for convening this e-hearing and also taking this time on the floor tonight.
I think it is imperative to read as many of these e-mails as possible into the Record and express the voice of so many people that earned their pensions, that worked their long work lives and took as a form of deferred compensation the rights to these pension benefits. They sacrificed pay raises and sacrificed other benefits in exchange for what they thought was a promise from the company that they were going to get this pension when they retired.
One UAL person wrote in and said, ``I joined UAL with stars in my eyes believing the promise of opportunity, a secure benefit package and the enthusiasm of being part of something great.''
Well, it really has not been something great for them. As the gentleman mentioned, in every way the employees tried to work it out with the company. I am so used, as the gentleman is, from hearing executives tell us, oh, the employees will not cooperate, the employees and their high costs are driving this company down.
Well, it was the employees at UAL that actually went into an ESOP program, an employee stock option program, that turned out to be near worthless for them in the long run. Some lost hundreds of thousands of dollars trying to help the company out. They underwent cuts in pay, they forewent benefits, and all of this to find the company surreptitiously sneaks into bankruptcy for 2\1/2\ years and then slides their benefits into bankruptcy and they end up going into the Pension Benefit Guarantee Corporation and getting about 30 to 40 percent of the benefits, if they are lucky.
These letters, these e-mails, are written about feelings of betrayal, absolute feelings of betrayal. They say it is a sign of what they think is happening to the moral fiber of this country. They wonder on a philosophical level how this is going to impact the values that they have been brought up with and they have been instilling in their children.
Jacob Acker said not too long ago that in 1938 FDR talked about the last great unconquered frontier of America was the frontier of uncertainty and insecurity. And then as a country we set out to do something about it. We worked with corporations, with employee groups, we worked with private groups and our government and we put in Social Security, we put in pensions, we put in health care benefits, the minimum wage, the GI Bill. We put in structures and security so people in this country would no longer feel that they were confronting that frontier of insecurity and uncertainty.
But here we are in 2005, we find out executives and management of a company can turn it around and take their promises and turn them into dust and take their employees and put them into sheer desperation, so that again in 2005 we are again facing a frontier of uncertainty and insecurity. And it is incumbent on this Congress to finally act.
I say to the gentleman from California (Mr. George Miller), as ranking member of this Committee on Education and Workforce, and the members on the minority side who have been banging away for some time now saying this is an impending problem that has to be addressed, where is Congress on this matter? Where is the White House on this matter? They are dealing with issues the American public does not even care about. You look at what has happened so far this year on the agenda of this Congress and the White House. It is not about jobs, it is not about health care, it is not about education for people's children, and it is not about pension protection and retirement.
The closest the President comes is trying to privatize Social Security, which would put these people in further jeopardy. And that is what I hear often from the people at United. Boy, if they ever realized about the guaranteed benefit of Social Security being
important, they now realize it, because what they thought was a benefit due them from their employment has gone out the window.
As I said, these stories are touching. But they are more than touching; they are tragic. For many of the people here, it is too late to start over. I think in one of the letters that either the gentleman or the gentlewoman from Illinois (Ms. Schakowsky) read, they talked about dedicating their life to the company for a promise and now being faced with decisions that they never thought they would have to face and making choices they never thought they would have to make.
What about their health care? Are they going to be able to afford it for themselves, for their loved ones, particularly for their children? There are 120,000 employees that face these deep benefit cuts. It is going to make a serious impact, and many of them are concerned for themselves, but, even more so, for what happens if other companies follow in the footsteps of United.
What happens if this Congress under Republican leadership continues to fail to act to shore up these defined benefit pensions, to shore up the Pension Benefit Guarantee Corporation system so that it takes care of people, to make sure that every corporation does not decide to slide into bankruptcy and dump its responsibilities onto the PBGC and to hurt their employees and leave them no recourse. We need to act.
Let me read one letter, if I can, from my district, Kevin P. Creighan and Cathy J. Hampton from Lynn, Massachusetts. They e-mailed in: ``We know that approximately 120,000 current and former employees will suffer if United Airlines is allowed to hand its pensions over to the PBGC. I will address the concerns of two of those current employees, my wife Cathy and myself, as examples of the upcoming devastation.
``Cathy has been with United for 27 years, and I have been there for 29, a combined 56 years of working hard, earning a living, and all along expecting a pension in 7 years' time when we planned to retire. At our retirement, between us we expected to have 70 years of loyal service to our employer, single employer; and we each expected to receive monthly pension checks of about $2,500 per month.
``If United is allowed to break its promise to pay our pensions, our actuaries tell us we would each probably receive less than $1,000 per month. We are already told that we could work an additional 15 years and we might get closer to our current pension, but that is predicated upon a very strong stock market and successful investments. Work 15 more years, and only to get closer to something else.
``Our retirement income would drop by 60 percent unless we choose to work beyond 70 years of age. This is not the American way. We thank you for considering how dreadful this situation is, not only for the two of us, but for our 120,000 colleagues who have worked every bit as hard.''
We have letter after letter from Massachusetts residents and people in my district that show, exactly as the gentleman's have, this is a tragic failure of Congress to respond and a tragic action by a corporation that should know better and should have acted differently.
If the gentleman will yield further, one of the things not true is most of these executives have not worked anywhere near the number of years that these employees have worked for that company. Many of them come on as directors of the board or in high-level positions for a much shorter period of time, qualify for some pretty extravagant pension rights of their own, solidify them by putting them in a trust that cannot be touched in a bankruptcy proceeding, and go out merrily into the sunset having destroyed a company, or at least their employees' chances to have a decent, dignified retirement.
If the gentleman will yield further, compare that to John Lagadinos from Billerica, Massachusetts. He is a retired aircraft mechanic with 42 years of service with United Airlines, 35 years were spent working the nightshift, afternoons, midnights, working most weekends, Saturdays, Sundays and holidays, with, as he says, no social life to speak of.
He says, ``We also worked in rain, sleet and cold, heat and cold. The executives didn't. So cold in the winter our hands would be cracked and bleeding from working on the aircraft outside.
``Contractually our monthly medical insurance for my wife and I was $22 per month pre-65 years of age and $24 per month post-65.
But, recently, that has been increased to $214 per month, with a decrease in coverage and an increase in out-of-pocket cost. So it is not bad enough that their pension rights are being shaved down to less than 15 percent but that they are heaped on with additional medical expenses, another promise that was made to them that is not being kept by corporations, as more and more companies are starting to default on their retirement health benefits as well. So it is a double whammy.
The prescription drug costs have increased from the $5 generic, $10 name brand to $19 generic, $51 name brand. His wife and he use four name brand drugs costing $204, that used to cost them $40.
Then he talks about what the gentleman from California (Mr. George Miller) and the gentlewoman from Illinois (Ms. Schakowsky) talked about earlier. These same employees went into an employee stock option plan at the request of the company to try to save the company. They were not allowed to contribute to the 401(k) that they paid on their own. The company never contributed to the 401(k). In lieu of wages, they were given useless stocks and ended up selling on the employees for about a dollar a share. For this individual, it was costing about $160,000, which he lost.
He says, with all of these losses and losing a portion of our pension, too, I do not know how we will make it. They do not want this to become a precedent for other companies. Thank you for your concern and action.
Concern is something that we have here. Action is what this Congress needs to do and which it has not been doing.
Mr. Speaker, I do not have to remind the gentleman from California about his efforts to have the committee go to the administration and get that information about where does the rest of the employment situation lie, where are the rest of these pensions in terms of their viability. The fact of the matter is we have been unable to get that information until very recently. We got some of it.
But what is the problem with disclosing that to the American public? What is the problem with the Congress knowing the full extent and the public knowing the full extent, how many companies are in this precarious situation? That, if anything, would force Congress hopefully to get up and act.
Something that we have known, something that the gentleman has led the way in writing to the committee, speaking to the committee and the administration on this issue and now trying to get the information that will compel them to act on it. Because it is devastating to learn just how many companies are in a situation that are near default or problematic.