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Friday Alert September 28, 2007
Alliance for Retired Americans
888 16th Street, N.W. - Washington DC, 20006 - (202)
974-8222 - www.retiredamericans.or
General Motors Strike
Ends
The United Auto Workers (UAW), which had
gone on strike at all of General Motors' (GM’s) U.S.
plants on Monday, began returning to work on Wednesday. A
proposed new contract allows GM to shift $51 billion in
liabilities for UAW retiree health care to an independent
trust. The auto giant could eventually contribute as much
as $35 billion to that trust, called a voluntary employees'
beneficiary association, or VEBA, according to people familiar
with the bargaining process. It will be up to the trust to
set and manage the benefits. “I’m pleased to
say that we have a VEBA in place that will secure the benefits
of our retirees and every seniority employee who was on the
rolls as of September the 14th, and that stretches out, in our
projections, for the next 80 years,” said UAW President
Ron Gettelfinger. Mr. Gettelfinger, who
now has to sell the deal to his rank and file, said that he is
confident of ratification, and that voting is likely to start
this weekend.
SCHIP Veto Threat Angers
Republicans
On Tuesday night, the House
approved the final State Children’s Health Insurance
Program (SCHIP) bill, H.R. 976, by a vote of 265-159 (Roll Call
906). The vote left Democrats more than 20 votes short of
the number needed to override President Bush's expected
veto. Eight Democrats voted against the legislation, and
45 Republicans supported it. On Thursday, the Senate voted
overwhelmingly, 67-29, to pass the bill (Roll Call 353).
Eighteen Republicans joined 49 Democrats in securing a
veto-proof majority. With the program about to expire on
Sept. 30, Bush said in a news conference that he would reject
the $35 billion funding expansion ironed out by House and Senate
negotiators. Members of both parties said that the
president is putting children's health in jeopardy. They
said most Americans, including many GOP governors, support the
expansion of the program's enrollment to about 10 million
children, from 6.6 million now. The decade-old program,
which currently costs about $5 billion a year, targets children
whose families earn too much to qualify for Medicaid but not
enough to buy insurance on their own. President Bush has
proposed only a $5 billion expansion, an amount the
Congressional Budget Office has said is insufficient to continue
covering the children who are already in the program.
“When even conservative Senators Orrin
Hatch (R-UT) and Charles Grassley
(R-IA) are on our side, the President is really out there on his
own against children,” said George J.
Kourpias, President of the Alliance. Older
Americans have taken a special interest in the issue, noting its
effects on their grandchildren and future generations.
Medicare Part D Late Fees
Waived
Seniors scored a major victory on
Thursday when Medicare officials waived the late enrollment
penalty for low-income beneficiaries of the Medicare Part D
prescription drug plan. In March, Rep Steve
Kagen (D-WI) had introduced H.R. 1521, the
Universal Health Act of 2007: Repeal of the Late Enrollment
Penalty in Medicare Part D. This week, the major part
of that legislation was made law by executive action.
Prior to the change, seniors who did not enroll in Medicare Part
D during the initial enrollment period were subject to a late
enrollment penalty in the form of higher monthly premiums.
Medicare beneficiaries who qualify for the low-income subsidy
for Medicare prescription drug coverage may now enroll in a
Medicare prescription drug plan with no penalty through December
31, 2008. The late enrollment penalty is approximately 1%
of the average monthly premium multiplied by the number of
months an individual delays enrolling.
New Bankruptcy Bill Affects
Retirees
On Tuesday, union and Congressional
leaders announced new legislation to change corporate bankruptcy
laws, making abuse of the bankruptcy process more difficult by
ensuring executives and workers share the sacrifices.
Judiciary Committee Chairman John Conyers
(D-MI) introduced the Protecting Employees and Retirees in
Business Bankruptcies Act of 2007 as H.R. 3652 in the
House. Senate Health, Education, Labor and Pensions
Committee Chairman Edward M. Kennedy (D-MA) and
Assistant Senate Majority Leader Richard Durbin
(D-IL) introduced the Senate version, S. 2092. The
legislation would allow much greater recoveries of lost earnings
by workers when corporations go bankrupt. The legislation
would also defend pensions, health care and wages by cracking
down on abuses of executive compensation that allow declaring
bankruptcy to exploit employees while leaving CEOs
unaffected. The bill mandates that executives be treated
in the same manner as their employees, stating that when wage
and benefit cuts are forced on workers, creditors may take an
equal percentage of the “labor cost savings” from
the compensation of some of the board of directors.
Companies are also forbidden from maintaining retiree health
benefits and pension plans for executives if they have been
eliminated or reduced for the workforce. Currently, some
companies abuse the bankruptcy system as a
“backdoor” means of cutting pay and benefits for
current employees and retirees, while providing corporate
executives bonuses, higher salaries, and other perks.
“Bankruptcy should never be used as a license to
steal,” said Ruben Burks,
Secretary-Treasurer of the Alliance. “Workers and
retirees should not have to stand at the back of the line to
collect what they have earned.”
Treasury Secretary, Former Fed Chairman
Weigh in on Social Security
Treasury Secretary
Henry M. Paulson, Jr. released an issue brief
on Monday, the first in a series of “Treasury Social
Security Papers on Common Ground.” The briefs are
designed to find areas of Social Security reform on which both
parties can agree. Paulson said that he had many
conversations with both Democratic and Republican members of
Congress, and had invited them to discuss Social Security reform
with no preconditions. He said that while differences over
personal accounts and taxes tend to dominate the public debate,
he has found areas of agreement. Issue Brief No. 1 is
entitled Social Security Reform: The Nature of the
Problem. “We must remain vigilant,” said
Edward Coyle, Executive Director of the
Alliance. “Despite what this Administration may say,
it has not given up on privatization.” On Sunday, on
the NBC talk show Meet The Press, former Federal Reserve
Chairman Alan Greenspan also weighed in on
Social Security. “Social Security is not (in) a big
crisis. We're approximately 2 percentage points of payroll
short over the very long run. It's a significant closing of the
gap, but it's doable, and doable in any number of ways,”
Mr. Greenspan stated. He expressed far greater concern
about Medicare.
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Alliance for Retired Americans 815 16th
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