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WASHINGTON, DC -- Warning that a recently announced change in his administration’s policy would “seriously undermine health and retirement security” for American workers, ten senior Democrats in the U.S. House of Representatives today wrote to President George W. Bush urging him to rescind the new policy.
The lawmakers, led by Representative George Miller (D-CA), the senior Democrat on the House Education and the Workforce Committee, wrote the letter after learning that the U.S. Department of Energy had announced significant changes in how it will reimburse its private contractors for their employees’ retirement and medical benefits. Specifically, the policy means that the Energy Department:
- Will no longer reimburse its contractors for the cost of a traditional pension plan for new employees. Unlike 401(k) investment plans, traditional pensions – called “defined benefit” pensions – provide workers with a guaranteed income at retirement. Generally, they provide far more substantial retirement benefits than do 401(k) plans.
- Will only reimburse contractors for the cost of a “market-based medical benefit plan,” thus encouraging contractors who provide comprehensive medical coverage for their employees to reduce that coverage, rather than asking contractors to find ways to reduce the cost of coverage. This move will likely worsen health benefits for both employees and retirees.
“These changes penalize responsible employers who provide their employees with guaranteed retirement benefits and real, affordable health insurance,” the lawmakers wrote in their letter. “Perhaps even more important, these changes, coupled with last year’s push for Social Security privatization and Administration efforts to shift more costs onto beneficiaries in Medicare and Medicaid and undermine workers’ coverage through support of Association Health Plans and Health Savings Accounts, call into question your Administration’s stated support both for preserving defined benefit pension plans and affordable health insurance coverage.”
In addition to Miller, the House members who signed the letter are: John Dingell (D-MI) the senior Democrat on the House Committee on Energy and Commerce; Charles B. Rangel, the Senior Democrat on the House Committee on Ways and Means; Benjamin Cardin (D-MD); Pete Stark (D-CA); Sander Levin (D-MI); Robert Andrews (D-NJ); Sherrod Brown (D-OH); Earl Pomeroy (D-ND); and Ted Strickland (D-OH).
“We strongly urge that your Energy Department withdraw this misguided new policy immediately,” the lawmakers wrote. “The federal government should not be leading a race to the bottom on health and retirement benefits for workers.”
Click here to view the full text of the letter.
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