[Congressional Record Volume 149, Number 17 (Thursday, January 30, 2003)]
[Senate]
[Pages S1789-S1793]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       NOMINATION OF JOHN W. SNOW

  Mr. DURBIN. Mr. President, pursuant to that unanimous consent 
request, I would like to take the floor for a few moments and then 
yield to my friend Senator Harkin.
  This evening, we are considering the nomination of John Snow to be 
the Secretary of the Treasury. It is a very important position, one of 
the most important in the President's Cabinet. I have had the 
opportunity on two occasions now to sit down with Mr. Snow and discuss 
with him a number of issues, but in particular one that I would address 
this evening. After these conversations, I am happy to report I will be 
supporting his nomination as Secretary of the Treasury. He will have an 
awesome responsibility in this post. I hope he can rise to that 
challenge. His resume shows that he can and that he will serve our 
Nation with pride.

  The particular issue which drew us together last night and again this 
evening is one that Senator Harkin has been the leader on for many 
years. Literally millions of Americans have pension plans which they 
have worked long and hard to maintain in their place of employment. The 
traditional defined-benefit plan is one where someone works for a 
company for a certain number of years and the company promised that at 
retirement they would pay them a certain amount of money. That is the 
retirement plan with which most people are familiar. That is the basic 
and traditional approach. But over the years retirement plans have 
changed. They have become more like 401(k)s or savings plans or 
investment plans, and those are known

[[Page S1790]]

as cash-benefit plans. Some companies have decided to go with defined-
benefit plans and some with cash-benefit plans. But many employees have 
been caught in the middle. Some started working for a company thinking 
they had a defined-benefit plan. Then the company at a later date says 
for a variety of reasons we are going to move to this other cash-
balance plan. For some employees, it is a good choice. If you are a 
young worker in a company, and they come in and say, Listen, you don't 
know if you are going to be at this place the rest of your life; you 
may pick up and move to another job; would you rather have something 
like a cash-balance plan where you know how much money is there? It is 
invested. You can build it up over the years and move it with you from 
job to job. A lot of younger workers said, That is exactly what I want.
  But the worker who has been on that job for longer periods of time 
has built up benefits under the defined-benefit plan may say, Wait a 
minute. Don't change the rules at this point. I am nearing retirement. 
I know what I was supposed to receive. I don't want to change the 
benefit plan at all.
  Therein lies the dilemma. Some corporations have said to employees, 
You make the decision. Decide what is best for you. Stick with the old 
defined-benefit plan or move to the cash-balance plan. But it is your 
choice.
  Frankly, from my point of view and Senator Harkin's point of view, 
that is fair. Let the employee decide his fate. Let the employee decide 
what is best for him, for his family, and for his future. That is what 
we would like to see.
  Frankly, that really was the law and the rule for so long, thanks to 
the hard work of Senator Harkin of Iowa protecting the rights of 
employees.
  A month ago, there was a shocking rule issued by the Treasury 
Department which basically said the corporations could wipe out 
defined-benefit plans and say to that employee of many years, Guess 
what. We have changed the rules. You are now in a cash plan.
  I was at a press conference and met with some former IBM employees 
who went through that experience. It is really heartbreaking to hear 
what it meant to their families, and where they expected to end up 
generating some $4,000 a month in retirement income is now going to 
generate about $2,000. It means, frankly, the survivor benefits are 
sacrificed and a quality of life has been lost.
  Senator Harkin, myself, Congressman George Miller of California, and 
Congressman Bernie Sanders of Vermont have really tried to dramatize 
this issue and this new proposed rule, and to say to the Treasury 
Department, For goodness sakes, treat these workers fairly. Don't force 
them into a plan that is going disadvantage them or their families.

  We gathered together some signatures--I don't take any credit for it; 
the work was done primarily by the two House leaders I just mentioned--
over 226 signatures of Members of Congress in both the House and the 
Senate, saying to the President and the Treasury Department, Don't 
change the rules in midstream. Protect these employees.
  Along comes the President's nominee for the Treasury Department, John 
Snow. Of course, he will be the man to make the ultimate decision on 
the rule and whether it will be fair to employees. Senator Harkin and I 
sat down with him this evening and had a lengthy and very positive 
conversation.
  John Snow comes to us from a career in private business where he has 
been a CEO of the CSX Railroad. He explained to us when his railroad 
decided to change pension plans, they left it up to the employees to 
decide. He thought that was a fair thing to do with his railroad. We 
think it is a fair thing to do for every company. He talked about other 
businesses he worked with where the same thing occurred.
  He said to us he was going to be fair and objective, and he was going 
to take the rights of the worker into account for any rule related to 
future pension plans.
  We talked about the fact that when it comes to Members of Congress, 
that is exactly the standard we followed when it came to our 
retirement. I guess it was 10, 12 years ago we decided to change the 
retirement plan. We went to individual Members of Congress and said, 
What do you choose? What is best for you and your family? That was our 
way. Should it not be the right of every American worker?
  In a meeting with Senator Harkin and myself, we decided to let this 
nominee go forward to give Mr. Snow an opportunity to become the 
Treasury Department Secretary and to use his values and corporate 
experience which he brings to the job not only to serve the Nation but 
to treat American workers and retirees fairly.
  I want to especially thank Senator Harkin. This is not the kind of 
issue likely to be on the front page of any newspaper, but it is the 
kind of issue that is likely to be front and center on the dining room 
table of American families who are genuinely concerned about their 
future. He fought a long and lonely battle on this issue. I was happy 
to support him. But he deserves credit for his leadership. The meeting 
with the new Treasury Secretary today points us in the right direction. 
We want to work with this Treasury Department and with this Secretary 
to be fair to workers across America.
  I will support the nomination of John Snow for Treasury Secretary 
because I believe he brings the right values and the right corporate 
experience to this job. I am sure I am going to disagree with him on 
many issues. But on this particular issue, the assurances which he gave 
us this evening are the basis for us to go forward and approve his 
nomination.
  At this point, I would like to yield to my leader on this issue, my 
colleague from Iowa, Senator Harkin.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. HARKIN. Mr. President, I thank my friend and colleague from 
across the Mississippi River in Illinois, Senator Durbin, for the very 
kind and overly generous words. More than that, I thank him for his 
diligence and for his hard work on this issue which means so much to 
the average working person in America.
  I will just say at the outset that Senator Durbin has, I believe, 
correctly laid out the meeting we had with Mr. Snow earlier this 
evening, and has also correctly portrayed the assurances we got from 
Mr. Snow regarding this issue and how he would approach it as the new 
Secretary of the Treasury.
  Again, I want to make it clear that the actions of this Senator 
earlier today and yesterday in wanting to have a bit of time here to 
talk about this before we voted on this nomination had nothing to do 
with Mr. Snow. I said that earlier this evening. This is nothing 
personal at all. He has a very distinguished career in the business 
community. He was head of the CSX Railroad, I guess for well over 20-
some years, if I am not mistaken, and has served well on boards of 
schools, universities, John Hopkins, and others. In other words, he has 
been both a business leader and a community leader.
  Again, I want to compliment him and commend him for his distinguished 
career and for his service both to his company and to our country.
  I congratulate Mr. Snow on his nomination for Secretary of the 
Treasury and will join with my colleagues in supporting that 
nomination.
  I feel, as Senator Durbin said, that he gave us assurances on this 
issue--and I will talk more about this issue in a minute--dealing with 
pensions and workers' rights; that he will assure the fairness and 
equity as the rule. In fact, I wrote down exactly what Mr. Snow said. 
He said:

       I believe we should protect the basic rights of workers. 
     And, if a rule doesn't meet that test, it won't move forward. 
     Fundamental fairness will be at the center of any policy.

  I compliment Mr. Snow for that. As Senator Durbin pointed out, as the 
CEO of the CSX Railroad, when they changed their plan over from a 
defined-benefit plan to a cash-balance plan, they left in place for 
older workers the defined-benefit plan. In other words, they could stay 
with that plan. Newer, younger workers could go with cash balance 
plans. To me, that really makes sense. That is really the way we ought 
to be going in this country when we talk about our pensions and 
protecting our pensions.

  So my actions here yesterday and today have not been about Mr. Snow. 
They have been about this issue. It is an issue of fundamental fairness 
for people who work hard, play by the rules, and then find out--after 
working

[[Page S1791]]

20 or 30 years--that what they thought they were going to get has been 
taken away. So that is what this is about.
  Over the last several days, I have been reading a book that was given 
to me last year. I had not gotten to it. I have now been reading it. I 
am almost finished with it. I recommend it highly. It is a book by 
Kevin Phillips called ``Wealth and Democracy.''
  I remember in one part of the book he pointed out that over the last 
30 years--I think from 1970 to about the year 2000--the difference in 
the compensation for our CEOs and the people who work on the shop 
floor, so to speak, has been that in 1972, the average CEO salary was 
about 42 times that of the average worker in that corporation. That was 
1970--42 times; by the year 2000, that gap had widened to 417 times. In 
other words, today, the average CEO is getting 417 times the 
compensation of the average worker in that corporation. So that gap has 
widened tremendously.
  Also what has happened is that we see, time and time and time again, 
that when CEOs of these large corporations hit a rough spot--the 
company maybe has a rough spot, the CEOs leave the corporation--they 
get wonderful golden parachutes. They get wonderful retirement 
programs. We have to have that same kind of fairness for the average 
workers.
  In 2001, we passed numerous pension provisions that had wide support. 
Many provisions favored those making more than $200,000 a year. I am 
not saying those provisions are bad, but we need some balance.
  In the early 1990s, U.S. companies began a process of switching from 
defined benefit pension plans to cash balance plans. I am not going to 
get into the esoteric descriptions of defined benefits plans and cash 
balance plans, but only to say that many workers who affected by these 
changes had no idea what was happening to their pensions.
  You might ask: Why has this all of a sudden come to the forefront in 
the year 2003? Well, it did not. I first drafted legislation in 1999, 
because by that time workers whose pensions had been changed in the 
early and mid-1990s, and who were now really facing retirement, all of 
a sudden woke up and found out that they did not have what they thought 
they would, and they had no recourse.
  So, in 1999, I introduced a bill to make it illegal for corporations 
wear away the benefits of older workers during cash balance 
conversions. We had a vote on that bill in the Senate. I offered it as 
an amendment to the reconciliation bill, and a point of order was 
raised, so we had to vote to waive the point of order. 48 Senators, 
including 3 Republicans, voted to waive the budget point of order so we 
could consider this amendment. Obviously, we did not have enough votes.
  After that, more and more stories came out about how many workers 
were losing their pensions. In April of 2000, I offered a sense-of-the-
Senate resolution to stop this practice, and it passed the Senate 
unanimously. The Secretary of the Treasury put a moratorium on 
conversions from defined benefit plans to a cash balance plans. That 
moratorium has been in effect now for over three years.

  Last month, a rule was proposed by the Treasury Department--a rule 
that would turn the clock back, undo the moratorium, and allow 
companies to once again engage in the practice of switching from 
defined benefit plans to cash balance plans and wear away the benefits 
of older workers.
  So that is why I wanted to utilize this time and this nomination of 
Mr. Snow to be Secretary of the Treasury, to raise this issue once 
again and to talk with Mr. Snow about it as the incoming Secretary of 
the Treasury. We cannot permit this rule to just go forward. I think it 
was clear here in the Senate, in 2000, that we did not want that 
practice to continue. So I wanted to take this time to bring this issue 
to the forefront.
  What are we talking about when we talk about how much people are 
losing in this? This morning, we had a press conference. We had a man 
there by the name of Larry Cutrone. He was one of thousands robbed of 
the full value of their earned pensions. He said that before AT&T 
converted his pension, it was valued at $350,000. After the conversion, 
in July 1997, the value dropped to $138,000. The calculation period for 
his pension was frozen at 1994-1996 salaries, so no value to his 
retirement account was added for any years he worked after the 
conversion.
  So he said:

       In September 2001, I was ``downsized'' out of AT&T and 
     decided to take my pension. I discovered that it translated 
     into an annual income of just $23,444 instead of the $47,303 
     income under the old plan.
       When these plans were changed over, workers were not 
     informed that this could happen. They woke up one day and 
     found out: they have less than 50 percent of what they 
     thought they were going to get in their retirement.

  Is that fair? Is that equitable?
  Mr. President, I ask unanimous consent that this statement of Larry 
Cutrone that he gave this morning be printed in its entirety in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record,  as follows:

                       Statement of Larry Cutrone

       My name is Larry Cutrone, one of thousands robbed of the 
     full value of their earned pensions due to the ``Cash 
     Balance'' pension conversion. Before AT&T converted my 
     pension it was valued at $350,000 and after the conversion in 
     July 1997, the value dropped to $138,000. Even with AT&T's 
     ``Special Update'' enhancement to my account, the value only 
     rose to $150,000. The calculation period for my pension was 
     frozen at 1994-1996 salaries, so no value to my retirement 
     account was added for any years I worked after the 
     conversion.
       In September 2001, I was ``downsized'' out of AT&T and 
     decided to take my pension. I discovered that it translated 
     into an annual income of just $23,444 instead of the $47,303 
     income under the old plan. This seems meager after 31 loyal 
     years of service to the company. As a result, my wife was 
     forced to waive her rights to the survivor benefits of my 
     pension in the event I predecease her. Invoking these rights 
     would have meant between 8% and 20% less per month. While my 
     pension was reduced by more than half, my monthly 
     contribution for medical benefits was increased five times 
     this year.
       As representatives of ``AT&T Concerned Employees Council on 
     Retirement Protection'' (ACE CORP), we are willing to 
     publicize our personal situation in order to bring to the 
     forefront the negative impact of the forced cash balance 
     pension on the older worker. We urge President Bush to 
     support Congressman Sanders, Miller, Senator Harkin, and 
     their fellow representatives to revise his proposal to the 
     IRS by including protection for the older worker and 
     preventing them from becoming ``Pension Challenged'' by 
     ``Cash Imbalance''!
       In President Bush's radio address this past Sunday he 
     states ``In 2003, we must work to strengthen our economy; 
     improve access to affordable, high quality health care for 
     all our seniors . . .'' In his State of the Union Address, he 
     urged Congress to pass his plan ``. . . to strengthen our 
     economy and help more Americans find jobs.'' (Assuming he 
     makes these comments in his State of the Union Address on 
     Tuesday.) We hope our efforts will convince President Bush 
     that his IRS Proposal and the affect of the cash balance 
     pension on the older worker further reduces consumer 
     spending, and reduces tax revenue while causing our economy 
     to continue suffering. We are aware of any negative impact to 
     the corporations who convert to cash balance pension plans. 
     Should the loyal worker and subsequently America's economy be 
     penalized?

  Mr. HARKIN. Mr. President, 189 Members of the House of 
Representatives and 25 Senators signed a letter that was sent today to 
President Bush, asking that we do not reopen the floodgates, that we 
withdraw this rule and promulgate a rule that is fair and equitable. As 
we said in our letter:

       We are writing to strongly urge you to withdraw proposed 
     Treasury Department regulations regarding cash balance 
     pension plans and to issue new regulations that will prohibit 
     profitable companies from reducing the pension benefits of 
     existing employees or retirees by converting to age-
     discriminatory cash balance plans.
       The recently proposed regulations would create an incentive 
     for thousands of companies to convert to cash balance plans 
     by providing legal protection against claims of age bias by 
     older employees.

  Often when companies switch from defined benefit plans to cash 
balance plans, a worker can work for 20 or 25 years, but the employer 
may not pay anything into your pension plan for several years. But they 
will contribute to a younger worker who has only been there for 2 
years.
  So let's understand this. You have two workers work for the same 
company, doing the same job. One gets extra wages in the form of a 
benefit of money put into a cash balance account. The other worker, who 
has been there 20 or 25 years, does not get it. That is age 
discrimination, pure and simple, in violation of Federal law. The only 
reason the one person is not getting it is because they have been there 
longer.

[[Page S1792]]

  The younger worker gets the money; the older worker does not. That is 
age discrimination, pure and simple.
  As we said in our letter:

       [The proposed] regulations [from Treasury] would result in 
     millions of older employees losing a significant portion of 
     the annual pension they had been promised by their employer 
     and had come to rely upon as part of their retirement 
     planning.

  That is what happened to Larry Cutrone.
  We write:

       We urge you to direct the Treasury Department to 
     immediately withdraw these proposed regulations and instead 
     issue regulations that provide for the protection of older 
     employees pensions.
       At a time when millions of employees are still reeling from 
     significant losses to their 401(k) retirement plans because 
     of corporate scandals and the ongoing weakness in the stock 
     market, we believe these regulations represent another 
     serious blow to the retirement security of hard working 
     Americans who have played by the rules in their companies 
     only to see the rules of the game . . . change midway through 
     their careers.

  I ask unanimous consent this letter, signed by 189 Members of the 
House and 25 Senators, be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                Congress of the United States,

                                 Washington, DC, January 30, 2003.
     The Hon. George W. Bush,
     President of the United States,
     Washington, DC.
       Dear President Bush: We are writing to strongly urge you to 
     withdraw proposed Treasury Department regulations regarding 
     cash balance pension plans and to issue new regulations that 
     will prohibit profitable companies from reducing the pension 
     benefits of existing employees or retirees by converting to 
     age-discriminatory cash balance plans. (Federal Register, 
     December 11, 2002, Internal Revenue Service, 26 CFR Part 1, 
     REG-209500-86, REG-164464-02, RIN 1545-BA10, 1545-BB79.)
       According to the General Accounting Office, annual pension 
     benefits of older employees can drop by as much as 50 percent 
     after a company converts from a traditional defined benefit 
     plan to a cash balance plan. Large companies favor the 
     conversion because they can save hundreds of millions of 
     dollars a year in pension costs. Delta Airlines, for example, 
     recently announced it would save $500 million per year by 
     switching to a cash balance plan. In the late 1990s, IBM 
     initially estimated it would save $200 million per year by 
     switching to a cash balance plan. IBM, AT&T, and Verizon are 
     among the 300 to 700 large companies that have already 
     converted to a cash balance pension plan. An additional 300 
     companies had been waiting for IRS approval of their 
     conversion plans even before the regulatory change was 
     announced. Thousands of companies employing millions of 
     people would be eligible to convert their pension plans under 
     the proposed regulations.
       Switching to a cash balance plan in mid-stream has the 
     greatest negative effect on older employees who have worked 
     for many years with one company and plan to continue to work 
     for additional years for the same employer.
       As you know, in September 1999, the IRS issued a moratorium 
     on issuing letters of approval to companies for pension plan 
     conversions because of age discrimination concerns. There are 
     over 800 age discrimination complaints currently pending 
     before the EEOC based on cash balance conversions. The 1999 
     moratorium has nearly stopped the flow of companies 
     converting to cash balance plans.
       The recently proposed regulations would create an incentive 
     for thousands of companies to convert to cash balance plans 
     by providing legal protection against claims of age bias by 
     older employees. The regulations would result in millions of 
     older employees losing a significant portion of the annual 
     pension they had been promised by their employer and had come 
     to rely upon as part of their retirement planning.
       We urge you to direct the Treasury Department to 
     immediately withdraw these proposed regulations and instead 
     issue regulations that provide for the protection of older 
     employees' pensions.
       At a time when millions of employees are still reeling from 
     significant losses to their 401(k) retirement plans because 
     of corporate scandals and the ongoing weakness in the stock 
     market, we believe these regulations represent another 
     serious blow to the retirement security of hard working 
     Americans who have played by the rules in their companies 
     only to see the rules of the game for rank and file employees 
     change midway through their careers.
       Re-opening the floodgates for cash balance conversions will 
     destroy what is left of our private pension retirement 
     system. This is a devastating step that your Administration 
     need not and should not allow.
       We deeply appreciate your attention to the concerns that we 
     are expressing on behalf of the millions of employees who 
     will depend on their pensions for a secure retirement. We 
     look forward to working with you to protect the pension 
     security of America's workers.
           Sincerely,
          Bernard Sanders, George Miller, Tom Harkin, Barbara 
           Boxer, Tom Daschle, Nancy Pelosi, Edward Kennedy, Paul 
           Sarbanes, Carl Levin, Christopher Dodd, Charles 
           Schumer, Dianne Feinstein, Jon Corzine, James Jeffords, 
           Mark Dayton, Patrick Leahy, Barbara Mikulski, Russell 
           Feingold, Hillary Rodham Clinton, Maurice Hinchey, John 
           McHugh, John Dingell, David Obey, Barney Frank, Tom 
           Lantos, Paul Kanjorski, Lloyd Doggett, Robert Andrews, 
           Jane Harman, David Price, Gene Green, Lucille Roybal-
           Allard, Rodney Alexander, James Clyburn, David Scott, 
           Ike Skelton, Ed Pastor, Adam Smith, Gil Gutknecht, Ron 
           Kind, James T. Walsh, Nick Lampson, Jay Inslee, 
           Sherwood Boehlert.
         Rahm Emanuel, Madeleine Bordallo, Rob Simmons, Solomon 
           Ortiz, Sanford Bishop, Gregory Meeks, Steve Israel, 
           Kendrick Meek, Steny Hoyer, Bob Etheridge, Artur Davis, 
           Ruben Hinojosa, Mike Thompson, Brad Miller, Max 
           Sandlin, Dutch C.A. Ruppersberger, Anibal Acevedo-Vila, 
           Adam Schiff, Sander Levin, Michael Honda, Melvin L. 
           Watt, Lincoln Davis, Marion Berry, Jim Cooper, Frank W. 
           Ballance, Jr., Shelley Berkley, Chris Bell, Dennis A. 
           Cardoza, Jack Quinn, Nick J. Rahall, II, Michael R. 
           McNulty, Richard Gephardt, Timothy Bishop, Karen 
           McCarthy, Raul Grijalva, Stephen Lynch, Ciro Rodriguez, 
           Bart Gordon, Mike Ross, John Spratt, Robert Menendez, 
           Virgil Goode, Jr., Denise Majette, Maxine Waters, Nita 
           Lowey, Jim Moran, Charles Gonzalez, Joseph Hoeffel.
         Jerry Costello, Sheila Jackson-Lee, Harold Ford, Jr., 
           Bobby Rush, Tom Udall, Timothy Ryan, Thomas Allen, 
           Elijah Cummings, Michael Michaud, Norman Dicks, Robert 
           Brady, Eddie Bernice Johnson, Jim Davis, Linda Sanchez, 
           Vic Synder, William Jefferson, Tim Holden, Diane 
           Watson, Carolyn Maloney, Lane Evans, Jesse Jackson, 
           Jr., Robert Wexler, Anthony Weiner, Betty McCollum, 
           William Lipinski, Peter Visclosky, Anna Eshoo, Steven 
           Rothman, Darlene Hooley, Nydia Velaquez, Martin Olav 
           Sabo, Gene Taylor, Ted Strickland, Danny Davis, Loretta 
           Sanchez, Chaka Fattah, Grace Napolitano, John Lewis, 
           Martin Meehan, Bart Stupak, Ellen Tauscher, Chris Van 
           Hollen, Zoe Lofgren, Edward Markey, Collin Peterson, 
           Henry Waxman, Michael Capuano, Diana DeGette.
         Jerrold Nadler, Bill Pascrell, Albert Russell Wynn, 
           Joseph Crowley, Gary Ackerman, Carolyn McCarthy, Gerald 
           Kleczka, John Murtha, Donald Payne, Louise McIntosh 
           Slaughter, Tammy Baldwin, John Conyers, Susan Davis, 
           Neil Abercrombie, Mike McIntyre, Fortney Pete Stark, 
           Hilda Solis, Bob Filner, Alcee Hastings, John Tierney, 
           Jose Serrano, James Langevin, Frank Pallone, Earl 
           Blumenauer, Juanita Millender-McDonald, Barbara Lee, 
           Lynn Woolsey, Robert Scott, Rush Holt, James McGovern, 
           Stephanie Tubbs Jones, John Olver, Lois Capps, Sam 
           Farr, Corrine Brown, Dale Kildee, Patrick Kennedy, 
           William Delahunt, Edolphus Towns, Joe Baca, Eliot 
           Engel, Silvestre Reyes, William Lacy Clay, Michael 
           Doyle, Carolyn Kilpatrick, Sherrod Brown, Luis 
           Gutierrez, Janice Schakowsky.
         Howard Berman, Bennie Thompson, Julia Carson, Mark Udall, 
           Rosa DeLauro, Peter DeFazio, Martin Frost, Marcy 
           Kaptur, Dennis Kucinich, Major Owens, Peter Deutsch, 
           Eleanor Holmes Norton, James Oberstar, Jim McDermott, 
           Rick Larsen, Donna Christensen, John D. Rockefeller IV, 
           Maria Cantwell, Jack Reed, Harry Reid, Daniel Akaka, 
           Richard Durbin, Frank Lautenberg, Debbie Stabenow, 
           Christopher Smith, Daniel Inouye, Alan Mollohan, Ed 
           Case, Bill Nelson.
  Mr. HARKIN. We have right now over 1,000 cases pending before the 
Equal Employment Opportunity Commission, over 1,000 cases regarding age 
discrimination. These are cases of people who have had their retirement 
pensions, what they were promised, reduced like Larry Cutrone; 1,000 
cases filed under age discrimination. I believe these cases have merit. 
They are going to go forward. They are going to go into Federal courts.
  I want to make it very clear: I am not opposed to cash balance plans. 
Some cash balance plans can be very good. What I am opposed to is the 
unilateral decision of a company being able to change their plans and 
stop contributing to an employee's pension without their knowledge. 
That is what I am opposed to.
  That is what this issue is all about. It is fairness. It is equity. I 
know sometimes when you get into pension laws, things like that, it 
sounds very convoluted. In essence, what some of these companies have 
been doing to these workers is nothing less than sheer thievery. They 
are able to save millions, in some cases hundreds of millions of 
dollars, by converting these

[[Page S1793]]

plans over, robbing--yes, I use the word ``robbing''--their workers who 
have been loyal and hard working, robbing them of their rightful claims 
on future benefits, taking that money and giving it in higher benefits 
to the CEOs and the corporate executives, golden parachutes. It is not 
right. It is not fair.
  There is one thing that has distinguished the American workplace from 
others around the world. We have valued loyalty. If you are hard 
working and loyal, companies value that. At least they used to. That is 
one of the reasons we had pension plans--the longer you worked there, 
the more benefit you had in your pension program. Obviously, the longer 
you work someplace, the better you do your job, the more you learn 
about it, the more productive you are. We valued that loyalty.
  If companies are able to just change these plans, what kind of a 
signal does that send to the workers? It sends this signal: Don't be 
loyal. You are a fool if you are loyal because if you work here for 20 
or 25 years, we can just change the rules of the game, and break our 
promise.
  What it says to younger workers is: It would be crazy to work for 
this company for a long time. I will work here a couple years; I will 
move on.
  It destroys the kind of work ethic we have come to value and that we 
know built this country. I also thought we valued fairness when it 
comes to workers. A deal is a deal. Let's say I wanted to hire you. I 
said: I will hire you for 5 years, pay you $50,000 a year. But if you 
stay with me for 5 years, I will give you a $50,000 bonus.
  You say, OK, that is good. So now you work for me 3 years and you are 
thinking you have 2 more years to go and you will get that $50,000 
bonus. But at the end of the third year I come to you and say: Do you 
remember the deal we made where I said if you work for me for 5 years 
you will get that $50,000 bonus? Well, the deal is off.
  Well, now you have 3 years invested there. If you had known that the 
deal was going to be off, maybe you would not have gone to work for me. 
Maybe you would have gone to work someplace else. Is that the way we 
want to treat workers in this country, where I have all the cards and 
you have none, and I can make whatever deal I want, but I can change 
the rules any time I want to and take away your pension? That is what 
this is about.
  Well, as Senator Durbin said, I thought we had a good meeting with 
Mr. Snow. I am encouraged by the fact that, as a CEO of his 
corporation, when they changed their plans over, they left a choice for 
workers. That is the right and honorable way to do things. I compliment 
Mr. Snow for having done that. I am also assured that the rules of the 
game won't be changed in the middle. In other words, there is a 
moratorium on right now, and I am assured that the moratorium will stay 
on at least until a final rule is promulgated.
  Mr. Snow has said he would agree to meet with people--employers, 
representatives of labor groups, representatives of elderly groups--to 
get their input on this approach and, hopefully, on perhaps having a 
new rule.
  I want to make it clear this Senator will continue to press for the 
Treasury Department--when Mr. Snow gets confirmed and sworn in--to 
withdraw that rule. He has the power to do it as Secretary of the 
Treasury--withdraw the proposed rule and come out with a new one that 
more closely reflects what he had done as a CEO of a corporation 
earlier on when they changed their plans over. That is the fair way to 
do it. This is an issue that is not going to go away. Again, I think 
more and more working Americans are beginning to find out their hard 
work and loyalty is being taken away and they have no voice. Well, that 
is what we are here for, to help protect these people, and to make sure 
their voice is heard and to make sure the pensions they have built up 
over a long period of time over their working years is not unilaterally 
taken away by the companies for whom they worked.
  Again, I have no intention of holding up Mr. Snow's nomination at 
all. As I said, my only intention in doing this was to raise this issue 
up, to make sure Mr. Snow understood the depth of our feelings about 
it, the history in the Senate that we had passed a sense-of-the-Senate 
resolution unanimously in 2000, and that there are a lot of strong 
feelings nationally--just witness the 1,000 cases now pending before 
the EEOC, plus the fact that there are now about 300 filings right now 
before the IRS, Internal Revenue Service, by companies wanting to 
engage in this practice--change from defined benefit plans, to cash 
balance plans, without protecting the rights of the workers. I have 
estimated, roughly, that this represents several hundred thousand 
workers in this country who would be affected by this.
  We need to send a clear and strong signal that we are not going to 
allow this to happen. If companies want to change plans, fine; but give 
the workers the choice to stick with the plan they have had or to take 
the new one. That is all we are asking for.
  Mr. President, again, I congratulate Mr. Snow on his selection to be 
Secretary of the Treasury. I look forward to working with him. I thank 
him for his distinguished career, and I hope he is able to bring to the 
position that he will assume shortly the philosophy he had when he was 
the CEO of CSX Rail, and the kind of implementation of the change in 
their pension plans will be the kind of philosophy that we will have 
now at the Department of the Treasury.
  Every worker in this country ought to have the right to choose just 
like the workers at CSX had under Mr. Snow. Again, I look forward to 
working with Mr. Snow on this issue. I hope we can get a fair 
resolution of this in the days and weeks to come.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. FRIST. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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