Earl Pomeroy

Mr. POMEROY

Mr. POMEROY. Mr. Speaker, reclaiming my time, maybe we can get some debate. But the 125 percent of current liability, among other things, does not address change in the relative position of the workers' advancement in position, all of which might require a heavier pension payout in the future. In other words, there are many that would tell you, including the Pension Benefit Guarantee Corporation, the Nation's pension regulator, that 125 percent of current liability is simply not sufficient.

Mr. POMEROY. This is one of the most tragic aspects of how this would play out, because there are thousands of corporations that understand their success is because of the hard work of their workers, and just as their workers are committed to the corporation, the corporation is committed back to the worker, and they run healthy pension funds to make sure there is no question about their ability to meet their retirement obligations when their workers retire. This corporation is going to have to think again, because a predator, just as we described earlier, could take this company over and use those pension funds to pay for the transaction, so actually, even those companies that highly value their employees and the importance of pension security are going to have to draw down the pension funds to avoid becoming a takeover target.

Mr. POMEROY. That is the tragic irony. All so often in these leveraged buyouts where the worker's very pension funds finance the takeover, the worker loses his job because of downsizing and rightsizing and restructuring and every other darned thing that results in so many pink slips that have gone out in so many recent years. [[Page H 11934]]

Mr. POMEROY. Absolutely, predator companies taking hold of other companies and bleed out their pension funds to pay the purchase price.

Mr. POMEROY. We have seen this before. This is the whole business that provided the financial underpinnings for the hostile takeovers that proliferated throughout this country in the 1980's, leaving so many of our corporations deeply leveraged and in debt, and so many workers unemployed. You are the predator, you want to buy a company; you basically want to use as much of this company's assets to pay the cost of buying it. In other words, you buy me and use my assets to pay off the purchase price. It is a heck of a deal.

Mr. POMEROY. Mr. Speaker, at the outset of my special order, let me express pretty substantial disappointment in the presenters that have occupied the last hour, filling this Chamber with rhetoric that often was not based in a single shred of fact. Mr. Speaker, I think the people that follow the carryings on in this Chamber probably get mighty tired of just long, windy speeches after long, windy speeches. What might be kind of fun once in a while is to have some meaningful dialog, give and take. God forbid even an honest debate might break out here on the House floor, and we had that chance that evening. We had that chance in the hour that just passed, and repeatedly, as I asked for recognition to pose a question, simply a question or a clarification, or to straighten out a flat misstatement of fact, I was denied that opportunity. Well, there are a couple of things I want to set straight at the outset of [[Page H 11931]] my comments. First of all, relative to Bosnia, the matter which we just heard a great deal about, there is no proposal before this Congress about sending troops, nor does the President have proposals that he is enacting about sending troops. The action about Bosnia is taking place in Dayton, OH, where a terribly important peace conference is going on with leaders of the warring camps in Bosnia, seated at a peace table. Lord knows they have a long, tough road to how in front of them. Coming out of that, this administration has given this Congress the assurance that there will be no commitment of U.S. troops without prior opportunity for Congress to speak on that question. At that time, this Congress will know exactly what is the plan of the administration, if any; how many troops, how many countries participating in the peace mission, what share might be ours, what is the mission, what is the length of time. Those are the questions we need to debate on this issue. This matter is not before the House, notwithstanding the representations of speaker, after speaker, after speaker that have just discussed this question ad nauseam. Second point: One of the speakers even had the audacity to talk about harm posed by the Democratic plan relative to pensions. I am telling you, this is an outrageous misstatement, because there has been nothing advanced from this Congress on the Democratic side or this administration that would impact either the risk or return on pension funds. Again, when I sought to pose the question to the gentleman, no, he would not yield any time, he did not want to discuss it, did not want to debate it. We can do better than that. In fact, in the next hour, I want to make sure we extend an opportunity. We are going to be debating the $40 billion pension raid proposal contained in the Republican Budget Reconciliation Act which passed the House. I am going to be joined in discussion of this topic by the gentlewoman from Jacksonville, FL [Ms. Brown] and the gentleman from Wisconsin [Mr. Barrett]. But we do not propose to have all the information on this topic, and we would be very happy to entertain any from the other side of the aisle that might like to come and shed some light on how in the world a proposal makes sense for our retirees and future retirees that would allow the withdrawal of $40 billion from America's pension funds. Any time anyone wants to come to the floor and seek to engage us in debate, I guarantee right now I will yield time. Let me give a little background before yielding to the other participants in our discussion this evening. This issue is of significant interest to me because I spent the 8 years of my professional life prior to coming to Congress as an insurance commissioner charged with regulating the solvency of insurance companies. I understood very well that often people had everything tied up in the security offered by whatever type of insurance plan they had in force. Therefore, we had to make sure the companies had the solvency to make good on their obligation. What do we have with pension plans? The very same thing. Retirees, today's retirees and tomorrow's retirees, need to know the companies can make good on their pension obligations to their workers. It is critical. It is even more critical now than ever before, because the Budget Reconciliation Act reduces the future spending in Medicare, exposing seniors and future retirees to greater out-of-pocket costs for their health care bills. So they must understand that their private retirement savings are absolutely secure. Quite incredibly, in my opinion, in the Budget Reconciliation Act is a proposal that would remove the penalties for raiding pension funds presently in the law. They estimate that $40 billion would flow out of pension funds under their proposal. Why in the world would they propose letting companies reach into the workers' pension funds and pull out $40 billion? One of two reasons. The first is a budget one. Companies deduct income when they invest in pension funds. They are taxed on income they pull out of pension funds. They recapture some tax. In fact, $40 billion raided from pension funds would produce about $9 billion in tax. Second, and a reason that I think has to have some bearing on this question, because the policy of raiding tomorrow's pension security simply to produce a little short-term revenue in the budget situation does not make any sense at all. That is absolutely cutting off your nose to spite your face in terms of long-term need. I have a sense that there must be some very well-placed companies out there with some powerful friends in the majority that want to get at their workers' pension money, and they have been accommodated beautifully by the Republican plan on the pension proposal. First of all, let me briefly discuss the history of how we got the existing protections in place in law. Remember the go-go 1980's? This was the rock-and-roll period of booming financial activity, some of it which did a great discredit to commerce in this country. This was the type of activity where there was a great amount of hostile takeovers, one corporation buying another corporation through transactions known as leveraged buyouts. Ultimately, the debt used in acquiring the company often was retired by robbing out of the workers' pension funds to pay some of the leveraged buyout costs. There is a public concern presented by this activity for two reasons. First, the workers often stand to get dramatically reduced pension benefits. Second, the Pension Benefit Guaranty Corporation ultimately supported by U.S. taxpayers guarantees the obligations. Since 1974, the Pension Benefit Guaranty Corporation has paid $370 million for 2,000 failed pension plans. Last year, it paid $720 million in benefits alone. Among the failed pension plans, some you will have heard of, Eastern Airlines, Pan American Airlines. These pension plans do go down, and this taxpayer-backed entity does make the payment. Now, when Congress saw pension plans flooding out to the extent they did in the 1980's they became mighty concerned. We can see exponential growth walking through the 1980's in revenues coming out of worker pension funds. It became so critical and so obvious that on November 3, 1985, the New York Times, almost 10 years ago to the day, had a cover story in their business section about raking in billions from company pension plans, how corporate officials were raiding pension plans to fund a variety of things that had nothing to do with worker pension security and placing the retirement security of their workers at risk as a result. This was unacceptable. This was totally unacceptable. It was not just one party that thought that, both parties thought this was unacceptable. On three different occasions they moved in place protections to stop the outflow of pension funds. In 1986, in 1988, and in 1990--on three different occasions--they moved in place serious excise penalties to stop the hemorrhage of pension funds, and it worked. We see the activity in the latter 1980's up to the present day dramatically reducing in this chart essentially the flood of pension funds out of pension programs to pay for these leveraged buyouts and other unrelated activities has all but stopped under the present scenario. The Republican plan would kick this into high gear. $20 billion flowed out of pension funds in the 1980's. The plan contained in the Republican majority Budget Reconciliation Act would have $40 billion, double the entire amount lost in the last decade, flowing out of worker pension funds. No one serious about retirement security in this country believes that our biggest pension problem as a country is overfunding. We are underfunded. We have got to get private capital together so people can meet their own retirement needs. In that vein, no one that I know of that is responsibly approaching this problem believes that the loss of $40 billion from pension plans makes the funding crisis we face with worker retirement obligations any easier. In fact, it makes it dramatically worse. The Pension Benefit Guaranty Corporation has said a plan like this is irresponsible and would expose workers' pension security. When this matter came before the House, because of the importance of [[Page H 11932]] the issue, a number of us went to the Committee on Rules and tried to get a vote. We had a darned good case to make, because, as important to the country as $40 billion of pension funds, this matter did not have a hearing in the Committee on Ways and Means, not a hearing. It was just marked up and plunked in the Budget Reconciliation Act. We asked in the Committee on the Budget for a separate vote. This did not give us a separate vote. It was passed as part of the budget package. In the Senate, a separate vote was demanded and ordered, because their rules do not allow the precluding of separate votes on issues of this consequence. By a vote of 94 to 5, the Senators rejected this proposal. Even today, the proposal lingers in conference committee. Well, is it dead or is it not dead? This proposal is very much alive as we debate it tonight. I along with my colleagues have not stayed up in this Chamber till this late hour simply to hear ourselves speak. We are vitally concerned about the seriousness of this issue and the unrelenting efforts of some, including the Ways and Means chairman and others in this majority, that are insistent upon the enactment of this proposal. They will not come to the floor and debate it, as I offered on last night and have again issued this evening, but they will try and get this plunked into the budget reconciliation package in the dead of night, behind closed doors, and we are here to explain this proposal and its devastating consequences to the American worker. In this respect, I yield to the very distinguished gentlewoman from Florida [Ms. Brown], clearly a champion for workers' retirement interests.

Mr. POMEROY. There is no question about that. We have watched U.S.- taxpayer dollars amount to tens of billions, hundreds of billions of dollars paying off the obligations of failed savings and loans. The taxpayer had to weigh in because these entities were insured by a U.S.- taxpayer-backed insurance program. Pension funds have the same type of thing, a U.S.-backed insurance program. That does not mean that retirees get all their money, because the amount guaranteed may be well less than the amount obligated and committed to them under their pension program. So it comes out the worst of both worlds. The worker gets stuck, the taxpayer gets stuck, and the corporation that fleeced the plan, those directors, are probably very long gone. In terms of calling this to the attention of the American people, though, I must applaud the gentlewoman for her very vigorous efforts in her district and beyond to alert workers about the threat posed to their pension security. Let me ask one question: If I am a retiree in Florida and my time comes for my pension that I have worked 30 years or 35 years or 40 years and the pension is not in, what happens? I mean, what if the company is no longer there?

Mr. POMEROY. That is a very good question. I will assume that you are talking about, and I will just answer in the context of an insured plan under the Pension Benefit Guaranty Corporation, the PBGC would pay a claim on that pension, would pay pension benefits. They may, however, not represent the entire amount of the pension that otherwise would have been paid had the pension fund not gone belly up. There is a critical component of this that I think really reflects just how mean-spirited the Committee on Ways and Means action was. When they put forward the plan to allow corporations to withdraw from worker pension funds $40 billion, an amendment was offered. It was an amendment that simply would have allowed notification of the workers. You are going to take our pension funds, at least let us know. The notification amendment was voted down. The committee went on record to allow corporations to quietly, without notice, undermine the solvency of the worker retirement fund.

Mr. POMEROY. I really thank the gentlewoman very, very much for her participation this evening. I now yield to my colleague, the gentleman from Wisconsin [Mr. Barrett].

Mr. POMEROY. I think this is a pretty classic case where actions and words simply do not run in a very consistently way at all. Not long before this issue came up, we had another pension issue. Now that, in my opinion, was a totally made up issue. It was about the issue of economically targeted investments which the other side has suggested was a proposal advanced by the Clinton administration that would allow the investment of pension funds in unworthy investment vehicles. They are flat out misrepresenting that issue. No economically targeted investments would be appropriate unless they met standards of risk and return consistent with the fiduciary obligation of the people running the fund. In other words, no short cuts on solvency, no short cuts on return, no short cuts on risk if you are going to do one of these so-called economically targeted investments. Anyway, that was a debate that is now past. But some of the statements offered by Members of the majority in the course of that debate, I think, underscored the importance of pensions and make their own votes in favor of the $40 billion pension grab very, very curious indeed. Here is a quote. ``This is the people's pension money. Keep your hands off of people's retirement. Keep your hands off the pension,'' spoken by a freshman Member of the majority. I agree with everything he said. The only thing is a vote for a $40 billion pension raid takes this statement and turns it right on its head.

Mr. POMEROY. What I saw with insurance regulation as one of the earliest signs of a company going under was when they would underfund their loss reserves. These are the reserves they put aside to pay claims in the future. When they start underfunding, it means they are underfunding tomorrow's obligation to meet today's cash flow. If a corporation is incompetently managed, and losing money, it has a couple of options. It can try and raise money through private markets, it can borrow the money, but in either instance it is expensive, and very difficult questions may be asked about the competence of that corporation's management. Would it not be easier to get rid of those penalties restricting that corporation management team from getting at the workers' pension money? And then would it not be easy for that corporation management team to pull off the workers' retirement kitty to meet cash flow demands of that corporation? That is exactly what would happen under this. That is exactly why the Committee on Ways and Means has allowed this money to be used for any purpose whatsoever; no notice to the employees when they pull money out of the pension funds, but it can be used for any purpose whatsoever. It could even be used for huge corporate bonuses, or any other lavish activity, unrelated to the workers themselves who, by their productivity, generated the success of the corporation and who are owed the retirement security in a well-funded pension plan.

Mr. POMEROY. Or worse yet, they would find out when the pension fund was no longer sufficiently solvent to meet their obligation, and the PBGC was entering into it. But all the technical dimension of this pension issue aside, do you not think that this Congress owes it to the workers you represent that when they move forward a plan that represents the biggest threat to solvency of pension plans ever considered by this body, that at least they would have a hearing?

Mr. POMEROY. I think that is a very important point, because the PBGC is just like a regulator of pension funds. Just like insurance commissioners regulate insurance companies, and you would ask an insurance commissioner about a solvency question on insurance companies, the PBGC is the regulator of pension funds. If you have something proposing a $40 billion hit to pension funds, you would think you would want to get the PBGC up and ask their opinion. It did not happen in the Committee on Ways and Means. Fortunately, the PBGC has stated their opinion anyway, and their opinion is no way, that is a terrible setback in the stability of pension funds. This threatens the security of worker pensions throughout the country.

Mr. POMEROY. I think that is an important question, because it is not too late for the workers across the country to get involved. I would answer you this way. I would hope that workers that become concerned about pension security would write to their Congressmen, their Congresswomen. Chances are if they are represented by a Republican Member of this body they have already voted not once but twice to allow a $40 billion raid on their pensions. That is unacceptable. Workers, I cannot understate the importance of it, have to let their Members know that their pension security is absolutely vital to them, and that playing with their pensions is simply unacceptable.

Mr. POMEROY. Mr. Speaker, reclaiming my time, I think there is not even an internal consistency, because it is part of a budget plan which they boast will bring down interest rates. Now, what happens if they bring down interest rates? Well, if interest rates fall, we have resulting underfunding in the pension plans. So it is not even consistent internally. Part of their plan would expose worker pension plans at the very time that they brag on the other side about bringing down interest rates.

Mr. POMEROY. I think that is a good point, the fact that this Congress, when it began, was supposed to be the Congress of open rules, where we could debate, and what do we see? We see continually that we are not allowed to break out very vital policy questions and have a separate debate and vote. And then, I think ironically, very typical tonight, they did not even want to ask questions or have a debate of any kind, even though we are here in fairly relaxed format the end of a very busy day. This is the opportunity where we could thrash this out; they were not interested.

Mr. POMEROY. Mr. Speaker, another one of our colleagues on the Republican side of the House said after all, can you claim to stand for the American worker and at the same time advocate a risky investment strategy that undermines his or her retirement funds. As far as I am concerned, that question has only one answer: No. You cannot claim to stand for the American worker and allow a program that places at-risk retirement funds. Again, to be fair, in this case they were talking about the earlier issue relative to pensions where there was no threat. How someone could make this statement and then vote for a proposal that allows a $40 billion raid on pension funds is beyond me.

Mr. POMEROY. Reclaiming my time, and I would pose a question to the gentlewoman before she leaves. In your district, men and women going to work every day, often finding really their entire future pension security riding on the solvency of the corporate pension fund that has been promised to them when they retire. Do you believe that they are aware that the majority party in this Chamber is proposing to expose their pension funds for a grab by those who control that corporation?

Mr. POMEROY

Mr. POMEROY. Mr. Chairman, will the gentleman yield? We have all kinds of time.

Mr. POMEROY. Mr. Speaker, will the gentleman yield?

Mr. POMEROY

Mr. POMEROY. Mr. Speaker, I would ask unanimous consent to vacate my request for 5 minutes.

Mr. POMEROY

Mr. POMEROY. Mr. Speaker, in the course of my time this evening, and I am not going to use the entire 60 minutes, I will be discussing the issue in the budget that places at risk worker pensions. I will be discussing that in some detail. Before beginning that topic, I want to say a couple of things. First, I would [[Page H 11812]] commend my colleague. I thought the poetry which he professes to have authored was excellent. Very, very distinct and captures, I think, a lot of the emotions many of us have around the Lebanon tragedy. Second, I would also express my deep feelings of sadness about the death of Yitzhak Rabin. I have, as a second term Member of this chamber, heard the presentations of many world leaders from the podium here. No one has so impressed me as Yitzhak Rabin when he spoke about the long march toward peace. He had committed his life for his country, he had been his country's leading warrior, and now he felt the moment was right for peace. The sheer courage and moral authority he brought to the leadership of his country in trying to react and trying to result in peace was really overpowering. He could convey it personally and he could even convey it through the television, for those of us that watched him in that forum as well. Mr. Speaker, his loss is a real tragedy to the world. Now, on to the pension issue. One of the proposals that concerns me the most, Mr. Speaker, in a budget reconciliation act that is full of proposals that concern me, is a plan that would allow the withdrawal of pension funds across this country of $40 billion. I will be discussing this plan over the next 7, 8, 9, maybe 10 minutes. I have an hour. I invite any Member of this chamber, any Member of the House of Representatives that favors this proposal, to join me on the House floor. Because I would be very happy to debate it in its technical dimension or in its public policy dimension. So if Members are watching this presentation, I would urge them to come to the floor and try to make their case. I do not think there is much of a case to be made for a proposal that would jeopardize workers' pensions to the tune of $40 billion across this country. Mr. Speaker, the issue, as I see it, is should protections that presently exist within the law, protecting solvency of pension programs, be maintained. The House budget has proposed eliminating the excise tax that prevents the withdrawal of pension funds exceeding 125 percent of termination liability. They would eliminate the excise tax altogether until July 1 of 1996 and then impose a 6.5-percent tax thereafter. The process leading up to the inclusion of this provision in the House budget is, in my opinion, truly startling, even for a Congress that is full of startling shortcuts. In process, this one takes the cake. Forty billion dollars in workers' pension funds placed at risk for a proposal that did not have a single hearing. No hearing. It was placed in the Budget Reconciliation Act in the context of a Committee on Ways and Means markup. They eliminated the solvency protections, allowed corporations to grab those excess funds, for any purpose, notwithstanding the fact that there might be a resulting threat to solvency. So much as a 1 percent interest downturn would take these 125 percent of termination liability plans and put them under water. Notwithstanding that risk, no hearings. Mr. Speaker, when one of the Members offered an amendment that said, well, at least notify the workers that we are going to take their pension funds, that amendment was also defeated. So we have no hearing, no opportunity for public input, the defeat of a provision that would have allowed for at least worker notification if their pension fund is robbed. Then some of us, because of the magnitude of this proposal, and let me tell my colleagues that $40 billion places at risk the pensions of millions of workers, and because of that we sought a rule. We sought a rule that would allow an amendment. Straight-up vote. We think this is a horrible idea, let us air it out on the floor of the House straight up or down. Give us a vote. We were denied the vote. The Committee on Rules did not allow us to offer an amendment striking this provision out because they wanted it sewn tightly into that huge Budget Reconciliation Act. They wanted to pass it in the sheer weight of this many hundreds of pages of proposals. I ask myself, Mr. Speaker, why in the world would they put worker pension funds at issue? We recognize as a country we have a savings crisis. People are not saving enough for their own pensions. In fact, this is the very budget that takes a run at Medicare, reduces what people will have under Medicare in the future. So why in the world, if we are going to reduce things like Medicare, which are public programs helping people in their retirement, why would we put at risk their private pension funds? The answer is one of two. First, let me give you the budgetary answer they have floated. If $40 billion comes out of pension funds, the U.S. Treasury collects a tax on it. It adds about $9 billion to the pension budget picture in the short run. It might strike the American people as more than a little curious that they would jeopardize long-term worker pension needs for a short-term hit to the budget, but that seems to be the gamesmanship underlying this proposal. Maybe there is another answer. The other thing that I can think of is that somebody has some powerful friends, and that somebody, corporation somewhere, wants to get at their pension kitty, and they have convinced this Congress, the Committee on Ways and Means and congressional leadership, to allow them to get at those pension funds because they want them. It has to be one of two, a short-term budget gimmick or unbelievable favors for special friends. In any event, it deserves more debate. Mr. Speaker, I want to talk a couple of minutes about the history of this. Having been an insurance commissioner during the eighties, I was responsible for regulating the solvency of insurance companies. As I did that, I also watched carefully what was happening to the solvency of pension plans, and what I saw I did not like; because in the go-go eighties, the mentalities of corporate takeovers, we began to see a run on corporate pensions. Often predators, trying to buy in a hostile buyout situation, a corporation would use the workers' own pension funds to finance the buyout. The great irony for workers is that their retirement savings, the pension fund, would actually be used to finance the hostile takeover that resulted in their loss of jobs. When the takeover artists enacted their downsizing and their cutbacks, their own pension funds financed the hostile takeover resulting in their loss of a job. Can you imagine anything worse? Over the 1980s, Mr. Speaker, we began to see acceleration in the tendency of money to flow from pensions. In 1982, $44 million. In 1983, you can see the amounts accelerating, until the total tally of money that flew out of pensions in the 1980s was estimated at $20 billion. Twenty billion dollars. And I will tell the American people, Mr. Speaker, that some of the pension funds that experienced those raids never came back, and some of the employees covered by those pensions did not receive what was owed to them in retirement savings. We can see the dramatically accelerating raid on pensions. To deal with this situation, past Congresses, operating on a bipartisan basis, because they understood that this country has an interest in having people have healthy pension funds, on three separate occasions enacted restrictions on people's ability to pull money out of their pension funds intended for their workers. First, they enacted an excise tax that was going to slow that up. They enacted a 15 percent excise tax to slow down the growth. That was not enough, and, as we can see on this chart, money continued to flow out. So they added to that the penalty for withdrawing from the pension funds and the amounts slowed, and the amount virtually stopped at the present protection, 50 percent excise tax on the withdrawal of the excess funds in pension funds. That left, as I mentioned earlier, a total of $20 billion out of those funds. Compare that to the $40 billion projected under the plan to come out if the protections are removed as proposed in the House-passed budget. Now, the resulting exposure if pension plans start going bust all over the country, because people have pulled out all this $40 billion, hits in two ways. First of all, it hits the worker that does not get their full benefits because the pension plan is under water; second, it hits taxpayers. We all have a [[Page H 11813]] stake in this because the pension programs are guaranteed by an insurance program ultimately funded by taxpayers. Guaranteed by taxpayers kind of like the savings and loan insurance deal that cost taxpayers billions. This is insured by the Pension Benefit Guaranty Corporation. The PBGC. So, ultimately, workers get less on their pensions and taxpayers are asked to pick up the difference. Tremendous future liability exposure to taxpayers under this proposal. That is why, Mr. Speaker, when I first saw the proposal I asked the Pension Benefit Guaranty people what they thought of it. Their response was unequivocal. At the PBGC they believe this proposal places distinctly at risk the pensions of millions of workers across the country. They have done various studies that show that plans which are healthy today would, if they drew down to the limit allowed in the budget, be in serious financial shape in the future. This thing has got to be stopped, and I will tell my colleagues my deep concern as we go into conference committee in the budget. It was initially proposed in the Senate as well. Now, the Senate can do something that we cannot in the House. They can have straight-up votes on whether this is a good proposal that ought to move forward. In response to the amendment offered in the Senate that we were precluded, prevented from offering in the House, the Senators voted 95 to 4 to take this out of their proposal. It is still in the House version, and I have every reason to believe that there is very strong feeling in the House for the passage of this particular proposal. They will try and blow it through in conference committee and tuck it into the folds of this massive Budget Reconciliation Act. And so the time for us, Members of Congress, who have a concern about this raid on workers' pensions is now. We must let the conferees on the budget know that it is not acceptable to place employees' pensions at risk in this fashion. I would hope that we would be joined in this effort by workers across the country whose future retirement security depends on the solvency of their pension funds. I would like these workers across the country to write to their Congressmen and let them know what they think of a proposal that would allow $40 billion to flow out of that pension fund. Those workers should know, as they write to their Congressman, that if their Congressman happens to be a Republican Member of this body, he or she has already voted for this pension raid. It is not too late to correct this mistake, but we better get after it, every Republican member having voted for this raid on pension funds. It is unacceptable, and although I have issued an invitation to any Member who cared to come down and debate the other side to supply to us how in the world they would allow a worker pension program to be raided to the tune of $40 billion, what was their motive in doing it, no one has joined me in the well or in the Chamber to conduct that kind of debate. Mr. Speaker, I let that challenge stand, and I will be back this week on other special order presentations fully prepared to debate with all comers this pension issue. It is a ripoff for working men and women, make no mistake about it, and will happen in one of three ways. Predator companies that want to take over a corporation will assess how fat their pension fund is, how secure their workers' retirement is, and they will base their takeover on whether they can bleed out pension funds to finance the takeover. We have seen it in the eighties, and we are going to see it in the nineties under this proposal. Second scenario, a corporation that cares a lot about the future retirement of its workers that has really tried to prudently manage their pension plan for solvency, that understands that they succeed as a corporation only because of the work of their workers and wants to be steadfast in their commitment to their retirement, will have to look again at their pension fund because they will know that the predators out there, the ones that I described under the first scenario, are taking a look at whether they can take over this corporation and use the workers' pensions to pay for it. Not only the predators will come after the pension funds, but even excellent corporations that fear takeover are going to have to look at whether they need to draw down in the pension fund, place the workers' pension funds at risk to avoid a hostile takeover. There is a third scenario, one that I used to watch as insurance commissioner. This is the struggling corporation, a corporation that is being badly managed, needs money, and cannot quite function in terms of meeting operating costs based on revenues. They have a couple of options. They can go to a bank, they can try and raise money privately, stock offerings and the like, but either of those prospects bring questions. How come you are being managed at a cash-flow loss? Why are you not doing more to improve your efficiency and productivity? Those are questions that go right to the caliber of the leadership of that corporation. Maybe they do not want those questions asked. Maybe the CEO's know they are not going to pass muster. It is real easy to dip in the workers' pension fund and take a little out of the pension kitty to fund cash flow. If they qualify on the reserves, no one is going to look. I saw this a little bit when I was insurance commissioner. The first indication of an insurance company heading into insolvency was that they would underfund their future liabilities. They would underfund the amount they are expected to pay in the future. That was a way of reducing the amount they were committing to the future and maximizing what they had available for cash flow, even though that was an incompetent management team that should have been replaced. Well, we are going to see it again. Incompetently run corporations are going to steal from their workers' pension cash kitty, forestalling the day of reckoning that faces that corporation and jeopardizing the solvency of the workers' pension fund while they are at it. Any way you slice it, these are unacceptable outcomes for our workers. It is unacceptable that Members would propose a $40 billion hit on the private pension funds of our workers and try and justify it. This is a case of where the Republican agenda has gone way too far. This is a case where I cannot understand for the life of me, and I try to be a bipartisan Member of this Chamber, I think we need more of that in the country, not less, but I cannot understand why they would walk lockstep on a proposal that so brazenly assaulted the sanctity of private pension funds necessary for the retirement obligations of their workers. We have got to stop this proposal, and that is why again in closing I would urge every Member of Congress to write, to contact, to call the House of Representatives in the budget conference on this issue. I would hope that we would be joined in this effort by workers across the country to contact their Member of Congress and say, ``Enough. Enough foolishness out of Washington. Do not place our pension funds at risk.''

Mr. POMEROY

Mr. POMEROY. Mr. Speaker, 95 to 4, by a vote of 95 to 4 the Senate overwhelmingly rejected a House Republican proposal to remove solvency safeguards on private pension funds. In the 1980's $20 billion was yanked out of private pension funds, often the workers' own retirement funds, which were used to finance hostile takeovers that resulted in downsizing and restructuring, ultimately costing them their very jobs. On three separate occasions, Congress put in place protections to preserve the solvency of these vital pension funds. Now, without so much as a hearing, House Republicans have sought to remove these protections so companies can yank money out of their pension funds. They estimate that $40 billion will be pulled from private pension funds under their proposal. When we sought a separate vote on this issue, we were rejected. It was included in the budget. And so now, without so much as a hearing, without so much as a separate vote, House Republicans are moving forward a proposal that would allow the biggest pension raid in the history of the country. They must be stopped.

Mr. POMEROY

Mr. POMEROY. Mr. Speaker, I regret that I was not present yesterday for rollcall No. 753, the motion to recede and concur on H.R. 1868, the Foreign Operations Appropriations Act of 1996. Had I been present, I would have voted ``no''.

Mr. POMEROY

Mr. POMEROY. Mr. Speaker, I want to speak to the agriculture component of the conference committee as well, and I suggest straight out that a conference committee of five is an insult to rural America. Mr. Speaker, the component of the Budget Reconciliation Act relating to agriculture has been handled in a way unlike any other for development of a farm bill in the history of farm bills in this country. I represent more production agriculture than any other Member of this House. I also come to this issue as a member of the Committee on Agriculture and as a member of the Committee on the Budget. Mr. Speaker, let me briefly recap the very curious turn of events that has followed the development of this legislation. Mr. Speaker, in August, not until August but in early August the chairman dropped a bill called the Freedom to Farm Act. We were told that was going to be the Budget component of the 1995 farm bill. The bill did not receive a single hearing in the Committee on Agriculture or the subcommittee. No hearings. On the day of the markup, after a long day, protracted debate, the bill was defeated with Republicans and Democrats voting against the Freedom to Farm Act. The committee was reconvened the next morning and informed that there would be no more committee meetings on the agriculture component of the budget. In other words, the House Committee on Agriculture was to have nothing to say about the critical part of the budget relating to agriculture. Mr. Speaker, it has never been like that. It is the House Committee on Agriculture that knows something about agriculture. That is why it ought to come through the House Committee on Agriculture, not go around it. When the Committee on the Budget marked up the reconciliation act, there was something, by my eyes very important, missing and that was the agriculture part of the budget. It was nowhere to be seen. The chairman of the Committee on the Budget told us that he would get it added when he went to the Committee on Rules. Again no involvement of the Committee on the Budget at that stage. We have the Committee on Agriculture excluded and the Committee on the Budget excluded. The gentleman went to the Committee on Rules and got Freedom to Farm included in the bill that was voted on last week as part of the Budget Reconciliation Act, but the morning papers the day of the budget vote said that a deal had been cut, and Speaker Gingrich announced that this would be rewritten in conference committee. In other words, Mr. Speaker, what was voted on by the House last week did not mean anything. Now we have excluded the House Committee on Agriculture, the House Committee on the Budget and the House of Representatives. Mr. Speaker, we learned this afternoon that it will be decided by a committee of five representing the House; three Republicans, two Democrats. No hearings. No language. No legislative proposal. Mr. Speaker, what are we talking about here? Agriculture in this country represents one out of six jobs involved in the production of food and fiber for all Americans. It is the single greatest component where we export more than we import. It is truly of vital interest to this country and the legislative process has at every stage of the game flowed solely from the Speaker's office and shut off all meaningful input from those of us representing rural America. This is no way for the legislative process to unfold. It is no way to leave rural America tonight, wondering what in the world is going to come out of the [[Page H 11411]] conference committee, where the House position is at. This thing reminds me of a fish. You put a fish in the sun. It starts to stink. You put some sunlight on the process that has involved the formation of agriculture policy in this budget, and it stinks to high heaven. Let me tell my colleagues, rural America deserves a whole lot better than this.