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June 01, 2005 at 08:00 PM
There’s No Stand
Like A Grandstand
Except for congratulating itself, there is nothing that Congress–and, in particular, the United States Senate–enjoys so much as excoriating witnesses called to testify at a hearing after something in the real world has blown up or otherwise reached catastrophic proportions.
I call your attention to the most recent example of this which occurred last week at a hearing of the Senate Finance Committee on the pension woes of the major airlines in this country.
As you know, on May 10 United Airlines got the judicial go-ahead to terminate four of its employee pension plans. This effectively handed the airline’s mess (amounting to billions of dollars) over to the federal government’s Pension Benefit Guaranty Corporation. It also threw a giant wrench into the plans of those employees who had been depending on these pensions for their retirement.
Thus, the Senate Finance Committee hearing which heard CEOs from Delta and Northwest–both of which are in precarious financial shape. The CEOs told the committee that the rules on pension funding needed to be eased or it was likely that they would have to seek bankruptcy protection.
(I know Delta’s in bad shape, but I did not realize how strapped Northwest was until I saw an article in the June 9 New York Times that reported that Northwest had decided to stop giving out free half-ounce bags of pretzels on most of its flights. Sure the pretzels only cost a couple of cents a bag, but when you add them up it saves about $2 million a year, just about enough for the typical exec’s bonus or deferred compensation.)
The Senate Finance solons were not happy with what they were hearing from the Delta and Northwest executives. And this gave them the opportunity to do what they love best–grandstand.
