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.
Committee Chairman Charles Grassley, R-Iowa, called what happened at United “a catastrophe.” According to the Wall Street Journal, Grassley said United used “illusory investment gains” to “hide and disguise” the condition of its pension plans. Comparisons to Enron filled the air.
Now, maybe the senator missed this particular flight, but as we say down on the ranch, this plane left the gate a long time ago.
The PBGC issued a report almost simultaneously with the committee hearing that said companies reported, again according to the Journal, “a record $353.7 billion shortfall in their defined-benefit pension plans at the end of 2004, a 27% jump over 2003.”
Obviously, with that kind of money involved the situation has been building for years and years. Yet only when “a catastrophe” (Grassley’s words) such as United occurs and other airlines see an escape hatch with a silver lining do our senators decide resolutely that umbrage must be taken.
One only can hope that in the overdue pension reform that will now inevitably take place that the rights of employees are protected along with the financial condition of the airlines. Otherwise, the senators could–and should–find themselves on the other end of the excoriation.
Only when ‘a catastrophe’ (Grassley’s words) such as United occurs and other airlines see an escape hatch with a silver lining do our senators decide resolutely that umbrage must be taken.”