Home > Speeches > 2005 Speeches

Pension Reform Should Guarantee Fairness
For Workers and Executives Alike
House of Representatives - House Committee on Ways and Means
November 9, 2005

The following are prepared remarks that McDermott spoke from at the Committee
on House Ways and Means markup meeting on HR 2830, the "Pension Protection
Act of 2005."

Watch this committee presentation [Click here to get Windows Media Player] Click here to see larger image

Thank you. We may be sitting in solid, comfortable chairs up here, but we are making decisions about the three legs of the stool that support Americans in retirement. A bad decision could rock that stool or knock it over.

Those are the stakes in our debate today about pension plans, one of the three legs.

The decisions we face cut to the heart of the differences between Republicans and Democrats.

Republicans favor going it alone, while Democrats believe America is at her best when we work together. A nation based on We defeated an enemy in World War 2 and demanded a safety net for older Americans called Social Security. A nation based on We put a man on the moon and food on the table when Americans fell victim to hard times.

The system worked, the world marveled, but Republicans tinkered until they transformed "We into Me." Re-making America into a nation where you are on your own. It hasn't worked very well. Today we stand at another crossroads and we should learn from experience.

The first sign of real trouble with "Me versus We" came in health care. The number of people with health insurance has dropped dramatically in recent years. In 1980, about 70 percent of Americans had employer-provided health insurance, but today it's much less and the number keeps falling. Americans are being forced to find their own health care. Does anyone think that's going well?

Click here to see larger image Click here to see larger image

The same is true with pensions.

In 1980, 40 percent of employers provided a pension. Today, only 20 percent do, and of the pensions that are provided, fewer provide a guaranteed benefit in retirement. The stool is shaky at best.

Pensions that Americans earned during their working life have been in dramatic decline since the 1980s. Instead, the burden has shifted to the individual, and riskier, personal plans are quickly replacing the benefit plans earned by workers on the job, whether white collar, blue collar, or no collar.

So, what are we left with?

Americans increasingly are on their own, tying the fate and future of their personal pension plan to their ability to outguess the stock market.

The third leg of the stool supporting retirement security is personal savings.

Click here to see larger image Click here to see larger image

Currently, just over half of all American households have a retirement savings account. About 42 percent of all households don't have any retirement savings account. And those who do have retirement savings are a long way from financial freedom- the median savings only provides about $385 a month.

America has fewer and riskier pensions, and they're less likely to provide a guaranteed benefit. "Me versus We" hasn't worked out very well.

People have been buffeted by Wall Street, burdened by economic downturns and banking scandals. And busted by high rollers like Enron that played dice with people's lives.

"Me versus We." That is where we are. Alone or together. That is what we must decide.

We have tried it your way, the Republican way, and America has found that on your own is on your knees. We need to work together and in that spirit I offer an amendment on behalf of my Democratic colleagues. We need to work with American business and the American people to strengthen and safeguard the private pension system.

Click here to see larger image Click here to see larger image

We would be penny wise and pound foolish if we rush to judgment today with a 300 page Republican bill that most Americans have never heard of, and most American businesses have never had the chance to even read.

For American business, the Democrat amendment would do no harm by injecting predictability into the system over the next two years while we develop a long term solution. For American workers, the Democratic amendment would protect worker pension benefits from runaway plan terminations.

Our philosophy is to guarantee fairness for workers and executives alike, and to use policy tools to encourage more retirement savings for middle-income workers. Our commitment is to find ways encourage employers to provide pension plans.

Our goal is to recognize that America can do better together. I urge favorable consideration.