AFL-CIO chief urges pension-agency aid

By Kristen Jensen and Kim Chipman
Bloomberg News Service

WASHINGTON — AFL-CIO President John Sweeney, who runs the nation's largest federation of labor unions, said the U.S. government should help the airline and steel industries pay for worker pensions as they struggle with bankruptcies.

The Pension Benefit Guaranty Corp., the quasi-government agency that backs the pension plans of individual companies, shouldn't be responsible for industrywide bailouts, Sweeney said. The agency estimated last year that the airline and steel industries have accounted for more than 70 percent of its claims.

"Industries like the airline industry, the steel industry have to be separated from the present PBGC," Sweeney, 71, said last week in an interview in Washington. "Our retirement security is really in trouble."

The Pension Benefit Guaranty Corp., which reported a $23 billion deficit last year, said last week that it's now managing a record 350 active bankruptcy cases. Legislation to address the underfunding of corporate pensions and proposals to allocate greater resources to the PBGC should also relieve that agency of responsibility to cover the airline and steel plans, Sweeney said in an interview.

"PBGC was not designed to take on whole industries," Sweeney said. To cope with shortfalls in the airline and steel industries, "there certainly would have to be some government funding," he said.

U.S. Rep. John Boehner, R-Ohio, introduced pension legislation Thursday that seeks to offer a compromise between proposals from President Bush and corporations. Sweeney said Boehner's plan appears to be "better" than Bush's but doesn't go far enough.

Sweeney and William Samuel, director of legislation at the 57-union AFL-CIO, said they had only seen a description of the Boehner legislation and will have to study it further. Sweeney said he and James Hoffa, president of the International Brotherhood of Teamsters, plan to meet with Rep. Bill Thomas, the California Republican who heads the House Ways and Means Committee and co-sponsored Boehner's legislation.

Sweeney's group, which says it represents more than 13 million of the 16 million union workers in the nation, is already fighting Bush's plan to add private accounts to Social Security. The AFL-CIO would consider options outside of private accounts, including adjusting the retirement age or raising taxes in some cases, Sweeney said.

"What we're really urging is there should be a bipartisan commission (to examine the social Security issue). We don't think there's a short-term crisis," he said.