----- Original Message ----- From: "Brad DeLong" <jbdelong at uclink.berkeley.edu>
> We neoliberals at least have broad agreement that developing-country
> governments are corrupt, by and large (East Asia excepted) lack the
> competence to run successful developmental states, and hence the best
> chance is to try to shrink them to keep them out of the way of
> economic development for a generation or so. We have broad agreement
> that maximizing economic contact--trade, investment, et cetera--is
> our best chance for accelerating technology transfer to poor
> economies and hence putting ourselves on the road to what may for the
> first time in history become a truly human world.
======================
And of course the following has nothing to do with the neoliberal worldview either:
[NYTimes] April 10, 2002 Critics Charge Pension Bill Favors Highly Paid Workers By RICHARD A. OPPEL Jr. WASHINGTON, April 9 - When many employees lost their retirement savings after Enron (news/quote) filed for bankruptcy protection, lawmakers in Washington promised legislation that would mend the holes in the pension safety net exposed by the company's collapse.
But some legal experts and pension rights advocates say the first of the post-Enron pension measures to reach the House floor actually opens up fresh loopholes. Some of the bill's provisions would lead companies to seek to reduce the number of employees covered by pensions and give proportionately larger pension benefits to the most highly paid executives, they say.
The measure was passed by the Ways and Means Committee by a vote of 36 to 2 last month and is expected to be combined into another bill on the House floor on Thursday. The legislation would be the first inspired by Enron's collapse to make it to a full vote of either chamber of Congress. Critics acknowledge it would fix some problems exposed by the Enron debacle, and proponents note that the criticized provision passed the House last year with bipartisan support, only to be dropped for procedural reasons in the Senate.
But the legislation's fine print highlights how Congressional efforts at "reform" - as the battle over campaign finance also demonstrated - can sow new concerns.
Current rules, dating to a 1986 pension law, require that to qualify for favorable tax status, pension plans must meet very specific tests for the balance between benefits for lower paid and higher paid workers.
But a provision tucked into the House bill during a Ways and Means Committee hearing last month would scale back those requirements, allowing companies to test their plans against more subjective standards and giving the Treasury Department authority to approve plans that do not meet today's tests.
The provision, which some pension law experts said would significantly weaken employee protections, was championed by business interests and supported by Representative Bill Thomas, the California Republican who is chairman of the committee. The provision was also supported by the bill's chief sponsors, Representative Rob Portman, Republican of Ohio, and Representative Benjamin L. Cardin, Democrat of Maryland. Mr. Portman said the provision is expected to be inserted into the other House bill on the floor Thursday.
"This provision is an outrage," said Daniel Halperin, a pension law expert at Harvard Law School and a Treasury official during the Carter administration. The language in the bill, he said, is an attempt to "basically gut" current rules intended to ensure that companies offer roughly proportional retirement plans to highly paid and more moderately compensated workers.
Another critic is J. Mark Iwry, who oversaw employee-benefits policy and regulation at the Treasury Department from 1995 to 2001.
"This controversial proposal would weaken existing legal protections for workers in both the statute and regulations," Mr. Iwry said. "It would allow corporations in some cases to exclude more employees from pension coverage and reduce the level of benefits for average- and lower-paid workers who remain covered."
Mr. Portman said that such criticism "way overstates" the effect that the provisions would have, and he predicted that the language would actually encourage small-business owners to offer retirement plans. The provisions, he added, "will be used only in rare instances, but it's considered important by companies which have a fair plan, but when you go through the very specific and very technical mechanical tests, they still don't meet the so-called nondiscrimination rules," Mr. Portman said.
"Frankly, it's not what the business community wanted," he added. "They wanted much more substantial reforms."
Yet business groups say the provision would go a long way toward eliminating inflexible tests for pension plans that make it difficult for some good plans to qualify for tax-favored treatment. They also note that the bill gives discretion to the Treasury Department to approve plans that otherwise do not pass muster.
"I'd certainly be surprised to see the Treasury Department start to bless plans that anyone believes are unfair," said James Delaplane, vice president for retirement policy at the American Benefits Council, which represents large employers. Many retirement plans that clearly treat all employees fairly have faced regulatory concerns over such matters as provisions governing early retirement, Mr. Delaplane said.
Other provisions have also drawn the ire of some experts, who say they would reduce scrutiny of some pension plans.
The legislation directs regulators to simplify reporting requirements for pension plans with fewer than 25 participants. Backers of the measure say it will encourage more small businesses to offer pension plans to their employees.
"Those are the ones most likely to not offer plans right now," said Jim Morrell, a spokesman for Mr. Portman.
But critics fear that less disclosure will make it harder to detect problems in these plans. "Small plans already have substantial relief when it comes to pension plan reporting," Mr. Iwry said. "Relaxing the reporting requirements still further would make it harder for regulators to monitor compliance with the rules."
Corporate lobbyists have sought changes in the 1986 pension rules for years. Their differences with pension rights advocates reflect a continuing tension built into the nation's private pension system.
On the one hand, because tax benefits are conferred on pension plans, government rules seek to ensure that highly paid executives do not get an unfair share of the benefits. On the other hand, lawmakers worry that excessively stringent rules will reduce the number of employers offering retirement plans, or prompt employers to curtail plan benefits.
The Portman-Cardin bill contains a number of provisions supported by pension rights advocates. They favor the bill's requirement that companies warn employees 30 days before freezing trading in their 401(k) retirement plan accounts - a proposal made in response to the inability of Enron workers to sell shares during several weeks last fall when the company's stock was in free fall.
Pension rights groups also embrace the bill's proposal forcing companies that use their own stock to match employees' 401(k) contributions to allow workers to sell those shares after three years.
Republican lawmakers said tonight that the Portman-Cardin bill would be combined with another bill, sponsored by Representative John A. Boehner, Republican of Ohio, on the House floor on Thursday, with the Boehner bill serving as the platform for the measure's final version. In the Senate, Democrats are working on a separate bill substantially different from the House proposals.
One of the most significant differences, for example, would force companies that do not offer a traditional pension plan to either use company stock as the matching contribution in employee 401(k) plans or offer the stock as a 401(k) investment option - but not both. The provision is an attempt to reduce the number of employees whose retirement plans are too heavily concentrated in shares of their own company.