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October 26, 2003

Underfunded Pensions? Fund them Less!

Pensions among Standard & Poor's 500 companies are estimated to be underfunded by $247 billion-- a rise of 10% from $225-billion in 2002.

The US government is largely on hook for these deficits if any companies go bankrupt.

So you'd think the solution would be to require companies to increase funding of their pension systems.

Well you'd be wrong.

Instead, bowing to corporate lobbying, the House has already passed legislation to REDUCE the minimum pension contributions for the next two years- increasing the underfunding of pensions by $18 billion this year alone. Bush has said he supports the measure and the Senate is set to vote on the measure.

Now, there was bipartisan support for the measure, because of fears that companies will just default on pensions given the economic burden of these underfunded pensions-- but this is all just part of the short-term crisis management that has become the hallmark of this administration's economic policy.

Posted by Nathan at October 26, 2003 06:40 PM