The U.S. Pension Benefit Guaranty Corporation’s investment losses now total almost $5 billion in fiscal year 2008, according to information released at a Committee hearing today.
Earlier this week, the PBGC reported a $3.1 billion loss in equity investment in the first 11 months of fiscal year 2008. The September loss of $1.7 billion in stocks increased PBGC’s total losses for the fiscal year to $4.8 billion.
The dramatic loss comes at a time when the PBGC is beginning to implement a new controversial investment policy approved in February. The new policy would significantly shift PBGC assets from fixed-income securities, such as U.S. Treasuries, into more risky securities like real estate, emerging market debt, junk bonds and venture equities.
“With the current market turmoil, we have to ask the question whether it is wise to invest our nation’s pension backstop in volatile equities,” Chairman George Miller said.
The head of the PBGC, Charles Millard, appeared before the Committee today regarding the agency's financial problems that may threaten the retirement security of millions of Americans. The PBGC is a government agency that insures traditional private-sector pension plans, manages failed pension plans and pays benefits to workers of those plans.
The American economy could slip into a deeper recession unless immediate action is taken to stem the tide of rising unemployment and falling family incomes, witnesses told the Committee in a hearing today.
Economists predicted that, based on past recession trends unemployment could soon reach eight percent or higher, and middle-class families’ incomes could drop by more than $2,000 this year.
“It is urgent that we prepare now to take the next steps to rescue the economy by creating jobs, providing immediate relief to the states and small businesses, and by making real investments in energy, technology and education,” Chairman George Miller said. “We must have a plan that speaks directly to the needs of American families and workers today.”
The number of out-of-work Americans has increased by 2.2 million in the last year. They join more than 2 million workers who have been unemployed longer than 27 months. In October, many workers began exhausting their unemployment insurance benefits. By the end of this month, an estimated 775,000 workers will be left without a safety net, and a total of 1.1 million workers will be in the same straits by the end of the year.
In a letter to Chairman Miller released at the hearing, economist Alan Blinder of Princeton University predicted that “unemployment will top out in the 8-8.5 percent range” if the coming recession is as severe as the recessions of 1981-82 and 1973-75. “My worry,” wrote Blinder, “is that we may be heading in that direction.”
“We are clearly in the early stages of a potentially very serious recession that will likely be as deep as anything we have experienced in a generation,” said Ron Blackwell, chief economist of the AFL-CIO. “Just how deep and protracted this recession will be depends on a timely, aggressive and well-focused economic recovery package.”
To help families make ends meet while they look for a new job, the Democratic Congress voted to extend unemployment benefits in early October. Unfortunately, that effort was blocked by Senate Republicans. The Bush administration threatened to veto the extension claiming it would encourage out of work Americans not to find a new job.
“There is nothing enjoyable about being up at night worrying about how you are going to make ends meet,” said Dana Stevens, an unemployed worker from Thorofare, NJ. “For anyone to suggest that receiving unemployment is like getting a free vacation is insulting and degrading to the millions like myself who are desperately trying to get back to work.”
Millions of workers not only lose their jobs during a recession, but household incomes for those with a job also decline on an average of four percent. Jared Bernstein, director of the Living Standards Program at the Economic Policy Institute, said that if past trends repeat themselves this time around, middle-class families’ who earn around $60,000 will see their income fall about $2,500 this year.
“Due to factors regarding job loss, fewer hours, and the slower wage growth driven by the weaker job market, incomes usually fall in recessions,” said Bernstein.
In September, the House of Representatives also approved an economic rescue and job creation package to help head off a deeper recession. It would have created good-paying jobs by investing in new energy technology and infrastructure. The bill would have also provided access to job training and helped working families with grocery and health care bills. Senate Republicans and the Bush administration also opposed this effort.
Many economists say that making infrastructure investments are some of the most effective uses of federal dollars that create jobs in both the short-term and the long-term.
Robert Pollin, a professor of economics at the University of Massachusetts-Amherst, said a $150 billion job creation program will create 2.9 million jobs in the short-term alone.
“In the midst of the severe financial crisis and deepening recession, it is imperative that the federal government take action as soon as possible to counteract the downturn,” said Pollin.
Pollin’s latest research also reveals that infrastructure investment produces a second wave of private sector job creation within two years, pushing the 2.9 million new jobs up to 3.3 million new jobs in a two-year time frame.
To encourage long-term job creation, investments are needed to build the nation’s technological backbone that will help foster growth in the emerging high-tech industry and green economy.
“Advanced networks will allow increased opportunities for the creation of even more highly skilled technology jobs to invent new products and improve existing ones in the vital areas of energy, health care, education, public safety and services,” said Christopher Hansen, president and CEO of AeA. “These are the jobs of the future.”
On Friday, October 24 at 10:00 a.m., the Committee will hold a hearing examining strategies – including investments in rebuilding crumbling infrastructure – to create good-paying jobs in order to put the nation’s stalled economy on the road to recovery. More than 2.2 million American workers have lost their jobs in the past 12 months and millions more are still looking for permanent employment.
“Building an Economic Recovery Package: Creating and Preserving Jobs in America” Scheduled on October 24, 2008 at 10 a.m. in room 2175 Rayburn H.O.B.
Witnesses:
Panel 1:
Hon. Charles E. F. Millard Director of the Pension Benefit Guaranty Corporation
Panel 2:
Jared Bernstein Director of the Living Standards Program Economic Policy Institute
Ron Blackwell Chief Economist AFL-CIO
Christopher Hansen President and CEO AeA (formerly the American Electronics Association)
Robert Pollin Professor of Economics Founding Co-Director of the Political Economy Research Institute University of Massachusetts at Amherst
Dana Stevens Unemployed Worker Thorofare, New Jersey
William W. Beach Director Center for Data Analysis The Heritage Foundation
Today, I chaired a U.S. House Committee on Education and Labor hearing in San Francisco where we examined how the current financial crisis is affecting retirement savings. Witnesses told us that after a lifetime of planning and saving, a growing number of retirees are facing shrinking 401(k)s and increasing insecurity as a result of the ongoing financial crisis. While this crisis may have started on Wall Street, it's Main Street that stands to suffer the most. More than ever before, there is an urgent need to help Americans strengthen their retirement savings.
We also learned today that U.S. Pension Benefit Guaranty Corporation lost at least $3 billion in stock investments during the last fiscal year through August, and invested a significant portion of its funds in mortgage-backed securities. The head of the PBGC, Charles Millard, will testify before the committee on Friday in Washington regarding the agency's financial problems.
Taxpayers subsidize 401(k) plans by $80 billion dollars annually. For a taxpayer investment of this size, we must ensure that the structure of 401(k)s adequately protects the nest eggs of participating workers.
At the hearing today, we heard from Roberta Quan, a retired school teacher from San Pablo, CA, who is also caring for her husband who has Alzheimer’s: "The recent unstable financial crisis is having a devastating effect on my life. A lifetime of savings in catastrophic decline is demoralizing. The bottom line is that I am retired and unable to re-earn lost funds."
Steve Carroll, a retired writer from Petaluma, CA, told us: "Our monthly budget has been severely depleted for life. We still have our IRAs. But, as they are in mutual stock funds they are so far down in value that selling any of them right now, as the law requires of [my partner] Chuck, the loss would be an enormous percentage of the investment."
Current regulations require account holders of 401(k)-type account to withdraw a minimum amount of money every year after they reach 70 ½ years old. If seniors do not take out a minimum amount based on an Internal Revenue Service formula, they are subject to a 50 percent penalty. For instance, if an individual fails to withdraw $4,000, they would be assessed a $2,000 tax the next year.
Other witnesses spoke about problems with the current retirement security system where individually directed 401(k)-type plans have become a worker's main retirement savings vehicle. Where investment decisions were once made by professionals managing a traditional pension portfolio on behalf of workers, the responsibility of picking the right investments and implementing retirement savings strategies are left up to an individual account holder.
We started this investigation last week, as part of a series of hearings the House is conducting to investigate the causes of the financial crisis, and what additional steps are needed to protect homeowners, workers, and families.
Last week, Peter Orszag, the director of the Congressional Budget Office, told us that American workers have lost more than $2 trillion in retirement savings over the last fifteen months – an astonishing loss that could lead workers to delay their retirement.
Several experts also told us that workers closest to retirement could suffer the most from this financial tsunami. But while the housing and financial crises are intensifying retirement insecurity, we also know that workers’ retirement savings have been declining for quite some time. Rising unemployment, stagnating wages and benefits, and a shift away from more traditional defined-benefit pension plans have been making it much harder for workers to save for retirement while juggling other expenses.
Now, the number of investors taking loans on their 401(k) accounts is increasing. And hardship withdrawals are also increasing. T. Rowe Price estimates a 14 percent increase in hardship withdrawals just in the first eight months of 2008. And, all the signs point to an increased frequency of 401(k) loans and hardship withdrawals in the coming year.
As other committees’ hearings have revealed, many of the Wall Street titans responsible for this crisis have still escaped with their plush perks, lavish spa trips and golden parachutes intact. This is an outrage. For too long, the Bush administration anything goes economic policy allowed Wall Street to go unchecked.
As we look at how we can rebuild workers’ retirement savings and our nation’s economy, the Democratic Congress will continue to conduct this much-needed oversight on behalf of the American people.
Being able to save for retirement after a lifetime of hard work has always been a core tenet of the American Dream. We can’t allow the promise of a secure retirement for workers to become a casualty of the financial crisis.
On Wednesday, October 22, the Committee will hold a field hearing in San Francisco, California to further examine how the current financial crisis is impacting Americans’ retirement security, including pension funds and workers’ directed retirement accounts like 401(k) plans. The Committee held a hearing on this topic on October 7 as part of a series of hearings House Democrats are conducting to look at the causes of the financial crisis and appropriate responses to it.
"The Impact of the Financial Crisis on Workers’ Retirement Security" Scheduled on at 9:30 a.m. Pacific Time on Wednesday, October 22, 2008 in the San Francisco Board of Supervisors Legislative Chamber, Room 250, 1 Dr. Carlton B. Goodlett Place, San Francisco, CA. Chairman George Miller will lead the hearing.
Witnesses:
Shlomo Benartzi, Ph.D. Professor UCLA Anderson School of Management Los Angeles, CA
Mark Davis Partner Kravitz Davis Sansone Encino, CA
Jacob S. Hacker, Ph.D. Professor University of California at Berkeley
In December 2006, Rep. George Miller, the new Chairman of the House Education and Labor Committee, announced that the Committee would be dedicated to the mission of strengthening America’s middle class. And over the past two years, the Committee has delivered on its promise. America's students, workers, and families need help more than ever during the current financial crisis, and the Committee will continue its work to strengthen the middle class. Below is an overview of the Committee’s legislative milestones in the 110th Congress.
Affordable colleges » The Committee has enacted three laws that together will make college more affordable and accessible for middle class students, create a more efficient, consumer-friendly, and fair American higher education system, and protect federal student loans from turmoil in the economy.
High quality education » The Committee enacted legislation to strengthen the nation’s premiere early childhood program, giving more young children the skills they need to succeed in school and in life. The Committee also helped enact emergency aid to help Gulf Coast schools and colleges still working to recover from Katrina and Rita. In addition, the Committee took a key step toward improving learning conditions for schoolchildren by passing legislation to help schools modernize their facilities and become more energy-efficient.
A competitive workforce » The Committee has enacted legislation that builds on the principles Democrats first laid out in their “Innovation Agenda – A Commitment to Competitiveness to Keep America Number One.” These new laws will help prepare more Americans for jobs in emerging, high-tech industries that will keep our nation more competitive and create more good-paying jobs here at home.
Fairness in the workplace » During the first 100 hours of the 110th Congress, the House passed the first increase in the minimum wage in ten years. Since then, Committee has passed a series of key measures to strengthen workers’ rights, improve workplace safety, end discriminatory practices that have unfairly eroded workers’ pay and other benefits, and help workers balance demands of work and family.
Retirement security » While roughly 50 million American workers now have 401(k) style retirement plans, studies show that the vast majority of these workers don’t know how much they are paying in fees to the companies that service their 401(k) plans – fees that could be eating away at their retirement savings. The Committee passed legislation to help workers better understand these hidden fees and strengthen their retirement security.
Safe children and youth » The Committee enacted laws to protect America's children and youth, including runaway, homeless and missing children, and to increase penalties when employers violate child labor laws. The House also passed legislation to protect teens in public and private residential programs.
Accountability and responsibility » The Committee conducted oversight over government agencies in its jurisdiction, shining a light on the Bush administration’s failures to safeguard taxpayer dollars used to fund education programs and its efforts to weaken protections for workers. In some cases, the Committee’s investigations paved the way for legislation and spurred the U.S. Department of Justice to pursue a criminal investigation.
By the numbers...» The Committee has held 113 hearings and heard from 683 witnesses in its efforts to grow and strengthen the nation’s middle class. In the next Congress, the Committee will continue to build on this record by working to improve the lives of children, students, workers and families.
Following an urgent meeting held by Democratic leaders and top economists in Washington on October 13, Speaker of the House Nancy Pelosi announced that House Democrats will begin laying the groundwork for a comprehensive economic recovery and job creation program, including a hearing to be held by the House Education and Labor Committee. Chairman George Miller said the hearing will focus on the nation’s severe unemployment outlook and strategies to spur job growth.
“The credit crisis and stock market crash is making an already dire unemployment situation worse,” Chairman Miller said. “The top economists who have briefed the Democratic leadership today and over the last few weeks all agree that unemployment is going to continue to rise. We are going to examine the best ways to get Americans back to work and put our economy on the road to recovery.
“The emergency financial bill we approved late last month was one important step toward rescuing the economy, but we knew then that additional, comprehensive measures would be needed to help stabilize and heal our broken economy. We need a longer-term economic recovery plan that will create jobs, grow the economy, and protect Main Street. These hearings will be vital to our efforts to develop a plan that rebuilds our economy while protecting taxpayers and helping workers and their families seize the opportunities that our 21st century economy presents.”
American workers have lost as much as $2 trillion in retirement savings over the last year – highlighting the devastating toll that the nation’s financial crisis is taking on their retirement plans, witnesses told the Committee today. Today’s hearing was one of several that House Democrats scheduled to investigate the causes of the financial crisis and what additional steps should be taken to protect taxpayers, homeowners, workers, and families.
“Unlike Wall Street executives, American families don’t have a golden parachute to fall back on,” said Chairman George Miller. “It’s clear that Americans’ retirement security may be one of the greatest casualties of this financial crisis.”
According to the Congressional Budget Office, this multi-trillion dollar loss in workers’ retirement wealth could further slow the ailing economy.
“To the extent households view balances in defined-contribution plans as part of their overall portfolio of wealth, a decline in those balances could lead people to reduce or delay purchases of goods and services,” said Peter Orszag, director of the CBO. “It could also lead some workers to delay their retirement.”
According to a survey released today by the AARP, in the last year 20 percent of baby boomers stopped contributing to their retirement plans because they have had trouble making ends meet. As several witnesses explained, workers closest to retirement may suffer the biggest hit from the financial meltdown.
“The current financial crisis has certainly highlighted the fact that 401(k) participants—whose 401(k) account represent their sole retirement savings—bear all the investment risk,” said Jerry Bramlett, president and CEO of BenefitStreet, Inc., an independent retirement plan administration firm. “The pain is particularly acute for those participants closer to retirement whose retirement income expectations have been significantly impaired possibly resulting in the need to postpone retirement.”
The AARP also found that a third of workers surveyed are considering delaying retirement as a result of the financial and housing crises.
“In the last few weeks, we’ve been confronted with older worker and retirees’ lives being turned upside down; their panic tops-off an already existing state of chronic anxiety about retirement futures,” said Teresa Ghilarducci, professor of economic policy analysis at The New School for Social Research.
Witnesses also said that while the current financial crisis is reducing workers' savings today, retirement insecurity had been steadily growing over the past decade.
“While the events that have taken place over the past several weeks have shone a spotlight on how affected Americans’ retirement plans can be by such volatility in the financial markets, it is important to keep in mind that Americans’ retirement security has been in distress for much longer than the past few weeks,” said Christian Weller, senior fellow at the Center for American Progress “In fact, retirement security has been a growing concern for Americans for many years due to limited retirement plan coverage, little retirement wealth, and increasing risk exposure of the individual.”
Chairman Miller said that greater transparency in retirement plans and the fees workers pay is needed, especially when workers are losing money and looking for the best deal.
“401(k) holders lack critical information about how their money is managed and what fees they pay. I’m here to say right now, those days are over,” said Chairman Miller. “We must have more transparency in 401(k) investment practices. The Wall Street veil of secrecy must end.”
Last week, Congress approved an emergency rescue plan in response to the worst financial crisis our country has seen since the Great Depression. We know that this plan alone will not magically turn the economy around. But we are confident that without it we will not have the chance to move forward.
We insisted that the plan include strong protections for taxpayers and tough accountability – neither of which was included in the President’s original request to Congress.
Immediately after the plan was approved, Speaker Pelosi announced that the House would conduct a series of hearings to investigate the causes of the current financial crisis and what steps we should take next to protect homeowners, workers and families struggling today.
As part of that commitment, the Committee on Education and Labor today is holding a hearing to explore how this financial crisis is impacting the retirement security of American families.
Yesterday, the House Oversight and Government Reform Committee launched the first of many oversight hearings examining the toxic mix of corporate greed, recklessness, and deregulation that created this financial crisis.
During his testimony, Lehman’s CEO, Mr. Fuld, showed no remorse for his catastrophic mismanagement of the company. In fact, he repeatedly denied responsibility for running the storied Lehman Brothers investment house into financial oblivion.
He refused to admit that his own reckless management – and his industry’s success of keeping regulators at bay – directly contributed to this historic financial crisis that is costing taxpayers, shareholders, and the nation’s current and future retirees billions of dollars from their nest eggs.
All the while, he insisted on taking obscene multi-million dollar bonuses for his executive teammates.
Unlike Wall Street executives, American families don’t have a golden parachute to fall back on. It’s clear that their retirement security may be one of the greatest casualties of this financial crisis.
The current financial and housing crises are stripping wealth from American families at a record rate.
A new poll just found that 63 percent of Americans are worried that they will not have enough savings for their retirement. Tragically, they may very well be right. Due to the collapse of the housing market and the financial crisis, trillions of dollars that Americans were counting on has been lost.
Americans were counting on much of this wealth for their retirement. Now it is gone – as is their ability to adequately fund their retirement.
Even before the current meltdown, middle-income families were losing ground due to the decline in middle-class wages over the last decade – making it harder for them to save for their retirement and family emergencies.
Retirement and financial experts now predict that retirees and older workers who rely on financial investments for retirement income may suffer more than any portion of the American population in the coming years.
According a survey released today by the AARP, one in five middle-aged workers stopped contributing to their retirement plans in the last year because they had trouble making ends meet. One in three workers has considered delaying retirement.
Now, the number of investors taking loans on their 401(k) accounts is increasing. And hardship withdrawals are also increasing.
T. Rowe Price estimates a 14 percent increase in hardship withdrawals just in the first eight months of 2008.
And, all the signs point to an increased frequency of 401(k) loans and hardship withdrawals in the coming year.
It makes sense that more Americans will be raiding their retirement accounts as they deal with rising unemployment and increasing costs of basic necessities.
Unfortunately, these drastic measures taken by workers today will have a long-lasting impact by significantly reducing account balances once these workers reach retirement age.
Over the past 12 months, more than a half trillion dollars have evaporated from 401(k) plans as a direct result of the crisis in the markets.
Some experts say that it will take as long as 3 years to recover market losses in 401(k)-style accounts – but only if the market turns around soon.
Just like consumer directed retirement plans, traditional pension plans are not immune from the financial crisis.
Although pension plans hire professional money managers and are required to be diversified, these plans will likely lose value as a result of the weak performance of the investment markets.
Sophisticated pension funds lost 20 to 30 percent of their value during the 2001 recession and took several years to overcome those losses.
We must keep our eye on these plans and I await further data on the health of our nation’s pensions.
While this crisis began on Wall Street, much of the financial burden will ultimately be borne by Main Street. And this did not happen overnight.
With the Republicans’ help and armed with their powerful lobbyists, Wall Street cunningly held off fair regulations by Congress, arguing that Americans would be better off if left to their own devices.
As Congress continues our investigations into this crisis, we cannot allow those responsible to emerge unscathed. The American people are paying the price of this go-go, Wild West approach to governing.
One cost will be the concern that our nation’s workers will not have sufficient savings to ensure a secure retirement after a lifetime of hard work. In the coming months, this committee will examine what measures may be needed to ensure a safe and secure retirement for workers, retirees and their families.
For starters, we know that 401(k) holders lack critical information about how their money is managed and what fees they pay.
I’m here to say right now, those days are over.
We must have more transparency in 401(k) investment practices. The Wall Street veil of secrecy must end.
I would like to thank all of our witnesses for joining us today. I look forward to their testimony.
And I expect that we will be back here repeatedly until we can ensure greater security for the retirement of hard-working Americans.
The Committee today will hold a hearing to examine how the current financial crisis is impacting pension funds and workers’ directed retirement accounts, such as 401(k) plans. According to a recent poll by the Associated Press, more than half of all Americans are worried that the ongoing financial crisis will force them to postpone retirement.
"The Impact of the Financial Crisis on Workers' Retirement Security" Scheduled at 1:00 p.m. on Tuesday, October 7, 2008, in room 2175 Rayburn H.O.B.
Witnesses:
Jerry Bramlett CEO BenefitStreet, Inc.
Dr. Teresa Ghilarducci Professor of Economic Policy Analysis The New School for Social Research
Dr. Peter Orszag Director Congressional Budget Office
Jack VanDerhei Research Director Employee Benefit Research Institute
Dr. Christian Weller Associate Professor of Public Policy, University of Massachusetts-Boston Senior Fellow, Center for American Progress
Stronger protections in federal law are needed to ensure that companies deliver on their promise to provide health care to retired workers, witnesses told the full committee today. With insurance premiums skyrocketing and companies looking to cut expenses, an increasing number of companies have been rolling back or eliminating promised retiree health benefits. The Kaiser Family Foundation estimates that the share of large firms offering retiree health coverage fell by half between 1988 and 2005, from 66 percent to 33 percent.
“Through the years, millions of workers have retired believing that they would be provided with the health care benefits that they were promised by their employer, benefits that they earned. What many of those workers found was their former employer eventually made a cost-cutting decision to renege on that promise and cut or reduce those health care benefits,” said Rep. John Tierney.
One of those companies was Raytheon Missile Systems, a defense contractor. Despite guaranteeing lifetime heath coverage to its retirees in the 1990s, in 2004 the company notified retirees that they would be have to pay several hundred dollars a month to continue coverage. “Retirees have been forced to sell a large part of their retirement dreams in order to afford the premiums they now have to pay,” said David Lillie, a Raytheon retiree. “More than a few retirees have had to mortgage their homes that were paid off in order to pay medical expenses that were not covered under a cheaper insurance plan.”
Employees have few protections when trying to prevent employers from shrinking or eliminating health benefits. Employer-sponsored health insurance for both retirees and current employees is voluntary. If an employer chooses to provide these benefits, employers are generally allowed to modify or terminate benefits, as long as they disclose it in the fine print. “The law is hostile to reasonable employee expectations about retiree health benefits – expectations created by the employer and from which the employer benefited in terms of increased employee loyalty and productivity,” said Norman Stein, a University of Alabama law professor and pension expert at the Pension Rights Center. “We know that in a real work environment, rather than the imagined work environment conjured up by the judge, employees tend to believe communications – oral and written – that they receive from their managers.”
The trend of scaling back or canceling promised health benefits accelerated in the 1990s when, as a result of an accounting rule change, companies were forced to disclose future health care obligations as a part of their balance sheet. By rolling back promised benefits, companies could result in a healthier bottom line to shareholders.
Historically, employer-sponsored retirement health benefits have been an essential source of health care coverage for retired workers and were a common benefit among larger institutions. As a part of their compensation package, loyal and dedicated employees were promised health benefits when they retired. “When most of the current retirees were in the workforce, larger American companies universally offered retiree health care to their employees and retirees as an incentive to retain trained employees,” said C. William Jones, chairman of ProtectSeniors.org, an advocacy group founded to protect retiree health care. “The workers accepted the IOU for retirement health care and other benefits in exchange for lower wages, and fewer vacations and holidays.”
On Thursday, September 25, the full committee will hold a hearing to explore options to safeguard promised retiree health benefits. With insurance premiums skyrocketing and companies looking to cut expenses, an increasing number of companies have been rolling back or eliminating promised retiree health benefits.
“Safeguarding Retiree Health Benefits” Thursday, September 25, 2008, 10:00 a.m. ET
A last-minute Department of Labor proposal could undermine future health and safety protections for American workers, witnesses told the Workforce Protections Subcommittee today. The Washington Post recently reported that the proposal was developed by political appointees in secret with little consultation with career agency health and safety experts. The proposal only gives 30 days for comment and provides for no public hearings. Critics say that the Department of Labor proposal would add additional layers of red tape to an already slow regulatory process, even for those initiatives being considered. The Bush administration has only issued one health-related standard over the past eight years, which it was forced to complete under a court-ordered deadline.
“I am troubled by the Department of Labor’s attempt to rush through this rule without a full consideration of its effect on the health and safety of American workers. This proposed rule has without explanation leapfrogged ahead of many other worker protection standards that OSHA should have been working on for the last 8 years.” -- Subcommittee Chair Lynn Woolsey
“Our nation’s system for protecting workers from harmful substances that cause injuries, illnesses, and deaths is paralyzed. Thousands of workers are exposed every day to chemical compounds and physical hazards that are known to be harmful, yet these exposures are permitted by outdated or non-existent OSHA and MSHA standards.” -- Dr. Celeste Monforton, a lecturer at the department of environmental and occupational health at The George Washington University
“The proposed risk assessment rule has been developed in secret by political appointees…with little involvement by OSHA and MSHA and with no public notice prior to its publication. The department is trying to rush the proposal through and is depriving the public of an opportunity to meaningfully participate in this rulemaking process.” -- Peg Seminario, director of safety and health at the AFL-CIO
On Wednesday, September 17, the Workforce Protections Subcommittee will hold a hearing examining the Department of Labor's last-minute proposal that would dramatically weaken future workplace health standards and further slow their enactment. The department has allowed only 30 days for comment on the proposal and will not hold public hearings.
"Secret Rule: Impact of the Department of Labor’s Worker Health Risk Assessment Proposal" Wednesday, September 17, 2008, 10:00 a.m. EDT
Dr. Willard Sakiestewa Gilbert testifies on September 9, 2008.
The administration should do more to improve academic standards for schoolchildren who attend Bureau of Indian Education (BIE) schools, witnesses told the House Subcommittee on Early Childhood, Elementary and Secondary Education at a hearing on Tuesday. Specifically, they said the U.S. Department of the Interior and the U.S. Department of Education must work more closely with tribal organizations to develop accountability systems under the No Child Left Behind Act. The federal government provides elementary and secondary education and educational assistance to Indian children directly through federally-funded schools or through assistance to public schools. Ninety percent of Indian students attend public schools operated by local school districts. However, 10 percent attend BIE schools, which are schools funded by the Department of the Interior. BIE schools are subject to NCLB with limited exceptions.
"Our success in the 21st century economy is directly tied to our ability to produce a high quality labor force. And that ability is, of course, directly tied to our ability to meet the challenge of providing every child – including every Indian child – with a world-class education. We must ensure that Indian tribes – which are sovereign entities who best understand their children’s needs – are full partners in that process." -- Subcommittee Chairman Dale Kildee.
"Recognizing and validating the cultural, social and linguistic needs of American Indians is critical to guaranteeing the continuity of their communities... We believe with good faith collaboration that we can provide our children with an education that honors their Native identities while simultaneously preparing them for successful futures by providing them with opportunities to incorporate into the curriculum their rich cultural heritages, languages, and traditions." -- Dr. Willard Sakiestewa Gilbert, President of the National Indian Education Association (NIEA), who testified that the BIE should expand upon the culturally based instruction currently taking place in Indian schools by promoting stronger integration of Native culture and languages into the curriculum.
"The frustration with this situation is NCLB provides opportunities for tribes to have a significant voice on assessing the quality of education for their children and making changes to their educational programs based on those assessments... The manner in which the BIE has chosen to implement NCLB has left tribes with no voice in educating their own children." -- Ted Hamilton, Executive Director of the Oceti Sakowin Education Consortium, who testified about the need to develop strong accountability systems tailored to BIE schools under NCLB.
On Thursday, September 11, 2008, the Healthy Families and Communities Subcommittee will hold a hearing on "Examining the Role of Museums and Libraries in Strengthening Communities," scheduled at 10:00 a.m. in room 2175 Rayburn H.O.B.
On Thursday, July 31, the Workforce Protections Subcommittee will hold a hearing on the growing income equality and its effects on the middle class. Stagnant wages have contributed to income inequality. The rapidly rising costs of food and energy have put additional pressures on families already struggling to make ends meet. Income inequality has been rising since the late 1970’s when the top 1 percent of wage earners earned less than 10 percent of all income. But since then, these top earners have increasingly accounted for a larger portion of the income pie: By 2006, the top 1 percent earned more than 20 percent of our nation’s wealth.
“The Growing Income Gap in the American Middle Class” Thursday, July 31, 2008, 10:00 a.m. EDT
Witnesses today told the Healthy Families and Communities Subcommittee that the field of social work affects the lives of Americans from all walks of life on a daily basis, and though the field faces some challenges, it is expected to grow in the coming years.
Social workers provide critical services across rural, urban and suburban areas. They work with a wide variety of people, from children, families and the elderly, to those with mental health problems or substance abuse issues, to those who are incarcerated. As baby boomers age, they will increasingly require more social work services, said Gary Bailey, associate professor at the Graduate School of Social Work at Simmons College in Boston, MA.
A master's degree in social work or a related field is now standard for many positions. Dr. Robin Mama, dean of the School of Social Work at Monmouth University in Monmouth, NJ, said recruitment is the biggest challenge facing undergraduate social work programs, in part because of negative associations. Mama also said there is a need for bilingual and trilingual social workers and cultural awareness and sensitivity. More »
On Wednesday, July 30, the Health, Employment, Labor, and Pensions Subcommittee will hold a hearing on the proposed merger of Delta and Northwest Airlines and the merger’s potential impact on workers of those airlines.
"The Proposed Delta/Northwest Airlines Merger: The Impact on Workers” Wednesday, July 30, 2008, 10:30 a.m. EDT
In light of the recent economic downturn and the nation’s aging population, the Healthy Families and Communities Subcommittee will hold a hearing on Tuesday, July 29 to examine how social workers can best meet the changing needs of American families.
Healthy Families and Communities Subcommittee Hearing on “Caring for the Vulnerable: The State of Social Work in America” Tuesday, July 29, 2008, 3:00 p.m. EDT
Witnesses told the Committee at today's hearing on physical education in America's schools that expanding and improving physical education in the nation’s schools is key to fighting child obesity. Studies show that more than a third of U.S. schoolchildren are now obese, that the physical activity of American children is dramatically decreasing as they move into their teenage years, and that overweight children are now more vulnerable to serious diseases that were once a rarity among young kids, including cardiovascular disease, Type II diabetes, asthma, sleep apnea, and certain types of cancer.
U.S. schools have drastically reduced their physical education programs in recent years; fewer than ten percent of all public schools now offer daily physical education classes. Although the National Association for Sport and Physical Activity recommends at least 150 minutes of exercise a week for elementary students and 225 minutes a week for middle and high school students, most schools offer far less.
With the U.S. facing staggering rates of child obesity, the Committee will hold a hearing on Thursday, July 24 at 10 a.m., to examine how to improve physical education in the nation’s schools and strengthen efforts to fight childhood obesity.
“The Benefits of Physical and Health Education for Our Nation’s Children” Witnesses: U.S. Rep. Ron Kind (D-WI) U.S. Rep. Zach Wamp (R-TN) Richard Simmons, Fitness Expert and Advocate Tim Brown, former Oakland Raider wide receiver and nine time Pro-Bowler Dr. Russell Pate, Associate Vice President for Health Sciences and Professor, Arnold School of Public Health, University of South Carolina Lori Rose Benson, Director of Fitness and Physical Education, New York City Department of Education Robert M. Keiser, Student Advisor to Governor Charlie Crist, Council on Physical Fitness, Florida
Improving the teaching and learning of mathematics and science in U.S. schools is vital to maintaining America’s global leadership, witnesses told the Committee in yesterday's hearing. A report released in March by the National Mathematics Advisory Panel found that the nation’s system teaching math is “broken and must be fixed” if the U.S. wants to maintain its competitive edge. Among other things, the panel called for a comprehensive, systemic effort to strengthen math education, including improving teacher training and professional development. The panel of experts, which included business leaders, a teacher, and the first American woman to travel in space, recommended expanding partnerships between the business and education communities that focus on bolstering STEM education, and increasing training and support programs for teachers. The witnesses also urged lawmakers to fully fund the America COMPETES Act, a law enacted by the Democratic Congress last year to provide education and job training for students and workers in math, science, technology, and engineering fields. Last year, Congress approved $193 million in funding for math and science education in the COMPETES Act, but President Bush vetoed that legislation.
“America won’t be able to maintain our great legacy of innovation and discovery, let alone compete in today’s global economy, unless we make investing in math and science education a top priority,” said Chairman George Miller. “Last year, Congress took a critical first step by enacting legislation to provide workers with the training and skills needed to compete in 21st century jobs. Now we must build on that down payment by working with business leaders and key stakeholders to help arm students with an excellent foundation in math, science, and other cutting-edge fields.” More »
Tomorrow, July 22 at 2 p.m., the Committee will hold a hearing to examine how business-education partnerships can help drive innovation and strengthen math and science education in America’s schools. A report released by the National Math Panel in March found that the nation’s system for teaching math is “broken and must be fixed” if the U.S. wants to maintain its competitive edge. In May, the Committee first examined the report’s findings and recommendations; Tuesday’s hearing will follow up on that hearing. Phil Mickelson, professional golfer and co-founder of the Mickelson Exxon Mobil Teachers Academy, will be among the witnesses to testify.
Setting high standards, ensuring that all children have access to outstanding teachers, holding educators accountable for their schools’ progress, and restructuring chronically struggling schools, are vital to creating a world-class public education system, mayors and superintendents of major U.S. cities told the Committee at yesterday's hearing.
Each of the four cities represented at the hearing -– New York City, Washington, D.C., Chicago, and Atlanta -– have made impressive gains in recent years in boosting student proficiency in reading and math and narrowing the achievement gap between groups of students. As the witnesses explained, many of these gains are the result of the innovative reforms being pursued through mayor-superintendent partnerships, including performance pay initiatives for teachers and principals, increased accountability, and community-wide partnerships that can help strengthen schools and provide better support for teachers. More »
On Thursday, July 17 at 10:00 a.m., the Committee will hear from mayors and school superintendents of major U.S. cities, including New York City, Washington, D.C., Chicago, and Atlanta, at a hearing on their challenges and successes in working to improve public schools.
“Mayor and Superintendent Partnerships in Education: Closing the Achievement Gap" Witnesses: Mayor Michael R. Bloomberg, New York City Chancellor Joel I. Klein, New York City Public Schools Mayor Adrian M. Fenty, District of Columbia Chancellor Michelle Rhee, DC Public Schools Arne Duncan, Chief Executive Officer, Chicago Public Schools Beverly L. Hall, Superintendent, Atlanta Public Schools
The U.S. Government Accountability Office (GAO), testified at a hearing today that findings from two separate investigations indicate that the U.S. Department of Labor is failing to effectively enforce the nation’s wage and hour laws. The two investigations found that the Wage and Hour Division of the Labor Department -– the agency responsible for investigating complaints of wage, hour, and child labor violations -– is failing to fully investigate and properly address violations of the law. The GAO calculated that actions initiated by the Department on wage and hour violations have dropped from approximately 47,000 in 1997 to fewer than 30,000 in 2007. Also, the use of fines that punish repeat or egregious offenders declined by nearly 50 percent from 2001 to 2007.
Other findings:
- Thousands of cases may have been mishandled by the agency over the past decade, which may have resulted in workers receiving reduced or no back pay at all. In one case, the GAO uncovered that the Wage and Hour Division dropped investigations when employers refused to pay or claimed no funds to pay back wages, even though the business was still in operation. Although the agency has the ability to take employers to court in order to force recalcitrant employers to issue back pay, the agency refused to do so in most cases.
- Hundreds of cases where the agency did not assign an investigator for more than a year after the initial complaint. It cited one example where a truck driver who was not paid for overtime had to wait for 17 months to be assigned an investigator. The case against the truck driver’s employer was dropped because the agency could no longer locate the truck driver.
The investigations were conducted by the GAO at the request of Chairman George Miller.
The Committee will hold a hearing on Tuesday, July 15 to examine the U.S. Department of Labor’s record of enforcing the nation’s wage and hour laws. The Government Accountability Office will highlight the results of two separate investigations requested by Chairman George Miller into the Labor Department’s failures to fully investigate and properly address violations of the law. Seventy years ago last month, President Franklin Roosevelt signed the landmark Fair Labor Standards Act into law. The law has provided generations of Americans with basic rights to minimum wages, overtime pay, and a ban on oppressive child labor. However, critics say that the Bush administration has failed to protect workers from a growing problem of “wage theft” by adopting weak approaches to enforcement and reducing funding and staffing levels of the Wage and Hour Division, the agency responsible for investigating complaints of wage, hour, and child labor violations.
With food prices continuing to soar, the Committee will hold a hearing at 10am tomorrow, July 9, to examine how rising food costs are making it harder for the nation’s child nutrition and school meal programs to provide healthy, low-cost meals for children. Nationwide, nearly 50 million children are served by federal child nutrition programs, which include school lunch programs, childcare programs, and summer food programs. According to the U.S. Department of Agriculture, whole grain breads, milk, and cheese prices increased by as much as 17 percent in 2007, and the costs of fresh fruits and vegetables are also up. Committee Schedule »
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