PRESS FROM AROUND THE WORLD


Center for American Progress:


The $47 Million Retiree Sellout

How White House/GOP donors bought a Medicare bill that lets them cut health benefits

May 14, 2004

On Oct. 29, 2003, President Bush reassured seniors that "corporations
have no intention to what they call dump retirees" from their existing drug
coverage after the Medicare bill passed.  But according to the Wall Street
Journal, the White House and its allies in Congress added "a little-noticed
provision" to the law which rewards companies with a tax subsidy even if they reduce retirees' existing drug coverage.  In effect, the provision creates a financial incentive to reduce retiree benefits.

The Wall Street Journal notes that the provision was pushed primarily
by a group called the "Employers' Coalition on Medicare" – an organization
made up of corporations that have given President Bush and the RNC more than $47 million since 2000.  These same corporations stand to profit from the provision.  And it appears at least 10 of them (representing tens of thousands of workers) have either tried in the past or are trying to slash retiree benefits. 

These 10 companies, which include 3M, AT&T, Bank of America, DaimlerChrysler, GM, IBM, and Verizon, have alone given more than $17 million.  Here is the breakdown of the contributions given to President Bush and his allies in Congress by all of the members of the "Employers Coalition" – contributions that no doubt helped buy this provision.  For the official list of members of the "Coalition" please see their Web site at www.employersandmedicare.org.

$17 Million From Companies Actively Cutting Retiree Benefits

These 10 companies, which are members of the "Employers Coalition on
Medicare," have tried to seriously reduce health/drug benefits for
their retirees.  And because of their campaign contributions to the White
House/Congress, the new Medicare bill insures they will now receive tax subsidies even as they continue to reduce those benefits.

Verizon Total Contributions: $3,882,181 
Hard money contributions to Bush since 2000:  $65,900
Soft money contributions to RNC since 2000:  $2,100,923
PAC money to Republicans since 2000:  $1,715,358

Verizon Reducing Employee/Retiree Health Benefits:  "Verizon
Communications stated it expects its obligation for post-retirement benefits to fall by $1.3 billion as a result of the new Medicare prescription drug benefit….  Verizon is relieved of liability for promises to pay benefits for retirees now that liability shifts to the federal government and the taxpayers.  A corporation improves its bottom line, but at the expense of the taxpayer and to the detriment of retirees." 
[Source: Allentown Morning Call, 3/24/04]

3M Total Contributions: $347,305
Hard money contributions to Bush since 2000:  $9,250
Soft money contributions to RNC since 2000:  $165,305
PAC money contributions to Republicans since 2000:  $172,750

3M Reducing Employee/Retiree Health Benefits:  According to the Austin
Business Journal, Austin's 3M is now requiring employees and retirees
to "shoulder more of the burden" for health care/drug benefits with its public
relations manager admitting "we're asking them to pay more."  [Source: Austin Business Journal, 11/29/02]

AT&T Total Contributions:  $4,660,815
Hard money contributions to Bush since 2000: N/A
Soft money contributions to RNC since 2000:  $4,141,772
PAC money contributions to Republicans since 2000:  $519,043

AT&T Reducing Employee/Retiree Health Benefits:  AT&T informed its
retirees that current "company-paid health insurance benefits guaranteed to
retirees were being canceled" and that any new coverage would cost far more. 
[Source: Baltimore Sun, 2/23/04]

Bank of America Total Contributions:  $1,261,823
Hard money contributions to Bush since 2000:  $88,100
Soft money contributions to RNC since 2000:  $181,655
PAC money contributions to Republicans since 2000:  $992,068

Bank of America Reducing Employee/Retiree Health Benefits:  "At Bank of
America Corp., the liability for retiree health benefits rose by $69
million, to $1.1 billion, in 2003.  But federal filings show that what the bank
actually spent for these benefits in 2003 declined to $63 million from $84
million the year before, a 25% drop.  Retirees' portion rose 27% to $62 million." 
[Source: Wall Street Journal, 3/22/04]

DaimlerChrysler Total Contributions:  $919,421
Hard money contributions to Bush since 2000:  $2,250
Soft money contributions to RNC since 2000:  $141,091
PAC contributions to Republicans since 2000: $776,080

DaimlerChrysler Reducing Employee/Retiree Health Benefits: 
DaimlerChrysler is currently engaging in "efforts to increase employees' contributions and cut costs."
[Source: AP, 3/18/04]

General Motors Corporation Total Contributions:  $760,060
Hard money contributions to Bush since 2000:  $92,050
Soft money contributions to RNC since 2000:  $95,260
PAC contributions to Republicans since 2000:  $572,750

General Motors Reducing Employee/Retiree Health Benefits:  "Automakers
such as General Motors Corp. are making retirees pick up more of the tab"
for health/drug coverage that they were promised. 
 [Source: Philadelphia Inquirer, 1/15/04]

IBM Total Contributions:  $25,083
Hard money contributions to Bush since 2000:  $25,083
Soft money contributions to RNC since 2000:  $0
PAC contributions to Republicans since 2000:  $0

IBM Reducing Employee/Retiree Health Benefits:  "IBM retirees as a
group saw their health-care premiums rise nearly 29 percent in 2003, on the heels of a 67 percent-plus increase in 2002.  For IBM, with its caps in place, spending on retiree health care declined nearly 5 percent, after a drop of 18 percent the year before.  The company confirmed that retirees' spending has risen as its own has fallen." 
[Source: Wall Street Journal, 3/22/04]

Motorola Total Contributions:  $635,764
Hard money contributions to Bush since 2000:  $11,500
Soft money contributions to RNC since 2000:  $305,839
PAC contributions to Republicans since 2000:  $318,425

Motorola Reducing Employee/Retiree Health Benefits:  "Companies
including Motorola Inc. have stopped covering new retirees." 
[Source: Philadelphia Inquirer, 1/15/04]

SBC Communications Total Contributions:  $4,087,981
Hard money contributions to Bush since 2000:  $9,450
Soft money contributions to RNC since 2000:  $1,762,206
PAC money to Republicans since 2000:  $2,316,325

SBC Reducing Employee/Retiree Health Benefits:  In March, 2004, SBC
announced it "will begin charging retirees monthly premiums and higher fees for using medical care… The plan will save SBC $300 million to $600 million annually. Then, in May of 2004, executives at SBC "divulged plans to force 90,000 retirees and their families nationwide to pay significantly more for health care insurance." 
[Sources: Wichita Eagle 3/20/04; San Francisco Chronicle,
5/10/04]

Sears, Roebuck and Co. Total Contributions:  $898,987
Hard money contributions to Bush since 2000:  $21,450
Soft money contributions to RNC since 2000:  $594,737
PAC money to Republicans since 2000:  $282,800

Sears Reducing Employee/Retiree Health Benefits:  "Sears is eliminating
company-subsidized medical insurance for employees after retirement. 
Employees under 40 will have access to medical benefits at group rates when they retire but the company will no longer provide a subsidy.  Employees who are 40 and older will continue to receive subsidized medical benefits at retirement, but the subsidy will be capped at 2004 levels."  [Source: HR Focus, 4/2004]
 

 

 

 

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