Saturday, March 5, 2016

OBAMA-CLINTONOMICS: TVA pension cuts: A new stage in the assault on American workers

TVA pension cuts: A new stage in the assault on American workers

OBAMA-CLINTONOMICS: SERVE THE 1%, ILLEGALS AND HAND THE TAX BILLS FOR THEIR CRIMES TO THE AMERICAN MIDDLE CLASS!



Millions of workers had their retirement savings wiped out as result of the collapse of the stock market in 2008 and most have never recovered. On average, workers between the ages of 56 and 61 saw their retirement savings fall by 23 percent between 2007 and 2013. Millions more, without any retirement benefits or savings, are entirely dependent on meager Social Security payments.

TVA pension cuts: A new stage in the assault on American workers

5 March 2016
The announcement this week of cuts to the pensions of the employees of the federally-owned Tennessee Valley Authority (TVA) marks a new stage in the drive by the ruling class, overseen by the Obama administration, to take back all of the social gains won by the working class over the course of a century of struggle.

The TVA, the largest public utility company in the US, employs 10,000 people and provides electricity and other services to 9 million residents in an 80,000 square mile area covering significant portions of Tennessee, Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia.
As was noted in Friday’s New York Times, the TVA cuts will breach the “firewall” that up to now has protected federal employee pensions, marking the first time that the federal government makes significant moves against defined benefit obligations. The underfunding of the pension plan by an estimated $6 billion is being used to justify the cuts.

The Tennessee Valley Authority Retirement System (TVARS) board approved a plan on Thursday that would shift workers hired since 2006 from a defined-benefit plan to a defined-contribution 401(k) investment plan. Those hired since 1996 with more than 10 years on the job would see their pensions split between the current plan and the 401(k). This scheme, which still has to be approved by the overall board of directors of the TVA, is slated to take effect in October.

While the plan maintains defined benefit pensions for current retirees, a cost-of-living adjustment (COLA) on benefits will be capped at 6 percent. For current employees and retirees under 50, the COLA will not kick in until they turn 65.

The plan approved by TVARS is a slight modification of a proposal put forward by the CEO of the utility, William D. Johnson, to cut $700 million from pension obligations over 20 years. The cuts would not impact a special executive retirement plan that supplements the pensions of those who sit on the TVA’s executive board, including the multi-millionaire Johnson.

Johnson, the former CEO of Progress Energy, received total compensation of $6.4 million in 2015, making him the highest paid federal employee. Expressing his contempt for TVA workers, Johnson told the New York Times that cutting his own pay would not make a dent in the pension system’s liabilities and that maintaining executive pensions was necessary to “attract talent.”

The attack on the pensions of TVA employees is a warning that no section of the working class is exempt from the social counterrevolution being carried out in the interests of the financial aristocracy. The TVA is seen as low-hanging fruit in the public sector since it is exempt from federal regulations that guarantee pension benefits and penalize companies for underfunding pension plans.

The imposition of cuts there will set a precedent for overriding pension guarantees for other federal employees, just as the Detroit bankruptcy, backed by the Obama administration, became the model for gutting public-sector pensions in other cities and states across the country, as well as for attacks in the private sector.

Over the past 35 years, the percentage of workers receiving pensions has been vastly reduced. The share of private-sector workers with a pension has fallen to less than 3 percent from close to 30 percent in 1980. Millions have been pushed into 401(k) investment plans, which funnel retirement funds into the hands Wall Street speculators.

The announcement of the assault on the TVA pension fund follows the Obama administration’s recent gutting of benefits for hundreds of thousands of retired truck drivers, package handlers and other workers covered by the Teamsters Central States Pension Fund.

In a country where 400 billionaires control more wealth than the bottom half of the population and the top 1 percent captures more than 21 percent of all income, it has become a mantra that there is “no money” for pensions, health care or any other social program. Yet hundreds of billions of dollars continue to be paid out in executive compensation.

Millions of workers had their retirement savings wiped out as result of the collapse of the stock market in 2008 and most have never recovered. On average, workers between the ages of 56 and 61 saw their retirement savings fall by 23 percent between 2007 and 2013. Millions more, without any retirement benefits or savings, are entirely dependent on meager Social Security payments.

The assault by the Obama administration on the TVA has a symbolic significance, underscoring the utter hostility of the Democratic Party today to the social reforms carried out decades ago by Democratic Party administrations. The utility was created by the federal government in 1933, marking a high point in Franklin D. Roosevelt’s New Deal public works program aimed at heading off a socialist revolution in the depths of the Great Depression.

Modeled to a certain extent on the central planning employed by the workers state in the Soviet Union, the TVA brought electricity and modern farming techniques to a section of the country that had remained mired in poverty and backwardness.

The attack on TVA pensions is the spearhead of a broader attack directed ultimately at the dismantling of the utility as a government-owned entity and its carve-up among corporations looking for new sources of profit. This is but the latest indication of the mortal crisis of American capitalism, which poses the necessity for a mass political and revolutionary response by the working class.

Niles Williamson

US employment report: Payrolls rise, wages fall


AMERICA: NO LEGAL NEED APPLY!

"These statistics point to the fact that the American ruling class, through its instrument, the Obama administration, has utilized the financial crash of 2008, for which it was responsible, to fundamentally reorganize the US economy, transforming it into a low-wage system. The millions of decent-paying jobs that were destroyed have been largely replaced by poverty-wage, part-time and temporary jobs."

US employment report: Payrolls rise, wages fall

By Barry Grey
5 March 2016
President Barack Obama seized on the February employment report, released Friday morning by the Labor Department, to tout the supposed “success” of his economic policies and paint a picture of a thriving US economy. The report, which showed a larger-than-predicted growth in private nonfarm payrolls of 242,000 jobs, confirmed that the US economy was “the envy of the world,” Obama told reporters at a White House appearance.

“The fact of the matter is that the plans that we have put in place to grow the economy have worked,” he boasted.” He derided “an alternative reality out there from some of the political folks that America is down in the dumps.” He countered, “America is pretty darn great right now.”


BLOG: BOTH OF OBAMA'S SEC. of (ILLEGAL) LABOR HAVE BEEN LA RAZA SUPREMACIST. THE DEM PARTY HAS SABOTAGED E-VERIFY AND VOTING WITH NO IDs TO EASE MORE MEXICANS INTO OUR JOBS, AND VOTING BOOTHS!


He did not attempt to explain why the “alternative reality,” which his labor secretary, Thomas Perez, attributed to “fear-mongers and fact-deniers,” is believed by tens of millions of Americans, whose anger over economic injustice is dramatically reflected in the current election campaign.

One does not have to look too closely at the Labor Department’s report, however, to get an idea of what is fueling the social indignation of working people in the eighth and final year of the Obama administration. Behind the top-line number for new jobs and the quasi-fictional official unemployment rate of only 4.9 percent, ongoing trends with disastrous consequences for the working class are evident. They account for two other important indices in the report: a decline in average earnings from the previous month of 3 cents, or 0.1 percent, to $25.35, bringing the increase for the year down to just 2.2 percent, and a fall in the average private-sector workweek of 0.2 hours to 34.4 hours, a two-year low.

These two figures arise from the fact that the vast bulk of new jobs created in February were low-wage and a huge percentage were part-time. The low-paying service sector—retail, bars and restaurants, health care—accounted for 245,000 jobs. The reality of recession in basic production was reflected in a 16,000 decline in manufacturing and the loss of another 19,000 mining jobs, bringing to 171,000 the total decline in mining since September 2014. The only better-paying industrial sector that saw an increase was construction, which recorded a gain of 19,000.

Another figure highlights the hollow and socially regressive character of Obama’s so-called “recovery.” The financial cable network CNBC pointed out that according to the Labor Department’s household survey, which is the basis for the unemployment rate figure (the figure on payroll growth is derived from a separate survey of business establishments), full-time jobs increased in February by only 65,000, while part-time positions increased by 489,000. This means that a mere 11.7 percent of new jobs in February were full-time!

These statistics point to the fact that the American ruling class, through its instrument, the Obama administration, has utilized the financial crash of 2008, for which it was responsible, to fundamentally reorganize the US economy, transforming it into a low-wage system. The millions of decent-paying jobs that were destroyed have been largely replaced by poverty-wage, part-time and temporary jobs.

The median household income has fallen sharply. Pensions and health benefits have been gutted, schools closed by the thousands, teachers and other public workers laid off by the millions. At the other end, the Federal Reserve and the US Treasury have pumped trillions of dollars into the financial markets, driving up the stock market and bringing the concentration of wealth at the very top to unprecedented levels. This is what Obama lauds as “success.”

Meanwhile, millions of Americans remain mired in long-term unemployment. The number of long-term unemployed, defined as without work for 27 weeks or more, was essentially unchanged at 2.2 million in February. This number has not shifted significantly since last June. The long-term jobless accounted last month for 27.7 percent of the unemployed, a far higher percentage than in any previous period categorized as an economic recovery.

A broader measure of unemployment that includes people working part-time but wanting full-time work and those too discouraged to seek employment registered 9.7 percent last month, nearly double the official jobless rate. There are, in addition, millions of people who have dropped out of the labor market and are not even counted in government employment reports.

While the employment-to-population ratio edged up to 59.8 percent and the labor force participation rate rose slightly to 62.9 percent, both measures remain extraordinarily low by historical standards.
The impact of soaring social inequality and falling living standards for broad sections of the population is reflected in a growing crisis in the retail sector. This week, sporting goods chain The Sports Authority filed for Chapter 11 bankruptcy protection and announced it was closing at least 140 of its 463 stores and laying off 3,400 of its 13,000 employees. This follows recent announcements by Walmart, Sears/Kmart and Macy’s of hundreds of store closures and thousands of layoffs.

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