Democrats Lay Plans to Tap Pension Issue

Senate Democrats, buoyed by the political payoff from their offensive to raise the minimum wage, have decided to repeat their strategy on an issue they believe has broad voter appeal: pension security and portability.

In recent days, Democrats have succeeded in harassing Majority Leader Bob Dole (R-Kan.) in particular and Republican lawmakers in general by repeatedly using parliamentary procedures to try to force a floor vote on a proposed 90-cent increase in the minimum wage.

Now the Democrats are preparing to use the same approach to push legislation making it easier for employees to take their pensions from one job to another, and take other steps to enhance the security of pensions.

Molly Rowley, a spokeswoman for Senate Minority Leader Tom Daschle (D-S.D.), said Democrats will continue to hammer on the minimum-wage issue until it is brought to a vote, then immediately shift their focus to the pension package. They intend to introduce the pension measures as an amendment to every appropriate bill that comes up for discussion, Rowley said.

Although Democrats have not succeeded in increasing the $4.25-per-hour minimum wage--or even in bringing the proposal to a vote--they have managed to put the Republican majority on the defensive and keep the focus at the Capitol on the Democrats’ agenda for the first time since the GOP took over last year.

Republicans are attempting to counteract the minimum-wage issue with their own legislative package. Unveiled this week by House Speaker Newt Gingrich (R-Ga.) and House Majority Leader Dick Armey (R-Texas), it calls for a $500-per-child tax credit for working families, changes in the earned income tax credit to give more to the lowest-income American families with children and alterations in labor laws to permit companies to offer flextime instead of overtime.

There is no indication how Republican congressional leaders would react to a Democratic offensive on pension security and portability. However, Republicans do not have the same record of opposition to the pension initiative that they do to a minimum-wage increase.

Bruce Bartlett, a senior analyst for the conservative National Center for Policy Analysis, said he believes that Democrats will have a tougher time maneuvering on the issue the way they have on the minimum wage because it is not as straightforward.

“The thing about the minimum wage is that it’s simple,” Bartlett said. “It’s not a new idea. Everybody understands. [But] the groundwork has not been laid on pensions.”

Nevertheless, Democrats say they believe that it will be easy to rally public support because so many Americans have felt pangs of insecurity over their coming retirements. More than half of U.S. workers have no pension plans. The statistics are worse for employees of small businesses, only 14% of whom have pensions.

The initiative is likely to be introduced next week in both chambers. It would, in part:

* Change a law that encourages private employers to impose a one-year waiting requirement for employees to enter pension plans and eliminate the waiting period for new federal employees to make pretax contributions to their Thrift Savings Plan.

* Create new rules to make it easier for employers to accept rollover 401(k) plans that employees bring from other firms. Currently 50% of workers are in plans that do not accept such rollovers.

* Ensure that workers get the pension benefits they earned even if they change jobs or their company folds.

* Require that state and local government pensions be held in trust so that employees do not lose their savings if the government declares bankruptcy, as the Orange County government did.