• House, Senate Leaders Try To Bail out
  Private Accounts
• President Now Touting Medicare Rx Benefit
• More Big Companies Ditching Pensions
• Bill Would Require Reporting of Companies
  with Employees
• Covered by Public Health Insurance Programs
• Get That Beach Book Today!
• Quote of Note:  The New Social Security
  Privatization Proposal
• Web Site of the Week:  http://www.family-friends.org/

HOUSE, SENATE LEADERS TRY TO BAIL OUT
PRIVATE ACCOUNTS
Faced with better than two-to-one opposition to President Bush’s privatization proposals, congressional Republican leaders hatched a new privatization plan: Use the current surplus of Social Security taxes over benefits to fund private accounts. The measure would balloon the national debt while reducing Social Security's long-term solvency and ultimately lead to a cut in guaranteed benefits. Supporters believe this will dampen public and political opposition with promises to stop raiding the trust fund. House Ways and Means chair Bill Thomas (R-Calif.) said the proposal will be part of his broad retirement package to be unveiled this summer. Senate Finance Committee chair Charles Grassley (R-Iowa) also hopes to include a privatization proposal in his legislation. The AFT sees this privatization proposal as a watered-down version of the President’s ill-conceived, unpopular, unwanted privatization plan. Social Security runs annual surpluses because of bipartisan legislation enacted in 1983 to prepare for retiring Baby Boomers. Since taking office, the Bush administration has squandered the surplus with massive tax cuts and run up record deficits. Appearing last week at a Maryland high school before an audience of hand-picked supporters, the President reiterated his belief that the same trust fund his GOP colleagues now want to use to fund private accounts is "nothing but IOUs." A New York Times/CBS News poll released June 17 revealed that only 42 percent of Americans approved of the way President Bush was handling his job, a big drop from his 51 percent rating after of the November election. Congress fared even worse, with an approval rating of just 33 percent.

Call your U.S. representatives and senators while they are at home during the July 4 recess and send them the newly updated version of the AFT letter on Social Security. Go to http://www.aft.org/ and click on the Legislative Action Center.

PRESIDENT NOW TOUTING MEDICARE Rx BENEFIT
With sinking approval ratings among seniors thanks to President Bush's unpopular Social Security proposals, the White House turned its spotlight to Medicare's drug benefit, scheduled to begin in January 2006. Centerpiece of the controversial 2003 Medicare law, the benefit will be delivered by an intricate web of private insurance companies offering coverage to Medicare's 40 million beneficiaries. Hundreds of insurers, anxious to tap into Medicare's lucrative drug market, have applied to provide drug coverage. President Bush praised the “modernization” and vowed to lead the campaign for participation, but advocates warned that seniors would be disappointed with the complexity and limited coverage of the benefit. Critics of the Medicare law, including the AFT and the Alliance for Retired Americans, argued it is a billion-dollar giveaway to corporate interests. Wary of criticism, Medicare officials are insisting insurers include a generous variety of drugs although health plans warn it will drive up costs for premiums. Insurance companies will begin marketing their drug plans to Medicare recipients in the fall. Download an at-a-glance overview of Medicare's drug benefit by visiting the Alliance's website at www.retiredamericans.org/medicare.

MORE BIG COMPANIES DITCHING PENSIONS
United Airlines isn't the only company to suffer pension problems. According to a study by consulting firm Watson Wyatt Worldwide, about 11 percent of the big companies offering traditional pension plans have frozen or terminated the plans. Of the 1,000 largest U.S. companies, 71 froze or ended plans in 2004, up from 45 in 2003. Although half are financially troubled businesses, even many successful companies are rethinking their pension plans. With lawmakers debating changes in pension funding rules, plus the uncertain legal status of some pension plans and rising expenses, the percentage of large companies abandoning their pension plans is likely to increase.

BILL WOULD REQUIRE REPORTING OF COMPANIES WITH EMPLOYEES COVERED BY PUBLIC HEALTH INSURANCE PROGRAMS
Sens. Edward Kennedy (D-Mass.) and Jon Corzine (D-N.J.) and Rep. Anthony Weiner (D-N.Y.) introduced legislation on June 22 that would require states to publicly disclose the names of companies with 50 or more employees who receive government-funded health coverage. The Health Care Accountability Act is intended to spotlight large employers such as Wal-Mart that rely on state aid for employee medical coverage. More than 600,000 of Wal-Mart's 1.26 million U.S. workers receive health coverage from government programs or through a spouse's employer, according to the legislators. "Every worker in America is paying a part of their taxes to pay for Wal-Mart." Kennedy said. "It's not only morally bankrupt, it is un-American for Wal-Mart,” Joe Hansen, president of the United Food and Commercial Workers Union, noted, “not to give its workers better health insurance than our public safety net.”

GET THAT BEACH BOOK TODAY!
Want to enjoy some of your favorite books at the beach this summer or while you're relaxing during the summer vacation? If so, Powell's Books has a convenient way to help you get what you need for your reading pleasure. AFT PLUS formed a relationship with Powell's so members can purchase used bestsellers, how-to’s, children's books, e-books and much more from the convenience of their own homes. Qualified orders totaling $50 or more receive free shipping from this union-represented bookstore, a West Coast institution. To start surfing selections, go to http://www.aftplus.org/ and click on the link for discounts and special services. You'll see Book-Powell's right there. Happy shopping!

QUOTE OF NOTE:  The New Social Security Privatization Proposal
“Sen. DeMint’s [private accounts] plan compared to President Bush’s plan is like going from smoking three packs of cigarettes a day down to one. No matter how you look at it, it’s bad for you and hazardous to your long term health.” 

Sen. Max Baucus (D-Mont.)
June 22, 2005

Sen. Baucus was one of two Democrats who joined Republicans in crafting the 2003 Medicare law.

WEBSITE OF THE WEEK:  http://www.family-friends.org/
Family Friends is an intergenerational family support program that strengthens vulnerable families and the communities. Begun 20 years ago by the National Council on the Aging, Family Friends now operates in 26 locations nationwide. Under the program, volunteers visit families in their homes, recruit other volunteers, raise funds, write articles for newsletters, carry out office tasks, organize special events and more. To see if there is a project near you, visit the Web site and click on the link for Local Projects. Call Adam Brunner at 202/479-6627 with any questions.