Everything Old is New Again

Back in the Good Old Days, Leveraged Buyouts (LBOs) all the rage. Not coincidentally, the phrase “underfunded pension liabilities” moved into the mainstream.

Long story short: when legislation is finally passed to make the “underfunded” portion a thing of the past (you can stop laughing any time), several large companies run by Captains of Industry—think Roger Smith and GM—complained that actually putting that funding on their balance sheet would cost One Billion dollars off their market cap. So they were given twenty (20) years to Make It Right.

And Everyone Lived Happily Ever After.

Apparently, until today:

Stung by outsize investment losses, some of the nation’s biggest companies are pushing Congress to roll back rules requiring them to put more money into their pension funds, just two years after President Bush signed a law meant to strengthen the pension system.

The total value of company pension funds is thought to have fallen by more than $250 billion since last winter. With cash now in short supply for companies, they are asking Congress to excuse them from having to replenish the required amounts.

Lawmakers from both parties seem receptive to the idea, and there was talk of adding a pension relief provision to the broad fiscal stimulus package Congress considered for this week’s lame-duck session. [emphasis mine]

The best line, of course, comes from an advocate of the Steal Short, Pauperize Long crowd:

“Congress needs to make the funding less volatile,” said Representative Earl Pomeroy, Democrat of North Dakota, who has long been outspoken on pension issues. “I believe that taking this step will save thousands of jobs without costing the Treasury anything.”

I believe in the Easter Bunny, the Tooth Fairy (not the Tom Noonan version), and the Reagan Revolution, too.

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