NEW YORK (TheStreet) -- Many campaign for office stating the "government should be run more like a business," but U.S. Rep. Howard Coble (R-NC) has actually focused his career on having generous congressional pensions more resemble those being forced on American workers at companies such as Boeing (BA - Get Report), General Motors (GM - Get Report), Bank of America (BAC) and others.
In an exclusive interview with TheStreet in his office in the Rayburn House Office Building, Rep. Coble explained why he has taken this path less traveled during his tenure in office, which ends this year.
The timing could not have been better for an interview with the premier foe of the U.S. Congress' pension system. That day's Washington Post contained an editorial warning more cities and states would suffer the fate of Detroit if civil service pensions aren't reduced. For Coble, addressing this fiscal problem is "a matter of a pledge I made in my run for Congress. One of the complaints of those in my district was the lavish, overly generous pension plans for members of Congress."
"A calculation was made that I have given up about $2 million in potential pension benefits," Coble added. As a state legislator in North Carolina, Coble also refused to participate in the pension plan. "It just seems unfair to the taxpayer to have them pay a pension after a politician has retired," Coble said. "There is only one other pension plan that I know of that is more generous than that for a member of Congress," he said. "That is for a major league baseball player." As the chart below shows, more and more major American corporations are greatly reducing the pensions they pay to workers. There has been a tremendous shift from defined benefit plans, where a fixed payment is received, to defined contribution programs, such as a 401(k). Since 1998, Fortune 100 companies offering defined benefit plans has fallen from around 90% to about 30%, at present. Firms such as IBM (IBM), Home Depot (HD), General Electric (GE), Walgreens (WAG) and others are using The Affordable Care Act, or ObamaCare, to reduce their retiree health care obligations.
|Bank of America||Froze plans; shift to Defined Contribution|
|Boeing||Replaced Defined Benefit with Defined Contribution; froze benefits|
|General Electric||Shifted into Health Insurance Exchange|
|General Motors||Closing plans; buyouts|
|Home Depot||Shifted into Obamacare exchanges|
|IBM||Shifted into Obamacare exchanges|
|Walgreens||Shifted into Obamacare exchanges|