- The Washington Times - Saturday, November 14, 2009

PENSION PROBLEM

Deficit doubles for fed pension insurer

The government-chartered company that insures the pensions of one in seven Americans said Friday that its deficit this year nearly doubled to $22 billion.

That’s an improvement over the Pension Benefit Guarantee Corp.’s midyear record deficit of $33.5 billion, which spiked as automakers and other companies faltered and caused the insurance fund’s liabilities to spike.

But experts say the long-term picture is grim. They say that without major changes, such as higher insurance premiums and less risky investments, the fund eventually will require a taxpayer bailout.

“Whatever the [deficit] number is, the real issue is that they have a major structural problem that is just going to get worse over time,” said Douglas Elliott, a fellow at the Brookings Institution who has studied the PBGC for years.

The PBGC’s finances have been battered by the weak economy, which put it on the hook for 144 new pension plans that failed during the year that ended Sept. 30. That compares with 67 in the previous year.

The PBGC is responsible for the benefits of 1.5 million Americans. It sends checks each month to 740,000 pensioners. It is funded entirely by fees on the companies whose pensions it insures.

But Congress sets those fees, and it’s been reluctant to raise them in the face of opposition from business and labor groups. Because the fund isn’t expected to run out for a decade or more, there is little impetus to raise rates.

OYSTER BACKLASH

FDA backs off oyster ban

Facing fierce resistance, the Obama administration on Friday backed off a plan to ban sales of raw oysters from the Gulf of Mexico during warm weather.

The Food and Drug Administration told lawmakers it will put the proposal on hold while it studies ways to make consumption of raw oysters safer, according to several lawmakers.

The oyster industry - as well as Democrats and Republicans across the Gulf - blasted the plan as government meddling. They said it could have killed a $500 million industry and thousands of jobs.

“By reversing course, the FDA has acknowledged that its original plan was unreasonable and that we need a common-sense approach to protecting the small number of at-risk consumers,” said Sen. Mary L. Landrieu, Louisiana Democrat, who said FDA Commissioner Dr. Peggy Hamburg informed her of the decision by telephone.

About 15 people die each year in the United States from raw oysters infected with Vibrio vulnificus, which typically is found in warm coastal waters between April and October. Most of the deaths occur in people with weak immune systems caused by health problems like liver or kidney disease, cancer, diabetes or AIDS.

The oyster industry has been working with regulators for years to improve its safety performance by increasing refrigeration and trying to raise awareness of the hazards to people with weak immune systems.

But the FDA says the results haven’t changed much.

ABORTION

RNC health insurance plan covers abortions

The Republican National Committee’s health insurance plan covers elective abortions for its employees, an option Republicans strongly oppose in health overhaul legislation that Democrats are trying to push through Congress.

Republican Party Chairman Michael S. Steele learned of the policy’s abortion coverage Thursday through a news report and immediately instructed staff to inform the insurance carrier that the RNC wanted to opt out of elective abortion coverage, RNC spokeswoman Gail Gitcho said.

“Money from our loyal donors should not be used for this purpose,” Mr. Steele said in a statement. “I don’t know why this policy existed in the past, but it will not exist under my administration. Consider this issue settled.”

Miss Gitcho said the policy has been in effect since 1991.

The GOP platform traditionally includes strong anti-abortion language. All House Republicans, except one, voted for an amendment imposing restrictions of coverage for abortions in the health care bill that passed the House last Saturday. Inclusion of the abortion restrictions prompted an angry backlash from liberal House Democrats, and some are now threatening to vote against a final bill if the curbs stay in.

On Thursday, Politico.com published a report citing two sales agents for Cigna who said the RNC’s policy covered elective abortion.

ENERGY DRINKS

Alcoholic energy drinks in question

The Food and Drug Administration is challenging makers of alcohol-infused energy drinks to prove their beverages are safe, citing complaints that the products can cause risky behavior and injury.

The FDA issued a letter Friday to 30 beverage manufacturers, giving them 30 days to provide evidence that the combination of caffeine and alcohol is safe.

“Today the FDA has listed caffeine only as an ingredient for use in soft drinks,” said Deputy Commissioner Dr. Joshua Sharfstein. “The agency has not approved caffeine for use in alcoholic beverages.”

FDA officials stressed they have not reached a conclusion about the safety of beverages like Joose and Charge. Instead they are trying to understand the companies’ legal rationale for marketing the products.

“There are some unusual safety questions raised by the addition of caffeine to these alcoholic beverages,” said FDA special adviser Mike Taylor. “So the burden is on the companies to provide evidence that supports the conclusion this use is safe.”

The FDA decided to take action at the urging of state attorneys general from New York, California, Maryland and 16 other states, who contend the drinks appeal to underage drinkers and encourage reckless behavior. Young adults already are the primary demographic for highly caffeinated drinks like Red Bull.

HEALTH CARE

First Lady: Overhaul will help older women

First lady Michelle Obama sought to assure older women on Friday that efforts to overhaul health care won’t undercut the benefits they receive through Medicare, saying her husband considers the government-run program a “sacred part of America’s social safety net.”

Mrs. Obama, championing the health care effort at the White House while her husband travels through Asia, said women are among those struggling the most under the current system and would benefit from health care overhaul.

She said there’s been “a lot of misinformation” and she wanted to be clear that the legislation in Congress would make Medicare more stable by eliminating wasteful subsidies to private insurance and cracking down on fraud.

“My husband believes that Medicare is a sacred part of America’s social safety net and it’s a safety net that he will protect - he will protect - with health insurance reform,” said Mrs. Obama, a former hospital executive. “America has a responsibility to give all seniors the golden years they deserve.”

To pay for part of the overhaul, the House bill would cut more than $400 billion from Medicare and Medicaid over 10 years. Democrats argue that the cuts can be made especially to the Medicare Advantage program that lets private insurers contract with Medicare to provide coverage. Republicans counter that seniors would be hurt by the cuts, and Congress’ nonpartisan budget analyst told a Senate panel that benefits could indeed be reduced.

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