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Thursday, March 07, 2002

By Jim McKay, Post-Gazette Staff Writer

With its fight over steel tariffs largely won, the United Steelworkers union is setting its sights on persuading Congress to pick up the tab for an estimated $12 billion in unfunded retiree health benefit costs.

Leon Lynch, international vice president of human affairs, said yesterday that the union is launching an "unprecedented campaign of political activism" to win federal protection of retiree benefits endangered by the industry's financial troubles.

"The perpetrators have been judged guilty," Lynch said, referring to President Bush's decision to impose tariffs on a range of steel imports that the United States contends are being dumped into the country at prices that harm domestic producers. "Now it's time to protect the rights of the victims."

At issue are supplemental health-care benefits for retirees or their surviving spouses who now receive Medicare coverage, and health benefits for retirees who are too young to qualify for Medicare assistance.

Pensions are not part of this particular fight. Many companies have improved pension funding and defined benefit plans are insured by the federal Pension Benefit Guaranty Corp., although generally at reduced levels.

At the forefront of the crisis are some 85,000 LTV Steel retirees and surviving spouses who will lose their health-care benefits at the end of this month. LTV has sold its assets in bankruptcy court and the new buyer did not assume the health-care liabilities.

With the bankruptcy filing yesterday of National Steel and filings made by 31 other companies since 1997, the union estimates that the health-care benefits of some 600,000 retirees are at risk.

To succeed, the union must overcome critics who question why ex-steelworkers should get special treatment, given that millions of workers from other industries are expected to retire only on Social Security plus Medicare.

The union argues that more than the lives of the retirees are at stake. It contends that the domestic steel industry will not be able to quickly reorganize under the tariff protections imposed this week if retiree benefits -- known as legacy costs -- are unfunded. Potential buyers, it said, will not be willing to take on that burden.

It also argues that the domestic industry is the only one in the world that must bear the costs of retiree benefits, thus putting American producers at a significant cost disadvantage.

"If we don't deal with the legacy costs, it will be very difficult if not impossible for the industry to restructure," said James English, the union's international secretary-treasurer.

Finally, the union also puts forth the moral argument that many of the retirees were prematurely forced into retirement by the industry's downsizing in the 1980s and are now being penalized a second time. And it cites a poll conducted for it last year that found nearly 3 of 4 people surveyed favored having the federal government help protect the financial health of steel worker retirement and health-care programs.

The union is working with U.S. Sen. Jay Rockefeller, D-W.Va., and other steel region lawmakers to help draft legislation that would create a trust fund from which benefits would be paid. Rockefeller said Tuesday that the effort will need the support of the Bush administration.

"We've had a number of talks with them about it," Rockefeller said. "And the body language has been mixed. But there can be nothing mixed about the importance of doing legacy legislation."

One idea is to use the money from the tariffs imposed by President Bush, but English said the union is not necessarily tied to that proposal as the only way to accomplish the funding.

"Frankly, we don't care how it's funded just as long as it's funded," he said.