New York Times: What's Online - Here Comes The Cram Down

Dan Mitchell

Saturday May 28th 2005; Page 5

THANKS largely to the ever expanding pension debacle, we are in the middle of ''the Decade of the Cram Down,'' declares Daniel Gross, who writes the Moneybox column for Slate (

''Cram down'' is somewhat indelicate finance jargon for stockholders' being forced to accept less-than-desirable compensation, like junk bonds, in the event of a merger. Mr. Gross broadens the term to include the many areas of public and private life where an ''entity charged with managing the investment'' has botched it, ''frittered away cash'' or sought bankruptcy.

''And this,'' Mr. Gross argues, ''is the theme that is defining personal, corporate and government finances this decade.''

Corporate pension plans, which are supposed to be guaranteed by the federal government, are getting all the attention now -- and with good reason. Old-line industries like steel and airlines have reeled since the 1990's boom went bust, and many companies have turned up their hands, telling longtime workers, Sorry, but we already spent your retirement money. The United Airlines plan, for example, fell short by $9.8 billion before it was taken over by the federal Pension Benefit Guaranty Corporation (

But that body will guarantee only about two-thirds of United's pension promise.

Mr. Gross, a contributor to The New York Times, expands his thesis to take on Republican plans to overhaul Social Security.

''It's not that Congress and President Bush can't adequately fund Social Security,'' he writes. ''It's that they just don't want to. Instead, they want to cram us down.''

The nonpartisan Center on Federal Financial Institutions ( provides a wealth of information on pension plans, including evenhanded comparisons of both old-style plans and personal-account plans like the 401(k).

The center's home page features about a dozen in-depth studies of various aspects of the pension problem, as well as transcripts of forums on the matter. This is true honest brokering, without a hint of dogma or advocacy for anything other than understanding and solving the problem.

The collection of documents explain, in refreshingly understandable language and helpful charts and graphs, how we got into this mess, and analyzes various proposals for getting out of it.

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