Uncertainty Describes 2008 Election Results Impact on ESOPs -The Election of 2008 and Its Impact on ESOPs shares the remarks delivered by the ESOP Association president J. Michael Keeling at the 2008 Las Vegas Conference. He discussed how the 2008 election results are like the 1980s all over again:
In 1984, we, the ESOP community had to fight for our lives in the House tax committee, the House Ways and Means Committee; we had to fight for our lives in 1985; we had to fight for our lives in 1987; we had to fight for our lives in 1989. And while we had to fight for our lives, we won more often than we lost. We survived. The House Ways and Means Committee in the 80s was controlled by the Democratsjust like in 2009/2010.
He discussed the push toward the reduction of the corporate tax rate. The Rangel tax proposal, the Treasury Department, and the Congressional Budget Office have recommended cutting ESOP "corporate tax loopholes" to fund the corporate tax rate cut. He also mentioned the war on 401(k) and defined contribution plans fueled by the recent decline in the stock market.
The drumbeat from the leaders of the two House committees with jurisdiction over ERISA plans is that all retirement savings plans should not have any risk, that all private sector plans should be like defined benefit plans. [The two committees are the House Ways and Means Committee, and the House Education and Labor Committee.]
These leaders are joined by prominent media pundits, such as Jane Bryant Quinn, a nice person who I spoke with just recently about ESOPs, but who says, "An employee who works for a company with an ESOP should find another job," and her remarks go along with what we have read in national newspapers recently, which is, "the stupidest thing a person can do is own stock in the company where they work."
He discussed the 2005 Letter from Barack Obama Regarding ESOPs and speculated on Obama's view of ESOPs:
What I now say is pure speculation on my part, but I do not believe I am too far off the mark. As an elected official representing Chicago in the Illinois State Legislature, and in the Congress representing the rest of Illinois as well, President-elect Obama has to have had many an employee of United Airlines complain about the United ESOP. He has to have heard complaints from the failed Peoria company, Foster and Gallagher, and as a former law professor at the University of Chicago, the many law suits arising there from.
He also noted that Lawrence Summers, an Obama economic advisor, vigorously opposed pro-S ESOP legislation. Unfortunately, Keeling noted, we do not have a friend in the White House like we had in the 80s in President Ronald Reagan.
He ended by stressing the importance of ESOP advocacy and moving more Democrats to be for ESOPs.
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