Loyalty: Not What It Used to Be, But is Washington to Blame?

Loyalty to your employer used to be one of the most important values that any employee could have, and no one can deny the role it has always played in career advancement. And until as recently as last week, you might have been forgiven for thinking that it was one of the values held most dearly by the Bush Administration. Ah, but how quickly things can change. I. Lewis “Scooter” Libby has now fallen on his sword to earn a criminal indictment, while Harriet Miers gets to watch from the sidelines as another Supreme Court nominee wins the plaudits she had desperately hoped to earn along the way. But when you look at how this administration has dealt with an increasingly important policy issue – retirement, and pensions in particular – it’s clear that loyalty no longer gets you nearly as far as it used to.

Washington had been buzzing for weeks, and no longer was the noise not much more than a faint opposition to Republican domination. Who would be indicted for ruining the CIA career of Valerie Plame Wilson – punishing someone who by all accounts was very loyal to her organization (see Associated Press article) because of her marriage to someone who was not so loyal? To the Administration, that is, although you could certainly argue that Joseph Wilson’s loyalty was first and foremost to the truth.

Would it be Deputy Chief of Staff Karl Rove – whose loyalty to the President has made him arguably the powerful man in America? Or Vice President Dick Cheney, whose loyalty to George Bush, Sr., brought him back to serve in this administration despite the apparent extreme detriment it represents to his health?

Not yet: so far, only Scooter (which is more fun to call him than Libby), Vice President Cheney’s chief of staff, is taking it for the team, while others wait to see whether Rove and Cheney’s loyalty will be enough to preserve them from the grasp of Special Prosecutor Patrick Fitzgerald. Last Friday, Scooter was indicted and forced to resign, while Fitzgerald’s investigation remains ongoing. (See Associated Press article.)

The end of last week was a busy couple of days in Washington. Just the day before, the news quickly spread that Harriet MiersSupreme Court nomination was history. It was not to be, as both conservative and liberal opposition had spread so widely that it was going to be impossible to avoid an embarrassing set of confirmation hearings – and subsequent votes. (See Knight Ridder article.)

Miers, who once called George W. Bush the most brilliant man she had ever met (now that’s loyalty for you!) was also paying the price for her loyalty. Or perhaps President Bush was paying the price for his loyalty to her, which seemed to blind him to her unsuitability as a Supreme Court nominee. At least she still has a job – unlike Scooter – as she returns to her role as White House Counsel – destined to continue vetting Supreme Court nominees rather than ever realizing that dream (which honestly was probably never on her list anyway) herself.

But is it really so surprising that the value of loyalty seems to have recently plummeted faster than stock in the major airlines and auto manufacturers? (Oops, there’s some more employers to which long-term loyalty has become almost devoid of value?) Not really, when you look at the Administration’s retirement policy. A system whose value has depended on loyalty is being dismantled in front of our eyes. This weekend’s New York Times Magazine feature story, The End of Pensions, shows just how far we’ve gone past the point of no return.

Many corporate pension plans are in deep trouble. As the Times article points out,

The amount of underfunding in corporate pension plans totals a staggering $450 billion. Part of that liability is attributable to otherwise healthy corporations that will most likely, in time, make good on their obligations. But the plans of the companies that fail will become the responsibility of the government’s pension insurer, the Pension Benefit Guaranty Corporation. The P.B.G.C., which collects premiums from corporations and, in theory, is supposed to be self-financing, is deeply in the hole, prompting comparisons to the savings-and-loan fiasco of the 1980’s.

State and local government pensions are not doing much better themselves. The Times article notes:

Public pensions, which are paid by taxpayers and thus enjoy an implicit form of insurance, are underfunded by a total of at least $300 billion and arguably much more. While governments have been winking at these deficits for years, they are now becoming intolerable burdens for taxpayers.

What is the Administration’s solution? According to the article,

The tough medicine favored by the Bush administration, which would eliminate loopholes in the system as well as much of the subsidy that now exists in the insurance system, would lead to more companies freezing their plans or leaving the system outright. The number of pension plans would continue to shrink and in time all but disappear. This would strip the elderly of the future of what is still the most secure form of retirement income. The fear of runaway pension costs plainly echoes the Social Security debate, and many suspect that the Bush administration would not much mind if pensions did disappear.

Is that true? Would the Bush administration just as soon be done with pension plans altogether? Roger Lowenstein, who wrote the Times article, says

I put that recently to Elaine Chao, the secretary of labor, and while her answer was diplomatic, she made no bones about the fact that, in the administration’s view, traditional pensions are losing their relevance. ‘Defined benefit plans have their advantages,’ she told me, ‘but in an increasingly mobile 21st-century work force, the lack of flexibility of D.B. plans is yielding to greater usage of defined contributions plans.’

When it is the Government’s view that a retirement system based upon long-term loyalty and employers honoring their promises equates to a “lack of flexibility,” you can see where we’re headed here. “Flexibility” just becomes a code word for selling out the most loyal long-term employees to suit the employer’s interests, just like the Administration needed the flexibility to torpedo Miers and Libby to halt the political freefall. It’s okay to be “mobile,” with no long-term loyalty to any particular employer: in fact it’s better, if you don’t want to keep working forever and hope to devote any time and effort to anything but your employer during your lifetime.

Don’t you bet that Scooter and Harriet are asking themselves some serious questions about loyalty right now? Perhaps it’s something that every American worker needs to think about, especially as it relates to their future retirement plans.

More Information:

Short-Changed: Broken Promises

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Madeline Messa

Madeline Messa is a 3L at Syracuse University College of Law. She graduated from Penn State with a degree in journalism. With her legal research and writing for Workplace Fairness, she strives to equip people with the information they need to be their own best advocate.