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Obama bypasses Brown, appoints head of PBGC
By GRACE WYLER
President Barack Obama has bypassed U.S. Sen. Sherrod Brown and appointed a new head of the Pension Benefit Guaranty Corp. during the Senate recess, the White House announced Wednesday.
Brown blocked the nomination of Joshua Gotbaum, Obama’s choice to serve as director of the PBGC, in May to express his objection to the treatment of Delphi Corp.’s salaried retirees.
The salaried retirees’ pensions were cut by 30 percent to 70 percent when the Delphi pension plans were turned over to the PBGC during the government’s restructuring of General Motors last year. GM agreed to cover the pension losses of most of Delphi’s hourly workers but no provisions were made for salaried employees.
Brown said he put the hold on Gotbaum’s appointment in order to urge the White House to bring GM to the table to meet their pension obligations to the Delphi retirees. Moreover, Gotbaum, who has recused himself from making decisions regarding Delphi, would be unable to resolve the issue, Brown said.
“I wanted to say to the White House that I am going to do everything I can to fix the issue with the Delphi retirees,” Brown said. “I don’t want a director of the PBGC who can’t deal with one of the PBGC’s largest issues.”
Gotbaum has done consulting work for Elliott Management Corp., one of the major owners of Delphi Holding Corp., on the company’s Delphi investment. He won’t be able to make decisions regarding the Delphi pension issue for one year.
U.S. Rep. Tim Ryan of Niles, D-17th, said he was “extremely disappointed” by the administration’s decision to appoint a PBGC director who is unable to resolve the Delphi issue.
Ryan, along with U.S. Rep. Charlie Wilson, D-6th, organized a congressional field hearing on the challenges facing Delphi retirees. The House Financial Services Oversight and Investigations Subcommittee will host the hearing at 9 a.m. Tuesday in the Canfield High School auditorium.