TEXT OF COMMENTARY

KAI RYSSDAL: The House of Representatives worked late into the night Friday to wrap things up before vacation. Lawmakers passed a pension overhaul bill, among other things. If the Senate passes it this week. it would be the first in more than 30 years. There’s a government agency that guarantees pensions gone bust, but commentator and economist Jeremy Bulow says Congress is sticking its head in the sand with this bill.

JEREMY BULOW: We’ll hear a lot less about risky, under-funded pension plans if Congress passes its reform legislation. And that’s not good news. We’ll hear less only because of sharply reduced disclosure requirements.

Right now, companies with pension plans short more than $50 million file a form. That’s how the Pension Benefit Guaranty Corporation monitors over $350 billion in plan deficits.

Congress has always prohibited the PBGC from disclosing this information to the companies’ employees, even though the forms don’t really contain any proprietary or trade secret information.

Now, the Bush Administration isn’t exactly a leader in the battle for openness. But it quite reasonably proposed that workers should get this information about their own pension plans.

Congress responded, but to heavy lobbying from business interests. The House originally added enough loopholes so that only 40 of the current 429 companies would have to report. In the bill passed Friday night there is still a large, unannounced cut in disclosure by big deficit plans.

Employees in those plans that do report will get some limited information. But the companies can use a different set of books to make the plans look stronger. By hiding information, companies can reduce the pressure to set aside enough money to cover their pension promises in the first place.

But disclosure is critical. One good example comes from the US Airways disaster. US Airways didn’t put any money in its pension plan for four years. Instead, it spent almost $2 billion buying back its stock.

Two years later, it left its pilots and the government in the lurch. If the pilots had known how underfunded their pensions were, they might have stepped in and stopped that buyback.

Congress’s ostrich approach to pension deficits just makes the problem worse. Only this time, you and me, the taxpayers and the workers, will be left holding the bag.

RYSSDAL: Jeremy Bulow is a professor of economics at Stanford University’s Graduate School of Business.