Swiss Missed

Swiss Missed

Swiss Missed

A summary of what's in the major U.S. newspapers.
Feb. 1 2002 7:05 AM

Swiss Missed

The Washington Post, New York Times, and USA Todayleads announce that today President Bush will recommend measures that would prevent workers from losing their 401k-invested life savings, as many Enron employees did. One key recommendation: Workers should be allowed to sell any company stock held in retirement accounts after three years instead of having to hold onto stock for decades, as some companies now require. The lead at the Los Angeles Times is a contribution to the press' effort to pin down whether Bush's State of the Union comment that Iraq, Iran, and North Korea represent an axis of evil is just rhetoric or signals a policy shift. The first item in the Wall Street Journal's world-wide news box says that Bush's proposed $48 billion increase in the defense budget is good news for defense contractors. The money will buy many Raytheon-manufactured Tomahawk missiles and C-130J cargo planes from Lockheed Martin. Congress isn't expected to object much to the spending increase.

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Many companies have potential traps in their 401k plans that are similar to Enron's, the papers report. To varying degrees, the papers evaluate Bush's proposals in the context of what went wrong with Enron 401k plans, the details of which have been reported over the last several weeks. USAT's lead provides little context, while the WP and NYT scatter bits of Enron background throughout their pieces. Today's Papers will sum up: Many Enron employees' 401k accounts were loaded with Enron stock because the company, as many companies do, matched employees' 401k stock contributions with more Enron shares. Employees were barred from selling the stock Enron used to match their contributions until age 50. In addition, when Enron stock was free-falling last autumn, the company imposed an ill-timed blackout on selling company stock held in 401k plans while it switched plan administrators. This investment plan lost $1.3 billion for 21,000 people in one year.

Under Bush's proposal, employers would be legally required to protect worker investments during times when they are forbidden to sell stock (the papers don't explain how this law would work), and they would also need to give employees 30 days notice before such blackout periods. In addition, a company's upper management would not be allowed to sell stock during times when employees couldn't. Enron executives sold lots of stock during the fall blackout. Finally, some of Bush's recommendations appear to be geared toward protecting employees from themselves, though the papers don't explicitly point this out. Companies would be encouraged to provide independent financial advisers to employees, and they would be required to pass out quarterly statements on employees' portfolios' performance (now required annually, the WP notes), which would also remind them of the importance of diversifying assets. Democrats have competing bills in the works.

The LAT reports that Bush toughened his warnings to Iraq, Iran, and North Korea yesterday, saying they need to "get their house in order." But the paper doesn't come up with any clear answers on what Bush intends to do about terrorism-sponsoring nations. The LAT notes, as the WSJ did yesterday, that State Department officials have insisted that Bush's comments reflect a change in priority, not policy. But, the paper says, Defense Secretary Rumsfeld said Bush meant there was a need for action to head off immediate danger. The LAT concludes therefore that the various interpretations of Bush's remarks mean that the administration is arguing over the future of the war on terrorism.

The WP thinks it has definitive information on what Bush is thinking: According to senior aides, the president has not ruled anything out, but he was not signaling imminent military maneuvers. Instead he wanted to encourage the world to strengthen nonproliferation regimes and to keep dangerous technologies away from undesirable nations so that military action against countries that seek weapons of mass destruction does not become necessary.

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The papers report that WSJ reporter Daniel Pearl's kidnappers have extended their deadline for their demands to be met by one day.

The LAT front announces that U.S.-Philippines joint military exercises have begun after the countries resolved differences over how the mission would work. It's officially considered a training event, as the Philippines' constitution forbids foreign troops from operating in the nation, but Americans will carry live ammunition as they hunt the Abu Sayyaf terrorist group alongside Philippines forces. The WSJ reports that an American military plane was slightly damaged by hostile fire during exercises in the Philippines. Iraqi opposition forces want American military training too, the NYT reports inside. The Iraqi opposition has renewed its request for such training, hoping that Bush's declaration that Iraq is evil will inspire the State Department to reconsider its belief that training the opposition is not practical.

The NYT offleads Israeli Prime Minister Ariel Sharon's lament that Israel didn't kill Yasser Arafat when it had a chance to 20 years ago in Lebanon. Though Sharon says he believes Arafat could still play a role in the peace process today, the Palestinians think Sharon intends to correct the mistake he made back then.

The Bush administration has proposed that fetuses be eligible for government-funded health insurance, the papers report. This way, low-income mothers will get prenatal care, officials say. In its opening paragraph, the WP piece points out that this is the first time the government has tried to define childhood as beginning before birth. Opponents of the plan say that by calling the fetus a child, Bush is taking the first step toward outlawing abortion.

The NYT seems to have fun with a front-page analysis of how socially competitive the New York version of the annual World Economic Forum meeting is. Some high-flyers who were not invited to certain parties during the WEF meeting may miss the Swiss incarnation of the event where things are a little more low-key. The "W.E.F. Smackdown" as the reporter calls this year's gathering, has left the likes of financier George Soros and Heidi Klum, who the paper can't resist identifying as a supermodel "best known for her ability to display the charms of the Victoria's Secret Miracle Bra" among the uninvited.