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The Labor Department cautioned organized labor in a letter made public Wednesday not to use money from pension funds to lobby against President Bush’s proposal to overhaul Social Security. “The department is very concerned about the potential use of plan assets to promote particular policy positions,” Alan D. Lebowitz, a department official, wrote AFL-CIO’s top lawyer. In the letter to Jonathan P. Hiatt, AFL-CIO’s general counsel, Lebowitz also wrote that officials charged with administering multistate pension funds must not hire or fire service providers primarily on the basis of their positions on Social Security legislation. Damon Silvers, an AFL-CIO lawyer, declined comment on the portion of the letter relating to what he termed “participant education.” As for hiring decisions about investment companies, he said, “we have no problem” with the letter. He said the AFL-CIO has considered a company’s position on Social Security as a “collateral issue,” and not as the sole or primary basis for a decision. Lebowitz sent the letter after GOP Reps. John Boehner of Ohio and Sam Johnson of Texas requested an investigation. They cited media reports “indicating that organized labor has engaged in concerted activity to pressure financial firms and brokerage interests to withdraw their support of the president’s proposal to reform Social Security.” The Labor Department letter to the AFL-CIO marked a political turnabout of sorts. Democrats have complained for months that the White House has improperly used the Social Security Administration itself to lobby on behalf of Bush’s proposals. Last month, the AFL-CIO trumpeted success in persuading one financial services company, Waddell & Reed, to drop its membership in the Alliance for Worker Retirement Security, a group lobbying for personal accounts. The announcement came a day before the labor federation planned a demonstration at the firm’s headquarters outside Kansas City, Mo. Organized labor opposes Bush’s call for Social Security solvency legislation that would allow younger workers to divert a portion of their payroll taxes into personal accounts. Democrats also are strongly opposed, and congressional Republicans are moving slowly, fearful of potential political repercussions. Rep. Bill Thomas, R-Calif., chairman of the House Ways and Means Committee, has announced plans for weekly hearings beginning this month on retirement issues, including Social Security. Among the witnesses scheduled to testify is Robert C. Pozen, an investment company executive and architect of a plan to help restore solvency to Social Security. Bush spoke favorably last week of Pozen’s approach, which would reduce benefits promised to future middle and upper income retirees. Thomas said last week he hopes to present legislation to the committee in June. Speaker Dennis Hastert, R-Ill., said during the day he wasn’t going to be “nailed down to one specific timetable” for a vote by the full House. Copyright 2005 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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