U.S. House snubs Senate-proposed pension relief
Reuters, 12.08.03, 8:04 PM ET
By Susan Cornwell
WASHINGTON, Dec 8 (Reuters) - Chances for billions of
dollars in proposed pension relief for troubled U.S. airlines
and other companies this year dimmed on Monday as the House of
Representatives headed home for the holidays without acting on
a deal proposed by the Senate.
Each chamber has been hoping the other would break the
stalemate that has developed in pension policy, despite intense
pressure from the business world to act to keep an estimated
$350 billion in underfunding of traditional pension plans
nationwide from growing even larger.
Airlines in particular are eager to get a break from
special "catch-up" payments they need to make to their severely
underfunded pension plans. No. 2 United Airlines, a unit of UAL
Corp. <UALAQ.OB>, estimates it will have to pay nearly $5
billion by the end of 2008 to resolve underfunding in several
pension accounts.
But older industries across the board that offer
traditional "defined benefit" pensions also want changes in the
rules about interest rates used in pension calculations, so
that their pension liabilities will look smaller.
Sen. Charles Grassley, an Iowa Republican, had hoped to
convince the House to pass a pension package including both a
temporary interest rate fix and extra relief for severely
underfunded plans.
But House lawmakers said they had already approved two
measures to give companies limited short-term relief to deal
with pension underfunding, and were not inclined to consider
the Senate proposal now, especially since there was no
guarantee Grassley could get it through the Senate this week.
"Last-ditch efforts to ask the House to pass yet another
pension fix before any assurance of Senate action were too
little, too late," said Rep. John Boehner, chairman of the
Education and Workforce Committee.
"The House has done its job, and we remain hopeful the
Senate will pass one of the two House-passed proposals tomorrow
or address this issue early next year," Boehner declared in a
statement as House members were finishing up their last day in
session this year.
Senate aides were not optimistic that either of the
House-passed pension relief bills could move through their
chamber when it returns to work on Tuesday, possibly its last
day of work this year. Both chambers must pass the same version
of legislation before it can become law.
One House proposal by Boehner, an Ohio Republican, would
let all businesses with traditional pensions use an index of
long-term corporate bond rates in figuring out their pension
liabilities over the next two years.
The Bush administration favors this proposal because it
contains no special breaks for companies that are way behind in
their pension payments.
The federal agency that insures pensions, the Pension
Benefit Guaranty Corporation, on Monday urged the Senate to
pass the Boehner bill, saying it was the "one last chance" for
a sensible approach while efforts for long-term pension reform
continue.
The other House proposal includes the first one but adds a
special break for airlines, letting them reduce by 80 percent
the extra contributions they would otherwise have to make in
order to make up for pension shortfalls.
Copyright 2003, Reuters News Service