>Last week the Senate passed the Pension Stability Act by an overwhelming 86-9 margin, a measure that provided a temporary fix to the pension liability calculation dilemma (see Senate Passes Pension Funding Bill ). The US Pension Benefit Guaranty Corporation (PBGC) estimates the legislation could save $80 billion over the next two years, according to a news release by the office of the bill’s sponsor Senator Judd Gregg (R – New Hampshire).
>The Senate version included a controversial deficit reduction contribution provision (DRC) opposed by the Bush Administration – a provision that would offer companies with severely underfunded pension plans a two-year reprieve from the stringent funding provisions under the DRC (see PBGC Calls Out DRC Modifications ). The House of Representatives passed a similar relief bill last October – by an overwhelming 397-to-2 margin – but without the controversial DRC bailout provision (see US House Solidly Approves Pension Funding Bill ). The Senate-approved version grants roughly $16 billion in breaks to companies via a reduction in DRC. Under the DRC provisions, airline and steel companies, those hit hardest by the recent pension underfunding storm, could waive 80% of those payments the first year and 60% the second year (see Details Emerge on DRC Provision of Senate Bill ).
>Now, however the Democrats have refused to start talks to reconcile the Senate bill with that passed by the House, until they receive assurances that they will have full participation in the negotiating sessions. “We just want their assurances that they will not repeat the painful experiences of the energy bill and the Medicare bill last year,” Senate Democratic leader Tom Daschle said, according to Reuters. “We were totally and literally locked out in some cases … I just want to go back to regular order,” he said.
>Republicans fumed at the intransigence. “At some point I would advise our (Republican) leader, to put it to the Democrats, to go to conference, or forget about the pension bill,” a clearly annoyed Senator Charles Grassley (R-Iowa), a co-author of the Senate pension bill, told reporters yesterday. “I don’t want to forget about the pension bill, but it’s time that we as a majority party do not allow the Democrats to shut down the whole legislative branch of government,” Grassley said, according to a Reuters report.
“He killed defined contribution pension reform as Senate Majority Leader, and now he’s blocking the path for defined benefit pension reform as Senate Minority Leader,” said House Education & the Workforce Committee Chairman John Boehner (R-Ohio) in a statement. “Senator Daschle’s refusal to move forward on this bipartisan pension proposal raises serious concerns about his commitment to protecting the retirement security of American workers.” Boehner was sponsor of the House bill.
>If Daschle refuses to budge, the House could take up the Senate version and pass it, but deep concerns about the DRC break for airlines and steelmakers make that an unlikely prospect.
>Meanwhile, the last temporary interest rate relief bill expired on December 31 – and April 15 is the deadline for companies to make contributions for benefits accrued by their workers during the first three months of this year.