Senate negotiators agreed yesterday on bipartisan legislation to shore up the nation's private pension system, and the House Republican point man on the issue predicted swift passage.
The deal is likely to mean that the pension legislation will pass as a stand-alone measure, not as a piece of a larger retirement security bill that would include President Bush's call to add private investment accounts to Social Security. Rep. Bill Thomas (R-Calif.), chairman of the House Ways and Means Committee, had hoped to use the pension legislation -- considered a must by corporate America -- to provide political momentum for Social Security changes.
But Rep. John A. Boehner (R-Ohio), chairman of the House Education and the Workforce Committee, said the centerpiece of Bush's domestic agenda has stalled in the face of political opposition.
"It's like asking Congress to eat a bowl of cold green peas," Boehner said in a forum on pension issues. "They don't want to do it."
The logjam on the pension bill was broken by the Republican and Democratic leaders of two Senate panels -- the Health, Education, Labor and Pensions Committee and the Finance Committee.
"Hardworking Americans who spend a lifetime earning their pensions deserve to reap the benefits they are promised in retirement," said Sen. Mike Enzi (R-Wyo.), the Labor and Pensions Committee chairman.
Senators were trying to balance two competing issues. They hoped to ease the burden on employers struggling to keep pension plans fully funded, but they also needed to shore up the federal Pension Benefit Guaranty Corp., which is badly in debt.
Under the compromise, the formula for determining whether a pension plan is fully funded would be adjusted to ease funding requirements. Currently, pension plans must adjust expectations for the return of pension plan investments to reflect current interest rates. Since interest rates have been low for several years, big increases in pension funding were required.
But the legislation would also increase premiums that companies pay the PBGC to $30 per employee from $19. It also would place restrictions on benefit changes after a corporation declares bankruptcy.
With the backing of conservatives like Enzi and liberals like Sen. Edward M. Kennedy (D-Mass.), the pension committee's ranking Democrat, Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) predicted that the bill would pass easily.
"Now more than ever, workers deserve the support of Congress to preserve their hard-earned pensions," Kennedy said last night in a written statement. "This bipartisan legislation will do just that."
If adopted by the Senate, it would have to be reconciled with a House version that Boehner said is likely to pass before the end of October.