Pension bill likely in House this week

By Susan Cornwell

WASHINGTON (Reuters) – A major union endorsed U.S. House
legislation aimed at shoring up the traditional pension system
on Tuesday, breaking a logjam that had blocked progress on the
bill and making a vote likely this week.

The United Auto Workers (UAW) endorsed the measure after
its Republican sponsors pledged to undo provisions that the
union said would have frozen pension benefits at the Big Three
U.S. automakers — General Motors Corp., Ford Motor Co. and
DaimlerChrysler AG’s Chrysler Group.

Opposition from the UAW, a major constituency of Democrats,
had stymied attempts to get Democratic support for the
legislation, which is also aimed at preventing a taxpayer
bailout of the deficit-ridden federal agency that insures
corporate pensions.

Changes to the bill would also allow “shutdown” benefits to
be paid to workers idled by plant closings, if their pension
plans are at least 80 percent funded, the UAW said.

“Based on these changes, the UAW supports H.R. (House
Resolution) 2830 and urges you to vote for this bill,” the
union’s legislative director, Alan Reuther, said in a letter to
all House members.

The bill is likely to come to the House floor for a vote
this week, said the Acting Majority Leader, Missouri Republican
Rep. Roy Blunt.

“We’re confident many Democrats will support the bill when
it comes up for a vote,” said Kevin Smith, an aide to Ohio
Republican Rep. John Boehner, co-sponsor of the bill along with
California Republican Rep. Bill Thomas.

But the ranking Democrat on Boehner’s Education and
Workforce Committee, Rep. George Miller of California, issued a
statement saying he was unconvinced. The Republican bill, he
said, actually “makes America’s pensions less secure.”

The bill gathered further steam as a spokesman for General
Motors, which had not taken a clear position on the House
measure, said the world’s largest automaker backed it.

While the company and union concerns about the bill
sometimes dovetailed and sometimes differed, resolving the
UAW’s worries “pushes this thing farther along,” said GM
spokesman Jerry Dubrowski.

Lawmakers have been getting mixed signals from the business
community on the pension bill. Business says it wants pension
reform enacted, but some companies worried about proposed new
funding requirements have sought to modify them and Republicans
in particular are loath to make changes that could hurt
distressed industries such as automobiles.

The bill rewrites the rules that govern the funding of
traditional “defined benefit” pensions, which have a fixed
payout at retirement. It increases premiums that companies pay
to the insurance agency, the Pension Benefit Guaranty Corp.

The Senate earlier this month approved a version of the
legislation that included extra relief for struggling airlines,
which the House version does not have. Ultimately, the two
chambers would have to approve the same version before it could
become law and this might not happen before next year.

The Bush administration is unhappy with both the House and
Senate versions of the bill, saying they fail to strengthen
pension funding requirements sufficiently.