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Pension bill likely in House this week

Posted on: Tuesday, 13 December 2005, 18:20 CST

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.

Source: REUTERS

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