U.S. SENATE Pension reform bill hits standstill

The House might tackle its own version in November.
WASHINGTON (AP) -- Nearly everyone -- business, labor, Republicans, Democrats -- agrees that something must be done to sustain company-based pension plans and make sure that the federal agency insuring them doesn't become a financial basket case.
Getting Congress to agree on legislation is another matter.
The Senate, on the verge of passing a bill several weeks ago, has since stalled, unable to come to terms with several lawmakers, backed by business and labor groups, who oppose requiring companies with poor credit ratings to pay more into their pension funds.
Proposals to change the annual premium that companies pay into the federal fund that insures benefits -- now $19 per participant -- could mean a premium as high as $46.75.
Confident of deal
Those involved in the effort to shore up the funds say they are confident a deal can be reached this year. "It will come up. It's too important for it not to," said Sen. Barbara Mikulski, D-Md., who, with Sen. Mike DeWine, R-Ohio, is trying to change the credit rating provision.
The House could take up its version of pension reform in November. That bill might be expanded to include other retirement issues, though President Bush's ambitious if ill-received proposals to overhaul the Social Security system probably will not be among them.
The pension bills have two basic goals. The first is requiring companies with traditional defined-benefit pension plans to meet their funding obligations. The second is ensuring the future solvency of the Pension Benefit Guaranty Corp., the federal agency that insures the benefits of some 44 million people in 31,000 pension plans.
The goals can be contradictory if financially shaky companies, forced to pay more into underfunded plans, go bankrupt or drop their pension programs. Such a move would shift the benefits burden to the agency, which went from running a surplus in 2001 to piling up liabilities of more than $23 billion in 2004.
Liabilities to get worse
Those unhappy with the proposed legislative remedies point to recent analyses by the agency and the Congressional Budget Office that conclude that the agency's liabilities will only get worse over the next decade under the House and Senate bills and a White House plan.
The chairman of the House Education and the Workforce Committee, Rep. John Boehner, R-Ohio, wrote recently for National Review Online that Congress must act to avoid something similar to the savings-and-loan crisis of the 1980s that cost taxpayers $120 billion.