bill should be Senate priority
Full consideration should be given to a measure that would
protect the retirement funds of 106 million working
Americans and their families.
Denver Post Editorial
Wednesday, August 2, 2006
With the financial security of 106 million working Americans
and their families at stake, the U.S. Senate is trying to
pass a major pension reform bill before breaking for recess
Friday. Unfortunately, senators are being muzzled by GOP
leaders who are forbidding any amendments to a flawed
The issue strikes close to home because the 2003 bankruptcy
of United Airlines ended defined-benefit pensions for the
carrier's 55,000 employees, including 5,000 in Denver. The
cost of picking up United's pensions along with those of
other bankrupt companies then threatened the solvency of the
Pension Benefit Guaranty Corp., the agency that insures
defined benefit pensions for 44 million workers. The PBGC
reported a $22.8 billion deficit this year.
As passed by the House, the Pension Protection Act of 2006
would strengthen the PBGC and force U.S. companies that have
underfunded their pension plans to bring them to solvency.
Companies underfunded their plans last year by $450 billion,
according to the U. S. Labor Department.
The House also contains good provisions to encourage
"automatic" 401(k) plans that automatically enroll employees
unless they specifically opt out. The bill also would make
the Savers Credit permanent and index it to inflation. That
tax credit rewards 401(k) and IRA savings by moderate- and
lower-income workers and is used by more than 5 million tax
filers each year.
Alas, the House measure also contains an unfair provision
that gives some airlines, including Delta and Northwest, 17
years to pay underfunded pension obligations. American and
Continental, which would have to bring their pension funds
to full funding in just 10 years, have protested that
double-standard puts them at a competitive advantage.
Senate Majority Leader Bill Frist wants a vote on the
pension bill by the end of the week -- prior to a five-week
summer recess -- and some supporters say the Senate could
deal with the disparity in airline pensions and other
problems in a separate bill after they return.
To the contrary, the bill is one of the most important to
come before Congress this year, and it should have the
Senate's full attention. It's unfair to force a vote
without allowing for amendments.
Frist earlier attempted to tack an estate tax cut for
multi-millionaires into the Senate pension bill, before
conspiring with House leaders to add the tax items to the
minimum wage bill that lurched through the House last week.
He seems unable to proceed in a straightforward manner.
Pension reform is too vital to be a mere ornament in a
special-interest Christmas tree. The Senate should give
full consideration to Pension Protection legislation and
resolve any differences with the House.