Action stalled on pension funding

WASHINGTON -- Squabbles over special treatment for bankrupt airlines and beleaguered auto companies are delaying final action in Congress on a pension bill that would affect millions of workers, retirees, and taxpayers.

Lawmakers trying to merge House and Senate versions have missed one deadline, April 15, when some companies had to recalculate pension fund obligations. May 29 is the new target for sending to President Bush a bill to prop up the finances of defined-benefit pension plans covering some 44 million people.

The Senate passed its bill in November; the House approved its version in December. They opened negotiations last month on a compromise but immediately hit a wall over a Senate plan to make companies with poor credit ratings pay more into their pension plans.

That proposal was part of the overall theme of the legislation: ensuring that companies honor their promises to retirees and restoring health to a pension system now underfunded by an estimated $450 billion.

The idea was opposed by senators with ties to the auto industry, and faces strong resistance in the House. Also crying foul is General Motors Corp., laboring under a junk bond rating and high health and pension costs.

The Pension Benefit Guaranty Corp., a federal entity financed by premiums paid by companies with pension plans, insures employer-based plans worth $2 trillion and covering 44 million workers. It has taken over paying current and future benefits to more than 1 million workers in more than 3,400 terminated defined-benefit plans.

It's running a $22.8 billion deficit.