Negotiators trying to finalize pension overhaul legislation reached agreement on an airline provision Tuesday evening, but made progress on little else, causing tempers to flare and leaving little time to clear the measure before the August recess.
"Yes, that is all done," Sen. Trent Lott, R-Miss., said late Tuesday when asked if conferees on the bill (HR 2830) had agreed on the airline language. "The last few odds and ends were worked out."
But the airline language was just one of the contentious issues that stood in the way of a conference report on the complicated bill to overhaul the nation's pension laws.
Congress has struggled to enact a pension bill for more than a year, since a number of high-profile bankruptcies resulted in pension plan failures that required the Pension Benefit Guaranty Corporation, the federal pension insurer, to step in.
Lawmakers have been concerned about chronically underfunded pension plans. Some have pushed for tougher funding rules; others have said raising the financial burden on such plans would cause more to fail.
Whether to give financially struggling airlines additional time -- possibly between 18 and 20 years -- to make up underfunding in their pension plans has been a sticking point during conference negotiations.
Lott, a conferee and advocate of the airline relief language, would not provide details on the final agreement but said he was comfortable with the language.
Despite that progress, an agreement on an overall conference report remained elusive Tuesday as disputes between lawmakers threatened to prolong the negotiations, making uncertain whether they could meet the latest self-imposed deadline of clearing the measure before the August recess.
Max Baucus of Montana, ranking Democrat on the Senate Finance Committee and a key vote in the talks, suggested he might not sign the conference report after Senate GOP leaders decided Tuesday not to include a package of tax cut extensions in the final pension measure.
"The extenders should be in there," Baucus said.
Meanwhile, a provision addressing the type of investment advice that financial firms can offer retirement plan participants without violating conflict-of-interest rules was the source of a widening schism between House Majority Leader John A. Boehner and Sen. Charles E. Grassley, chairman of the Finance Committee.
Boehner, R-Ohio, supports significantly loosening current restrictions, which prevent a financial adviser managing a company's retirement plans from giving participants advice on financial products for which the adviser's firm receives fees or other commissions. Grassley, R-Iowa, has resisted the House language, favoring the use of independent sources to provide advice.
A House GOP aide said Tuesday that agreement had been reached on the issue, an outline of which was circulated to reporters. That language would allow qualified advisers to offer investment advice, provided it is "prudent and objective and for the exclusive purpose of providing benefits" to participants, according to the outline. Also, advisers for employer-sponsored retirement plans such as 401(k)s would have to base their recommendations on a computer model certified by a third party.
The latter provision was sought by Senate conferees, and a GOP aide said Baucus and fellow Senate Democrat Edward M. Kennedy of Massachusetts had signed off on the investment advice language.
Baucus would not confirm that late Tuesday. He said only that he "possibly" agreed to the language in exchange for a promise to eliminate or tone down wording opposed by Kennedy and Baucus dealing with the right of health plans to seek compensation from plan members injured in a car accident or other medical emergency who receive compensation from a third party.
One unresolved issue was whether to give a special break for financially struggling airlines.
House Majority Leader John Boehner stressed that the final product will strengthen the current system, under which employer-based defined benefit pension plans are underfunded by an estimated $450...
New provisions in the effort to reform the nation's pension laws could put American Airlines at a disadvantage against bankrupt competitors -- and encourage the airline to freeze its own pensions.
The House could possibly formally approve the legislations Friday, before it departs for its August recess.