Republicans expressed confidence Thursday that pension overhaul legislation, after months of negotiation, would make it to the president before Congress' August break.
"We're very very close and we should be able to wrap this up next week," said the chairman of the House Education and the Workforce Committee, Rep. Howard "Buck" McKeon, R-Calif.
House Majority Leader John Boehner, R-Ohio, a chief negotiator in the House-Senate talks that have dragged on since March, said the bill no longer would allow employers to underfund pension plans and would protect taxpayers from a multibillion-dollar bailout.
Lawmakers emerging from a meeting Thursday said they needed to work through to settle final details.
One unresolved issue was whether to give a special break - extra years to catch up with underfunding - for financially struggling airlines. Negotiators also were discussing proposals to exempt defense contractors from the schedule for meeting pension obligations.
Boehner said that the final product will strengthen a system that has seen employer-based defined benefit pension plans grow underfunded by an estimated $450 billion. Also, the Pension Benefit Guaranty Corp., the federal agency that insures these plans, is running a $22.8 billion deficit.
The difficulty is how to force companies with underfunded plans to meet obligations to their workers without forcing these businesses to eliminate their plans, shifting the financial burden to the agency and possibly taxpayers.
"We have to walk a very fine line if we are going to meet all those goals," Boehner said.
Sen. Max Baucus, D-Mont., the top Democrat on the Senate Finance Committee, said he was generally pleased with the bill. "It's needed protection for workers, for retirees, especially in the wake of Enron. It will help retirement security for employees and that's good," he said.
According to documents from GOP aides, the final bill is expected to:
_require all plans to be 100 percent funded in seven years. Under current law 90 percent is regarded as full funding.
_adopt a new interest rate to more accurately measure liabilities.
_prevent plans funded below 80 percent from using credit balances, past contributions to the plans that may have overstated value because of stock market losses.
_give people with 401(K) and IRA investments greater access to investment advice. Some worry that Wall Street companies offering advice might have conflict-of-interest problems.
_encourage savings by including automatic enrollment for 401(K) programs.
_restrict the practices of companies giving deferred-compensation payouts to executives of financially troubled companies with at-risk pension plans.
Lynn Dudley, vice president of the American Benefits Council, which represents companies with pension plans, hoped for changes to the formula for determining what plans are at risk and must increase contributions until they are fully funded.
The concern, she said, is that the proposed formula might force some essentially healthy plans to freeze benefits or opt out of their defined-benefit plans.
The agreement was expected to reinstate temporarily some popular tax breaks, including a corporate research and development credit and a deduction for state and local sales taxes. Lawmakers also planned to use the bill to keep some of the president's temporary tax incentives for retirement savings, first passed in 2001.
The chairman of the Senate Finance Committee, Sen. Charles Grassley, R-Iowa, said negotiators were under pressure from GOP leaders to fold in a cut in estate taxes.
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