Pension Bill Split Senate Democrats

By DAVID ESPO
The Associated Press
Saturday, April 10, 2004; 4:56 PM

WASHINGTON - To unionized machinists, autoworkers and airline pilots, an $80 billion pension relief bill making its way through Congress offered badly needed help. To construction unions and the Teamsters, it was a loser.

To the quiet satisfaction of Republicans, that left unhappy Senate Democrats in the middle, forced to make a politically painful choice between reliable election-year allies on one side and those on the other.

On the strength of a 78-19 vote in the Senate, the bill went to President Bush on April 8. On Saturday, he signed the measure sought by businesses to sharply reduce the amount of money they must put into employee retirement funds through 2005.

"It is unfair, it is wrong and it is discriminatory," said Sen. Edward M.Kennedy, D-Mass. He attacked the Bush administration for refusing to provide the same relief to all pension plans battered by stock market losses earlier in the decade.

Sen. John Kerry, the party's presidential nominee-in-waiting, opposed the bill. Senate Democratic leader Tom Daschle of South Dakota and other members of leadership voted against it.

They formed a minority of a minority, though. Party sources say Daschle and Kennedy came up empty when they went looking for the 41 votes needed to block passage until the administration agreed to changes.

"I am reluctant to vote against the men and women who build our homes and move our goods, but I am not left much choice," Sen. Herb Kohl, D-Wis., said before the bill's passage Thursday.

Sen. Dick Durbin, D-Ill., voiced regrets, too, yet voted for a bill he said was "vital for United Airlines, based in my home state," and help manufacturers Caterpillar, Goodyear and John Deere as well.

Sen. Dianne Feinstein, D-Calif., said she received more than 280 calls from pilots "telling me that if this bill does not pass, United Airlines may have to terminate their pension plan." She was one of 33 Democrats to vote for the bill; 12 voted against.

The measure was passed by the House on a bipartisan vote of 336-69.

Democrats' discomfort stemmed not from Republican insistence on granting relief to employers, although major business organizations pushed hard for passage. Instead, it resulted from the administration's insistence on treating two types of pension plans differently, even though both suffered in the stock market earlier in the decade.

"I don't think there are two separate stock markets, one where large corporations are invested and then another for everybody else," said Sen. Mary Landrieu, D-La., another reluctant supporter.

Nearly all of the relief in the measure is targeted at roughly 31,000 single employer funds, including those for the Big Three automakers, airlines, and other large companies. A far smaller amount will go to multiemployer funds, prevalent in the construction and trucking industries.

The legislation grants additional relief to the airlines and steel industries, as well as others, including several with Republican advocates in Congress.

"In terms of the immediate things that Congress can do to help manufacturing, this is probably the most important," said Alan Reuther, the legislative director of the United Autoworkers Union.

He said the bill would free money to invest in production, create jobs and pay salaries.

"This bill is not broken down on the basis of whether you are union or not union," Sen. Judd Gregg, R-N.H. said, underscoring, if inadvertently, the Democrats' discomfort.

The White House originally opposed all relief for multiemployer plans and only dropped its position under pressure from GOP Senate Republican Whip Mitch McConnell. Republican officials, speaking on condition of anonymity, said he was acting on behalf of UPS, his state's largest private employer.

UPS is a contributor to the Central States Pension Fund and others run jointly by the Teamsters and many employers. UPS has served notice it wants to ease its long-term obligations, and while those changes are not in the bill, company spokesman David Bolger said, "long-term reform" is the next step.

For its part, the White House drew the line at satisfying McConnell and UPS. It scuttled one tentative House-Senate agreement to help 20 percent of the multiemployer plans that need it most.

It also engineered rejection of a last stab at compromise by Sen. Charles Grassley, R-Iowa, who suggested help for about 10 percent of multiemployer plans.

That blew up in what some participants described as a memorably contentious meeting - Kennedy angrily accusing Rep. Bill Thomas, R-Calif., of using bullying tactics and Thomas vehemently demanding Kennedy address him as chairman instead of congressman. Thomas is chairman of the House Ways and Means Committee.

The bill is estimated to help only about 3 percent of multiemployer plans. In a remarkable show of clout by one company and its powerful legislative ally, the bill was rewritten at the last minute to make sure the Central States Fund would be covered.

Not enough to suit the Teamsters, though. The union opposed the bill.

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EDITOR'S NOTE - David Espo is chief congressional correspondent for The Associated Press.