The main sponsor of a bill to tighten rules governing US corporate pensions said on Wednesday he did not want any special airline aid added to the measure as it progresses in the House of Representatives.
Republican Representative John Boehner of Ohio said he intended to keep the pension bill free of specific relief for any particular industry, although he did not rule out such action in the Senate or later in the legislative process, when the two chambers negotiate a single bill for final passage.
Boehner's legislation, which passed the House Employer-Employee Relations subcommittee by voice vote on Wednesday, would require companies to fully fund their pension plans within seven years.
But some airlines are lobbying Congress to incorporate provisions into the legislation that would specifically help their industry by stretching out the time they would have to repair their pension funds, from 10 to 25 years.
"This bill has no industry specific relief and it's my intention to not have that in this bill as it leaves the House," Boehner told reporters after the subcommittee vote.
American Airlines flew 300 employees to Capitol Hill on Wednesday to press for legislation giving major carriers some 10 to 15 years to repair pension funds.
An official with Delta, which has urged a 25 year pension fix, repeated warnings to lawmakers that without changes in pension laws, the Atlanta-based carrier may file for bankruptcy protection.
But Congressional auditors said that even if Congress did allow airlines to space out pension contributions as they sought, it would not solve their long-term financial problems.
"This is a severe crisis in liquidity for all the (airline) carriers, and the pension (problem), while it's real and severe, is only about one sixth of that problem," said JayEtta Hecker of the Government Accountability Office.
Hecker also told the House aviation subcommittee that even when the airlines were making money, they had not properly funded pension plans. In profitable years, they had put in only about 8.5 percent of the maximum allowed by law, she said.
In addition to making companies fund up their pension plans, Boehner's bill also requires companies to pay higher insurance premiums to the federal agency that insures the pensions, called the Pension Benefit Guaranty Corporation (PBGC).
The PBGC has a USD$23.3 billion deficit swelled by the pension defaults of United Airlines and others, and nationwide pension underfunding stands at USD$450 billion.
The goal of the bill is to prevent more pension defaults such as United's, and improve the PBGC's bottom line, averting a possible taxpayer bailout of the agency. The measure may eventually become part of legislation to change Social Security that co-sponsor Representative Bill Thomas and others are working on.
Boehner's bill would also change the threshold at which companies with the worst-off pension plans are required to disclose details of those plans to the PBGC.
Under current law companies must file reports if their plans have over USD$50 million in underfunding. The bill would drop the USD$50 million threshold and instead require reports from companies with plans that are less than 60 percent funded.
The "defined benefit" pensions covered by the bill have a fixed payout at retirement, and are found in older industries covering about a fifth of the US workforce.
