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Congress is about to send a pension-reform bill to the White House that forces employers to meet their funding obligations for employee pension plans. Unfortunately, HR 2830 exempts at least one key industry from meeting that requirement, and tosses some serious pork into the stew to boot. I explain this at the Heritage Foundation Policy Blog:
Airlines employ hundreds of thousands of Americans and the risk to those pensions will require immediate action. This free pass allows the industry to continue its under-the-radar flight on pensions, which hides the instability of the industry’s economic position. Postponing action does not mean that the PBGC would not have to bail out these pension funds; if history is any judge, exemptions and postponements result in less compliance, not more.
Not only does the bill contain these exemptions, putting the retirement of many Americans at risk, the Senate has played their usual pork-barrel games in putting together this legislation. What do scenic prairie roads and the cleanup of abandoned mines have to do with pension reform? To the untrained eye, nothing at all – and yet two Senators have earmarked $50 million and $5 billion for these tasks in HR 2830, respectively.
Rep. Mike Pence has voiced serious reservations about the Abandoned Mine Land Fund under any circumstances. Since 1977, AML has existed on fees charged for coal production, and these fees will expire in 2007. The fees go to cleanup of old mining sites, and also to supplement health-care premiums of miners whose companies have left the industry or gone under altogether. The new proposal starts lowering fees on coal production, increases payments to states and retirees, and forces the federal government to replace the funds – and changes AML from discretionary to mandatory spending. This adds the $5 billion to an already-bloated set of entitlement spending by the federal government, making it ever more difficult to reduce the federal budget.
Be sure to read David John's entire analysis of HR 2830, and why we should push for a presidential veto if it remains in its current state.Sphere It View blog reactions
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