Mr. Speaker, pursuant to the prior order of the House of October 7, 2003, I call up the bill (H.R. 3108) to amend the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986 to temporarily replace the 30-year…
Mr. Speaker, pursuant to the prior order of the House of October 7, 2003, I call up the bill (H.R. 3108) to amend the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986 to temporarily replace the 30-year Treasury rate with a rate based on long-term corporate bonds for certain pension plan funding requirements and other provisions, and for other purposes, and ask for its immediate consideration in the House.
Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on H.R. 3108.
Mr. Speaker, it was my understanding that the Committee on Ways and Means would control the first 30 minutes of debate on H.R. 3108, but considering that the chairman is not here as yet, let me, under my 15 minutes, yield myself such time as I may consume.
Mr. Speaker, we have a pension underfunding crisis in this country; and it has significant implications on the retirement security of the American workers. This chronic underfunding crisis we face among traditional defined benefit pension plans, the type that guarantees workers a set monthly benefit when they retire, is jeopardizing the pension benefits of millions of American workers who have worked all their lives for a safe and secure retirement.
The committee hearings we have conducted on this issue, which have included a joint hearing with the Committee on Ways and Means, demonstrated the critical nature of this problem and the need for a solution that will give workers a renewed sense of confidence that their pension savings are on a sound financial footing. This is precisely why I was joined by the gentleman from California (Mr. Thomas), the gentleman from California (Mr. George Miller), the gentleman from New York (Mr. Rangel), the gentleman from Texas (Mr. Johnson), who chairs our subcommittee, and the gentleman from Ohio (Mr. Portman), my good friend and colleague, in producing legislation to address this underfunding problem.
The Pension Funding Equity Act, the bipartisan bill to be considered today, would protect the retirement benefits of millions of American workers in the short term while committing Congress to immediately proceed with efforts to identify permanent long-term solutions to this underfunding crisis.
This underfunding crisis has manifested itself in several ways. The termination of large underfunded pension plans in the steel and airlines industries, for example, has led to growing anxieties about the financial condition of the Federal Pension Benefit Guarantee Corporation and its ability to ensure the pension benefits of American workers across the country. Those concerns were sufficient to lead the General Accounting Office in July to include the PBGC on its list of high-risk programs that require increased Federal scrutiny because the PBGC's mounting deficit had grown to $5.7 billion, the largest in history.
To make matters worse, the PBGC recently announced that there are some $80 billion in unfunded pension benefits looming on the horizon among financially weak companies, pension benefits that may ultimately have to be paid by the PBGC; and this poses a serious question of whether a taxpayer bailout of the PBGC would be necessary if the alarming trend of underfunded pension plans and company plan failures continue.
One of the several reasons that defined benefit plans are in financial jeopardy is because the interest rate used by employers to calculate the amount of money they must set aside in their employee pension plans, the interest rate on the now discontinued 30-year Treasury bonds, has been at artificially low levels, therefore, inflating plan funding liabilities.
Congress enacted a temporary fix in March of 2002 by allowing employers to use a higher interest rate. But because this fix expires at the end of 2003, there is an urgency on the part of employers, unions, and workers to address this issue because of a growing consensus that this problem is putting the pension benefits of American workers at risk.
The bipartisan Pension Funding Equity Act represents a responsible short-term approach that would replace the 30-year Treasury interest rate with a blend of corporate bond index rates for 2 years through 2005. If Congress fails to provide a pension funding solution by the end of 2003, the benefits of millions of workers could be jeopardized.
Strengthening the funding of defined benefit pension plans in the short term will reduce the likelihood that the PBGC will have to step in and pay benefits to underfunded plans. Moreover, employers who are making major short-term financial decisions need greater certainty to make key decisions about how to allocate scarce resources. Doing nothing could jeopardize employers' willingness to continue the defined benefit programs that provide stable and secure pension benefits to workers during retirement.
The act before us today would help ensure the financial integrity of America's defined benefit plans in the short term while Congress takes a broader look at the defined benefit system and considers permanent solutions to the pension underfunding problems that are jeopardizing the retirement security of America's working families.
I again want to thank my colleagues, the gentleman from California (Mr. Thomas), the gentleman from California (Mr. George Miller), the gentleman from New York (Mr. Rangel), the gentleman from Texas (Mr. Johnson) and the gentleman from Ohio (Mr. Portman) for working together in a bipartisan manner on this bill. I look forward to continuing to work with them and the administration as we move ahead, and I urge my colleagues to support the bill we have before us.
Mr. Speaker, I reserve the balance of my time.
Mr. Speaker, I yield such time as he may consume to the gentleman from Oklahoma (Mr. Cole).
Mr. Speaker, I am pleased to yield such time as she may consume to the gentlewoman from Tennessee (Mrs. Blackburn).
Mr. Speaker, I am prepared to close on our side.
Mr. Speaker, I yield myself the balance of my time.
Let me thank all my colleagues on both sides of the aisle for their work in moving this very important piece of legislation to help strengthen the Pension Benefit Guaranty Corporation and, more specifically, to help strengthen defined benefit plans. Making this change in the 30-year bond rate to a corporate bond index rate will, in fact, strengthen a lot of defined benefit plans, single-employer plans. Multiemployer plans use a different index.
There has been some discussion on the floor today about this fact that this is temporary, that it is only 2 years. Frankly, that is by design. Putting this in place we all know needs to happen because the current temporary fix is about to expire. It has been my intention, as the chairman of the Committee on Education and the Workforce, who shares jurisdiction with our friends on the Committee on Ways and Means, to continue our work on defined benefit pension plans, both single employer and multiemployer plans. There are long-term issues that have to be dealt with.
Congress, over the last number of years, has kind of shoved this off and shoved it off. Allowing for a 3-year fix or a 4-year fix, in my opinion, provides far too much time. It gets people unengaged in the process, when, in fact, we need to stay with this difficult process in order to come up with a longer term solution.
We have to walk a very fine line, as all of my colleagues know, in terms of getting the appropriate funding levels in many plans, securing the retirement security for millions of American workers, without unduly or unnecessarily pushing employers out of the defined benefit system. These are voluntary plans offered by employers to their employees. It is very critical, I believe, and others believe, that we find the right balance in terms of restructuring the regulatory system for how these plans operate and the contribution levels that need to be made.
While others want to make changes, and we have heard some of the suggestions made on the floor today, to fix the lump-sum problem, to fix the mortality-rate issue, all of these issues in defined benefit plans are interrelated. And as you begin to pull on that string, what we do not want to have happen, and what usually happens around here, is that the law of unintended consequences jumps up and bites us.
I know that our committee is going to take a very serious look at what needs to be done to improve the health of these plans, to ensure that the money is there to pay the benefits to American working families and to try to maintain some stability so that employers will continue to offer these plans. I suspect my colleagues on the Committee on Ways and Means will do the same. It is my plan, Mr. Speaker, to have a bill through the House next year. And I do believe that this 2-year temporary fix will, in fact, keep pressure on us to do the heavy lifting that needs to be done.
There have been calls for a commission to look at this. In all honesty, I do not know that we need a commission. What we need to do is the heavy lifting of legislating. And to legislate, we need to talk to people in the administration and in the real world about the kind of changes that need to be made in order to make sure that these systems, these defined benefit plans, are there for American working families and that they work properly and are funded properly.
Mr. Speaker, I intend in our committee to do the work that is necessary, and I believe our colleagues on the Committee on Ways and Means will do likewise. I urge Members to support the bill.
Mr. Speaker, I yield back the balance of my time.
Mr. Speaker, on that I demand the yeas and nays.