March 8, 2002
THE RISE AND FALL OF ENRON
Business Digs In Against Attempts
To Reform Existing Pension Rules
By KATHY CHEN
Staff Reporter of THE WALL STREET JOURNAL
PENSIONS IN PERIL
Enron Triggers a Slew of Proposals, but Which Reforms Will Truly Stick?3
Kennedy's Pension-Reform Measure Could Spark a Showdown With Bush4
Besieged Employers Warn of Cuts to Workers' Retirement Accounts5
WASHINGTON -- Business groups are hardening their position on pension overhaul, forcefully opposing all but tiny changes to existing rules.
At the same time, congressional staff members said their bosses are willing to work with business groups to address their concerns. Given this year's short congressional session, businesses could thus delay the process -- and with it any changes to pension law that are being pushed in the aftermath of the Enron Corp. collapse.
See full coverage of the Enron saga1.
Businesses' tougher stance comes as congressional leaders voiced hopes of quickly moving bills to revamp pension rules, after thousands of Enron workers lost their nest eggs. House leaders have said they want a committee-level vote on their bill -- which is expected to mirror the pension overhaul proposed by President Bush -- before Easter recess, which is scheduled to begin March 22, and a full House vote by mid-April.
In the Senate, Education and Labor Committee Chairman Edward Kennedy, the Massachusetts Democrat, just this week acquiesced to Republican requests to delay a committee vote on his pension bill to March 20.
With so much going on quickly, business groups have stepped up lobbying. "It's not politically popular, but we need to say it," said David Wray, president of the Profitsharing/401(k) Council of America: "We believe nothing should be done."
Kathleen Havey, director of pension policy for the U.S. Chamber of Commerce, said the chamber won't endorse any of the current bills. She said it won't oppose a proposal that employers give workers 30 days notice before imposing "blackouts" on trading stocks in their pension plans. Most companies already do that.
Neil Trautwein, director of employment policy for the National Association of Manufacturers, said NAM has toughened its "go slow" message to "no, never ... not these bills," because of the momentum in Congress. He added that NAM plans to send companies' chief executives to visit with lawmakers.
Aides to Rep. Rob Portman of Ohio, chairman of the Republican leadership in the House, recently met with several business groups that had complained about a measure in Mr. Bush's pension-overhaul package that would hold employers legally liable for certain pension-plan losses during blackout periods.
Jim Morrell, a spokesman for Mr. Portman, said those concerns were conveyed to the House Education and Workforce Committee, which is helping to write a compromise bill based on the Bush plan.
Edward Ferrigno, a lobbyist for the Profitsharing/401(k) Council of America, said his group was working with House Education Chairman John Boehner, an Ohio Republican, "to clarify confusion" over the liability issue. A number of business groups have met with Mr. Boehner on the issue. Kevin Smith, a Boehner spokesman, said the congressman "is aware of their concerns and is taking a look at them, but strongly supports Mr. Bush's proposal."
Because of the Enron scandal, business lobbyists say some change to pension laws is likely. Even as businesses harden their message, labor and consumer groups are stepping up efforts to protect workers' nest eggs. The AFL-CIO plans to hold two dozen town-hall meetings to encourage union members to call on Congress to enact changes. The AARP, a lobbying group for senior Americans, is also planning an extensive grass-roots lobbying campaign.
Still, business groups have a huge advantage: time. In this midterm-election year, Congress is likely to adjourn as early as October, shortening the time it has to act. Moreover, the issues are complex, and House and Senate versions of legislation are likely to be significantly different.
"If you put up a big fight, you can hope to run out the clock," said AARP lobbyist David Certner. "Then, you hope calls for major changes will have died down by next year."
Write to Kathy Chen at email@example.com
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Updated March 8, 2002
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