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Business groups push pension bill

By Jim Abrams
The Associated Press

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"We cannot stress enough the urgent need to act now," said a letter to House and Senate negotiators sent by the U.S. Chamber of Commerce, the National Association of Manufacturers, the American Benefits Council, the Business Roundtable and other groups.

"The negative consequences of inaction for both the economy and retirement security grow with each day that passes," they wrote in a letter dated Monday.

Negotiations broke down last Friday on legislation that would for two years change the interest-rate formula under which providers of single-employer pension plans must determine their contributions. Estimates are that employers will save $80 billion with the change, protecting pension funds from insolvency and freeing money for investment and hiring.

But while there's general agreement on that part of the bill, the White House is opposed to language in the Senate-passed bill that also offers relief to multiemployer plans, a smaller group of pension funds that are run jointly by unions and management in such trades as trucking and construction.

The White House argues that multiemployer plans are in better financial shape than single-employer plans, and that the Senate language would encourage the underfunding of plans.

Negotiators last week failed to agree on a compromise offering relief to only the most needy multiemployer plans, and the Republican chairman of the Senate Finance Committee, Sen. Charles Grassley of Iowa, said the White House has not budged in its position. "They haven't moved one fraction of an inch," Grassley told reporters, adding that they're taking a "shortsighted view."

"The fate of this important bill rests squarely with the White House," said Sen. Edward Kennedy, D-Mass., another negotiator. "I hope President Bush will work with Congress to protect Americans' pensions and shield thousands of small businesses from punitive taxes by providing relief to the multiemployer plants that need it most."

The business groups, in their letter, said that if no action is taken before April 15, the deadline for quarterly contributions for 2004, "It will be a clear signal to employers who voluntarily sponsor these plans that the current chaotic and unreasonable situation is likely to continue."

That could lead to more sponsors being forced to freeze or in some cases terminate their pension plans, it said.

Congress is under pressure to act this week, before the House leaves for a two-week spring recess and the Senate recesses for a week.

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