Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that when the Senate resumes consideration of the pension rate bill tomorrow, there be 30 minutes of debate equally divided between the chairman and ranking member or their designees, with an additional 10 minutes under the control of Senator Kyl. I further ask consent that following the use or yielding back of the time, the Senate proceed to a vote in relationship to the Kyl amendment No. 2236; provided further, that following the disposition of the Kyl amendment, the Senate then proceed to a vote on the adoption of the Grassley amendment No. 2233, with no intervening action or debate. Finally, I ask consent that following the disposition of that amendment, the bill be read a third time and the Senate proceed to a vote on passage of the bill, again, with no intervening action or debate.

Mr. GRASSLEY. Mr. President, I associate myself with the remarks the distinguished assistant Democratic leader just made about the highway bill. It is one of the most important jobs bills we can have before the Senate this year. It should have been done last year. We couldn't get it done. But we can do that now and the Senate is committed to that. I think the leadership in the House is committed to it. Obviously, we need to get it done. I thank the Senator from Nevada.

Mr. GRASSLEY. Yes.

Mr. GRASSLEY. There is one more on this side.

Mr. GRASSLEY. We hope to work out agreements on all of the remaining amendments yet today and then have a vote tomorrow and close down very shortly because of weather.

Mr. GRASSLEY. Mr. President, I move to reconsider the vote.

Mr. GRASSLEY. Mr. President, there have been some inquiries about other amendments. We have some other amendments on which we are working. I will file them. Then I believe that would be the end of consideration of this legislation today. I will come back later on to do that. I yield the floor.

Mr. GRASSLEY. Mr. President, as I indicated, this amendment has been cleared on both sides. I ask for its adoption.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the pending amendment be set aside for the purpose of offering another amendment that has been agreed to.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Kyl amendment be temporarily set aside and, further, that the Senate now proceed to the consideration of amendment No. 2261, as modified, which is at the desk. I further ask consent that the amendment be agreed to and the motion to reconsider be laid upon the table.

Mr. GRASSLEY. Mr. President, I send an amendment to the desk on behalf of Senator Nickles and ask for its consideration.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet to conduct a hearing on Tuesday, January 27, 2004, at 9:30 a.m. on ``Ensuring the Continuity of the United States Government: A Proposed Constitutional Amendment to Guarantee a Functioning Congress,'' in the Dirksen Senate Office Building Room 226. Witness List: Hon. Alan K. Simpson, Co-Chairman, Continuity of Government Commission, Former United States Senator [R-WY], Cody, WY and Prof. Sanford V. Levinson, W. St. John Garwood and W. St. John Garwood, Jr., Centennial Chair in Law and Professor of Government, University of Texas Law School, Austin, TX.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Committee on Governmental Affairs' Subcommittee on Financial Management, the Budget, and International Security be authorized to meet on Tuesday, January 27, 2004 at 10 a.m. for a hearing titled, ``Oversight Hearing on Mutual Funds: Hidden Fees, Misgovernance, and Other Practices that Harm Investors.''

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Committee on Agriculture, Nutrition, and Forestry be allowed to conduct a hearing during the session of the Senate on Tuesday, January 27, 2004. The purpose of this hearing will be to examine the current situation regarding the discovery of a case of bovine spongiform encephalopathy in a dairy cow in Washington State as it relates to food safety, livestock marketing, and international trade.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Tuesday, January 27, 2003 at 10 a.m. to hold a hearing on ``Afghanistan Stabilization & Reconstruction: A status report.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, if there is no further business to come before the Senate, I ask unanimous consent that the Senate stand in adjournment under the previous order.

Mr. GRASSLEY

Mr. GRASSLEY. Tomorrow morning the Senate will resume consideration of H.R. 3108, the pension bill. Under the previous order, there will be 40 minutes of debate prior to the vote in relation to the Kyl second- degree amendment regarding waivers. Following the disposition of the Kyl amendment, we should be prepared to quickly move to a vote on passage of the underlying legislation. Senators should therefore expect a vote or maybe two votes prior to noon tomorrow. In addition to the pension rate bill, the Senate may consider any judicial nominations that can be cleared for action. Additional votes are, therefore, possible during Wednesday's session of the Senate.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I ask unanimous consent that when the Senate completes its business today, it adjourn until 11 a.m., Wednesday, January 28. I further ask that following the prayer and pledge, the morning hour be deemed expired, the Journal of proceedings be approved to date, the time for the two leaders be reserved for their use later in the day, and the Senate then resume consideration of H.R. 3108, the pension bill, as provided under the previous order.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I send an amendment to the desk and ask for its immediate consideration.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GRASSLEY. Mr. President, in turn, I thank the Senator from New Hampshire as the chairman of the committee dealing with some pension legislation. I thank him for his cooperation. That cooperation has been over a long period of time, going back to at least a year when we started efforts to work together on pension legislation so we would have a solid approach on the floor of the Senate. Mr. President, the replacement of the so-called ``30-year Treasury'' interest rate has reached an emergency. This is the statutory rate used to value pension liabilities. There is an inverse relationship between interest rates and pension liabilities: As interest rates go up, pension liabilities go down. Conversely, as interest rates go down, pension liabilities go up. Small changes in interest rates mean big differences in pension contributions. Current interest rates are at historic lows. Low interest rates have caused pension plan liabilities to skyrocket. To make matters worse, the recession that began in 2000 brought down stock values. The combination of unusually low interest rates and the decline in stock values have combined to worsen the pension plan funding problem. Just when you think things can't get any worse, they do. In October 2001, the U.S. Department of the Treasury discontinued the 30-year Treasury bond. The 30-year bond is the statutory rate used by pension plans to value their liabilities. While the Treasury Department still calculates the yield on the 30-year Treasury bond, the number is increasingly ``soft.'' To help plans cope with high funding requirements, Congress adjusted the rate to 120 percent of the 30-year Treasury shortly after the terrorist attack of September 2001. That adjustment was effective for 2002 and 2003. Plans were depending on Congress to extend that relief before December 31, 2003. We missed our deadline. At the end of the last session, we needed unanimous consent to pass an interest rate bill, but we did not have UC to proceed. The objections were not over replacing the rate, they were over deficit reduction contribution, or ``DRC relief'' and over relief to mutliemployer plans. Let me talk about DRC relief for a moment. There is an honest difference of opinion in the Senate over whether or not to grant DRC relief to underfunded pension plans. The real answer to the question of whether underfunded plans should be given DRC relief is: It depends. If a company is otherwise healthy but in a cyclical industry, should the combination of the economic downturn and an arbitrary pension rule force them into bankruptcy? I respectfully suggest that DRC payments should not force an otherwise healthy company into bankruptcy. Remember, the company could survive if the Government takes its thumb off the pension DRC scale for a little while. So what should Congress do? The Senate Finance Committee decided that we should provide temporary relief to overburden plans. The HELP Committee did not take action on this issue. Out of respect to the HELP Committee, we agreed to winnow back the relief to qualifying airlines and steel firms, but to allow others to apply to the Government for relief so long as they meet the qualification requirements. The bill provides only 2 years of limited DRC relief. Relief for 2004 is limited to 80 percent of the deficit reduction contribution. In 2005, the DRC relief is further limited to only 60 percent of the otherwise payable deficit reduction contribution. Plans that were poorly funded in 2000 are not eligible for this relief. We are concerned that for the healthy companies, the DRC creates an artificial cash demand on companies. The DRC is well- intentioned, but it may be a flawed requirement. We wish we had time now to simply reform the DRC. If we had anticipated the amount of time it has taken us to get to this point, we would have reformed the DRC. As an alternative to reform, we are providing short-term DRC relief to qualifying companies. Now, let me turn to the multiemployer plans. The same fiscal and financial conditions that have caused the pension funding crisis among single-employer plans are working against the multiemployer plans. Since we have already given 2 years of relief to single-employer plans (in 2002 and 2003), it is only fair that we now provide some relief to the multiemployer plans. This amendment gives multiemployer plans an extra couple of years to amortize their experience losses. If we don't give them relief, excise taxes will cascade down the employers who contribute to the plan. The excise taxes and penalties will hurt the employers--not the unions. The excise taxes start at 5 percent, but they quickly increase to 100 percent. These taxes do not help fund the pension plan. They just enrich the Federal Government. The reason that this relief is a little different from the single- employer language is that the multiemployer plans are structured very differently than a single-employer plan. A multiemployer plan consists of tens, or hundreds, or a thousand employers contributing to the same fund. Each employer may have a slightly different arrangement for its work force. With all those employers and all the potential differences in the individual arrangements, the plan cannot change overnight. The language that we are bringing to the floor gives the multiemployer plans a little extra time to rearrange their contributions and benefits before these excise taxes would take effect. It gives the plans time to go back to the bargaining table and renegotiate. This package has been drafted to give temporary funding relief to both single-employer and multiemployer defined benefit pension plans. Currently these plans are straining to pay their contributions. Relief is limited in duration. It will expire at the end of 2005. Our objective is always to balance the requirement that participants' benefits be funded and guaranteed, but to do so without driving otherwise healthy employers into insolvency. Pension funding rules need to be revised. We know that. While we work toward that goal, however, this proposal will lessen the burden that usually low interest rates place on plan funding. I yield the floor.

Mr. GRASSLEY. Mr. President, I suggest the absence of a quorum.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.