Judd Gregg

Mr. GREGG

Mr. GREGG. Mr. President, pursuant to section 313(c) of the Congressional Budget Act of 1974, I submit for the Record a list of material in S. 2020 considered to be extraneous under subsections (b)(1)(A), (b)(1)(B), and (b)(1)(E) of section 313. The inclusion or exclusion of material on the following list does not constitute a determination of extraneousness by the Presiding Officer of the Senate. I ask unanimous consent that the material be printed in the Record.

Mr. GREGG

Mr. GREGG. Mr. President, we must get serious as a Congress and a nation about across-the-board retirement reform. It is time every American worker has a sense of ownership over his or her retirement income and the promises that have been made. To do so requires valid information about the security of his or her future retirement income, and current and relevant information to be able to make smart choices when options are available. Beneficiaries must be timely notified when their retirement income is in jeopardy; workers must be assured that the law doesn't allow and even encourage hollow promises. Employers and union leaders should be prohibited from offering rank-and-file members benefit increases that cannot be paid for, particularly when a company is below investment grade. The law must place a tangible price on all plan underfunding to limit the moral hazard of shifting risk to beneficiaries, the PBGC, and other companies paying premiums. Accounting schemes that paper-over massive funding shortfalls must be outlawed, and interest rate policies should be straightforward to administer and consistent with each plan's liability payout schedule. Continuing the underlying 30-year-old pension law is not an option. It is a law without transparency where union bosses and irresponsible management are allowed to go into back rooms and make promises they know cannot be kept. If we continue the status quo, we will move ever closer to the precipice of the slippery slope to a taxpayer bailout of the pension insurance system. Those who make and then break their promises have now pushed us to the edge of a raid on the U.S. Treasury. The Budget Committee held a hearing back in June where we heard testimony from the Congressional Budget Office, CBO, and the administration that confirmed the Nation is already in the midst of a retirement crisis. I am not speaking of the crisis in Social Security but of private pension plans and the program that insures benefits when sponsors default on their promises. Since then, the CBO has prepared two additional reports analyzing the current state of health of defined benefit pension plans and the Pension Benefit Guaranty Corporation the Government insurance agency that insures them. Employer groups, think tanks, and the financial press have also widely reported on the poor health of America's single employer defined benefit pension system. The consensus is indisputable that we have a crisis on our hands on our watch if you will. The PBGC already has a serious deficit and a cash crisis looming with a clock that will toll 20 or 30 years sooner than what we expect in the Social Security system. While many criticized the PBGC over the last year as being overly pessimistic in projecting a $23 billion deficit, we learned just yesterday with their year end reporting that not only was the PBGC surprisingly accurate--posting a deficit of $22.8 billion, if recent events that occurred right after the end of the fiscal year had been included, the deficit in the single-employer program would have been posted at $25.7 billion--a 10 percent increase. Furthermore, because accounting standards require the PBGC to disclose additional information on the change in its net position, we learned that PBGC's exposure to losses from plans sponsored by weak employers has risen to $108 billion from $96 billion just a year ago-- that is an increase of 13 percent in a year when sponsors would have had us believe things are not as bad as they seem. Just last year, there were 120 defaults requiring the PBGC to assume responsibility for pension benefits of an additional 232,000 workers and retirees. In just 3 short years, the PBGC has taken on more workers' retirement responsibilities than the previous 27 years combined. We are obviously in a crisis and something must be done. Unfortunately, the bill before us today is only a very modest and incomplete step toward addressing the issue. With regard to the PBGC's health, modification to premium levels fall $1.7 billion short over 5 years from what was reported just last month by the HELP Committee in meeting its budget reconciliation instruction, comparatively lowering the level of resources available to the PBGC to take on the responsibilities of plan defaults. With regard to the health of pension plans themselves, the administration has analyzed the funding rules in the bill and reports that its provisions do not improve the underlying funding requirements for plan sponsors over current law. With regard to innovative retirement programs offered by employers, I continue to have serious reservations about the measure before us today and its failure to provide comprehensive clarification of the law applicable to cash balance and hybrid pension plans. The Congress should be able to enact legislation stating unequivocally that providing interest on employees' pensions is an important benefit protection and is not and never has been age discriminatory, and that Federal law does not and never has required any type of pension plan to pay out lump sum benefits that are much larger for younger employees than for identically situated older employees. At best, the bill half heartedly recognizes these principles only as to the future and then only subject to numerous qualifications and benefit mandates--apparently trying to dance around the concerns of some who would try to repeal laws of mathematics, specifically the effect of compound interest. The failure to acknowledge the legitimate status of plans already in place leaves companies that provided generous pension benefits to their employees, many of them with favorable determination letters from the IRS, facing hundred of billions of dollars in potential liabilities and continues a legal landscape for frivolous lawsuits and attempts by the plaintiff bar to extract unreasonable settlement agreements. The numerous qualifications and benefit mandates in the bill applying to hybrid plans are more likely to discourage employers from continuing innovative pension plans. Indeed, the only parties that clearly benefit from these provisions as currently drafted are trial lawyers who will gladly file frivolous lawsuits and extract settlement agreements with no basis in underlying Federal law. On the plus, side, the bill does improve transparency and more-timely notification to participants regarding their retirement plan's health-- a significant step in moving toward making more information public and allowing the marketplace to more reliably take into account funding decisions of plan sponsors. Fortunately PBGC payments are generally not made on a lump sum basis unlike withdrawals on a savings & loan. Nevertheless, the pension insurance fund will first run short on cash in just under 5 years. It will take roughly another 15 years to liquidate its remaining assets to pay claims but then all its resources are gone. If Congress allows shortcomings in current law to remain, more defined benefit pension plan terminations will happen, and millions of workers will receive only a fraction of the retirement they were promised. Consider that in 1986 there were over 170,000 defined benefit pension plans. That number has dropped to roughly 56,000. Just since 1999, 7,500 defined benefit plans were terminated--a drop of 19 percent in just 3 years. Continuing a broken system and the uncertainty about promising opportunities to preserve creative defined benefit approaches to retirement plans such as cash balance plans will only increase this trend. Specifically, absent stronger funding rules, clarifying the legitimacy of innovative plans, improved transparency and increased premiums, employers will have little incentive to restore faltering pension plans to financial stability, and the PBGC deficit will continue to grow, posing an ever greater risk that taxpayers will be asked to step in and bail out the private defined benefit system long before social security goes in the red. To be very clear, we are very close to the slippery slope of no return from a default crisis of a magnitude that cannot be handled alone by premium increases on employers to shore up the PBGC. I am disappointed that the measure we have before us today does not solve the defined benefit pension crisis and at best only postpones a political fight about the advisability of a taxpayer bailout of pension promises made by American companies to American workers. But we must move the legislative process forward. If Congress doesn't act, the PBGC will need to charge even higher premiums for companies that remain in the system, significant economic losses affecting beneficiaries and investors will result, and pressure for a taxpayer bailout will be seen as a commonplace solution to the crisis, resulting in the likely demise of defined benefit pension plans altogether. While I commend the chairman and ranking member for a significant amount of hard work and progress on these challenging issues, there are still important areas that I believe require a great deal of work. I strongly encourage the chairman to ensure that the shortcomings in this bill that I have identified today be corrected as it moves through the remainder of the legislative process. An incomplete fix to these issues will have a devastating effect on companies, current workers, and retirees. I understand that this bill is a work in progress and my concerns will continue to be addressed as this legislation proceeds through the legislative process. For the retirement security of millions of American workers and taxpayers, I hope so.

Mr. GREGG

Mr. GREGG. Mr. President, pursuant to section 313(c) of the Congressional Budget Act of 1974, on November 3, 2005, I submitted for the Record a list of material in S. 1932 considered to be extraneous under subsections (b)(1)(A), (b)(1)(B), and (b)(1)(E) of section 313. The last page of the list that was printed in the Congressional Record of November 3, 2005, was inadvertantly dropped. Today I resubmit the complete list and asked that it be printed in the Congressional Record.

Mr. GREGG

Mr. GREGG. I suggest the absence of a quorum.

Mr. GREGG. Mr. President, I ask unanimous consent that the Senator from Nebraska have 2 minutes to introduce an amendment and then withdraw it.

Mr. GREGG. As I understand the situation, the 2 minutes of debate has already occurred on the Enzi amendment. We are now under 2 minutes of debate on the second-degree amendment, which is the Ensign amendment. Is that correct?

Mr. GREGG. Madam President, if I may respond to the Senator from Massachusetts.

Mr. GREGG. After this amendment is debated, there will be a vote on the motion to waive the point of order made by Senator Enzi from Wyoming, the motion to waive being made by Senator Ensign relative to the second-degree amendment. Is that correct?

Mr. GREGG. Madam President, I say to the Senator from Massachusetts, because there was a second degree, the way it worked out, the debate on the Enzi amendment occurred as part of that process. So the 2 minutes did occur. However, because this is the first exercise here in this undertaking, I would suggest that, after the Ensign amendment is disposed of, if it is favorably disposed of, that there won't be 2 minutes, but if it is not favorably disposed of we would have another 2 minutes of debate on the Enzi amendment.

Mr. GREGG. Madam President, parliamentary inquiry. And I ask unanimous consent that this time not be applied to the time relative to the debate that is available.

Mr. GREGG. I presume Senator Enzi and Senator Ensign can continue their discussion.

Mr. GREGG. I move to reconsider and I move to lay that motion on the table.

Mr. GREGG. I yield to the Senator from Louisiana for the purpose of sending a modification to the desk.

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

Mr. GREGG. I move to reconsider the vote.

Mr. GREGG. I move to reconsider the vote.

Mr. GREGG. Mr. President, at this time, we have come to the end of the amendment process. I now ask, before we go to final passage, we have 5 minutes equally divided between myself and Senator Conrad, and then we will go to final passage.

Mr. GREGG. Mr. President, let me begin by thanking all my colleagues for their very constructive efforts today. The fact that we were able to complete the voting process today was a reflection of the willingness of people in this Chamber, especially the staff who acted in an extraordinarily professional way. Also, of course, I want to thank Senator Conrad and his staff, Mary Naylor and her team. Senator Conrad has been an incredibly positive, constructive, and professional individual to work with on this bill. This bill would not have been completed--even though he may not agree with the bill, which he doesn't, obviously, and he has argued his position--he has been more than fair in allowing us to proceed through the bill. And it is a reflection of his extraordinary professionalism. I thank everyone on the staff, except his chart maker. (Laughter) I also especially want to thank my staff--led by the inimitable Scott Gudes--Gail Miller, Jim Hearn, Cheri Reidy, and the rest of the staff-- Dave Fisher and Denzel McGuire. We have had two staff members who have had children just recently, Bill Lucia and Matt Howe. Matt's child was born just as the debate started. I am sure he called him ``deficit reduction.'' We are all very excited about that. We very much appreciate the extraordinary job the staff has done here. I think it is important for our membership to remember that this is the first time in 8 years that this Congress has stepped forward to try to reduce spending by addressing the entitlement and mandatory accounts of our Government. This is a major step forward in the activity of fiscal responsibility. The other side of the aisle has tried to join this bill with other bills. The simple fact is, the only vote you will cast--the only vote that will be cast in the next few minutes--will be the only vote you are going to have to significantly reduce the deficit. It will be a veto to reduce the deficit by approximately $35 billion. If you oppose the next bill that comes down the pike--the tax relief bill--that is your choice. But that is not what you are voting on here. What you are voting on here is the opportunity to reduce the deficit, and it is the only opportunity you are going to have, and it is the first time, as I mentioned, in 8 years that we will be proceeding down this road. It is a step toward fiscal responsibility, and it is a reflection of the Republican Congress's commitment to pursue a path of fiscal responsibility. I ask for the yeas and nays.

Mr. GREGG. Mr. President, I wish to reiterate my statement which was inadvertently omitted from yesterday's Record with regard to amendment No. 2392 that we will support an effort to pass legislation to make the technical change deleted from our bill in a more appropriate vehicle. Pharmacy Dispensing Fees

Mr. GREGG. I move to reconsider the vote.

Mr. GREGG. Yes.

Mr. GREGG. Mr. President, we now turn to Senator Reed for his second amendment.

Mr. GREGG

Mr. GREGG. Mr. President, have the yeas and nays been ordered?

Mr. GREGG

Mr. GREGG. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet to conduct a markup on Thursday, November 3, 2005 at 12:15 p.m. in Senate Dirksen Office Building Room 226. Agenda I. Nominations: Wan Kim, to be an Assistant Attorney General, Civil Rights Division; Steven G. Bradbury, to be an Assistant Attorney General for the Office of Legal Counsel; Sue Ellen Wooldridge, to be an Assistant Attorney General, Environment and Natural Resources Division; Thomas O. Barnett, to be an Assistant Attorney General, Antitrust Division; James O'Gara, to be Deputy Director for Supply Reduction, Office of National Drug Control Policy; Emilio Gonzalez, to be Director of the Bureau of Citizenship and Immigration Services, Department of Homeland Security; Julie L. Myers, to be an Assistant Secretary of Homeland Security. II. Bills: S. 1088, Streamline Procedures Act of 2005; Kyl, Cornyn, Grassley, Hatch; S. 1789, Personal Data Privacy and Security Act of 2005; Specter, Leahy, Feinstein, Feingold; S. 751, Notification of Risk to Personal Data Act, Feinstein, Kyl; S. 1699, Stop Counterfeiting in Manufactured Goods Act, Specter, Leahy, Hatch, DeWine, Cornyn, Brownback, Feingold, Durbin, Kyl; S. 1095, Protecting American Goods and Services Act of 2005, Cornyn, Leahy; H.R. 683, Trademark Dilution Revision Act of 2005, Smith--TX; S. 1787, Relief to Victims of Hurricane Katrina and Other Natural Disaster Act of 2005, Vitter, Grassley, Cornyn, DeWine; S. 1647, Hurricane Katrina Bankruptcy Relief and Community Protection Act of 2005, Feingold, Leahy, Durbin, Kennedy, Feinstein.

Mr. GREGG. Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on November 3, 2005, at a time to be determined, to conduct a vote on the nomination of Mr. Matthew Slaughter, of New Hampshire, to be a member of the Council of Economic Advisers; Ms. Katherine Baicker, of New Hampshire, to be a member of the Council of Economic Advisers; Mr. Orlando J. Cabrera, of Florida, to be an Assistant Secretary of Housing and Urban Development; Ms. Gigi Hyland, of Virginia, to be a member of the National Credit Union Administration Board; and Mr. Rodney E. Hood, of North Carolina, to be a member of the National Credit Union Administration Board.