WASHINGTON — The House of Representatives approved a temporary formula for pension funds Friday that could save U.S. companies more than $80 billion in the next two years.
The bill provides accounting relief for two years for about 31,000 companies with traditional pension plans.
The vote was 336 to 69, and supporters said this should encourage the Senate to act quickly on the stopgap measure. But the outlook is shakier there.
The biggest U.S. corporations favor the proposal and want Congress to act before April 15, when they must make their first pension contributions of 2004.
The measure's sponsor, Rep. John A. Boehner (R-Ohio), said it was a temporary solution that would help workers' pensions stay afloat while Congress worked on long-term reforms to strengthen the traditional "defined benefit" pension system.
Companies deserved the break, he contended, because low interest rates had made their long-term pension liabilities look larger -- forcing them to take money from job creation and investment and pour it into pensions instead.
"In reality, they don't need to put that money there," Boehner said.
None of the relief comes from the federal government. Most of it flows from a change in the formula companies use for pension contributions. That formula has been tied to the yield on the 30-year Treasury bond. But under the bill the formula would be based on a blend of corporate bond rates.
The bill also calls for $1.6 billion in extra aid for several steel companies, including AK Steel Holding Corp. of Middletown, Ohio, and major U.S. airlines, such as United Airlines, a unit of UAL Corp.
United needs to cut its pension liabilities to qualify for a federal loan guarantee, which is a cornerstone of its plan to emerge from bankruptcy protection.