WASHINGTON, Jan. 28 (UPI) -- The U.S. Senate ignored warnings of a presidential veto Wednesday and approved legislation easing pension plan payment requirements for corporations.
The measure, which echoes a House bill approved last year, replaces the 30-year U.S. Treasury bond for calculating corporate pension plan payments with higher-rate corporate bonds for two years.
The higher rate bond will result in lower payment obligation for companies.
Business lobbyists in Washington, including the U.S. Chamber of Commerce, have argued that without the changes troubled businesses -- especially in the manufacturing arena -- may be forced to freeze their pensions or even cancel them due to high payment requirements.
The bill also provides the Treasury secretary the ability to lessen contribution requirements for companies having trouble meeting future contribution demands.
Critics contend the move endangers the budget of the federal agency that backs up private pensions, the Pension Benefit Guarantee Corp., which is already facing record deficits.
The veto threat came from several Bush administration cabinet heads who say the Treasury power along with provisions allowing commercial passenger airlines and steel manufacturers to reduce their required contributions significantly for two years could exacerbate the problem of systemic under funding of pensions in the United States.
