House Votes For Delta, Northwest Pension Relief

The House of Representatives' vote late Friday to overhaul the private U.S. pension system would give bankrupt Delta and Northwest airlines more time to make catch-up contributions to their pension plans without extending the same relief to American Airlines and Continental Airlines.

The 279-131 vote came over the objections of the Texas delegation, which said the inequitable treatment would put American and Continental at a competitive disadvantage. Under the terms of the bill, Delta and Northwest would get 17 years to shore up their pension plans, while Continental and American would get only 10 because of the way the legislation pegs contribution rates to the companies' bond yields: the higher the rate, the lower the payments. The bankrupt carriers are paying higher interest rates on their notes because they are higher credit risks.

The House acted after failing throughout the week to reach an agreement with the Senate on the pension measure. A House-Senate conference committee was unable to agree over whether to include a package of tax cuts in the measure.

House Ways and Means Committee chairman Bill Thomas (R-Ca.) said the House-passed measure reflects agreement between House and Senate negotiators last week, before they reached an impasse on the tax cuts. In order for the new pension bill to become law, the Senate first would have to adopt it without amendment, which is unlikely unless the tax cuts are adopted on separate legislation that also would increase the minimum wage for the first time in a decade.

The House passed those tax cuts separately, 230-180, at about 1:30 a.m. Saturday. In addition to the increase in the minimum wage, renewal of a research and development tax credit for businesses, and a permanent reduction in the inheritance tax, the package would renew an old tax break that allows spouses who accompany workers on business travel to deduct their expenses.