Senate Drops Controversial Pension Withdrawal Provision
WASHINGTON — Prodded by Democrats, the Senate overwhelmingly rejected a provision that would have let corporations take billions of dollars out of pension plans.
The Clinton Administration hailed the 94-5 vote dropping the provision from the budget bill as a sign Republicans were starting to respond to the public’s fears.
“The polls are showing a steady deterioration of support for what the Republicans are proposing. . . . This reveals the Senate is beginning to listen,” Labor Secretary Robert B. Reich said.
The pension provision, according to congressional analysts, would have sparked an estimated $19 billion in withdrawals over six years. Its defenders said freeing the money would help the economy and that corporations would be required to leave an ample cushion to pay retirees.
The Administration, however, said the provision would tempt failing companies to loot their pension funds, endangering the retirement security of as many as 13 million Americans and posing a risk to the Pension Benefit Guaranty Corp., the federal agency backing the pension system.
“This is one cookie jar . . . that Republican hands aren’t going to get into,” Sen. Edward M. Kennedy (D-Mass.) said after the vote on the amendment, which he sponsored.
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