Guaranteed retirement pensions were one of the great social accomplishments of U.S. employers after World War II.
The decay of those pensions has been ugly. Fixing or replacing the nation's underfunded pension plans will be expensive, no matter who is forced to pay for it: employers, taxpayers, or future retirees.
It is going to take a lot of Washington name-calling, favor-trading, and class and generational warfare to ease the multibillion-dollar gap between what U.S. employers have promised and what they have set aside to pay.
On Friday, the House of Representatives voted to cut business pension plans some slack.
Members passed a bill written by Reps. Earl Pomeroy (D., N.D.) and Pat Tiberi (R., Ohio) that will give plans a few more years to hope that investment values recover before they are legally required to cut off future accruals, vastly increase corporate pension subsidies, or both. A Senate version passed in March.
On Thursday, Sen. Bob Casey (D., Pa.) presented another bill that would make it easier for two big multiemployer pension plans that cover a half-million truck drivers and other Teamsters to drop retirees who worked at firms that have closed.
That means big trucking employers like Yellow Freight wouldn't have to keep paying for pensions promised by former rivals that are now out of business.
Instead, the failed-company pensions would be guaranteed by the government's retirement plan insurance fund - the Pension Benefit Guaranty Corp. - and, behind it, U.S. taxpayers.
The public would likely end up financing old truckers' pensions years from now, as the dwindling assets the failed companies set aside to pay them run out. The funds pay retirees from more than 2,000 companies an average of $13,000 a year.
Casey's bill has the support of the conservative U.S. Chamber of Commerce, and dozens of employer and industry associations. Many of their members participate in other "multiemployer" pension plans that could benefit from the bill if things get worse.
They don't speak for all business, however.
The Casey bill provoked an opposition campaign backed by the Associated Builders and Contractors, a lobby for nonunion employers.
The bill "will provide a bailout to underfunded union pension plans at the expense of taxpayers," Brett McMahon, of Maryland-based Miller & Long Concrete Construction, told me and other reporters in a conference call.
McMahon appealed to the resentment felt by the many Americans who don't have a guaranteed pension, including those whose 401(k) plans, not guaranteed by any government agency or private employer, lost value in the 2008 stock market crash. "Why should the rest of the country pay for these folks' retirements when they're having a tough time paying their own?" he asked.
The top Republican on the committee that reviewed Casey's bill at a hearing was less hostile, Casey told me later.
That senator, Mike Enzi (R., Wyo.), "believes we need to build a stronger defined-benefit pension system," Enzi's policy director, King of Prussia native Greg Dean, told me.
Still, a lot of senators aren't ready to commit to future taxpayer funding of failed trucking-company pensions, at a time when the guarantee fund is running a growing deficit bailing out pensions of failed airline and steel companies.
Senators like Enzi would rather focus on ways to get more companies to offer sustainable pensions, instead of leaving them to the mercy of the market, where small savers need "Spartan discipline, a Harvard investment degree, and a Cassandralike ability to predict the direction of different investment markets [and] the date of their own deaths," as Drexel law professor Norman Stein testified in the hearing.
For future pensioners, Dean cited the so-called DB(k) pension program, which was included in the 2006 federal pension reform act.
The DB(k) is a hybrid, targeted to companies with 500 or fewer workers. It offers a modest but guaranteed yearly pension that adds up 1 percent of your average pay each year; plus a non-guaranteed, 401(k)-type retirement plan that would skim up to 4 percent of your paycheck to risk as you choose, sweetened by a 2 percent bonus from your boss.
That plan was supposed to be cleared for investment companies to sell in January. But Timothy Geithner's busy Treasury Department hasn't gotten around to writing the rules yet.
The House bill that eased pension rules may end up boosting the long-term cost of propping up retirement plans. But it also took a few steps toward boosting U.S. revenue, by increasing tax rates on buyout-fund managers, among other pro investors.
Some of those dollars, you might say, are coming home: As St. Louis University pension scholar Jack McGowan noted in the hearing, buyout managers that specialize in bankrupt companies have been routinely dumping their pension obligations on the federal pension insurance system, "creating a multibillion-dollar mess."