Washington, DC – Today, Ways and Means Committee Chairman Dave Camp (R-MI), a member of the joint U.S. House of Representatives and U.S. Senate conference committee on the Highway Bill, issued the following statement regarding House action the legislation. The bill passed the U.S. House of Representatives by a bipartisan vote of 373-52:
This bill helps to provide the funding that cities and towns depend on to develop and maintain the infrastructure they need to attract businesses to locate in their communities and create jobs. However, given the current fiscal challenges facing our country, we must ensure that meeting those obligations does not further hamper an already weak economic recovery.
This legislation reflects that effort and serves as a reminder that Washington must learn to live within its means. To that end, House Republicans ensured that the provisions in this conference report promote job creation and do not add to the national debt.
First and foremost, the Conference Report rejects nearly $7 billion in tax hikes included in the Senate bill. From higher taxes on private investment in infrastructure to redundant and ineffective tax enforcement measures, House Republicans were able to prevent $7 billion in costly tax hikes on the nation’s families and businesses during a time when our economy is still struggling to get back on its feet.
In addition to preventing these job-killing tax hikes, the Conference Report also adopts necessary reforms to the Pension Benefit Guaranty Corporation – or PBGC – resulting in greater accountability to taxpayers, the pension plans who participate in PBGC’s insurance program, and workers who depend on PBGC to insure their retirement needs. Importantly, these reforms will also protect taxpayers from being on the hook for potential bailouts in the future.
Along with these critical reforms, this legislation provides companies who sponsor pension plans with some important funding relief made necessary by the stagnant economy, while also requiring greater accountability and transparency so that resources are correctly accounted for and used in a way that puts workers first.
Specifically, to address the failed policies of the Obama Administration that are squeezing employers and pension plans, there has long been bipartisan support for some form of pension funding relief. Liabilities in pension plans are often calculated by using an average of interest rates on corporate bonds over the prior two years. In response to an extremely weak Obama economy, the Federal Reserve has driven interest rates to historic lows and kept them there. Combined with plan investment policies, this has substantially increased the value of plan liabilities, resulting in “a rising tide” of required pension contributions (to quote a report by the Society of Actuaries). The pension funding relief provided in this conference report will allow companies to spread these skyrocketing required contributions over a long period of time, rather than forcing employers to divert resources in the near term from other business activities such as hiring, expansion or pay increases.
Pension funding relief is necessary, but so too are reforms that provide greater protection, accountability and transparency to the workers who depend on the PBGC, and taxpayers who should not be called upon to bailout PBGC. That is why this Conference Report includes several necessary PBGC reforms that were not included in the Senate bill to protect against a taxpayer-funded bailout. Those reforms include:
- Disclosure requirements so participants in pension plans know of any shortfalls;
- Adjustments to PBGC fees, including for multiemployer plans, which currently pose the greatest risk to PBGC;
- Reforms to PBGC’s governance structure;
- The establishment of a new PBGC Risk Management Officer;
- A required annual peer review of PBGC’s insurance modeling systems; and
- The termination of PBGC’s unsecured $100 million line of credit from the U.S. Treasury.
We have passed nine extensions of the highway bill. Today we have an opportunity to put an end to the “stop and start” and take more significant steps toward a longer-term set of solutions.