Congress will vote Thursday on a $1.1 trillion spending planthat includes a provision to help out the Pension Benefit GuarantyCorp. by letting financially ailing multiemployerpension plans cut retiree benefits for the first time in 40years.

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Opponents to the provision were trying to get additional Housemembers to oppose the last-minute 161-page bill, which was attachedto the massive spending plan during a lame-duck session ofCongress.

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The current Congress was scheduled to adjourn Thursday, and thespending bill must be approved in order to keep the governmentrunning. There is a possibility that Congress could pass acontinuing resolution which would keep the government open untilthe end of the week, which would give legislators more time forlegislative proposals.

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Also read:

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Benefit clawbacks: Only way to avoid a pensioncliff?
PBGC deficit hits record $62 billion

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Critics such as the Pension Rights Center charge the provisionis short on details and uses complex language. They areparticularly opposed to cuts to retiree benefits in troubledmultiemployer pensions. Immediate legislative action is not needed,the opponents add, because the pension plans will not run out ofmoney for 10 to 20 years, and only some 150 to 200 of the nation’splans are in trouble. Overall, there are some 1,400multiemployer plans covering about 10 million workers, according tothe center.

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“We want these multi-employer provisions … stripped from the[spending] bill,” Nancy Hwa, a spokeswoman for the center, said.“They shouldn’t have been attached in the first place.” Among theunions opposing the plan are the International Association ofMachinists and The Teamsters.

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However, supporters say it is desperately needed. They explainthe provision comes as a result of a bipartisan effort supported byHouse Education and the Workforce Committee Chairman John Kline, aMinnesota Republican, and George Miller, a ranking CaliforniaDemocrat, and it is backed by business groups, retirement fundmanagers and some labor unions.

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“Today, leaders from both parties came together under verydifficult circumstances and stood up for the employers, workers andretirees who count on multiemployer pensions,” Randy G. DeFrehn,executive director of the National Coordinating Committee forMultiemployer Plans, said in a statement.

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While opponents charge the process has beenundemocratic and negotiated behind closed doors, DeFrehn saidthere was three years of hearings and negotiations involving laborunions and employers.

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He also said the provision will help actually help protectretirees from potentially deeper cuts to their benefits. “Impactedworkers will have more to live on in retirement because theinsolvency of their pensions can now be avoided,” he said. “Thisbipartisan agreement gives pension trustees the tools they need tomaintain plan solvency, preserves benefits for the long haul, andprotects the 10.5 million multiemployer participants. With timerunning out on the retirement security of millions of Americans,moving this bipartisan proposal forward now is not only timely, butnecessary.”

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The National Coordinating Committee for Multiemployer Plan’s“Solutions, Not Bailouts” recommendations’ were a “foundation” forthe multiemployer pension proposal, congressional staff said.

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Several safeguards were inserted in the congressional proposalincluding one that allows trustees to cut retiree benefits onlyafter a vote by workers and retirees. A majority of participantswould have to approve any cuts.

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In addition, there are protections for retirees who are 75 orolder or are disabled. Also, the PBGC can facilitate the merger oftwo or more multiemployer plans if they are in critical shape.Another limitation is that a participant’s or beneficiary’s monthlybenefit from the plan cannot be reduced below 110 percent of thePBGC’s guarantee level. And participants and beneficiaries who are80 and older as of suspension will be exempt.

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"This may mean some benefit cuts, but it may mean a plan willlast another decade or even longer," Miller has said. “We have aplan that first and foremost works for the members of the unions,the workers … and it works for the companies.”

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The Employee Retirement Income Security Act has kept retireebenefits from being cut since its enactment in 1974.

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"This is not a perfect solution ... but it is a good solution,"Kline said in testimony Wednesday before the Rules Committee."Further delay will make this harder not easier."

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Similarly, Miller said the amendment is the "only availableoption to save these failing plans."

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He added that the proposals in the amendment are "not a newidea" but "I think it's time has come."

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Also read: Can this government bailout be avoided?

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