Vernon Ehlers: “This is a very complex issue, and we have worked on this bill for a considerable amount of time in the Committee on…”

“This is a very complex issue, and we have worked on this bill for a considerable amount of time in the Committee on Education and the Workforce, of which I am a member. I am puzzled, because there is a little confusion on the floor tonight about the airlines issue, and I hope I can help to clarify that. The impression that has been given, and I have heard it in other discussions and not just in this debate, that there is one plan here for Northwest and Delta and a different plan here for Continental and American Airlines. That is simply not true. There are two plans, but it does not specify which airlines. Any of the airlines can pick one of the two plans. It is an open choice. One plan is for an airline which chooses to freeze their pensions. In that case, they will pay what they owe to the PBGC at a certain rate of interest over a certain period of time. In the other plan, airlines do not have to freeze their pensions and they pay their obligation to the PBGC at a certain rate over a certain amount of time. Now, those rates and times are different because the two plans are different. The liabilities of the airlines are different. But Continental or American Airlines can choose to use the frozen plan with no problem whatsoever. If they think Northwest and Delta are getting a better deal, they can join them. They can freeze their plans and get the same repayment rate, same interest rate, same time to repay as Northwest and Delta. It is very simple.…”