senate will come to order the chaplain dr barry black will lead the senate in prayer new in challenge and in hope lift our hearts amid the fathomless beauty of creation above all malice and indifferent use our senators today to do your bidding may day fill these precious hours with republican leader soon as he completes his statement here today to see if we can figure out an orderly way to proceed on this very important piece of legislation the managers i have have a good feel of this legislation they think is something we can complete fairly quickly we just have to make sure we legislate on the f a a aspect of what's going on in the world today and not thanks has no bearing on this so we'll see what we can work out hopefully we can have a good day and with a little bit of good fortune finish the snow this week game over the next four and a half decades he proved himself and dispensable as the school's top cheerleader and bester of goodwill and confidence but the players and coaches alike mr bill as he was called about friends and family and witness three national championships befriended six head coaches and cared for hundreds of players over his long briere bloodbath ends and respected by he earned a permanent seat on the kentucky bench at every single game in fact mr kiley attended more than fourteen hundred u k basketball games nearly sixty percent of all games ever play the players and many recall his talks with his boys on anything from kentucky sports to lessons of integrity and pride players coaches and athletic directors come and arkansas had this to say that for forty eight years mr bill looked over coaches and student athletes with love and care that only a father could give every time we had an encounter there was a hearty hello  laughed every single time just like the first time in one thousand nine hundred seven mr bill's jersey was elevated on to the rafters rupp arena making him one of only two people to receive this honor without having taken to the court adjusting to the big city or young man who had just been recruited from out of state and was getting accustomed to a brand new life in kentucky mr kite lived his life as a celebration perhaps the most lasting tribute to bill began in two thousand and two when the university of kentucky athletic department presented its first bill kiley award to the individual who exemplifies the pride respect and positive attitudes associated with the university of kentucky basketball program k followers and basketball lovers across the commonwealth of los the sports number one fan no us big for all of them when i say our prayers and best wishes of support go out to his family including his wife hazel and his daughter and son in law karen and all and marlo u k presently to junior best expressed what many can cut cancer feeling when he said that we have lost someone who is not only the face of kentucky wildcat basketball but of the university itself second his words and i had this am mile we will not soon forget the loyalty passion and dedication to excellence that bill exemplified design a system that would offer american workers the most secure retirement possible where we just start if you're starting from scratch what principles would guide you here are a few that i think you might begin with first you want to encourage companies to offer secure retirement benefits that's obvious second you want to ensure that companies keep their promises to their employees and retirees that ought to be in the top of the list third don't create circumstances under which employers decide they can't afford to keep offering decent retirement benefits without becoming uncompetitive as a business or insolvent that's pretty sensible fourth treat all the companies in an industry equally so as not to pick the winners and losers don't tip the scales and there are many other goals that you might set out to achieve of course we're not starting from scratch this morning and this isn't primarily a pensions bill it's reauthorization bill for the federal aviation administration but the substitute amendment that we are now considering contains one pension provision that i think violates the principles i just laid out that's why i'm offering amendment w senator hutchison of texas with a lengthy list of bipartisan co sponsors to strike that provision of the bill the impact of our amendment will be to provide retirement security for over one hundred eighty thousand american workers and at same time maintain air service for all of our constituents in over three hundred cities in our nation and around the world who supports this amendment dealing with the pensions of workers the workers themselves it is supported by the hundred thirty five thousand strong transport workers union of the a f l c e o and it's supported by a long list of bipartisan list of co sponsors starting with  florida senator john cornyn of texas senator bob menendez of new jersey and senator tom harkin of iowa as you can tell from this list this is a very diverse sponsorship both sides of the aisle all over the country so we have the support of the workers whose pensions are being affected and we have the support of senators from both sides of the aisle in a bipartisan fashion to strike this section of the bill it's a little complicated but for the record we need to get into the background of why we're here today in two thousand and six we passed the pension protection act which established new rules for defining which companies were meeting their obligations to their employees and retirees and which companies were not all the companies in america were in effect given seven years to catch up on any underfunded pension plans and rules were established regarding how the underfunding was to be estimated that's only right and sensible because if we're going to offer a pension to an employee and the employee can count on that pension they have to make sure that the pension plan is adequately funded so when they call on that plan a time of retirement the benefits will be there benefits that have been promised over the lifetime of a worker affected all the companies in america except for airlines we recognized at the time that the airlines were facing unique circumstances they owed huge amounts of money to hundreds of thousands of workers and retirees and yet they were facing a very difficult struggle to profitability after nine eleven we all recall what happened airlines were shut down completely across the united states and then air travel was at least compromised if not inhibited for months and years afterwards and we understood the airline industry needed special consideration so we gave the airlines a special arrangement when it came to funding their pension plans we said that the airlines had ten years to make their pensions whole instead of seven years gave a little longer period time and we allowed the airlines to assume a rate of return on their investments of six percent instead of assuming a lower rate based on the formula that other companies were forced to use all airlines that is except for to delta and northwest these airlines had frozen their defined benefit retirement plans what does it mean to freeze your benefit plan it meant that no new workers at those airlines could participate it meant that the workers then working were covered by their defined benefit pension plans those new workers coming on board at these airlines didn't get that benefit and no new benefits could be provided to existing workers and retirees froze the current pension benefits excluded new employees from coverage so in a way delta and north of most were given special treatment they were allowed to deal with their retirees in a different fashion than any company in america than any airline in america these airlines were told that they could take seventeen years to catch up on the payments instead of ten years and they could assume a rate of return of not six percent but eight point eight five percent it was a very generous deal restate that another way some airlines but not all of them could assume a far higher rate of return and spread their payments over a much longer period of time what difference does it make it meant that those airlines delta and northwest had to set aside far less cash toward their pension plans each years than the other airlines they were competing with in a very competitive industry such as air travel in this country this created a huge advantage for these two airlines delta and northwest to make matters worse we rewarded the airlines that froze their pensions let's compare that result then to the principles i laid out the beginning of the statement did we encourage with this decision companies to offer secure retirement benefits no it seems to be instead we encourage companies to freeze their benefit plans second did we ensure that companies keep their promises to their employees and retirees i don't know about that is allowing companies to take seventeen years to adequately fund their obligations ensure that they keep their promise it's a fair question third did we have void creating circumstances under which employers might decide that they can't afford to keep offering decent retirement benefits without becoming uncompetitive or even insolvent i think trying to avoid this scenario was part of the rationale for giving the airlines a bit more of a cushion so perhaps we did did we treat all companies and industry equally so as not to pick winners and losers and create a competitive advantage for some airlines over others we most certainly did not now fast forward to last year on the first day of the new congress senator kay bailey hutchison of texas introduced legislation to bring more balance to pension rules for the airline industry we passed this legislation as part of the iraq supplemental last spring and i supported senator hutchison one of the language to it gave the airlines that have not frozen their pension plans and let me be specific with airlines american airlines continental hawaiian alaskan and u s airways the opportunity to assume a better rate of return on their investments they now can is say assume a rate of return of eight point two five percent remember delta and continental under the law that we passed can assume a rate of return of eight point eight five percent whether that in fact takes place or not so even under the existing law before the bill that we have before us those two airlines are going to benefit they get a better break better treatment delta northwest that all the other airlines and they can smooth out these payments over seventeen years not ten years so did the change in the law on pensions benefit those two airlines admission late yes is their benefit compromised by what we're doing with this amendment today no but does it bring the other airlines and the country closer to the same treatment yes it does so we still haven't provided all of the industry players with parity delta northwest still do much better the airlines that are still trying to provide their workers with secure retirement through defined benefit plans that are not for those and are still getting a much worse deal than the airlines the froze their plans but it is a bit fair so what was done years ago rewarded those airlines struggling i will concede those airlines with better treatment in terms of funding their pension plans from a corporate point of view than other airlines what we're doing today is lessening that advantage slightly but not at the expense of delta and northwest in fact what we're doing is maintaining what has been the law since last year that brings us today to this substitute amendment which we're considered section eight zero eight of the substitute amendment would place new responsibilities only on those airlines that we tried to help last year this section would once again widen the disparity between the rules that apply to some airlines versus the rules that apply to others that doesn't make any sense this section would require only the five airlines that i mentioned to fully fund all new pension obligations this year and every year going forward only those five airlines now you might say in a vacuum that seems reasonable fully funding a pension we want companies to pay their pension plans right well that is up to a reasonable point there are three fundamental problems here that i think are very important for my colleagues to understand first the provision in the bill which senator hutchison and i would strike penalizes the airlines that have worked the hardest to fully fund their pensions already don't we want companies to work hard to fully fund their pensions if we do why would we want this section of the bill which penalizes them for their effort to protect their workers and be fair in their pension plans take american airlines for example according to the rules american airlines pensions are one hundred sixteen percent funded it another way the management has put more money into their pension plans than they actually need to put in to make sure that they make all the payments promised sixteen percent more it isn't as if american is underfunding their pensions their overfunding their requirements the assets on hand after assuming the investment return rate of return over time are worth more than what american airlines has promised its workers and retirees how can we ask for anything more than that so why should american airlines have to then fully fund all of its new obligations each year so that it continually maintains a hundred sixteen percent funding isn't one hundred percent enough provision unnecessarily pushes these five airlines closer to bankruptcy is it really in our nation's best interest that these five airlines pay an additional two billion dollars into their pension funds over the next five years when they simply don't have cash lying around as a national policy is it better for us to have more airlines or fewer do we want more competition or less do we want fewer bankruptcies or more and if we really care about the retirements of these hundreds of thousands of workers that are employed at these five major airlines why would we push their companies closer to bankruptcy you know what happens when a company goes into bankruptcy as the employees of united airlines what happened the first casualty their pension plan i've been through this they're based in illinois they're based in chicago it was painful and if you push more airlines into bankruptcy you aren't helping their workers and their retirement you're jeopardizing them if that sounds dramatic i'd like to show this chart to my colleagues we're following this debate the bankrupt airlines recent bankrupt airlines front tier airlines filed for bankruptcy makeup seen six thousand employees were affected by that season eighty eight filed for bankruptcy two thousand two hundred thirty employees affected skybus four hundred fifty employees terminated aloha nine hundred employees e o s airlines four hundred fifty employees this is the reality of the airline industry today by my  thousand employees were affected by these bankruptcies so why in the world would we put a provision in this bill which would require our airlines these fiber alliance to put dramatically more cash into these pensions beyond what is required of other airlines beyond what is required for one hundred percent funding and jeopardize them and in danger them so that they face bankruptcy let's look at the losses recently reported for the first quarter by some of the largest domestic carriers just in case those who are critical of this amendment believe that these airlines are flush with cash look at what happened in the first quarter of this year delta airlines first quarter losses two hundred seventy four million dollars american airlines three hundred twenty eight million dollars and united five hundred thirty seven million dollars if there is someone who believes and i don't know who it might be that the airline industry is so flush with cash that they are so strong that they can handle this new pension requirement that is put in this bill and it won't have a negative impact they haven't noticed the reports on the first quarter in virtually every instance here every airline in america has struggled and fallen behind because of jet fuel costs now comes this bill not providing these airlines a helping hand through one of their most difficult periods in history where bankruptcies are rampant and losses are at record levels this bill imposes new obligations on five airlines struggling to survive at a time where crude oil is threatening to reach one hundred twenty dollars a barrel and it did just last week and jet fuel is pushing one hundred sixty dollars a barrel i don't think that the airlines are in a position to add another two billion dollars to their pension which are already well funded remember delta and northwest were given a privileged position when it came to the treatment of their pension plans under the law they didn't have to put as much money into their pension plans they were given a longer period of time to pay out or to fund them seventeen years and the rest of the airlines were given circumstances which were more demanding of them they had to put more money in hutchison are trying to do is to protect a difference here but one that we think is reasonable what the bill does is to push these airlines at exactly the wrong moment in america's business history into a position where they are going to have to surrender can't reserves and risk bankruptcy now is that in the best interest of the workers and the pilots of those airlines eleven thousand workers at airlines already bankrupt or out of work are over one hundred eighty thousand workers in america who stand to lose nearly everything if we push these airlines into bankruptcy and over three hundred cities that could lose air service and face higher fares why why do we want this third and finally this provision creates an even larger disparity between the way some airlines are treated and the way that other airlines are treated in this most competitive industry why in the world are we trying to tip the scales to the advantage of some airlines and push others near bankruptcy doesn't sound right why are we demanding these five airlines follow rules that no other company in america must follow why are we demanding these five airlines follow rules that two of their competitors don't have to follow him and i have with senator hutchison and others with strike this provision from the bill and leave current law unchanged i think this is important to all senators it is just an issue for those of us whose home states entertain these airlines and and have them as carriers i urge every member who is interested in providing equitable treatment under the law to all companies in a given industry to support our amendment do this for one hundred eighty thousand workers who have weighed in whose pensions are at stake here and said strike section eight zero eight is a bad idea and let me just also say this on behalf of the largest carrier affected american airlines this legacy carrier is the only one left a large and larger carriers i should say that has not gone through bankruptcy they have made sacrifices they've cut back they've tried to protect their workers and provide quality service and it hasn't been easy now they're facing record breaking jet fuel costs that's a reality they have tried to keep their word to their unionized workforce to keep them on the job to pay them as promised to give them the pensions that they promised why do we want to punish good conduct why do we want to punish an airline that really is trying to level best to keep its word to its employees retirees that's a question asked not just by the management of american airlines it's being asked of us by the workers of american airlines to they oppose section eight zero eight they just think it could be the end of their airline boy what a legacy we would leave if at the end of the day we pass a bill that is supposedly designed to make air travel safer and jeopardize the existence of five major airlines in the process that is exactly what section eight zero eight would do i urge every member who is interested in giving their constituents as many options for flight travel as possible by keeping afloat as many airlines as we amendment i think the hundred thirty five thousand members of the transport workers unions whose pensions are at issue with this amendment they've stood up in what i think is the best interest not only of the section from the floor from the bill or should say this on the floor and then let's move forward to do what we need to do to make american air travel safe and to respect the companies and the workers that we count on every day  or an amendment or on an issue before our senate that has shown the company fighting so hard to do the right thing for their employees the employees he's standing with them and in total solidarity saying this is something that we should be encouraging companies to do not discouraging companies from doing and that is to provide the very best pension plans  these are huge corporations american continental u s air has some of these provisions as well and these are big corporations and they're trying to do the very best they're really going the extra mile  for their employees and yet they can't rely on the united states congress to make a law and then keep that law let's go back a little bit in the history here first of all we settle this issue in a very hard fought negotiation last year we had  airlines that chose to keep their defined benefit plan doing the very best for their employees that they could make added contributions based on the law as it was so they got ahead in their back up payments because under the law as it was that anything in excess of their back up payments would help them offset their going forward payment they were in good shape in a relatively good shape is good shape as an airline can be last year they had extra money they poured it right into the pension plan they overfunded their past obligations or the obligations they had or their past pension deficits so they did that thinking that if they got into a cash flow problem they would be able to that is going to address the safety issues that we want to make sure our the very best that that we can provide for the consumers and passengers in our country the bill that will provide a passenger bill of rights when a passenger is in an airplane and it's delayed there are going to be new rules there will be plans that have to be submitted for airlines to take care of them in a bill that has so much good that was came out of the commerce committee of which i am the ranking member of the aviation subcommittee and senator rockefeller is the chairman it came out with complete bipartisan support and now we have in the package that's going to be put forward a rehash of the long ago haitians that were settled last year you know i'm just going to take a moment here and say that i had a very telling conversation with the c o of a major international corporation based in america and i said why are you why are you opening plants overseas instead of america why are you sending jobs overseas instead of america and they said this c e o said well really basically two things one is the regulatory environment is better overseas and secondly the regulatory laws are more stable i said more stable this is america what do you mean there is a country overseas that has more stable regulations and he said hansa loosely because we can't count on the law being the law we see time and time again congress or regulator coming in after a law has been on the books we have denting xin compliance with the law realizing that it is the law and congress comes in and changes something that affects something that we have done in reliance on the law i said if there is one thing that the united states should be able to do it would be leading in stability in laws and regulations maybe there are too many laws and regulations maybe there are too many taxes but at least we should be able to be stable we are the greatest economy on earth and yet here we have a prime example of a law that was passed contributions were made from the company to the pension systems based on the law that was passed thinking we had come to an agreement it was hard fought a deal is a deal so let's go back and look at that law in two thousand and six congress passed the pension protection act and clued in that legislation was a change in funding rules for airlines that had chosen to freeze their defined benefit pension plan i argued strongly at the time that the playing field should be levelled for those carriers that continue to meet their obligations there was virtually unanimous support for this view in the senate but in conference the chairman of the  committee of the house who is no longer a member of congress refused a provision that would level that playing field accordingly we reached an agreement with the leadership of the senate at the time that we would take the first available opportunity in the next congress to defied this inequity that is why on january the fourth two thousand and seven my colleague from texas senator cornyn and i introduced senate bill one ninety one this bill was referred to the committee on health education labor and pensions my staff also provided it to the finance committee staff and personally briefed them on the bill on january twenty sixth two thousand and seven a bill which was subsequently enacted into law established funding rules that while not as generous as those given to the airlines that froze their plants or at least more equitable and created a better level playing field than we had seen in the two thousand and six bill it was very clear when we introduced this bill that we had it out there for the purpose of everyone knowing that we intended to offer it when appropriate legislation came through that is the way things work in the senate the provision adopted by the senate and agreed to by the house is the exact language that we drafted and senate bill one ninety one it should be a surprise to no one that we would offer that bill at the first available opportunity which was the last omnibus appropriations bill now there has been something said in writing in opposition to our amendment that this was a big surprise that was crammed into the supplemental appropriations was not a surprise it was out there in the open all of the relevant committees had been briefed and knew that this was a bill that was pending that would be available for amending a proper vehicle and the proper vehicle was the appropriations  because there was not anything else that was going through none of the airline adversity affected by the proposed change in the pension pension laws has missed a pension payment under current law the greatest risk to pensions is bankruptcy i'm not saying that the proposal in the bill would necessarily result in bankruptcy of these carriers although that has been brought up as one of ensure aleksey but at the very best case it is going to restrict their cash reserves precisely at a time when they need it the most jet fuel is now being sold at one hundred and sixty dollars a barrel at these prices it is a race against time for airlines to preserve their cash for congress to intervene now and do a law that was passed and relied on by the airlines to restrict the flexibility of a few airlines that need the maximum flexibility to meet this crisis would just be irresponsible it's as if maybe some of our our senators who i think have very good motives but are just not realizing the situation today which is ten times worse than it was last year when this legislation was passed prices have gone up of oil every airline is on its knees everyone is drug dealing we're seeing the beginning of mergers which i don't like but it's a free world and i don't think we have the right to intervene but i don't want to have fewer airlines i want our airlines to be robust compete and do the best for their employees that they can possibly do so it's like we are living in another world to think that this is not a crisis time for the airlines in our country and i don't want to hurt the other airlines either i have nothing against delta and northwest i hope they serve five i hope they do very well because the more airlines we have doing well the better it is for the consumers and passengers in our country but i sure want to make sure that the airlines that have kept their defined benefit plans who are trying to go the extra mile for their employees and do the very most they can as they are the same time struggling with the higher cost of fuel especially i don't think we ought to penalize them and i don't think we are to rector actively change what they relied on and made contributions to their pension plan relying that the law was the law and that the united states senate and the united states congress was a of a body of intelligent people who could reasonably look at the economic news in the world and know that this is not a time when we would destabilize and further hurt an industry that is so important to our current commerce and overall by ability in our country so let's let's put it on the table in the past five years american airlines has made one point seven billion dollars in contributions to its pension plan when i may be wrong i'm not saying that i know exactly but in the last five years and might remember two quarters maybe three where they've actually shown a profit maybe it's been one year out of five but every time i pick up the papers i'm not the airlines with great big robust profits being reported at the end of a quarter last year alone as the all prices were going up and jet fuel is even more expensive than gasoline they made a contribution of three hundred eighty six million dollars which is more than they needed to make to keep their obligations current under the rules in place today before this change would take place they are one hundred fifteen percent funded continental airlines has made a one point three billion dollar contribution to its defined benefit pension plan in the previous five years including three hundred thirty six million last year significantly above the minimum funding required so mr president if there is anything that our senate ought to be able to do it is number one when a law is passed and relied on we would not retroactively change that law to penalize one company in an industry it is not the place of the united states senate to pick winners and losers in our country we are the model of free enterprise in the world and we must keep that stability and secondly mr president if the the parts of the bill that are being added that are extraneous to the underlying f a a modernization built stay in it is going to bring down a great deal a bipartisan bill that my colleague senator rockefeller and i have worked on very hard along with senator in a way and senator stevens the chairman and vice chairman of the committee we've all supported the bill that came out of commerce almost unanimously it has been a joy to work on a bill that provides a better consumer environment a safer environment for passengers that would modernize our air traffic control system even further that would address the issues that have been raised in the last few months about passengers being held hostage on airplanes that are on the ground and giving them rights and requiring airlines to do right by them it's a great bill but if we leave this amendment or if we don't strike this pension plan that is i don't think right in any sense of the word if we strike don't strike this from the bill and we don't take out some of the other extraneous tax provisions that we will deal with later that have nothing to do with aviation it's going to do great damage i think to the flying public and to commerce in our country so i urge my colleagues to look at the arguments here and help us remain stable as stable as an airline can be in this very volatile environment let's not change the rules let's not give advantages to one over another let's try to help all of the airlines make it be profitable be robust provide competition and especially give the very best benefits to their hardworking employees that they can possibly do employees like do not penalize those that are going the extra mile and giving their employees what is becoming more and more rare in this country today and that is defined benefits for their pension plan thank you mr president and i y as president on this surface this is a complicated matter it's pension laws complicated it gets to where the company have a defined contribution plan defined after all the charts and all of this takes a knowledge stuff what's really going on here and i think senators and staff will find when they do that what's really going on here is the question of whether we want to keep two questions  want to keep the playing field level among the airlines or not airlines are going through some difficult times today clearly fuel costs are high it's just it's there are other problems those the two basic questions so how do we get here back several years ago after nine eleven and when the country was facing some economic difficulties and when pension plans for going belly just airline pension plans but other companies pension plans so we've refined the law in two thousand and six to give much more protection to of retirees their pension plans because companies basically were not do what they had been doing back up to that time when we had a little problem on the side that's airlines because there are a lot more financial stress and other companies that have days generally so what we do we said well we want to help airlines the standard rule was six years for all of the companies we say ok here in real stress you get seventeen years here and some strikes it's not as much you get ten years and we detail as companies that were not as much stressed those are companies that helping those they're in bankruptcy too much at our expense they say they're doing the right thing so we said ok that's what this bill does bill says ok we'll give you the same virtually the same interest rate as the others do which is what's that mean that means you don't have to contribute to your pension plan you don't have to so we think that levels the playing field because now all companies will have to contribute to their plans at least prospectively and we're saying to the couple other companies that work and that as a ten year companies you don't have to contribute your plan up to it today's right answer is to keep it fair for everybody at the same law essentially apply for everybody and a committee does that and i must say i also want to protect our protection to retirees don't forget under the two thousand and six pension bill we're trying to get more protection tyreese and also the second effect of the durbin mehmet is on level the playing field it favors certain airlines expense of others president this president i respect the senator's chair finance committee it's one of the toughest assignments on capitol hill and he has adequately described what i think is the challenge of pension plans how to make sure that companies put the money in that they promised and they keep their promise to their retirees what i'm saying is that the approach that the senator brings to the floor in section eight zero eight is opposed by the retirees and workers they do not believe it is in their best interest they certainly don't think it's in their best interest if their airlines goes into bankruptcy they know what's happened repeatedly when airlines goes into bankruptcy the first losers of the retirees and the pension benefits the current workers and they're worried and they should be look at how precarious descend this tree is with jet fuel cost with record losses that these airlines are facing and secondly i can't quarrel with the chairman's promise about keeping the playing field level when it comes to airlines but if that is the case how can he explain to us the two airlines are treated so dramatically different than others delta and northwest have seventeen years to make their pension liability right and we assume that they're going to earn eight point eight five percent each year on their investments regardless of what the actually earn the airlines we're talking about have ten years to make their pension liability right and their assumption of interest is eight point two five percent doesn't sound like much to spend dismissed a little bit here but if you're talking about hundreds of millions of dollars that are being invested in the pension funds you can understand the impact that this might have in the last point i want to make is this senator hu and i want to keep the current status quo the section eight zero eight amendment that we want to strike changes it under the current status the largest airline affected american airlines has one hundred fifteen percent of funding one hundred fifteen percent they are not falling behind they're keeping their word to their employees