Budget Reconciliation and the PBGC

Publication Date: November 2005

Publisher: Library of Congress. Congressional Research Service

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Research Area: Banking and finance

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Abstract:

The Pension Benefit Guaranty Corporation (PBGC) posted a deficit of $23.5 billion as of the latest reporting period, and the deficit is expected to grow further. Major bills introduced in the 109th Congress to reform funding rules for the defined benefit pension system and to raise PBGC premiums include H.R. 2830 and S. 1783. Neither has yet passed the full House or Senate. PBGC premiums are an important source of revenue for meeting the budget reconciliation targets. The House Budget Committee has reported out H.R. 4241, a budget reconciliation package that would raise PBGC premiums. The Senate has passed S. 1932, a budget reconciliation package that also contains PBGC premium increases. The House and Senate budget reconciliation proposals include different provisions for increasing PBGC premiums that would raise revenues of $6.2 billion and $6.7 billion, respectively, over five years. The House Republican leaders are attempting to bring the budget reconciliation bill to the floor in the near future. Once the House passes its budget reconciliation bill, the House and Senate will conference in the remaining weeks of 2005 to try to pass a final bill. This report will be updated as legislative developments warrant.