The Senate passed the House version of the pension bill last night by unanimous consent. We were not successful in getting further relief for American Airlines into the bill as Delta and Northwest were successful in convincing Senators that they would terminate their pensions and force the PBGC (taxpayers) to pick up the cost if they were not offered immediate relief.

However:

1) The bill did include a two-year extension of a Deficit Reduction Contribution (DRC) relief measure worth $1 billion to American Airlines. (This measure only brought that kind of financial relief if passed this year so AA also shared some urgency in the bill’s passage.)

Six months ago American Airlines was not even mentioned in connection with pension relief, so our $1 billion inclusion in the final measure is a credit to all the TWU and other union members at AA who worked so hard to force Congress to include us.

2) We also received a pledge from GOP Senate leaders to pass a pension “corrections bill” through Congress after the August recess that would provide more equal treatment for American and Continental Airlines with Delta and Northwest.

[This measure would address the discount rate used to compute pension contributions. Despite American’s having earned 9% on its pension fund assets over the past years, the current bill would force them to assume only a 5% return which would almost double the amount they were forced to contribute. Northwest and Delta were granted an 8.75% rate. An 8.5% rate for American would be worth about $1.5 billion in current savings to the company.]

TWU members should recognize that it will take a lot of work on our part to make this pledge a reality. The measure would have to pass not only the Senate but also the House, where Ways & Means Chairman Bill Thomas successfully fought us last week.

Nonetheless, it was a sign of the strength of our Grassroots Program that Senators were able to force this pledge at all. The Pension Bill was held up by a number of Republican Senators from states with a strong American and Continental presence who would not agree to give unanimous consent to its passage unless they were guaranteed additional help for those airlines. The measure already has the near-unanimous support of both House and Senate Democrats with Sens. Ted Kennedy (D-MA) having championed it during the failed pension Conference.