Winter 2007

By Susan J. White and Jonah Mainzer, Susan J. White and Associates, Inc.

The end of 2006 brings not only the end of the 109th Congress but also the end of twelve years of Republican control Congress. Many issues-especially the appropriations bills which fund the federal government-- were left to wither during the Lame Duck session of Congress and these will have to be reintroduced during the next session of Congress.

Elections
Election results in both the House of Representatives and the Senate left both Chambers of Congress in control of the Democrats for the first time since 1994. One race in Florida remains undecided and is apparently headed to court. Currently, Democrats have gained thirty seats in the House and unless the courts overturn the results in Florida this is how it will remain. These results give the Democrats a 233-202 edge in the House.

In the Senate, Democrats were able to defeat six Republican incumbents and were able to take control by a narrow 51-49 margin. This fifty-one includes two independents who have both announced that they plan to caucus Democrat.

Many of these races were extremely close and recounts were ordered automatically depending on the state and margin of victory. As an example in both Virginia and Montana the Democratic challenger defeated the Republican incumbent by under .5%.

Committee changes
The Democratic takeover of Congress means that Democrats will now chair Congressional Committees. These announcements were made in the weeks following the election and have so far contained no surprises as Democrats, with the exception of the Select Committee on Intelligence have chosen the Ranking Members of the Committees as Chairmen.

In the Senate, Democratic committee, but not subcommittee, assignments have already been announced and as expected Sen. Max Baucus (D-MT) replaced Sen. Charles Grassley (R-IA) as chairman of the Finance committee which has jurisdiction over state and local government defined contribution plans, as well as Social Security. The Senate also has a Special Committee on Aging which does not have any legislative jurisdiction, but studies all matters pertaining to aging, including overviews of retirement income programs-both public and private-- women's retirement matters. The incoming chairman of that committee is Sen. Herb Kohl (D-WI) and he replaces Sen. Gordon Smith (R-OR) who recently cosponsored National Save for Retirement Week.

In the House, Congressman Charles Rangel (D-NY) will take over the helm of the Committee on Ways and Means, for retiring Rep. William Thomas (R-CA). Ways and Means has jurisdiction over state and local government defined contribution plans and also has a subcommittee that deals exclusively with Social Security and Representative Sander Levin (D-MI) is the replacement for Rep. Jim McCrery (R-LA) as subcommittee chairman. The Administration has already indicated that it wants to reopen the debate on Social Security, so this subcommittee will be key.

Upcoming Agenda
The 110th Congress will convene on January 4 and will stay in session until the President's State of the Union at the end of the month. This is not the usual practice, as both chambers typically wait to get down to business until after the State of the Union. Appropriations bills for Federal Fiscal Year 2007 will likely be the first order of business as only two of the eleven annual Appropriations bills have been signed into law. The rest of the government is being funded in the short term by a continuing resolution, funding the government at the previous years levels. Congress will also have to immediately begin work on the Federal Fiscal Year 2008 appropriations bills and so the Democratic Leader's Office in the House has announced its intention to fund the remainder of 2007 through a continuing resolution.

After a failed attempt to reform Social Security during the 109th Congress, President Bush has vowed another attempt. Incoming Ways and Means Committee Chairman, Representative Rangel has announced that he is willing to work with the Administration to find solutions to the funding concerns of the program; however, he has also indicated that authorizing private accounts under Social Security is a "non-starter".

On all other fronts related to pension legislation, it is unclear how Congress or the Administration might proceed. Some possible highlights for the coming year and possible agenda items for NAGDCA include:

  • Introduction of Joint Congressional Resolution for a National Savings for Retirement Week
  • Department of Treasury release of regulations on 403(b) plans and to implement the Pension Protection Act of 2006
  • Reintroduction by Senator Smith (R-OR) of S. 3951, the Women's Retirement Security Act of 2006
  • Expansion of benefits under some of the healthcare and other public employee benefit provisions recently passed as part of the Pension Protection Act of 2006.
  • Continued review by the General Accounting Office (GAO) and Congress regarding the financial status of state and local defined benefit plans
  • Social Security Reform
  • Congressional oversight hearings on the status of state and local defined contribution plans and how plans are working, who is covered and how many jurisdictions offer such plans

We look forward to continuing to work with NAGDCA as the 110th Congress convenes and we wish you all Happy and Safe New Year!