Legislation to overhaul the U.S. private pension system suffered another setback on Thursday as key House Republican lawmakers boycotted a negotiating meeting in a fight over whether to keep some $35 billion in tax breaks in the bill.

A furious Sen. Charles Grassley (news, bio, voting record), Republican of Iowa, denounced the no-shows from the House as scaredy-cats. But the chairman of the House of Representatives and Senate pension negotiating team, Wyoming Republican Sen. Mike Enzi, said he intended to keep talking to all the negotiators to seek a deal on the bill.

I was just wondering why you wouldn't have guts enough to come forth and cast a vote, Grassley fumed as he looked around a half-empty conference table in a Senate office building.

Progress on the bill to overhaul the troubled traditional pension system was delayed earlier this week when Grassley and other senators rebelled against plans by Republican leaders in both the House and Senate to strip the bill of popular tax breaks for businesses, education and research.

The array of tax breaks includes deductions for certain tuition costs, state and local sales taxes in areas where there is no state income tax, and tax credits for companies' research and development costs.

House Speaker Dennis Hastert and Senate Majority Leader Bill Frist want to take these popular tax cuts and pair them with a more contentious Republican plan to cut the estate tax. The estate tax cut has failed repeatedly to pass the Senate.

Enzi, however, called the meeting on Thursday to try and force a vote on the pension bill with the popular tax cuts still in it. The tactic failed when many House negotiators did not appear.

Grassley, chairman of the Senate Finance Committee, said he had promised earlier this year to put the more popular tax break extensions in the pension bill and felt he was being asked to go back on his word by lawmakers pressing him to change his mind. He implied he did not think the estate tax cut would pass, even with other tax cuts attached.

When my credibility is abused and used, I resent it, Grassley stormed.


Just two out of 11 House members of the negotiating team were present to hear him, both Democrats. Ten of 16 senators in the group from both parties attended.

A spokesman for House Majority Leader John Boehner, an Ohio Republican and one of the no-shows at the meeting, said he wanted to keep working with other negotiators.

In order to get this deal done, Mr. Boehner believes we ought to get back to working together in a constructive fashion to resolve the one issue unrelated to pensions and pass the most sweeping reforms to our America's pension laws in more than 30 years, the spokesman, Kevin Smith, said.

Most of the pension bill aims to close loopholes that led to massive underfunding of employer-sponsored pensions that cover 44 million Americans. Another goal is to cut the risk that the pension insurance agency will need a taxpayer bailout.

The pension bill has been under negotiation for months, and lawmakers said Thursday they had agreed on virtually all its provisions. But time is short if it is to be voted on now.

The House is set to break for an August recess at the end of this week. The Senate stays in one more week before break.

Enzi said negotiators had agreed on details of aid affecting two other airlines, Delta Air Lines Inc (Other OTC:DALRQ - news), Northwest Airlines Corp (Other OTC:NWACQ - news), but he did not provide them. These carriers had threatened to default on their pension next month if they did not get help with meeting funding gaps.

(Additional reporting by Donna Smith and John Crawley)