SALEM, Ore. — The Oregon Senate sent the House a short-term pension fix cutting public employee retirement benefits, a politically difficult vote for Democrats who say they were forced to choose between slashing benefits or letting employer interest rates rise.

Ultimately, some who were originally against the proposal reluctantly came around, saying higher interest rates would eat into budgets and lead to layoffs in the public sector.

“My heart is broken today because my back is against the wall,” said Sen. James Manning Jr., a Democrat who voted yes after signaling his opposition earlier this week. “I have two worlds that are colliding today — how do I respond?”

The plan, which the Senate approved by a 16 to 12 vote Thursday, essentially refinances the $25 billion in debt incurred from the Public Employee Retirement System, known as PERS. It extends the state’s repayment period from 20 to 22 years, which is meant to shield employers from an impending interest rate hike in the upcoming years.

More controversially, the measure also redirects 2.5 percent of employee salary toward PERS. That translates to a 7 percent to 12 percent cut to employees’ secondary retirement account, which is a 401(k)-type plan meant to supplement the public pension.

Sen. Tim Knopp, a Bend Republican, stressed this “is not a permanent solution,” and there needs to be more legislative action if the state wants to substantially pay down the debt.

Senate Minority Leader Herman Baertschiger Jr., who was the public face of a Republican walkout over perceived Democratic inaction on PERS, voted against the measure but said in a statement that it was the “first step to remedying the unfunded liability that has been a detriment to our state.”

The plan garnered fierce opposition from unions, who have bashed the idea of cutting benefits.

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