Republicans have dropped efforts to include estate tax reform in the pension bill now being crafted by a House-Senate conference committee.

Conference committee watchers say the decision will clear the way for a compromise pension bill to get through Congress next week.

The House could vote on a compromise bill by Saturday, and Senate leaders hope to schedule a vote before Aug. 4, when the Senate leaves for a month-long summer recess.

“Pension reform legislation is very important to the workers, employers, life insurance, as well as the nation as a whole,” Jack Dolan, a spokesman for the American Council of Life Insurers, Washington, says of the reports that the pension bill conference committee has decided to leave out a major estate tax provision. “[The bill] did not need any unrelated measures.”

The Association for Advanced Life Underwriting, Falls Church, Va., which has been leading the industry lobbying effort against the bill, called the decision “an incrementally positive step in this debate.”

“We recognize that key senators such as Sens. Olympia Snowe, R-Maine, and Max Baucus, D-Mont., were concerned that inclusion of such an estate tax provision would potentially jeopardize passage of the pension bill,” AALU President Dermot Healey says.

But the “estate issue hasn’t been taken off the table entirely for this year,” Healey says.

Lawmakers could return to the estate tax issue after the August recess, and “the most recent news indicates that a package of tax extenders, which originally were slated for inclusion in the pension bill, will be considered separately,” Healey says.

Sen. William Frist, R-Tenn., Senate majority leader and proponent of an outright repeal of the estate tax, says Republicans stopped trying to attach the estate tax repeal package after Snowe said that she would not sign the pension bill conference agreement if the estate tax bill was attached to it.