WASHINGTON -- After heavy lobbying by railroads and unions, the Senate was scheduled this week to take up legislation that would allow the federally administered railroad pension system to take its assets out of government bonds for the first time and invest the money on Wall Street, reports the New York Times.

A similar bill passed the House with little debate earlier this year after railroads, their employees and retirees flooded members of Congress with phone calls and e-mail messages supporting the change, which would save money for the companies and improve benefits for retirees and their spouses. The measure enjoys broad bipartisan support in the Senate, too.

But the legislation faces intense opposition from some Republicans, who say they will seek to block it through procedural steps. The opponents said it would hurt the government's budget, leave taxpayers liable for bailing out the pension fund if its investments fail and set a bad example at a time when Congress may need to impose cutbacks in Social Security.

"It's just pilfering," said Senator Phil Gramm, Republican of Texas. "It's the railroads and the unions getting together and saying we've got $15 billion in our trust fund, let's steal it. They want to lower the amount of money the railroads put in, increase benefits and reduce the retirement age. The problem is it leaves the taxpayer holding the bag."

The railroads and the unions said the plan would simply modernize an archaic pension fund that was established by the government during the Depression at a time when railroads were failing.

Because the railroad retirement system cannot now invest on Wall Street in search of higher returns than are available from government bonds -- something that nearly every pension fund is permitted to do -- the railroads say they face exorbitant costs to pay retirees, and unions say their members receive less than they deserve in benefits.

"What we hope to get out of it is what any pension plan has -- a more flexible approach to investments," said Edward R. Hamberger, chief executive of the Association of American Railroads, the trade association for the industry.

The railroads and unions said that the $15 billion the pension fund has invested in government bonds was money they contributed, and that they ought to be free to invest it as they see fit. But under federal bookkeeping rules, moving the money onto Wall Street would force the government to record an outlay of $15 billion -- even though no money would actually be spent -- making what is shaping up to be a sizable budget deficit this year even bigger.

The House bill averted the problem by essentially requiring the government to waive its normal rules for dealing with this type of transfer, meaning it would not have any effect on the budget. It is unclear how the issue will be resolved in the Senate.

"It's almost like we've put money into the bank, money collected from retirees and the companies," said James M. Brunkenhoefer, national legislative director of the United Transportation Union. "Now that we want to take the money out of the bank and put it in equities, we're being told we're being unfair to the bank."

Congressional aides said the bill had widespread support because of aggressive lobbying by railroads and unions.

Mr. Brunkenhoefer said in an interview that unions, for example, had organized employees and retirees to make 61,000 phone calls to one Congressman, Representative J. D. Hayworth, Republican of Arizona.

Mr. Hayworth said the claims of lobbying prowess by unions were vastly exaggerated. He said he was happy to support the interests of the 4,250 railroad retirees in his district, but that he had received nowhere near the volume of calls and e-mail messages claimed by Mr. Brunkenhoefer.