Railroad Retirement Legislation

Of course, all persons on fixed income are vitally concerned with the cost of living figures for this same period which really determine what can be purchased for the fixed pension or annuity on which they must exist.

An examination of the Consumer Price Index of the Department of Labor shows that the index for all items rose from 111.0 in 1951 to 114.7 in December of 1955. However, this general index alone is insufficient to clearly illustrate sharp increases in many of the other necessities of life. For example, the housing index increased by more than 8 points. The rent index went up to 18 points over this period. Cost of medical care, a big item for old folks, jumped by 19 index points. Miscellaneous goods and services increased by 11 points. The food index dropped by 3 points, while the clothing index went down by 2 points, but this was hardly enough to make any significant difference.

Mr. Chairman, I strongly believe that our future economic growth and development depends to a considerable extent upon the ability of retired individuals to buy an ever-increasing amount of the goods and services which are produced by our highly industrialized society.

The proposed 15 percent increase in railroad retirement pensions ⚫ and annuities is one vital way to implement this objective. The increase, I feel, can be more than justified solely on moral grounds. Our retired senior-partners whose labors have built our Nation into the industrial giant of today are entitled to receive a fair share of the abundance which has been created.

By enactment of this legislation we can also strengthen our economy at its very foundations by opening up broad areas of demand for basic consumer goods, such as food, clothing, better shelter, appliances, and other items.

Mr. Chairman, I sincerely hope that the decision of this committee will be overwhelmingly in favor of reporting H. R. 9065 and that it may be enacted into law at the present session.

Now, with your permission I would like to discuss a related matter in connection with proposed amendments to the Railroad Retirement Act.

In recent months I have received letters from certain wives of retired railroad employees who have, in their lifetime, earned social security benefits in their own right. In many instances during the past 20 years, wives have found it necessary to find jobs to supplement their husband's income when layoffs, sickness, or other circumstances threatened the family's living standards.

Under the present law, such wives are not permitted to draw dual benefits, that is the full amount of their social security benefits and the full amount of the spouse's benefits paid under the Railroad Retirement Act. The amount of the social security benefit to which the wife is entitled at age 65 is deducted from the amount she receives under the spouse's railroad retirement benefit.

As you know, the right to draw dual benefits was extended to retired railroad employees in 1954 and to survivors of such employees last year. It seems to me, that in all fairness, the wives of retired railroaders are similarly entitled to receive their full share of their husband's railroad retirement benefits as well as any social security benefits which they may be entitled to because of employment in covered industry in their own right.

The present law discriminates against these wives who were required to seek employment because of circumstances over which they often had no control. I feel that railroad retirement and social security are separate and distinct types of laws. To deprive persons of benefits earned through their own labor by a combination of the two laws for purposes of limiting total benefits is to me unwarranted and unjustified.

I am informed that legislation is pending before this committee which would permit the payment of dual benefits to wives entitled to social security benefits. I sincerely hope that the committee may see fit to approve such legislation so that these individuals will no longer be penalized unnecessarily.

Thank you for the opportunity of presenting my views to the committee.

Mr. HARRIS. Thank you, Mr. Rhodes. The next witness is our colleague from North Dakota, Mr. Burdick.

STATEMENT OF HON. USHER L. BURDICK, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH DAKOTA

Mr. BURDICK. Mr. Chairman and members of the committee, a bill, introduced by the chairman of the subcommittee, recommends itself to me, and having become convinced of the merits of H. R. 9065 introduced by Congressman Harris, I also introduced a companion measure, H. R. 9256. These bills include three main proposals which are stated here briefly:

1. These bills provide for a much needed increase of 15 percent in benefits for thousands of pensioners, widows and other beneficiaries under the Railroad Retirement Act.

2. In order to pay for these increased benefits and maintain the railroad retirement fund on a sound basis, both of these bills would impose an additional 1 percent tax on the railroads and their employees.

3. The tax on employees would be immediately offset by exempting the employee's tax from gross wages in the computation of their income tax. Workers in Canada and Great Britain presently have such an exemption benefit. Under this amendment, most railway employees would ultimately be taxed less than they are now under the 614 percent tax, or the proposed tax of 74 percent under these bills. H. R. 9065, the original bill, and the many companion measures which have been introduced, including my bill, H. R. 9256, are finding widespread support both in and out of Congress. I hope these bills will be favorably considered and reported by this committee and passed by the House and Senate promptly and enacted into law. Mr. HARRIS. Thank you, Mr. Burdick. The next witness is the Honorable Frank Thompson, Jr., of New Jersey.

STATEMENT OF HON. FRANK THOMPSON, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY

Mr. THOMPSON. Mr. Chairman and Members of the committee, I have received numerous letters from retired railroad workers and members of their families residing in my Congressional District stat

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ing their need for increased benefits under the Railroad Retirement Act. I have studied H. R. 9065, a bill introduced by the Chairman of this Subcommittee, Congressman Oren Harris, and find that it contains provisions which would answer the needs of my constituents for greater benefits, and, in addition, would provide the ways and means to collect additional taxes without imposing a burden upon the active railroad workers. I have, therefore, introduced H. R. 9663 as a companion measure.

The provisions of these bills would (1) increase the benefits by 15 percent for thousands of pensioners, widows and other beneficiaries under the Railroad Retirement Act; (2) impose an additional 1 percent tax on both the railroads and railroad employees to provide the necessary funds for these increased benefits in order to keep the railroad retirement fund on an actuarily sound basis; and (3) offset the increased taxation of employees by making their taxes paid to the railroad retirement fund exempt from Federal income tax. The railroads at the present time enjoy this exemption.

This legislation has the support of all the standard railway labor organizations.

I sincerely hope that these bills will be favorably considered and reported out by this committee and ultimately passed in both Houses of Congress and enacted into law.

Mr. HARRIS. We thank you for your testimony, Mr. Thompson. The next witness is our colleague from Wisconsin, Mr. Zablocki.

STATEMENT OF HON. CLEMENT J. ZABLOCKI, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WISCONSIN

Mr. ZABLOCKI. Mr. Chairman, I am delighted to have the opportunity of presenting a statement in support of H. R. 9628, which I introduced to provide for an increase in railroad-retirement benefits, and on behalf of similar measures introduced by my distinguished colleagues.

The purpose of the legislation before your committee is simple, but of vital importance to thousands of retired railroad workers, their dependents, and survivors. H. R. 9628 proposes a badly needed 15 percent increase in railroad-retirement benefits. This increase would be granted to retired pensioners, widows, and other beneficiaries with minor exceptions.

I am certain that it is not necessary for me to review the reasons which have prompted the introduction of this legislation. I would only like to state that these proposed improvements have the endorsement of the majority of organizations of railroad employees, and of other persons familiar with the benefits presently payable under the Railroad Retirement Act.

At this point I would like to note that H. R. 9628-while increasing retirement benefits- would maintain the actuarial soundness of the railroad-retirement fund. To pay for the increased benefits and keep the railroad-retirement fund in sound financial condition, the bill would raise the additional funds in the amount of 2 percent of covered payrolls. Both the employee and the employer will pay an additional 1 percent, making their contributions 714 percent on the first $350 of monthly wages instead of 614 percent.

The increased tax on railroad workers would be immediately offset under another provision of this legislation which exempts the employees' contributions from gross wages in the computation of their income tax. This exemption is considered fair and equitable since the employers already receive credit on their corporate taxes for the amounts paid into the retirement fund.

Mr. Chairman, it is my hope that your committee will take prompt and favorable action on the legislation before you. Your approval of the proposal will be sincerely appreciated by the thousands of railroad workers and their families.

Mr. HARRIS. Thank you, Mr. Zablocki.

The next witness will be Col. Raymond J. Kelly, who is Chairman of the Railroad Retirement Board.

We also have other members of the Board present. We have Mr. Horace W. Harper and Mr. Thomas M. Healy, members of the Board here.

I assume, Colonel, in view of the report that I have received over the weekend, the three of you will probably have statements to make.

STATEMENT OF RAYMOND J. KELLY, CHAIRMAN OF THE RAILROAD RETIREMENT BOARD

Mr. KELLY. That is correct, sir.

Mr. HARRIS. Very well, you may proceed.
Mr. KELLY. Mr. Chairman and gentlemen-

Mr. HARRIS. Colonel Kelly, I fully realize you obviously have a difficult assignment this morning if you are going to report the views of the Board on all of the bills that are pending before this committee.

I would not personally, and I am sure the other members of the committee would not expect you to take the time to comment on all of the bills because I assume now that there are about 120 or 130 bills pending before the committee. I fully realize that many of them are similar. I know that we have here on this bill, H. R. 9065, some 69 cosponsors and on other bills there are many cosponsors. But there are a number of other bills, of course, that your Board has reported on, and I have already included those reports in the record.

But we would like to have you report on any major items which this committee has to consider.

Mr. KELLY. Mr. Chairman and gentlemen, I have an 11-page statement together with a list of all of the bills which have been introduced in the 84th Congress to amend the Railroad Retirement Act, and which have been referred to us for reports.

Now copies of this list have been distributed to the members of this committee and, unless the committee wishes otherwise, I will try to summarize briefly the statements in a very few sentences.

Mr. HARRIS. Very well. We would be glad to have you do that. I notice that you have with your statement a summary of the provisions of all the railroad-retirement bills pending before the committee. Without objection, it will be included in the record with your statement, and all of your statement may be included in the record.