-3

deficit and would create precedents which narrow the options available. We would be farther from a solution--not nearer to a solution--if H. R. 7200 were enacted.

Major trends in the transportation industry in recent decades have been

(1) a steady decline in the percentage of the total traffic shipped by rail and (2) a steady decline in railroad employment. The enactment of H. R. 7200 would accelerate both of these trends. In the final analysis these trends exist because of the fact that in more and more situations the rates and services of rail carriers have not been competitive; they are becoming less competitive. enactment of H. R. 7200 can only further reduce the competive status of railroads and give new impetus to the above trends. This is a short-run expedient which solves nothing, makes the problem more difficult and will have an adverse impact on railroads, railroad employment and the nation.

The

We appreciate the complexity of the problem. Congress is being asked to act hastily because the temporary increase in benefits is near expiration.

However,

we believe the parties should be expected to produce something better than H. R. 7200--an answer that does not involve shifting the burden to others. We recommend that the Congress avoid any change in benefits or the sharing

of costs, or any change which would narrow the options available. We recommend that action be taken to stabilize the current situation for a few months to provide the parties an incentive and an opportunity to present more satisfactory proposals than those in H. R. 7200.

Senator HATHAWAY. The subcommittee will go into executive session in 2 minutes.

[Whereupon, at 11:30 a.m., the subcommittee proceeded into executive session.]

APPENDIX A

Public Law 93-69

93rd Congress, H. R. 7200

July 10, 1973

An Act

To amend the Railroad Retirement Act of 1937 and the Railroad Retirement Tax Act to revise certain eligibility conditions for annuities; to change the railroad retirement tax rates; and to amend the Interstate Commerce Act in order to improve the procedures pertaining to certain rate adjustments for carriers subject to part I of the Act, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

87 STAT. 162

Railroads.

Retirement annui

TITLE I-RAILROAD RETIREMENT ACT AMENDMENTS ties and tax

rates.

SEC. 101. Section 2(a) of the Railroad Retirement Act of 1937 is Interstate and amended

intrastate rate

(1) by striking out "Women" in paragraph 2 and inserting in adjustments. lieu thereof "Individuals";

(2) by striking out "Men who will have attained the age of sixty and will have completed thirty years of service, or individuals" in paragraph 3 and inserting in lieu thereof "Individuals";

and

60 Stat. 727; 75 Stat. 585. 45 USC 228b.

(3) by striking out "such men or" in paragraph 3 thereof. SEC. 102. (a) Section 3201 of the Internal Revenue Code of 1954 Employee re(relating to the rate of tax on employees under the Railroad Retire- tirement tax ment Tax Act) is amended by striking out all that appears therein and rates, reducinserting in lieu thereof the following:

tion.

80 Stat. 1078.

"In addition to other taxes, there is hereby imposed on the income 73 Stat. 28; of every employee a tax equal to the rate of the tax imposed with 26 USC 3201. respect to wages by section 3101 (a) of the Internal Revenue Code

of 1954 plus the rate imposed by section 3101 (b) of such Code of so 86 Stat. 1362, much of the compensation paid to such employee for services rendered 1363.

by him after September 30, 1973, as is not in excess of an amount equal to one-twelfth of the current maximum annual taxable 'wages'

as defined in section 3121 of the Internal Revenue Code of 1954 for 68A Stat. 417; any month after September 30, 1973."

(b) Section 3202 (a) of such Code is amended

86 Stat. 419, 1365.

(1) by striking out "1965" wherever it appears in the second 80 Stat. 1088. sentence thereof and inserting in lieu thereof "1973";

(2) by striking out "(i) $450, or (ii)" wherever it appears in

the second sentence thereof; and

(3) by striking out ", whichever is greater," wherever it appears

in the second sentence thereof.

(c) Section 3211 (a) of such Code (relating to the rate of tax on Employee repreemployee representatives under the Railroad Retirement Tax Act) is sentatives, tax. amended by striking out all that appears therein and inserting in lieu 73 Stat. 29; thereof the following: 80 Stat. 1078, 1088.

"(a) In addition to other taxes, there is hereby imposed on the income of each employee representative a tax equal to 9.5 percent plus the sum of the rates of tax imposed with respect to wages by sections 3101(a), 3101(b), 3111(a), 3111(b) of the Internal Revenue Code of 1954 of so much of the compensation paid to such employee representative for services rendered by him after September 30, 1973, as is not in excess of an amount equal to one-twelfth of the current maximum annual taxable 'wages' as defined in section 3121 of the Internal Revenue Code of 1954 for any month after September 30, 1973."

(d) Section 3221 (a) of such Code (relating to the rate of tax on Employers, employers under the Railroad Retirement Tax Act) is amended by excise tax. striking out "In addition to other taxes" and all that follows to "except

87 STAT. 163

68A Stat. 417; 86 Stat. 419, 1365.

26 USC 3121.

73 Stat. 29.

Pub. Law 93-69

July 10, 1973 "In addition to other taxes, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to 9.5 percent of so much of the compensation paid by such employer for services rendered to him after September 30, 1973, as is, with respect to any employee for any calendar month, not in excess of an amount equal to one-twelfth of the current maximum annual taxable 'wages' as defined in section 3121 of the Internal Revenue Code of 1954 for any month after September 30, 1973;". (e) Section 3221 (a) of such Code, as amended by section 102 (d) of this Act, is further amended

(1) by striking out "1965" wherever it appears in the first sentence thereof and inserting in lieu thereof "1973";

66

(2) by striking out “(1) $450, or (ii)" wherever it appears in the first sentence thereof; and

(3) by striking out ", whichever is greater," wherever it appears in the first sentence thereof.

(f) Section 3221(b) of such Code is amended by striking out all that appears therein and inserting in lieu thereof the following:

"(b) The rate of tax imposed by subsection (a) shall be increased. with respect to compensation paid for services rendered after Septemher 30, 1973, by the rate of tax imposed with respect to wages by section 3111 (a) of the Internal Revenue Code of 1954 plus the rate imposed 86 Stat. 1364. by section 3111(b) of such Code."

79 Stat. 396;

Annuity increase,
termination
date, exten-
sion.

84 Stat. 792;

85 Stat. 102. 45 USC 228c note.

86 Stat. 767.

45 USC 2280 note.

82 Stat. 17;

86 Stat. 765.
45 USC 228c.

Annuity com-
putation.
42 USC 401.

42 USC 1305.

SEC. 103. (a) Section 6 of Public Law 91-377, as amended by section 8(c) of Public Law 92-46, is further amended by striking out "June 30. 1973" each time that date appcars and inserting in lieu thereof "December 31, 1974".

(b) Section 8(b) of Public Law 92-46 is amended by striking out "June 30, 1973" each time that date appears and inserting in lieu thereof "December 31, 1974".

(c) Section 5(b) of Public Law 92-460 is amended by striking out "June 30, 1973" each time that date appears and inserting in lieu thereof "December 31, 1974".

SEC. 104. (a) Section 3(a) of the Railroad Retirement Act of 1937 is amended by inserting at the end thereof the following new paragraph:

"(6) If title II of the Social Security Act is amended to provide an increase in benefits payable thereunder at any time during the period July 1, 1973, through December 31, 1974, the individual's annuity computed under the preceding provisions of this subsection and that part of subsection (e) of this section which precedes the first proviso shall be increased in an amount equal to the difference between (i) the amount (before any reduction on account of age) which would be payable to such individual under the then current law if his or her annuity were computed under the first proviso of section 3 (e) of this Act, without regard to the words 'plus 10 per centum of such amount' contained therein; and (ii) the amount (before any reduction on account of age) which would have been payable to such individual under the law as in effect prior to July 1, 1973, if his or her annuity had been computed under such first proviso of section 3(e) of this Act, without regard to the words 'plus 10 rer centum of such total amount' contained therein (assuming for this purpose that the eligibility conditions and the proportions of the primary insurance amounts payable under the then current Social Security Act had been in effect prior to July 1, 1973): Provided, however, That, in computing such amount, only the social security benefits which would have been payable to the individual whose annuity is being computed under this Act shall be taken into account: Provided further, That if an annuity accrues to an individual for a part of a month the added

July 10, 1973

Pub. Law 93-69

87 STAT. 164

amount payable for such part of a month under this section shall be one-thirtieth of the added amount payable under this section for an entire month, multiplied by the number of days in such part of a month. If wages or compensation prior to 1951 are used in making any computation required by this paragraph, the Railroad Retirement Board shall have the authority to approximate the primary insurance amount to be utilized in making such computation. In making any computation required by this paragraph, any benefit to which an individual may be entitled under title II of the Social Security Act 42 USC 401. shall be disregarded. For purposes of this paragraph, individuals entitled to an annuity under section 2(a) (2) of this Act shall be deemed 45 USC 228b. to be age 65, and individuals entitled to an annuity under section 2(a) (3) of this Act who have not attained age 62 shall be deemed to be age 62. Individuals entitled to annuities under section 2(a) (4) or 2(a) (5) of this Act for whom no disability freeze has been granted shall be treated in the same manner for purposes of this paragraph as individuals entitled to annunities under section 2(a) (4) or 2(a) (5) for whom a disability freeze has been granted. In the case of an individual who is entitled to an annuity under this Act but whose annuity is based on insufficient quarters of coverage to have a benefit computed, either actually or potentially, under the first proviso of section 3(e) of this Act, the average monthly wage to be used in determining the amount to be added to the annuity of such individual shall be equal to the average monthly compensation or the average monthly earnings, whichever is applicable, used to enter the table in section 3(a) (2) of such Act for purposes of computing other portions of such individual's annuity."

(b) Section 2(e) of the Railroad Retirement Act of 1937 is Spouse's mended

annuity.

(1) by striking out "section 3(a), (3), (4), or (5) of this Act" 86 Stat. 765. and inserting in lieu thereof "section 3(a), (3), (4), (5), or (6) 45 USC 228b.

of this Act";

(2) by striking out the second sentence of the last paragraph; and

(3) by adding at the end thereof the following new paragraph: "The spouse's annuity computed under the other provisions of this section shall (before any reduction on account of age) be increased in an amount determined by the method of computing increases set forth in subsection (a) (6) of section 3. The preceding sentence and the Ante, p.163. other provisions of this subsection shall not operate to increase the annuity of a spouse (before any reduction on account of age) to an amount in excess of the maximum amount of a spouse's annuity as provided in the first sentence of this subsection. This paragraph shall be disregarded in the application of the preceding three paragraphs."

(c) Section 2(i) of the Railroad Retirement Act of 1937 is amended 45 USC 228b. by striking out "the last paragraph plus the two preceding paragraphs" and inserting in lieu thereof "the last paragraph plus the three preceding paragraphs".

(d) Section 5 of the Railroad Retirement Act of 1937 is amended by Survivor's inserting at the end thereof the following new subsection:

"(q) A survivor's annuity computed under the preceding provisions

annuities.

of this section shall be increased in an amount determined by the 86 Stat. 766. method of computing increases set forth in subsection (a) (6) of sec- 45 USC 228e. tion 3: Provided, however, That in computing such an amount for an individual entitled to an annuity under subsection 5(a) (2), the 90.75 82 Stat. 19. per centum figure appearing in the third paragraph of section 3(e) 45 USC 228c. of this Act shall be deemed to be 82.5 per centum."

SEC. 105. If title II of the Social Security Act is amended to provide Benefit inan increase in benefits payable thereunder at any time during the increases. period July 1, 1973, through December 31, 1974, the pension of each