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ized to avail itself of the cooperation, services, records, and facilities of such State authorities in the enforcement of any provision of this part or part III.

(4) Whenever in any such investigation the Commission, after full hearing, finds that any such rate, fare, charge, classification, regulation, or practice causes any undue or unreasonable advantage, preference, or prejudice as between persons or localities in intrastate commerce on the one hand and interstate or foreign commerce on the other hand, or any undue, unreasonable, or unjust discrimination against, or undue burden on, interstate or foreign commerce (which the Commission may find without a separation of interstate and intrastate property, revenues, and expenses, and without considering in totality the operations or results thereof of any carrier, or group or groups of carriers wholly within any State), which is hereby forbidden and declared to be unlawful, it shall prescribe the rate, fare, or charge, or the maximum or minimum, or maximum and minimum, thereafter to be charged, and the classification, regulation, or practice thereafter to be observed, in such manner as, in its judgment, will remove such advantage, preference, prejudice, discrimination, or burden: Provided, That upon the filing of any petition authorized by the provisions of paragraph (3) hereof to be filed by the carrier concerned, the Commission shall forthwith institute an investigation as aforesaid into the lawfulness of such rate, fare, charge, classification, regulation, or practice (whether or not theretofore considered by any State agency or authority and without regard to the pendency before any State agency or authority of any proceeding relating thereto) and shall give special expedition to the hearing and decision therein. Such rates, fares, charges, classifications, regulations, and practices shall be observed while in effect by the carriers parties to such proceeding affected thereby, the law of any State or the decision or order of any State authority to the contrary notwithstanding.

(5) Whenever, under the provisions of paragraph (4) of section 15a of this part, the Commission permits or authorizes any increase in the general level of rates, it shall require that any carrier or group of carriers making such an increase effective shall make it effective concurrently both as to interstate rate, fares, charges, classifications, regulations or practices and those made or imposed by authority of any State; and such intrastate increases shall be deemed to have been prescribed within the meaning and under the authority of paragraph (4) of this section: Provided, however, That to the extent any increases in rate finally authorized by the Commission under paragraph (4) of section 15a are less than increases in rates initially made effective hereunder, the carrier or carriers shall upon demand, subject to such tariff provisions as the Commission shall deem sufficient, make refunds in the amount by which the initially increased rate collected exceeds the finally authorized increased rate.

RULE OF RATE MAKING Sec. 15a. (1) When used in this section the term “rates” means rates, fares, and charges, and all classifications, regulations, and practices relating thereto.

(2) In the exercise of its power to prescribe just and reasonable rates the Commission shall give due consideration, among other factors, to the effect of rates on the movement of traffic by the carrier or carriers for which the rates are prescribed; to the need, in the public interest, of adequate and efficient railway transportation service at the lowest cost consistent with the furnishing of such service; and to the need of revenues sufficient to enable the carriers, under honest, economical, and efficient management to provide such service.

(3) In a proceeding involving competition between carriers of different modes of transportation subject to this Act, the Commission, in determining whether a rate is lower than a reasonable minimum rate, shall consider the facts and circumstances attending the movement of the traffic by the carrier or carriers to which the rate is applicable. Rates of a carrier shall not be held up to a particular level to protect the traffic of any other mode of transportation, giving due consideration to the objectives of the national transportation policy declared in this Act. ::

(4) (a) Notwithstanding any other provision of law, the Commission shall, within thirty days of the filing of a verified petition by any carrier or group of carriers subject to this part, permit the establishment of increases in the general level of both the interstate and intrastate rates of said carrier or carriers in an amount approximating that needed to offset increases in expenses theretofore experienced or demonstrably certain to occur commencing on or before the effective date of the increased rates, as a result of the enactment of the Railroad Retirement Amendments of 1973. Such increases in rates may be made effective on not more than thirty nor less than ten days' notice to the public, notwithstanding any outstanding orders of the Commission. To the extent necessary to effectuate their establishment, rates so increased shall be relieved from the provisions of section 4 of this part and may be published in tariff supplements of the kind. ordinarily authorized in general increase proceedings.

(b) The Commission shall within sixty days from the date of establishment of interim rates under paragraph (A) (a) of this section commence hearings for the pirpose of making the final rate determination. T'he Commission shall then proceed to make such final rate determinations: In making such determination, the Commission may take into account all factors appropriate to ratemaking generally under part I of this Act and shall determine such final rates under the standards and limitations applicable to ratemaking generally under port 1 of this Act. If the increases in rates finally authorized by the Commission are less than the increases in rates initially made effective, the carrier or carriers shall upon demand, subject to such tariff provisions as the Commission shall deem sufficient, make refunds in the amount by which the initially increased rate collected exceeds the finally authorized increased rate. Nothing contained in this paragraph shall limit or otherwise affect the authority of the Commission to authorize or to permit to become effective any increase in rates other than the increases herein specified. : :

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L. H.R. 7200-RAILROAD RETIREMENT AMENDMENTS The Railroad Retirement System is being raided. This has been said over and over again in the past few years while we went right ahead and paid additional benefits out of the fund without providing for increased payments to compensate. In fact, within a five year period the benefits under Railroad Retirement have been increased 52%....

*** from 1951 to 1970 the average monthly benefit for a
retired single worker has increased from $90 to $194, or 116%.
Adjusted for inflation, the real purchasing power of the bene-
fit for the unmarried retiree has improved 44% since 1951.
For a worker and wife, the average monthly benefit has in-
creased from $141 in 1951 to $310 in 1970, or 120%. In con-
stant purchasing power terms, the improvement has been

47% for the couple. (Committee Print “Excerpts from the · Report of the Commission on Railroad Retirement;" p. 7)

At the rate we are going, present employees can look forward to an empty cupboard when it comes time for them to retire. Railroad employment has been declining steadily and must, if railroad operation is to remain economically competitive, decline still further. Present railroad employment is 604,000 while at the same time the system is supporting 985,000 pension beneficiaries.

This trend was recognized when the first of three so-called “temporary” increases to match Social Security increases was passed. The measure also contained a provision to create a Presidential Commission to study and recommend a basic restructuring of the system. That Commission reported late last year suggesting a two-tier system having as its basic tier the Social Security fund. All benefits over the above were to be supplementary, but the way to finance these additional benefits was not spelled out. ..

When the report was submitted it was readily evident that Congress would not have time to work out a restructuring by, July 1, 1973, at which time the three temporary increases expire. Some kind of extension would be necessary. H.R. 7200 purports to serve in that capacity. It goes beyond this. There are very basic changes to the present system included in this legislation. Employee payments into the fund are reduced to those paid by Social Security coverage (5.8%), and this cuts payments by individual employees by almost one-half. At the same time management agrees to take on this added cost and increases the management share by the 4.75% of wages, over and above present input. for regular and supplemental pensions. Railroad companies have a future pension cost of 15.3% of total payroll. There is also the provision for immediate higher inflationary freight rates to the public. Yet the agreement still does not provide enough funds to cover the deficits which are accruing every day. . .

These changes set the stage for some very undesirable developments in any restructuring effort. By providing for immediate liberalization of basic benefits it presupposes what can and will be done in the permanent system. The introduction of the automatic freight rate increase removes any incentive to keep the system within reasonable bounds.

96-447 0 - 73 - 28

Labor can demand any kind of benefit increases and management will have no reason to argue since the additional money will be directly stuck on the shipper and the public which has no vote in the matter.

Railroads generally have a very low profit margin and many of them, as we know only too well, are losing money steadily. Of the 70 major industries in the United States, railroads are at the bottom of the list in return of investment with a return of only 1%. In spite of this, railroad management agrees to a pension plan which provides much better benefits than those in most other industries. The Commission on Railroad Retirement reports:

Only about half of the workers in private employment in the United States are covered by private pension plans, and in the retirement area railroad workers do better than most of them. Analysis of pension plans indicate that in 1969 a 30-year career railroader whose monthly earnings would correspond to typical wages in blue collar industries covered by private pension plans already had considerably better retirement benefits than those in other private pension plans. Moreover, since 1969 railroad benefits have been raised (temporarily) 26.5%. Also, a study of income data shows that in 1970 the benefits of an unmarried retired railroad worker were higher than the benefits received by 8 out of every 10 single retirees from any type or combination of public and/or private plan benefits in the country, including social security. The benefits of a married retired railroader and his wife were higher than benefits received by 9 out of any 10 retired couples from any combination of similar benefits. (Committee Print “Excerpts from the Report of the Commission on

Railroad Retirement,” p. 14.) Somewhere, sometime, pressures of such settlements must rip the economic fabric of the country. Inflation will never stop or even slow with such burdens being placed upon the consuming public. Food prices have gone up 49%. The farmer complains bitterly because only 6% can be attributed to rises in prices at the farm. The remainder is in distribution, and certainly a large proportion of that difference is represented by transportation and labor costs.

It is not wise hastily to rush to accept H.R. 7200 just because the parties to a labor contract negotiation saw fit to try it on the public for size. If some or all of the changes turn out to be consistent with a workable long-range plan, they can be accepted and incorporated into a future committee product. If they do not so turn out, they should not be already a part of Railroad Retirement law.

Again Congress is being asked to provide another temporary extension. There is no permanent financing. The deficiency grows greater. Let's consider the present railroad employees who may have no pension reserves when they reach age 65. Let's think of the public which will feel the pressure of higher freight costs. Let's recommit this bill and demand a permanent solution.




Public Law 93-58
93rd Congress, H, R. 7357

July 6, 1973
An Act

87 STAT. 141 To amend sections 3(e) and 5(1) (1) of the Railroad Retirement Act of 1937

to simplify administration of the Act; and to amend section 226(e) of the Social Security Act to extend kidney disease medicare coverage to railroad employees, their spouses, and their dependent children ; and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congre88 assembled, That section 3(e) Railroad Rettreof the Railroad Retirement Act of 1937 is amended by striking out the ment Act of 1937, word "and" after clause (ix) in the second paragraph thereof and amendment. inserting after the semicolon in clause (x) in such second para- Kidney disease

medicare. graph the following new clauses: “(xi) years of coverage as defined in section 215(a) of the

the 82 Stat, 183 Social Security Act for an employee who has been awarded an

86. Stat. 765.

15 USC 2280. annuity under section 2 of this Act shall be determined only on 26 Stat. 410. the basis of his wages and self-employment income credited under 1333. the Social Security Act through the later of December 31, 1971, 42 USC 415. or December 31 of the year preceding the year in which his an- 45 USC 228b. nuity began to aocrue; and (xii) in determining increment months for the purpose of a delayed retirement increase, section 303 (w) (2) (B) (ii) of the Social Security Act shall be deemed to read as follows: "such individual was not entitled to an old-age insurance

benefit”;'." Sec. 2. Section 5(1) (1) of the Railroad Retirement Act of 1937 is Child's annuity, amended

extension. (1) by striking out from clause (ii) “shall not be adopted 60 Stat. 733; After such death by other than a stepparent, grandparent, aunt,

65 Stat. 6883

80 Stat. 1084. uncle, brother, or sister;" ;

45 USC 228e. (2) by striking out from such clause (ii) “age eighteen” and inserting in lieu thereof "age twenty-two or before the close of the eighty-fourth month following the month in which his most recent entitlement to an annuity under section 5(c) of this Act terminated because he ceased to be under such a disability":

(3) by striking from the third sentence thereof “202 (d) (3) or (4)” and inserting in lieu thereof “202(d) (3), (4), or (9)”;

(4) by adding immediately after the seventh sentence thereof Reentitlement. the following new sentence: “A child whose entitlement to an annuity under section 5(c) of this Act was terminated because he ceased to be disabled as provided in clause (ii) of this paragraph and who becomes again disabled as provided in such clause (ii), may become reentitled to an annuity on the basis of such disability upon his application for such reentitlement."; and

(5) by adding the following new paragraph at the end thereof: Full-time “A child who attains age twenty-two at a time when he is a students, full-time student (as defined in subnaragraph (A) of paragraph annuity. 7 of section 202(d) of the Social Security Act and without the 79 Stat, 371; application of subparagraph (B) of such paragraph) but has not 81 Stat. 860. (at such time) completed the requirements for, or received, a 42 USC 402. degree from a four-year college or university shall be deemed (for purposes of determining whether his entitlement to an annuity under this section has terminated under subsection () and for purposes of determining his initial entitlement to such an annuity) not to have attained such age until the first day of the first month following the end of the quarter or semester in which he is enrolled at such time (or, if the educational institution in which he is enrolled is not operated on a quarter or semester system, until the first day of the first month following the completion

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