1/ Amount per full week of unemployment or sickness; equals 5 times daily benefit. NOTE.--Data are subject to revision when later reports are received. See Explanatory Notes on page 4. approximately 4,000 in April compared with 19,000 in March. In addition, there was a drop of about 6,000 in other payments. With fewer strike payments in April, the average number of compensable days was 6 per payment, compared with 5 in March. Also, the average payment in April was $75, compared with $67 in the preceding month. Beneficiaries receiving normal payments numbered 25,000-36 percent fewer than in March, while the total on the extended benefit rolls increased from 1,700 to 2,200. Clerks and other office employees and brakemen, baggagemen and switchtenders, with about equal numbers, together formed 30 percent of the total. The latter is usually the largest group. Sickness beneficiaries numbered 19,000 in April, compared with 21,000 in March. A decline in the number receiving normal benefits more than offset an increase in those receiving extended payments. The net amount paid dropped 27 percent to $2.2 million. The average amount for a full week of sickness, before adjustment, remained $63. Beneficiaries receiving normal payments declined 12 percent from March to 16,000, while the number on the extended benefit rolls increased from 3,900 to 4,000. About 500 individuals received both normal and extended payments. More than two-fifths of all the beneficiaries were from three occupational groups: shop craftsmen; brakemen, baggagemen and switchtenders; and clerks and other office employees. Injuries other than fractures and ischemic heart disease were again the most common types of disability, together accounting for one-fourth of the month's total. Railroad workers with these disabilities also accounted for the largest numbers of March and April benefit exhaustions, and formed the largest groups on the extended benefit rolls in April. Of the new beneficiaries in April, only 7 percent, compared with 11 percent in March, were affected by diseases of the respiratory system. Statement of James L. Cowen, Chairman Before the Subcommittee on Railroad Retirement of the Mr. Chairman and Members of the Committee: My name is James L. Cowen. I have been Chairman of the Railroad Retirement Board since October 1972. Prior to that I was the Chief Actuary of the Railroad Retirement Board. I am here to testify on the bill S. 1867 which is similar but not identical to H.R. 7200 which has passed the House. Before commenting on the specifics of this bill, I feel it incumbent upon me as the public member of the Board to review certain other items. First, the Commission on Railroad Retirement and the Board's actuaries have estimated that the Railroad Retirement Account will be exhausted by the year 1985 or 1986 if the temporary 15%, 10%, and 20% increases enacted in the years 1970, 1971, and 1972 were extended indefinitely even without additional liberalizations. Secondly, the increases were made temporary because the enacting legislation which introduced them lacked provisions to finance them. The 15% increase enacted in 1970 has already been extended once. Both this bill and H.R. 7200 have three titles, one amending the Railroad Retirement and Railroad Retirement Tax Acts, one amending the Interstate Commerce Act, and the third being a technical legal provision. Because I am not sufficiently versed in the last two, my comments will be limited to the first which amends the Railroad Retirement and Railroad Retirement Tax Acts. 96-447 0-73- -6 -2 On March 7, representatives of railroad labor and management initialed a tentative agreement which was a landmark in that it was reached well in advance of the expiration date of the old labor contract. It contained the provisions of the bill H.R. 7200, as introduced in the House, and regular labor contract provisions not in this bill. Therefore, H.R. 7200 must be considered in the context of the entire agreement. Senate version of the bill, which is being considered at these hearings, differs somewhat from the House version. The The provisions of Title I of H.R. 7200, as passed by the House, would do the following: 1. 2. Provide full retirement annuities at age 60 or over for em- Four and three-fourths percentage points of the tax rates Employers covered by the Railroad Retirement Act would pay 9.5 percentage -3 paying 15.35 percent of taxable payrolls compared with 5.85 percent to be paid by employers for OASDHI. The total amount of taxes received by the Railroad Retirement Account will remain the same as that provided under present law. Thus, the bill, as passed by the House, does not make any provision for eliminating or reducing the actuarial deficiency of the railroad retirement program. 3. The temporary increases of 15% provided by P.L. 91-377, 10% provided by P.L. 92-46, and 20% provided by P.L. 92-460 would 4. all be extended 18 months from the current termination date of June 30, 1973, to December 31, 1974. Provision is also made for automatic increases in railroad retirement benefits at any time increases are made before 1975 in benefits payable under the Social Security Act. The increases in railroad retirement annuities would be the same dollar amount that the railroad retirement beneficiaries would have received had railroad earnings been covered under the Social Security Act. In determining this increase, social security earnings would be combined with railroad earnings, but no adjustment would be made for any increases in concurrent social security benefits the railroad retirement beneficiaries may be receiving. This provision is temporary only for the period from July 1, 1973, through December 31, 1974. Public Law 92-336, which was enacted in July 1972, pro vided for automatic cost-of-living increases in social security benefits. The first such cost-of-living increase |