Principal provisions and level costs of bills to amend the Railroad Retirement, Railroad Retirement Tax, and Railroad Unemployment Insurance Acts pending before the Senate, 85th Cong., as of Mar. 5, 1957 S. 360, Barrett.. S. 491, Chavez.. S. 945, Langer and Martin. 8. 1180, Morse and Neuberger. S. 1313, Morse and 14 others. Changes the disability work clause to allow earnings of up to For the relief of a particular individual. (a) Full retirement annuities at age 60 with 30 years of service, (c) Raises the limit on creditable compensation to $350 a For the relief of a particular individual. 1. Railroad retirement system: (a) Increases retirement and survivor benefits by ap- (b) Increases limit on monthly compensation to $400. (d) Liberalizes the disability work clause, provides re- (e) Increases the combined rate of retirement taxes by Effect of amendments: 1 Unless indicated otherwise, cost figures relate to a payroll with a $350 limit on monthly compensation. 2 Not applicable. Relates to a payroll with a $400 limit on monthly compensation. 4 After allowing for funds on hand and estimated gains from financial interchange. NOTE.-Prepared by Railroad Retirement Board. Senator MORSE. There will appear, following that, the text of S. 945 and S. 1313, and my summary of the provisions of S. 1313, and the reports of the Board will appear thereafter unless it also constitutes the main testimony of the Board. (S. 945 follows:) [S. 945, 85th Cong., 1st sess.] A BILL To amend the Railroad Retirement Act of 1937, as amended Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Railroad Retirement Act Amendments of 1957". SEC. 2. Paragraphs numbered 2 and 3 of section 2 (a) of the Railroad Retirement Act of 1937, as amended, are amended to read as follows: "2. Individuals who will have attained the age of sixty and will have completed thirty years of service. "3. Individuals who will have completed thirty-five years of service, without regard to age". SEC. 3. Section 3 (c) of such Act is amended to read as follows: "(c) The 'monthly compensation' shall be the average compensation paid to an employee with respect to calendar months included in his 'years of service', except that with respect to service prior to January 1, 1937, he shall be credited with monthly compensation in an amount equal to the average compensation paid to him monthly for the five calendar years (consecutive or nonconsecutive) included in his 'years of service' for each of which he received aggregate compensation exceeding that received by him for any other such calendar year: Provided, That in computing 'monthly compensation', no part of any month's compensation in excess of $350 shall be recognized." SEC. 4. All recertifications required by reason of any amendment made by this Act shall be made by the Railroad Retirement Board without application therefor. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, Hon. LISTER HILL, Chairman, Committee on Labor and Public Welfare, United States Senate, Washington, D. C. July 29, 1957. DEAR MR. CHAIRMAN: This letter is in response to your request of March 25, 1957, for a report on S. 945, a bill to amend the Railroad Retirement Act of 1937, as amended. S. 945 would provide for payment of a full railroad retirement annuity (rather than a reduced annuity) to male employees at age 60 after 30 years' service (provided for female employees under present law) and would permit payment of a full annuity at any age after 35 years of service. The bill would restrospectively raise to $350 the present $300 ceiling on creditable railroad earnings which is applicable under section 3 (c) of the act to service before July 1954, and it would amend section 3 (c) by providing that an employee's average monthly compensation for the pre-1937 period shall be basted on his 5 years (not necessarily consecutive) of highest earnings, instead of the now used straight monthly average for the 1924-1931 base period. At the same time, perhaps inadvertently, the bill would drop the present provisions for disregarding compensation and service after age 65 if such compensation and service would reduce annuity amounts. In a report which we recently sent you giving the views of this Department on S. 1313, we referred to the need for improving the financial situation of the railroad retirement system. S. 945 would increase the costs of the railroad program without making any provisions for meeting these increased costs and would thus increase the present deficit of the system. We therefore recommend against the enactment of the bill. The Bureau of the Budget advises that it perceives no objection to the submission of this report to your committee. Sincerely yours, M. B. FOLSOм, Secretary. (S. 1313, the summary of Senator Morse of the provisions of S. 1313 and the report of the Department of Health, Education, and Welfare follow :) [S. 1313, 85th Cong., 1st sess.] A BILL To amend the Railroad Retirement Act of 1937, the Railroad Retirement Tax Act, and the Railroad Unemployment Insurance Act, so as to provide increases in benefits, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, PART I-AMENDMENTS TO THE RAILROAD RETIREMENT ACT OF 1937 SECTION 1. (a) Section 2 (a) 3 of the Railroad Retirement Act of 1937 is amended to read as follows: "3. Individuals who will have attained the age of sixty and will have completed thirty years of service or, in the case of women, who will have attained the age of sixty-two and will have completed less than thirty years of service, but the annuity of such individual shall be reduced by one one-hundred-and-eightieth for each calendar month that he or she is under age sixty-five when the annuity begins to accrue." (b) Section 2 (d) of such Act is amended by adding at the end thereof the following new sentence: "If pursuant to the third sentence of this subsection an annuity was not paid to an individual with respect to one or more months in any calendar year, and it is subsequently established that the total amount of such individuals earnings during such year as determined in accordance with that sentence (but exclusive of earnings for services described in the first sentence of this subsection) did not exceed $1,200, the annuity with respect to such month or months, and any deduction imposed by reason of the failure to report earnings for such month or months under the fifth sentence of this subsection, shall then be payable. If the total amount of such individual's earnings during such year (exclusive of earnings for services described in the first sentence of this subsection) is in excess of $1,200, the number of months in such year with respect to which an annuity is not payable by reason of such third and fifth sentences shall not exceed one month for each $100 of such excess, treating the last $50 or more of such excess as $100; and if the amount of the annuity has changed during such year, any payments of annuity which become payable solely by reason of the limitation contained in this sentence shall be made first with respect to the month or months for which the annuity is larger." (c) Section 2 (e) of such Act is amended by striking out "than an amount" and inserting in lieu thereof "than 110 per centum of an amount". (d) Section 2 (g) of such Act is amended by inserting after "wife under age 65" the following: "(other than a wife who is receiving such annuity by reason of an election under subsection (h))". (e) Section 2 of such Act is further amended by adding at the end thereof the following new subsection: "(h) A spouse who would be entitled to an annuity under subsection (e) if she or he had attained the age of 65 may elect upon or after attaining the age of 62 to receive such annuity, but the annuity in any such case shall be reduced by one one-hundred-and-eightieth for each calendar month that the spouse is under age 65 when the annuity begis to accrue.' SEC. 2. (a) Section 3 (a) of the Railroad Retirement Act of 1937 is amended (1) by striking out "3.04", "2.28", and "1.52" and inserting in lieu thereof "3.35", "2.51", and "1.67", respectively; and (2) by striking out "$200" and inserting in lieu thereof "$250”. (b) Section 3 (c) of such Act is amended by inserting after "or in excess of $350 for any month after June 30, 1954," the following: "and before July 1, 1957, or in excess of $400 for any month after June 30, 1957,". (c) Section 3 (e) of such Act is amended (1) by striking out "$4.55" and "$75.90" and inserting in lieu thereof $"5.00" and "$83.50", respectively; (2) by striking out "is less than the amount, or the additional amount" and inserting in lieu thereof "is less than 110 per centum of the amount, or 110 per centum of the additional amount"; (3) by inserting after "age sixty-five," the following: "women entitled to spouse's annuities pursuant to elections made under subsection (h) of section 2 to be entitled to wife's insurance benefits determined under section 202 (q) of the Social Security Act,"; and (4) by striking out "such amount of such additional amount" and inserting in lieu thereof "110 per centum of such amount or 110 per centum of such additional amount". SEC. 3. (a) Section 5 (f) (1) of the Railroad Retirement Act of 1937 is amended (1) by striking out of the first sentence the following: "who will have died leaving no widow, widower, child, or parent who would on proper application therefor be entitled to receive an annuity under this section for the month in which such death occurred"; (2) by inserting in the first sentence after "ten times the employee's basic amount" the following: ", but not to exceed a total of $750,"; and (3) by striking out the fourth sentence. (b) Section 5 (f) (2) of such Act is amended by striking out "and 7 per centum of his or her compensation after December 31, 1946 (exclusive in both cases of compensation in excess of $300 for any month before July 1, 1954, and in the latter case in excess of $350 for any month after June 30, 1954)," and by inserting in lieu thereof the following: "plus 7 per centum of his or her compensation paid after December 31, 1946, and before January 1, 1957, plus 71⁄2 per centum of his or her compensation paid after December 31, 1956, and before January 1, 1958, plus 8 per centum of his or her compensation paid after December 31, 1957 (exclusive of compensation in excess of $300 for any month before July 1, 1954, and in excess of $350 for any month after June 30, 1954, and before July 1, 1957, and in excess of $400 for any month after June 30, 1957),". (c) Section 5 (h) of such Act is amended by striking out "$33", "$176", and "$15.40" wherever they appear and inserting in lieu thereof "$36.30", "$193.60", and "$16.95", respectively. (d) Section 5 (i) (1) (ii) of such Act is amended by striking out "or in which month he engaged on seven or more different calendar days in noncovered remunerative activity outside the United States (as defined in section 203 (k) of the Social Security Act)" and inserting in lieu thereof the following: "or, having engaged in any activity outside the United States, would be charged under such section 203 (e) with any earnings derived from such activity if it had been an activity within the United States". (e) Clause (A) (i) of section 5 (1) (9) of such Act is amended by striking out the word "and" appearing after "July 1, 1954," and by inserting after “June 30, 1954," the following: "and before July 1, 1957, and any excess over $400 for any calendar month after June 30, 1957,". (f) Clause (A) (ii) of section 5 (1) (19) of such Act is amended (1) by inserting "and before 1957" after "1954" where it first appears; (2) by inserting after "$4,200" where it first appears the following: ", or for the calendar year 1957 is less than $4,500, or for any calendar year after 1957 is less than $4,800,"; (3) by striking out $350" and inserting in lieu thereof "$400"; and (4) by striking out "and $4,200 for the years after 1954, by" and inserting in lieu thereof the following: $4,200 for years after 1954 and before 1957, $4,500 for the year 1957, and $4,800 for years after 1957, by". 66 (g) Section 5 (1) (10) of such Act is amended by striking out "44", "11", "$350", "$15.40", "$36.66", "$27.50", and "$14.66" wherever they appear and inserting in lieu thereof "49", "12", "$400", "$16.95", "$40.33", "$30.25", and "$16.13", respectively. SEC. 4. All pensions under section 6 of the Railroad Retirement Act of 1937, all joint and survivor annuities and survivor annuities deriving from joint and survivor annuities under that Act awarded before July 1, 1957, and all annuities under the Railroad Retirement Act of 1935, are increased by 10 per centum. SEC. 5. (a) The amendments made by section 1 (other than subsection (b) thereof), by subsections (a) and (c) of section 2, and by subsections (c) and (d) of section 3 shall be effective only with respect to annuities (not including annuities to which section 4 applies) accruing for months after June 1957. The amendment made by subsection (b) of section 1 shall be effective with respect to annuities accruing during the calendar year 1957 and subsequent calendar years. The amendments made by subsections (a) and (b) of section 3 shall be effective only with respect to lump-sum payments (under sections 5 (f) (1) and 5 (f) (2) of the Railroad Retirement Act of 1937) in the case of deaths occurring after June 1957. The amendments made by subsection (g) of section 3 shall be effective only with respect to annuities accruing for months after June 1957 and lump-sum payments (under section 5 (f) (1) of the Railroad Retirement Act of 1937) in the case of deaths occurring after June 1957. Section 4 shall be effective only with respect to pensions due in calendar months after July 1957 and annuities accruing for months after June 1957. (b) All recertifications required by reason of the amendments made by this part shall be made by the Railroad Retirement Board without application therefor. PART II-AMENDMENTS TO THE RAILROAD RETIREMENT TAX ACT SEC. 201. (a) Sections 3201, 3202 (a), 3211, and 3221 of the Railroad Retirement Tax Act are each amended (1) by striking out "after December 31, 1954" wherever it appears and inserting in lieu thereof "after June 30, 1957", and (2) by striking out "$350" wherever it appears and inserting in lieu thereof "$400". (b) Sections 3202 (a) and 3221 of such Act are each further amended by striking out "after 1954" and inserting in lieu thereof “after June 1957." (c) Sections 3201 and 3221 of such Act are each further amended by striking out "64 percent" and inserting in lieu thereof "71⁄2 percent". (d) Section 3201 of such Act is further amended by striking out the period at the end thereof and inserting in lieu of such period a colon and the following: "Provided, That the rate of tax imposed by this section shall be increased, with respect to compensation paid after December 31, 1969, for services rendered after such date, by a number of percentage points (including fractional points) equal at any given time to the number of percentage points (including fractional points) by which the rate of the tax imposed with respect to wages by section 3101 at such time exceeds the rate provided by paragraph (2) of such section 3101 as amended by the Social Security Amendments of 1956." (e) Section 3211 of such Act is further amended by striking out "121⁄2 percent" and inserting in lieu thereof "15 percent", and by striking out the period at the end thereof and inserting in lieu of such period a colon and the following: "Provided, That the rate of tax imposed by this section shall be increased, with respect to compensation paid after December 31, 1969, for services rendered after such date, by a number of percentage points (including fractional points) equal at any given time to twice the number of percentage points (including fractional points) by which the rate of the tax imposed with respect to wages by section 3101 and such time exceeds the rate provided by paragraph (2) of such section 3101 as amended by the Social Security Amendments of 1956." (f) Section 3221 of such Act is further amended by inserting "(a)" before "In addition", and by adding at the end thereof the following new subsection: "(b) The rate of tax imposed by subsection (a) shall be increased, with respect to compensation paid after December 31, 1969, for services rendered after such date, by a number of percentage points (including fractional points) equal at any given time to the number of percentage points (including fractional points) by which the rate of the tax imposed with respect to wages by section 3111 at such time exceeds the rate provided by paragraph (2) of such section 3111 as amended by the Social Security Amendments of 1956." SEC. 202. The amendments made by section 201 shall, except as otherwise provided in such amendments, be effective only with respect to compensation paid after June 30, 1957, for services rendered after such date. PART III-AMENDMENTS TO THE RAILROAD UNEMPLOYMENT INSURANCE ACT SEC. 301. Section 1 (i) of the Railroad Unemployment Insurance Act is amended by striking out the proviso in the first sentence and inserting in lieu thereof “: Provided, however, That in computing the compensation paid to any employee, no part of any months' compensation in excess of $300 for any month before July 1, 1954, or in excess of $350 for any month after June 30, 1954, and before July 1, 1957, or in excess of $400 for any month after June 30, 1957, shall be recognized". SEC. 302. (a) Section 2 (a) of the Railroad Unemployment Insurance Act is amended by striking out the language between “(i)” and “(ii)” and inserting in lieu thereof the following: "for each day of unemployment in excess of four during any registration period, and". (b) Section 2 (a) of such Act is further amended by striking out columns I and II and inserting in lieu thereof the following: |