then I will briefly explain the bill, because I think the committee is quite familiar with it. I introduced this bill in the 83d Congress and reintroduced it in the last session.

The committee adopted my bill as an amendment to a bill that was passed by the House and by the Congress during the first session of this Congress, H. R. 4744. However, because the committee had devoted itself to only two or three special situations in H. R. 4744, it was felt that my bill would not be appropriate as an amendment at that particular time, and because there were many other bills that the committee wished to consider and had not considered. On that basis, I asked the committee permission to withdraw the amendment.

Mr. HARRIS. May I say to our colleague that we recall very well what transpired at that time. I think I am correct in saying that every member of this committee appreciates the interest you have in any legislation that you introduce and sponsor. The gentleman from Michigan is to be highly commended for his action in this regard in the last session of Congress, it was done in an effort to get the other bill through.

Mr. BENNETT. I think the committee felt my bill was meritorious. What it does is simply this: It would take out of the present Railroad Retirement Act the so-called last person employer clause. People who receive disability annuities, or in fact any annuities, under the Railroad Retirement Act, are barred from railroad employment, naturally. But in the case of disabled annuitants, they are also barred from working for their last employer, if the last employer was not a railroad company. There may have been some good reasons for putting that provision in the original law. In 1937, it was very difficult for a retired employee to find any supplementary work in addition to his railroad job, and the provision was part of a sort of spreadthe-work philosophy during the depression.

There is no such provision in the social-security law, and there is none in the Federal Civil Service Retirement Act. In my judgment, there is no basis for having it in the Retirement Act now. I think it is unfair and discriminatory to many people who have been badly treated, I think, because of that provision.

I do not believe this will be too costly to the fund. I hope the committee in its consideration of the present proposed amendments will look with favor upon the addition of this particular amendment. Mr. HARRIS. We will be glad to have your entire statement included in the record at this point.

(Mr. Bennett's statement follows:)

STATEMENT OF HON. JOHN B. BENNETT IN SUPPORT OF H. R. 5702, A BILL TO AMEND THE RAILROAD RETIREMENT ACT

My bill, H. R. 5702, provides for the repeal of the so-called last person employer clauses in the present Railroad Retirement Act, the effect of which would be to permit certain employed persons to be paid annuities under such act. The specific provisions of my bill are as follows:

(1) It would eliminate the present requirement in the Railroad Retirement Act that an applicant for a retirement annuity must cease service for any person, other than an "employer," as that term is defined in the law, as a condition of eligibility for an annuity.

(2) It would eliminate the present requirement that an applicant for a retirement annuity must relinquish his rights to return to the services of his last nonrailroad employer as a condition for the receipt of an annuity, and

(3) It would eliminate the present restriction on the payment of an annuity for any month during which the annuitant rendered compensated service to his last nonrailroad employer.

As the law stands now, an applicant for an annuity payable under the Railroad Retirement Act must give up not only his railroad employment but also must give up any job he holds for a nonrailroad employer. Once he receives his annuity, he can return to work for anyone except a railroad or the last nonrailroad employer for whom he last worked prior to retirement. Let me illustrate the absurdity of this provision with the following example:

John Smith, a railroad worker, has a part-time job in a grocery store. He applies for an annuity under the Railroad Retirement Act, and qualifies for it. Before he can receive such annuity, he must resign from the railroad and must resign from the job he has in the grocery store. And as a condition of the continued receipt of his annuity, he must not return to the employ of that grocery store. But the law permits him to work for any other grocery store, or any other employer in town.

There may have been some good reasons for having that provision in the Railroad Retirement Act in 1937, but it does not make any sense now. In 1937, it was very difficult for a retired railroad employee to find any supplementary work in addition to his railroad job. This provision was a part of the spreadthe-work philosophy during the depression. As a result, very few individuals were affected by this restriction. Today, jobs are more plentiful, and many active railroad workers have part-time jobs which they would like to continue in after retirement. I believe that these men should not be penalized for wanting to continue to work part time in a job they have held before retirement.

Furthermore, these "last person" employer clauses are inequitable to railroad employees as compared with employees covered under the Federal Civil Service Retirement Act and the Social Security Act. A retired civil-service employee is not required to give up his last employer, other than the Federal Government, in order to receive an annuity. He may continue to work for any employer, other than the Federal Government, and still receive his civil-service annuity. Similarly, an employee covered by the Social Security Act is not required to give up his last employer in order to qualify for an annuity under that act. Such employee may receive his full monthly benefits so long as he does not earn more than $1,200 a year, regardless of who his employer is. The Railroad Retirement Act, by contrast, prohibits the railroad annuitant from earning 1 cent in the service of his last nonrailroad employer without losing his entire annuity for that month.

The Railroad Retirement Board has advised me that my proposed amendment would add only $82 million to the cost of the railroad retirement system, which is very slight.

In my opinion, this restriction in the law is outmoded, inequitable, illogical, and should be repealed. My bill, H. R. 5702, provides for the removal of this restriction.

Mr. HARRIS. I do not believe the hearings on H. R. 4744 in the last session of Congress had anything in it with respect to the "last person" employer clause, did it?

Mr. BENNETT. No, there were hearings in the 83d Congress. I recall asking some questions of some of the witnesses who testified when we were considering amendments at that time. I think that the Chairman of the Railroad Retirement Board discussed my bill, H. R. 7843, and I think I asked him some questions about it. I also believe there is a report in our hearings of 2 years ago.

Mr. HARRIS. Do you recall approximately how many people would be affected by it?

Mr. BENNETT. I do not know whether the report shows the number of people, but I think the Board estimated that it would cost the fund $8.5 million a year. I think it is an overestimate of what the cost would be.

I hope that when the Railroad Retirement Board is here, a new estimate or appraisal of the cost of this particular proposal can be had from them, and also the number that would be affected.

Mr. HARRIS. I think it would be appropriate and desirable for the record that that be done. I might mention at this point that the committee would like to extend an invitation to you to come down and be with us during the hearings when your bill will be discussed by the Railroad Retirement Board. Of course you know that every member of our committee is welcome to attend the hearings of any one of the subcommittees.

Mr. BENNETT. I appreciate the invitation, Mr. Chairman.

Mr. HARRIS. Are there any questions from any member of the committee?

If not, thank you very much. We appreciate having had you here. Mr. BENNETT. Thank you, sir.

Mr. HARRIS. Mr. O'Konski, of Wisconsin, has introduced H. R. 2026 and H. R. 4301. Mr. O'Konski, we will be pleased to have your testimony at this time.

STATEMENT OF HON. ALVIN E. O'KONSKI, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WISCONSIN

Mr. O'KONSKI. Mr. Chairman, it was my intent by the introduction of H. R. 2026 to further amend the Railroad Retirement Act to permit wives as well as widows-of retired railroad employees to receive both the social-security benefits to which they are entitled and a full Railroad Retirement spouse's annuity.

It seems only fair and just to me that when a woman has contributed from her own earnings to the social-security fund and is receiving those benefits to which she is entitled, she should not be penalized for her own industry by having her share of the railroad retirement spouse's annuity cut by the amount of her social-security benefits.

True, Public Law 383 did raise the ceiling on the wife's annuity. However, in these days of high living costs, I definitely feel that a family should be permitted to receive the full annuities to which they are entitled and to which funds they contributed, in good faith, from their earnings.

From the vast evidence in my files of widespread interest in this further amendment of the Railroad Retirement Act to permit wives to receive both amounts in full, I feel sure that every Member of Congress will recognize the importance to large segments in his own district of passage of such legislation.

H. R. 4301, by liberalization of computation of annuities, will provide an incentive for earlier retirement of active railroad workers, and thus alleviate the very serious unemployment problem that exists in the railroad industry, caused by the advent of diesel engines, and so forth.

H. R. 4301 lowers the spouse's eligibility age to 60, thus providing an incentive for the employee to retire earlier (in view of a husband's usually being older than a wife) and not to wait until his wife reaches 65 so that the family retirement income may reach the limits presently allowed.

This bill provides for use of the 5 highest years of earnings, subsequent to 1936, in computing the retired employee's annuity.

Mr. HARRIS. We thank you for your appearance and the information you have given the committee.

Mr. O'KONSKI. Thank you, Mr. Chairman.

Mr. HARRIS. The next member to appear before the subcommittee is Mr. Van Zandt, of Pennsylvania.

We are glad to welcome you here before this committee. You have appeared before us on many occasions, in the interest of many proposals amending the Railroad Retirement Act, and in the interest of the retired employees. I observe that our colleague has introduced a number of bills, H. R. 856, H. R. 858, H. R. 859, H. R. 861, H. R. 2443, H. R. 7982, H. R. 7983, H. R. 7984, H. R. 7985, H. R. 7986, H. R. 7987, H. R. 7988, H. R. 7989, and H. R. 7990.

We will be glad to have you explain all of your proposed amend·· ments, Mr. Van Zandt.

STATEMENT OF HON. JAMES E. VAN ZANDT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA

Mr. VAN ZANDT. Mr. Chairman and members: Once again I am grateful to you and the members of this committee for according me the privilege of appearing before you to explain the bills I have introduced to amend the Railroad Retirement Act.

As all of you know, I represent a large group of active and retired railroad employees and at their request and in their interest, I introduced proposed amendments to the Railroad Retirement Act.

Before discussing these amendments, I should like to convey to you the attitude of the active and retired railroad employees of my district, as I talked to many of them last fall during the congressional

recess.

Not only did I find a lot of dissatisfaction, and may I repeat dissatisfaction, among the retired people because of the failure of Congress to increase benefits, but I also found a general feeling among active railroaders that the Railroad Retirement Act should be revised for the purpose of providing more adequate benefits at the time of retirement.

Mr. Chairman, the basis of the majority of complaints stems from the action of Congress last summer in approving an increase in spouse benefits. The widow and widower are the chief critics of what they call discriminatory action on the part of Congress.

Frankly, I found it very difficult to answer a widow whose average monthly benefit check is in the neighborhood of $40 when she asked me if I could exist on the scale of benefits paid those in her category.

In addition to the criticism that I received from the widow and widower on my visits to my Congressional District last fall, I encountered a concerted and organized drive by actively employed railroaders, especially those in the Altoona, Pa., area where the largest railroad shops in the world are located, in support of amendments to permit retirement after 30 or 35 years of service, or at age 60, with the retirement annuity being computed on the 5 years of highest earnings and not less than one-half of the individual's monthly compensation. In addition to the personal contacts I had with active railroaders in regard to the new formula of computing annuities, I have received postcards and petitions that contain in excess of 5,000 signatures in support of the proposed change in formula.

Mr. Chairman, it is my understanding that this committee has received similar communications urging approval of these proposed amendments.

Mr. HARRIS. Your understanding is correct.
Mr. VAN ZANDT. Thank you.

In all my statements regarding the possibility of liberalizing the Railroad Retirement Act and increasing benefits, I have stressed the absolute necessity of maintaining the stability of the retirement fund and keeping it in a solvent condition to guarantee the payments of present and future benefits with the highest degree of certainty.

Regardless of the repeated admonition that the solvency of the retirement fund is of paramount consideration, there is an honest difference of opinion in disputing the assertion that benefits cannot be increased without a corresponding increase in payroll taxes.

I called attention to this difference of opinion during the last session of Congress when I pleaded for an across-the-board increase in railroad-retirement benefits.

In this connection, the views I voiced the past 2 years that my constituents felt an increase in benefits would not impair the financial stability of the retirement fund are worthy of your close examination. While there is always room for an honest difference of opinion, in view of the widespread insistance that the Railroad Retirement Act be liberalized and benefits increased, I am certain that this committee will review the entire subject and hold adequate hearings at an early date so that final action can be taken on proposed amendments before the 84th Congress adjourns next summer.

Mr. Chairman, I have pending before this committee 14 bills designed to amend the Railroad Retirement Act and I should like at this time to briefly describe them :

H. R. 856 which provides full annuities at compensation of half salary or wages based on the 5 years of highest earnings, for individuals who have completed 35 years of service or have attained the age of 60.

H. R. 857 repealing the prohibition against the payment of dual benefits to widows which I introduced January 1955 was incorporated in the committee bill H. R. 4744, which became law last year and is now known as the 1955 amendments to the Railroad Retirement Act.

H. R. 858 provides retirement on a full annuity at age 60 or after 30 years of service and that such annuity for any month shall not be less than one-half of the individual's average monthly compensation for the 5 years of highest earnings.

'Mr. HARRIS. What is the difference between H. R. 856 and H. R. 858?

Mr. VAN ZANDT. One is 35 years of service and the other is 30 years of service.

Mr. HARRIS. Is that the only difference?

Mr. VAN ZANDT. Yes, sir.

Mr. HARRIS. Which do you think would be the most desirable from your standpoint?

Mr. VAN ZANDT. Well, I would appreciate it if you would let me conclude my statement and then I will answer your question.

H. R. 859 provides for an across-the-board increase of 25 percent in the annuities and pensions payable to retired railroad employees or their survivors. This bill has been revised since its introduction because of changes made in the Railroad Retirement Act by the 1955 amendments. The bill superseding H. R. 859 is H. R. 7984 which I introduced January 1956.