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after retirement of working for any “last employer” without forfeiting his annuity rather than requiring that the last employer be a railroad.

Another much-needed change is the elimination of the spouse “dual benefit restriction” to permit receiving both full social security and railroad retirement benefits along the lines recommended in H. R. 3420 and similar bills.

These proposals, together with the bills under consideration, if enacted, will provide the Nation's railworkers with a more realistic pension program under which they can face their later years in true security and dignity. We cannot continue to attempt to solve the problem with piecemeal, fringe-benefit proposals. Just as soon as they are enacted they are either inadequate or out of date. So long as we continue this approach we will continue to disregard the real problems and needs of the railroad worker. I urge this committee to seriously consider enactment of real, comprehensive changes in the railroad retirement system designed to furnish the railworker an adequate, up-to-date pension system which he so richly deserves.

Mr. MACK. Thank you very much, Mr. Blatnik.
Mr. BLATNIK. Thank you, Mr. Chairman.

Mr. Mack. The next witness is our colleague from Maryland, Hon. DeWitt S. Hyde.

STATEMENT OF HON. DEWITT S. HYDE, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF MARYLAND Mr. HYDE. Mr. Chairman, thank you for allowing me to testify this morning on my bill, H. R. 5022. As you know, I have been before you in the past years on the same problems that exist in my congressional district so far as retired railroad employees are concerned.

As you will note, one section of my bill deals with broadening the base period for computing annuities from the present 7-year period hetween 1924 and 1931 to a 7-year base period between 1940 and 1947, whichever would be greater to the retiree. I have many retired railroad employees in my district with service dating back prior to 1937 and this change in the bill would bring their retirement income more nearly in line with the original intent of Congress. · Another section of my bill would allow individuals who have completed 40 years of service or who have attained the age of 65, to retire. Actually, most of the employees who have had 40 years of service have reached the age of 65. I note that this provision is in many bills introduced this year.

These amendments to the Railroad Retirement Act would make the Act more equitable and bring it more in line with modern pension systems. Moreover, it would appear that they would not result in too great a burden on the pension fund and should not make it nécessary to increase the contributions to the pension fund by the employees. · The committee's early and favorable consideration of these amendments would be welcome by the railroad retirees and employees.

Mr. MacK. Are there any questions? If not, we think you for your testimony, Mr. Hyde. Mr. Hyde. Thank you, Mr. Chairman.

Mr. Mack. The next witness is Hon. Robert C. Byrd of West Virginia.

STATEMENT OF HON. ROBERT C. BYRD, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF WEST VIRGINIA

Mr. BYRD. Mr. Chairman and members of the committee, I appreciate the opportunity to present this statement in support of the legislation that has been introduced by the chairmari of this committee to amend the Railroad Retirement Act, the Railroad Retirement Tax Act, and the Railroad Unemployment Insurance Act, so as to improve and liberalize benefits payable to railroad workers and other beneficiaries under those laws. I am today introducing legislation similar to H. R. 4353.

Legislation to increase benefits under the railroad retirement system is overdue. The abundant information and testimony already on record convincingly reveal that the benefits available to rail workers upon their retirement from active employment are inadequate to support a man and wife at an average standard of living. The responsibility to correct this situation, as well as the obligation to so do, is that of the Congress—for the very reason that the railroad retirement system is under the management of the Congress and is not worked out through bargaining between labor and management.

With reference to the Railroad Retirement Act, the proposed measure would increase all annuities, pensions, and insurance lump sums by 10 percent. The only exception under the 10-percent increase would be those annuities that are based on the equivalent of the annuitant's average monthly compensation while working in the railroad industry. A disability annuitant would not lose the annuity for any month in which he earned over $100 in outside employment, provided his total annual earnings did not exceed $1,200. Women workers with less than 30 years of service would be eligible to retire at age 62 on a reduced basis, rather than at age 65. A wife may elect to receive her annuity at age 62 on a reduced basis, rather than at age 65. The election to draw an :annuity before reaching age 65 would reduce the annuity by one one-eightieth for each month that the annuitant is under age 65. The bill authorizes payment of the insurance lump sums up to a maximum of $750. The act presently precludes the payment of this sum if the deceased employee is survived by a person entitled to an annuity in the month in which the employee died. The maximum creditable compensation under the Railroad Retirement Act would be increased from $350 to $400 a month.

To finance the benefits under the Railroad Retirement Act, an amendment is proposed to the Railroad Retirement Tax Act which will increase the rate of tax from 61/4 percent to 712 percent on carriers and employees.

Of great importance are the amendments which the bill proposes to the Railroad Unemployment Insurance Act. The daily benefit rate would be increased to 50 percent of compensation for the employee's last employment in a “base” year—the present rate being 50 percent. Daily benefit rates would be $0.50 to $1.70 higher than the present rates. The maximum benefit rate would be increased to $10.20 from $8.50. Sundays and holidays would be treated as days of employment. Benefits would be payable for each day of unemployment over 4, rather than the present requirement of 7 days. The period for which unemployment benefits are to be paid will be extended in the 65

91

In the Sixe have many, made idle bec

case of career railroad employees, i. e., those with at least 5 years of railroad service—the extended benefit period depending upon the employee's years of service. The maximum period for which unemployment benefits are presently payable is 130 days. In this regard, the bill, H. R. 4353, provides as follows:

Number of

compensable Years of service:

14-day periods 5 and less than 10-------------------------

39 10 and less than 15------------------------------------15 and less than 20--20 and over--------------------------------------------

--- 117 In the Sixth District of West Virginia, which I have the honor to represent, we have many railroad workers—a good number of whom in recent years have been made idle because of the conversion from steam to diesel power. This is seemingly inconceivable when one realizes that the net income of railways in 1955 was $925 million against a total of $681.5 million in 1954. I recall distinctly the despairing letter I received around the holidays from one of my constituents— a man, 63 years of age, with 50 years of service as a roundhouse machinist, who had been "advanced to the rocking chair.” Under the proposed amendment, this worker could receive unemployment insurance benefits until he reaches 65 years of age.

The absolute necessity of expanding the unemployment insurance benefits has been clearly demonstrated by the bare statistics of railway employment in recent years. The testimony before this committee shows that railway traffic in 1956 was 40 percent above 1929, but employment in the same period went down by 40 percent. The tabulation that follows substantiates this fact:

Number of Year:

railway employees 1948

2, 300,000 1951.-

2, 100, 000 1956_

11, 600,000 1 Approximate. In other words, there were 30 percent fewer railroad workers in 1956 than there were in 1948, and yet the volume of traffic in those years was almost the same. Furthermore, the prospect is that another 250,000 railroad workers will be dropped from the rolls within the next 10 years or so. Automation is taking its toll. I understand the newer yards have a machine with an electronic memory by which the routing of cars can be selected in advance and recorded on a machine. When the cars come to the yard, the machine sorts them automatically and rolls them into their proper place.

In July 1956, when legislation was enacted by the Congress to increase benefits by, generally, 10 percent, the echo resounding from the enactment was that the increase was, in essence, a temporary measure, for the purpose of providing an interim modest increase in benefits of 10 percent which, on the average, amounted to $10 a month. That was merely a step in the right direction, and its purpose was to afford some measure of hope to beneficiaries under the Railroad Retirement Act. At the time of the 1956 enactment, the rolls of the Railroad Retirement Board showed 650,900 beneficiaries. Out of that total number, the increases went to about 300,000 annuitants, about 40,000 wives, and 65,000 survivors. The average monthly benefit now is only $111.70, and the average for survivor benefits ranges from only $46.30 to $50.50.

in 1948ince 193the rail that prior

It is also noteworthy that prior to the 1956 legislation employee anmuities under the railroad retirement system had been increased only twice since 1937, and survivor benefits, only once since their inception in 1946. On the other hand, the cost of living, as measured by the consumer price index, has risen 5 percent in the period between 1950 and November 1956. Today it is the highest it has ever been in the history of our country.

The retirement income now provided for industrial workers under most negotiated plans is far above that received by railway annuitants. The retirement income for a 30-year worker in industry, with annual earnings of $4,200, has been placed at between $170 and $200 a month (including social-security benefits of $108.50). It is plainly evident that railroad workers lag behind the rest of the American workers. Surely, such workers should not be penalized with working and living conditions below the standards of other industries as a result of governmental regulation. Railroad workers and their dependents are entitled to share in the improvements and adjustments received by all other American workmen. I, therefore, sincerely hope that the committee will be able to give favorable consideration to legislation beneficial to railroad workers and their dependents.

Mr. MACK. We thank you for your statement, Mr. Byrd.
Mr. BYRD. Thank you, Mr. Chairman.

Mr. Mack. The next witness is our colleague from Georgia, Hon. James C. Davis.

STATEMENT OF HON. JAMES C. DAVIS, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF GEORGIA Mr. Davis. Mr. Chairman and gentlemen of the committee, I appreciate very much your courtesy and consideration in extending me the privilege of appearing before your committee in behalf of the two bills I have had the honor to introduce and sponsor.

The first of these that I would enlist your consideration of is H. R. 4194.

This bill has three major objectives: (1) It repeals the dual benefit restrictions on spouse's annuities; (2) it allows survivor benefits under both the Social Security Act and the Railroad Retirement Act; (3) it removes the restriction on dual-survivor benefits under the Railroad Retirement Act.

Under existing provisions of the Railroad Retirement Act the spouse of a retired railroad worker cannot receive the full spouse's annuity under the act if entitled to social security benefits, in which case, the amount of the spouse's annuity would be reduced by the amount of such benefits. This is true whether the spouse has applied for such dual benefits or not. This restriction is equally applicable to a parent's insurance annuity under the Railroad Retirement Act. The spouse's annuity would be reduced by the amount of the parent's annuity.

Similarly an individual who is entitled to more than one insurance annuity under the Railroad Retirement Act as the surviving widow, widower, child, or parent of a deceased railroad worker can receive only the one of such annuities which is the largest.

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Finally, an individual cannot receive any social-security benefits (including a lump-sum death payment) as the survivor of an employee if he is entitled to an insurance annuity under the Railroad Retirement Act on the basis of the wages of the same employee. · This bill which I have introduced would remove these restrictive provisions of the act so that in no case would an individual lose any part of the social-security benefits to which he may otherwise be entitled merely because he is also entitled to a railroad annuity. Also an individual would not lose any part of a railroad annuity to which he is entitled merely because he is also entitled to a social-security benefit or to another railroad annuity.

The people of this Nation that have been most adversely affected by the inflation of the past 15 years are those who are or have been dependent upon pensions and annuities for their livelihood.

We all know what has happened to the value of the dollar. Its purchasing power has been reduced at least 50 percent. The majority of the Railroad Retirement Act was enacted in 1937. Compare the 1939 dollar with 1957. See what today's dollar buys in comparison with what it bought in 1939. It is unrealistic to contend that one can even exist today on the same amount that provided a comfortable living less than 20 years ago.

At a time when an individual's earning power has decreased or vanished entirely it is an impossibility for him to survive on a fixed pension or annuity that has failed to keep pace with the inflation in the value of the dollar. .. We must not allow the living standard of our pensioners and annui

tants to be reduced below a mere subsistence. This is especially true with respect to those annuities which have been purchased with sound dollars.

It is our duty to remove the restrictive provisions of the Railroad Retirement Act that would prevent a wife from receiving a socialsecurity benefit that she has earned solely because her husband may have earned an annuity for her by his service with a great industry. My bill would do only this. It would provide equity where it is most needed.

I have many retired people in my district who find it increasingly difficult to make their annuities meet the requirements of daily living. It is for this reason that I urge the approval of this bill. It will allow some of them to increase their annuity by an amount equal to that which they would otherwise be entitled to receive under the Social Security Act were it not for the present restrictions.

The second bill which I urge your favorable consideration is H. R. 4195. This bill would amend section 2 (a) (4) of the Railroad Retirement Act which presently requires certain permanently disabled individuals to attain the age of 60 years before they may receive their annuities. My bill would revise this section so as to lower the age limit to 50 years.

Here again we must consider the change in the situation of our country. Today the qualifications for employment of persons beyond the age of 50 have changed so very much since the enactment of the Railroad Retirement Act that we must give consideration to such present conditions. In the not too distant past an individual could live

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