Mr. STACK. They pack the Pension News. Our Pension News is the biggest item we have. It runs $1,400 every edition. Mr. YOUNGER. I did not get that. Mr. STACK. Our Pension News runs about $1,400 for printing each edition. And we use the extra employees to pack that and get it out with prompt haste. Mr. YOUNGER. So you have about 14 part-time employees? Mr. STACK. That is right. Mr. YOUNGER. So you have about 19 or 20 employees? Mr. STACK. Oh, no. We only have five regular employees. Mr. YOUNGER. Well, you have 5 regulars, and then you have 14 half-time, which would be 7 full time. Mr. STACK. They are not half time. Mr. YOUNGER. So that is 12 employees you have. Mr. STACK. They might work for a week. They might work for 5 days, something like that. Mr. YOUNGER. I am just taking your word. You said they were half-time employees. Mr. STACK. Part-time employees. Mr. YOUNGER. Part time? Mr. STACK. That is right. Mr. YOUNGER. You have probably what might be considered 10 full-time employees, at least, do you not? Mr. STACK. NO. We only have five regular employees. These other extra employees we only pay a dollar an hour, the minimum scale of wages. Mr. YOUNGER. You do observe the minimum wage, though? Mr. STACK. That is right. Mr. YOUNGER. I am interested in this angle of your approach, which has been strictly consistent, in the times that you have appeared. You have observed what is considered the fine political attitude of being for all appropriations and against all taxation. In other words, you are advocating not only the benefits in 1012, but you are advocating all of the benefits in all of the other separate bills, but you are opposed to any increase in the tax. Mr. STACK. We are willing to increase the tax base to $400. Mr. YOUNGER. Yes, but you are not willing to increase the tax rate. Mr. STACK. We thought you should have a good long look at that feature before increasing the tax rate. Mr. YOUNGER. How do you mean, "a good look?" Have you not had a good look at it this last year? What have you been doing? Mr. STACK. No, we have a reserve there of $3.8 billion, and there is no railroadman wants this rate increased. If it has to be increased, they certainly want more than fringe benefits. Mr. YOUNGER. Have you consulted with any actuary to find out whether or not the tax should be increased? Mr. STACK. No, outside of what we get from the Retirement Board. Mr. YOUNGER. You do not believe the actuary of the Retirement Board when he says that they would have to have an increase in the tax rate if the fund is maintained on an actuarial status? Mr. STACK. I assume they are all right. Of course, they are based on estimates. Mr. YOUNGER. They advocate it, and the actuary says that is true. He has told the committee that. He has told the Board that. Would you not take his word? Or have you an actuary that can go into the question and give us an actuarial appraisal that would be better? Mr. STACK. All you have is the Board actuaries, and you would have to be governed by what they would do. Mr. YOUNGER. If they say they need an increase in the tax rate, will you go along with that? Mr. STACK. Yes, provided we get the benefits we want. Mr. YOUNGER. They have already said that, as you know; but you advocate, here, that there be no increase in the tax rate. Mr. STACK. I think that it does not warrant it. Mr. YOUNGER. Why? What do you base that opinion on? Mr. STACK. Well, we have no practical experience in connection with this. It is all assumptions. This tax rate proposition is based over a period of 50 years, and none of us is going to be here 50 years, to know how wrong these fellows are. Mr. YOUNGER. Well, you just finished saying that you would be willing to take the actuary's word for this. Mr. STACK. That is all we have got. Mr. YOUNGER. All right. That is what you have. And you said you would be willing to take his word. Now, why are you not willing to take his word? Mr. STACK. I am willing to take his word. Mr. YOUNGER. Well, he has said that we have to have an increase in the tax rate. Then why do you advocate no increase in the tax rate? Mr. STACK. If they have to increase the tax rate, then let them go ahead and increase the tax rate. But then we certainly want what the employees want. Mr. YOUNGER. You knew the recommendation before you made your testimony, Mr. Stack. Mr. STACK. I know I did. Mr. YOUNGER. Then why did you not come along and say, "The actuaries advise us that the tax rate must be increased, and we agree with it." You say now you agree with it. Mr. STACK. From a logical standpoint, the tax rate is proposed to go to 132 percent under this bill. That is going to be the highest taxing system in the country. You have got one now in California representing some aircraft where the tax rate is 62 percent. It is higher than railroad retirement. But this is going to be the highest tax in the country, this 132 percent. And it does not look logical for the benefits that the employees receive. Mr. YOUNGER. You know the reason for that, do you not? For that rate? Do you not agree with the reason? Mr. STACK. The actuaries. Mr. YOUNGER. Well, look at all of the assumptions of liability which they took on in 1937; benefits that were never paid for during the working period. Mr. STACK. You have read this article in Business Week, here. All of these other companies took on liabilities like that. And today they have-for example, the Bell Telephone Co. They invested $2,800,000. They took on a liability of private service. All of these companies that are establishing pensions, over 4,000 of them, now, have all taken over that liability. That is nothing out of the ordinary. They are taking it over under railroad retirement, and they are using the years 1924-31, which are entirely detrimental to the wage of today. Mr. YOUNGER. Mr. Stack, you know just as well as you are sitting there that that statement is not true. Mr. STACK. It is true. Mr. YOUNGER. It absolutely is not true. Mr. STACK. Point me out where it is not. Mr. YOUNGER. Because I belong to a pension system that did not do that. We had to pay for all past service. Mr. STACK. You read this book, here. Mr. YOUNGER. I am not talking about that book. You made the statement that all pension systems assumed liability for past service that was not paid for. That was the statement you made. Mr. STACK. That is right. Mr. YOUNGER. That is an incorrect statement, and you know it. Mr. STACK. You might have isolated cases where it is not. Mr. YOUNGER. All right. Then why do you not say what you mean? You come before this committee every time, and you make statement after statement that you cannot verify in fact. Now, I hate to say that to you, Mr. Stack, but you have done that every time you have appeared before this committee. I told you that before when you were here. Now, why do you not make temperate, accurate statements when you come before the committee to give evidence? That is the only thing I have. Mr. Chairman, I yield the floor. That is all, Mr. Stack. Mr. STACK. Thank you, Mr. Chairman. Mr. DOLLINGER. I note the presence of two of our colleagues, and we will be glad to hear the gentleman from New York, the Honorable Herbert Zelenko. STATEMENT OF HON. HERBERT ZELENKO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW YORK Mr. ZELENKO. Mr. Chairman, I am pleased to have this opportunity to express my support of H.R. 2814, the bill I have introduced 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. My bill is one of many which have been introduced for the benefit of the conscientious railroad employees of our country. This legislation is vitally necessary for the welfare of these workers in order to permit them to live in comfort and dignity in accordance with our American standards. I cannot stress too strongly the importance of this legislation and respectfully urge favorable action by this committee. Mr. DOLLINGER. We appreciate your interest and testimony, Mr. Zelenko. Are there any questions? If not, thank you again, Mr. Zelenko. The next witness is our colleague from New Jersey, the Honorable Frank Thompson, Jr. STATEMENT OF HON. FRANK THOMPSON, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY ` Mr. THOMPSON. Mr. Chairman, I am glad to have this opportunity to present to the House Committee on Interstate and Foreign Commerce my views on H.R. 1012, and similar legislation, and I want to urge this committee to favorably report to the House this measure or a similar bill, which will help retired railroad workers. During extensive and comprehensive hearings the committee has had before it witnesses who have presented eloquently and, I believe, convincingly, a case for amending the Railroad Retirement Act. I do not, therefore, find it necessary to review all of the reasons for amendment of this act whereby more equitable treatment will be provided for so many fine Americans, who are finding it most difficult in these days of high living costs to maintain themselves and their families. These Americans are, in many instances, past the age of lucrative employment in any field, yet their expenses continue to mount, and even the bare necessities are difficult to obtain. I feel obliged as the Representative of the Fourth Congressional District of New Jersey to bring to the attention of this committee some statisties pertinent to my own State, and to the Fourth Congressional District, which emphasize the need for amendment of the act and in-creased benefits to these citizens. I, therefore, incorporate in this statement a table on present benefits and proposed increases, as well as a table on the total benefits to retired annuitants in New Jersey. I believe that it can be clearly shown that an increase in the income of a considerable segment of the population in my State will have a beneficial effect on an economy which has been adversely affected by unemployment and a resultant recession. These retired workers, although receiving belated increases in benefits, will contribute considerably to the economic welfare of the whole State, Last session Congress increased retirement benefits for other groups, and I feel this assistance to railroad worker is long overdue. I believe we have an obligation to them to bring their pensions, for which they gave a great many years of devoted service, in line with other pension plans, and once again I urge this committee to report legislation to the House which will correct these inequities. I include herewith the informational tables mentioned above. 37110-59-14 (The tables referred to follow :) Statistics-Year ending 1956–57 New Jersey: Total money paid to retired annuitants: Retirement benefits.. Survivor benefits___ Unemployment benefits.. Sickness benefits--- Total Total number of people in New Jersey receiving benefits: Railroad retirement annuitants, 12,400__ Total_ Benefit year 1956-57: Unemployment beneficiaries, 3,700 Sickness benefits, 3,100__. $15, 557, 000 4,978, 000 848,000 1, 180, 000 22, 563, 000 Monthly benefits $1, 256, 000 356, 000 1,612, 000 Average amount paid $243 415 Mr. DOLLINGER. Are there any questions? If not, we thank you, Mr. Thompson. Mr. THOMPSON. Thank you, Mr. Chairman. Mr. DOLLINGER. The committee will stand adjourned, subject to the call of the Chair. (Whereupon, at 3:30 p.m., the committee hearing was adjourned, subject to the call of the Chair.) |