This measure would accomplish its purpose by increasing the tax rates and by raising the maximum wage base sufficiently to finance the benefit increases contained in the bill. It would also help liquidate the present deficiency in the railroad retirement fund. Tax rates would be increased from the present 614 percent on railroad employers and employees to 634 percent beginning with the current year and to 74 percent commencing in 1962. After this date, the tax rate increases would match those taking place under the social security program. The wage base maximum would be increased from $350 to $400 a month. This, of course, would put the railroad retirement system on a par with the social security system which covers earnings up to $4,800 a year. There are other major changes covered in this Act which I strongly feel should be enacted into law. I certainly hope this committee will act favorably on this important legislation so that the urgent necessities for strengthening the finances of both of these systems and bringing their benefits in line with present living costs will be met. The CHAIRMAN. We appreciate your appearance, Mr. Horan, and the information given the committee. Mr. HORAN. Thank you, Mr. Chairman. The CHAIRMAN. The next witness is our colleague from Indiana, the Honorable Fred Wampler. Mr. Wampler, we are glad to have you. STATEMENT OF HON. FRED WAMPLER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF INDIANA Mr. WAMPLER. Mr. Chairman, my appreciation to you and the other members of the House Committee on Interstate and Foreign Commerce for allowing me this opportunity to appear during the committee's consideration of amendments to the Railroad Retirement Act. In a letter which I recently received, Mr. Chairman, from Mr. Elmer R. Henry of Terre Haute, Ind., Mr. Henry outlines what I consider to be an inequitable railroad retirement-social security situation involving his wife. In sum, Mrs. Henry, who is entitled to both railroad retirement and social security benefits, is being penalized to the extent that the railroad retirement board deducts from her railroad retirement the amount she receives in social security benefits. I hope, Mr. Chairman, that the committee will consider favorably an amendment to the Railroad Retirement Act which will relieve the inequities, and resulting hardships, caused by apparently unjust multiple pension benefit conflicts. (Mr. Henry's letter follows:) I wish to call to your attention a situation in regards to a wife's pension on social security and railroad benefits. I am a retired railroad machinist from Pennsylvania Railroad, 46 years, 4 months. Now I get a pension under Railroad Retirement Act. When my wife became 65, which she was August 29, last year, she applied for her benefits under the Railroad Retirement Act. Now she worked some and at 63 years age, applied for her social security pension. She gets $26.50 per month from the social security. She is entitled to $54.30 per month railroad pension but the railroad retirement board deducts $26.50 from her $54.30 and pays her $27.80, the two combined not to exceed $54.30. I paid for railroad retirement benefits. She paid for her social security benefits but having her $26.50 deducted from her $54.30 she worked and paid social security for nothing. She should receive both her social security pension, also her railroad benefits. Why not put an amendment to Railroad Retirement Act, whereby a wife can get what she pays for, she should get both because she paid for hers and I paid in railroad retirement for her $54.30 if she had never worked a day, she would still get her $54.30 railroad pension. Because she worked on social security she is penalized $26.50 per month. Is this fair? You know it is not. If you pay for something you should get what you pay for, I wrote Mr. Wayne Morse also Mr. Oren Harris last year in regards to this; never got a reply from either one. A man retired on railroad can also draw social security if he worked when furloughed on social security and is entitled to both-no deductions. Let me hear your views on this. ELMER R. HENRY. The CHAIRMAN. Thank you for your appearance, Mr. Wampler. Mr. WAMPLER. Thank you, Mr. Chairman. The CHAIRMAN. We will now hear our colleague from Minnesota, the Honorable Joseph E. Karth. Mr. Karth? STATEMENT OF HON. JOSEPH E. KARTH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MINNESOTA Mr. KARTH. Mr. Chairman, I appreciate this opportunity to make a statement in support of H.R. 1012 and similar bills which would improve the benefits provided under the Railroad Retirement Act and the Railroad Unemployment Insurance Act. In the last session of Congress, while there was enacted important legislation which was of substantial benefit to the operations and financial health of the railroad employees, the bill similar to H.R. 1012 which would have helped railroad companies, although reported favorably by this committee, failed to be enacted. I believe a tragic wrong was done, especially to the tens of thousands of railway workers who thus failed to win improved unemployment benefits to which, in justice, they are entitled. As testimony before this committee last year brought out, a high proportion of the men and women who suffer the loss of their jobs for long periods, or even permanently, as the result of technological change, are older employees with long service. It was indicated in those hearings that while improved unemployment insurance benefits, as proposed by H.R. 1012, could be of substantial assistance in alleviating hardship of unemployment that through the cooperation of railroad management with railroad labor and the Railroad Retirement Board, the extra burden of those benefits to the railroads can be largely avoided by transferring and converting furloughed workers to new jobs which are constantly opening up in the industry. The amendment to the Railroad Unemployment Insurance Act proposed by H.R. 1012 will, I believe, provide a worthwhile inducement to reemploy faithful, capable, and experienced workers whose unemployment might otherwise be a loss to the industry and to the Nation. I urge that the committee also support the amendments to the Railroad Retirement Act incorporated in H.R. 1012 for it has become obvious in the past few years that the growing burden of inflation is reducing even further the already inadequate standard of living imposed on railroad retirees, on widows and children who are dependent 37110-597 upon the fixed incomes of pensions and annuities of the railroad retirement system. Since 1951, benefits under the Railroad Retirement Act have lagged behind the ever-mounting cost of living. This hard fact makes most essential the enactment of the modest 10 percent increase in monthly benefits provided in H.R. 1012 and similar bills. Such an increase is both fair and economically necessary. The proposed change in granting the social security system privilege of earlier retirement at 62 years of age to women employees and wives of retired employees on a reduced annuity basis should also be adopted. Mr. Chairman, I urge that the committee give its approval to Ĥ. R. 1012 and help restore fairness and equity for the railroad retirees, the widows and children, and help substantially the unemployed railroad workers who have suffered over much in recent years from the hardships of inflation and the confusions of a changing industry. The CHAIRMAN. We appreciate your interest in the legislation, Mr. Karth, and your appearance before the committee. Mr. KARTH. Thank you, Mr. Chairman. The CHAIRMAN. The next witness is our colleague from California, the Honorable Harold T. Johnson. Mr. Johnson, we will be glad to hear you at this time. STATEMENT OF HON. HAROLD T. (BIZZ) JOHNSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA Mr. JOHNSON. Mr. Chairman, I appreciate the opportunity to make a brief statement in connection with my bill, H.R. 3972, and similar legislation to amend the railroad retirement and railroad unemployment insurance systems. This legislation is of utmost importance to the railway workers and I hope it will be adopted. As pointed out by the general counsel of the Railway Labor Executives Association, an increase of at least 10 percent in benefits should be granted due to the rise in living costs. The 10 percent increase adopted by the Congress in 1956 in terms of today's living costs had now been cut to just a little over 1 percent. I want also to mention the other section of the bill which would increase railroad unemployment insurance benefits. You have detailed information on this situation before you. In essence, it would grant a modest increase from $8.50 a day to $10.20 a day, thus permitting a maximum benefit of $51 a week. This amount would represent about 60 percent of the average railroad worker's pay. In contrast, workers in most other industries receive approximately 65 percent of their average weekly wage. I thank you. The CHAIRMAN. Thank you, Mr. Johnson. Other members who have introduced various bills may have permission to include their statements in the record at this point if they desire. I have a statement from the National Association of Retired and Veteran Railway Employees signed by Mr. C. W. T. Robinson, grand secretary-treasurer, which will be included in the record at this point. (The statement referred to follows:) NATIONAL ASSOCIATION OF RETIRED AND VETERAN RAILWAY EMPLOYEES, Mr. W. E. WILLIAMSON, Clerk, Committee on Interstate and Foreign Commerce, MY DEAR MR. WILLIAMSON: Notice of hearings on bills to amend the Railroad Retirement Act received. It is not the intent of Mr. Guy F. Fain, grand president, to appear before the committee as a witness. However, we do request the attached statement be made a part of the record of the committee. As an association we endorse the bills that have been presented by Mr. Harris and Mr. Bennett, namely H.R. 1012 and H.R. 1013. Very truly, C. W. T. ROBINSON, Grand Secretary-Treasurer. STATEMENT OF GUY F. FAIN, GRAND PRESIDENT, NATIONAL ASSOCIATION OF RETIRED AND VETERAN RAILWAY EMPLOYEES Mr. Chairman and members of your committee, my name is Guy F. Fain. My home is in Glendale, Ohio. The association I represent urges your approval of House bills H.R. 1012 and H.R. 1013, presented by the able chairman of your committee, Mr. Harris, and the senior minority member, Mr. Bennett. These bills have the endorsement of the Railway Labor Executives' Association, and certainly provide only for such increases that are within the ability of the Retirement Board to meet, without affecting the stability of the retirement funds. Feeling that the interests of our members will be ably represented by those who will appear before your committee in behalf of the Railway Labor Executives' Association, we have not requested the privilege of appearing before your committee. The CHAIRMAN. Now, we are glad to welcome again to the committee the Chairman of the Railroad Retirement Board, Hon. Howard W. Habermeyer. Mr. Habermeyer, we are glad to have you again before the committee on this subject. We have been striving now for a number of years to get a satisfactory program worked out. I hope that by getting an early start at this time we can finally bring a definitive program that will be as nearly acceptable as possible and in the interest of not only the railroad employees but the industry itself as well as the American public. You may proceed with your statement. STATEMENT OF HOWARD W. HABERMEYER, CHAIRMAN, RAILROAD RETIREMENT BOARD Mr. HABERMEYER. Mr. Chairman and members of the committee, my name is Howard Habermeyer. I am the Chairman of the Railroad Retirement Board. It is a pleasure to appear before this committee again and to discuss proposed amendments to the Railroad Retirement and Railroad Unemployment Insurance Acts. In accordance with your request, I have attached to this statement a compilation of the bills that have been introduced to amend the two acts. Included in this compilation are some 20 bills on which the Board has had the opportunity to file reports with your committee. The Board unanimously opposed the enactment of all these bills except H.R. 1012 and similar bills, because they proposed to increas benefits and made no provision for the additional needed revenue. Included in the Board's report on H.R. 1012 we gave the committee a very detailed analysis of the provisions of this bill, and you, Mr. Chairman, gave a summary of it this morning. I would like to skip over the summary that I have in my statement. The CHAIRMAN. Very well. Your entire statement will be included in the record, Mr. Habermeyer. (The statement referred to follows:) STATEMENT OF HOWARD W. HABERMEYER, CHAIRMAN, RAILROAD RETIREMENT BOARD Mr. Chairman and members of the committee, my name is Howard W. Habermeyer. I am the Chairman of the Railroad Retirement Board. It is a pleasure to again appear before this committee and discuss proposed amendments to the Railroad Retirement and Railroad Unemployment Insurance Acts. In accordance with your request, I have attached to this statement a compilation of the bills that have been introduced to amend our acts. Included in this compilation are some 20 bills on which the Board has had the opportunity to file reports with your committee. The Board unanimously opposed the enactment of all these bills except H.R. 1012 and similar bills, because they proposed to increase benefits and made no provision for the additional needed revenue. Included in the Board's report on H.R. 1012 we gave the committee a very detailed analysis of the provisions of this bill. I would like for the record to summarize the major items of this proposal. AMENDMENTS TO THE RAILROAD RETIREMENT ACT 1. All retirement and survivor annuities, including spouses' annuities, computed under the regular railroad retirement formulas, including the minimum formulas, would be increased by 10 percent, effective with respect to annuities accruing for January 1959 and thereafter. 2. All retirement and survivor annuities, including spouses' annuities, computed under the overall social security minimum would be increased by 10 percent, effective with respect to annuities accruing for January 1959 and thereafter. 3. All pensions payable under section 6 of the Railroad Retirement Act would be increased by 10 percent, effective with respect to pensions due on February 1, 1959, and thereafter. 4. The maximum amount of monthly compensation creditable for benefit purposes would be increased from $350 to $400 effective with respect to services rendered after 1958. 5. The formula for computing the residual lump sum would be amended, in conformity with amendments proposed to the Railroad Retirement Tax Act to increase the tax rate and to increase the maximum monthly tax base to $400, by increasing the percentage factor applicable to compensation after 1958 and before 1962 to 71⁄2 percent and to compensation after 1961 to 8 percent, and by increasing the maximum amount of compensation to which such factors are applicable from $350 to $400 for any month after 1958. 6. The privilege now available to a male employee with 30 years of service of electing to receive a reduced annuity at age 60 would be available to women employees with 10 years of service at age 62. 7. Spouses of annuitants, age 65 or more, would have the right to elect to receive a reduced spouse's annuity at age 62. 8. The reduction in 6 and 7 would be by one one-hundred-and-eightieth for each calendar month the beneficiary is under age 65, and both provisions would be effective for annuities for January 1959 and thereafter. 9. The earnings test now applicable to disability annuitants, under which such an annuitant under age 65 does not receive his annuity for any month in which he is paid more than $100 in earnings, would be modified by a proviso to the effect that if the annuitant's total earnings in any calendar year do not exceed $1,200, the annuity otherwise not payable because of his earnings in excess of $100 in any month in the year would become payable. Should the an |