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year 1968, the wages received by him during such year exceed $6,600, or (D) during any calendar year after the calendar year 1967 and prior to the calendar year 1972, the wages received by him during such year exceed $7,800, (E) during any calendar year after the calendar year 1971 and prior to the calendar year 1973, the wages received by him during such year exceed $9,000 or (F) during any calendar year after the calendar year 1972 and prior to the calendar year 1974, the wages received by him during such year exceed $10,800, or (i) during any calender year after the calendar year 1973 and prior to the calendar year 1975, the wages received by him during such year exceed $13,200, or (H) during any calandar year after 1974, the wages received by him during such year exceed the contribution and benefit base (as determined under section 230 of the Social Security Act) which is effective with respect to such year; and the employee shall be entitled (subject to the provisions of section 31(b)) to a credit or refund of any amount of tax, with respect to such wages, imposed by section 3101 or section 3201, or by both such sections, and deducted from the employee's wages (whether or not paid to the Secretary or his delegate), which exceeds the tax with respect to the first $1,200 of such wages received in such calendar year after 1954 and before 1959, or which exceeds the tax with respect to the first $4,800 of such wages received in such calendar year after 1958 and before 1966, or which exceeds the tax with respect to the first $6,600 of such wages received in such calendar year after 1965 and before 1968, or which exceeds the tax with respect to the first $7,800 of such wages received in such calendar year after 1967 and before 1972, or which exceeds the tax with respect to the first $9,000 of such wages received in such calendar year after 1971 and before 1973, or which exceeds the tax with respect to the first $10,800 of such wages received in such calendar year after 1972 and before 1974, or which exceeds the tax with respect to the first $13,200 of such wages received in such calendar year after 1973 and before 1975, or which exceeds the tax with respect to an amount of such wages received in such calendar year after 1974 equal to the contribution and benefit base (as determined under section 230 of the Social Security Act) which is effective with respect to such year. The term "wages" as used in this paragraph shall, for purposes of this paragraph, include "compensa

tion" as defined in section 3231(e). (2) APPLICABILITY IN CASE OF FEDERAL AND STATE EMPLOYEES, EMPLOYEES OF CERTAIN FOREIGN CORPORATIONS, AND GOVERNMENTAL EMPLOYEES IN GUAM, AMERICAN SAMOA, AND THE DISTRICT OF COLUMBIA.-

(A) FEDERAL EMPLOYEES.- In the case of remuneration received from the United States or a wholly owned instrumentality thereof during any calendar year, each head of a Federal agency or instrumentality who makes a return pursuant to section 3122 and each agent, designated by the head of a Federal agency or instrumentality, who makes a return pursuant to such section shall, for purposes of this subsection, be deemed a separate employer. and the term “wages" includes for purposes of this subsection the amount, not to exceed $3,600 for the calendar year 1951, 1952, 1953, or 1954, $1,200 for the calendar year 1955, 1956, 1957, or 1958, 210

$4,800 for the calendar year 1959, 1960, 1961, 1962, 1963, 1964, or 1965, $6,600 for the calendar year 1966 or 1967, $7,800 for the calendar year 1968, 1969, 1970 or 1971, or $9,000 for the calendar year 1972, $10,800 for the calendar year 1973, $13,200 for the calendar year 1974, or an amount equal to the contribution and benefit base (as determined under section 230 of the Social Security Act) for any calendary year after 1974 with respect to which such contribution and benefit base is effective, determined by each such head or agent as constituting wages paid to an employee.

(B) STATE EMPLOYEES.- For purposes of this subsection, in the case of remuneration received during any calendar year, the term “wages” includes such remuneration for services covered by an agreement made pursuant to section 218 of the Social Security Act as would be wages if such services constituted employment; the term "employer" includes a State or any political subdivision thereof, or any instrumentality of any one or more of the foregoing; the term “tax” or “tax imposed by section 3101” includes, in the case of services covered by an agreement made pursuant to section 218 of the Social Security Act, an amount equivalent to the tax which would be imposed by section 3101, if such services constituted employment as defined in section 3121; and the provisions of this subsection shall apply whether or not any amount deducted from the employee's remuneration as a result of an agreement made pursuant to section 218 of the Social Security Act has been paid to the Secretary.

(C) EMPLOYEES OF CERTAIN FOREIGN CORPORATIONS.-For purposes of paragraph (1) of this subsection, the term “wages" includes such remuneration for services covered by an agreement made pursuant to section 3121(1) as would be wages if such seryices constituted employment; the term "employer" includes any domestic corporation which has entered into an agreement pursuant to section 3121 (1); the term "tax" or "tax imposed by sertion 3101,” includes, in the case of services covered by an agreement entered into pursuant to section 3121 (1), an amount equivalent to the tax which would be imposed by section 3101, if such services constituted employment as defined in section 3121; and the provisions of paragraph (1) of this subsection shall apply whether or not any amount deducted from the employee's remuneration as a result of the agreement entered into pursuant to section 3121 (1) has been paid to the Secretary or his delegate.

(D) GOVERNMENTAL EMPLOYEES IN GUAM.-In the case of remuneration received from the Government of Guam or any political subdivision thereof or from any instrumentality of any one or more of the foregoing which is wholly owned thereby, during any calendar year, the Governor of Guam and each agent designated by him who makes a return pursuant to section 3125 (a) shall, for purposes of this subsection, be deemed a separate employer.

(E) GOVERNMENTAL EMPLOYEES IN AMERICAN SAMOA.- In the case of remuneration received from the Government of American Samoa or any political subdivision thereof or from any instrumentality of any one or more of the foregoing which is wholly owned thereby, during any calendar year, the Governor of Amer

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ican Samoa and each agent designated by him who makes a return pursuant to section 3125 (b) shall, for purposes of this subsection, be deemed a separate employer.

(F) GOVERNMENTAL EMPLOYEES IN THE DISTRICT OF COLUMBIA.- In the case of remuneration received from the District of Columbia or any instrumentality wholly owned thereby, during any calendar year, the Commissioners of the District of Columbia and each agent designated by them who makes a return pursuant to section 3125(c), shall, for purposes of this subsection, be

deemed a separate employer. (3) APPLICABILITY WITH RESPECT TO COMPENSATION OF EMPLOYEES SUBJECT TO THE RAILROAD RETIREMENT TAX ACT.-In the case of any individual who, during any calendar year after 1967, receives wages from one or more employers and also receives compensation which is subject to the tax imposed by section 3201 or 3211, such compensation shall, solely for purposes of applying paragraph (1) with respect to the tax imposed by section 3101(b), be treated as wages received from an employer with respect to which the tax imposed by section 3101 (b) was deducted.

SUPPLEMENTAL VIEWS OF MR. PELL

It will be noted that I have not been recorded in the affirmative on the Committee action on H.R. 15301, the Railroad Retirement Act of 1974.

I am in full accord with the purpose and, indeed, the necessity of this present legislation. It seeks to insure that those individuals presently covered by the railroad retirement system and those who will in the future participate in this system will have a decent, meaningful pension on which they may live with dignity. However, I do not fully support the method by which H.R. 15301 proposes to accomplish this for it is the first Federal program which, to my knowledge, would fund with general Treasury revenues, a pension plan that was intended to be a self-liquidating and self-financing pension plan.

When the Railroad Retirement System was established in 1934, it was understood that even with increases and additions to its benefit structure, the funds should remain in actuarial balance. It has now been clearly demonstrated that due to the decline in Railroad employment and large increases in retirement benefits, the fund is no longer in balance. This bill would seek to erase that deficit and stabilize the fund by drawing from general Treasury revenues. It would commit the Congress to appropriate at least $7 billion over the next twenty-five years to stabilize the trust fund, and this amount could rise as high as $7.9 billion. This is a precedent-making step and I believe the Congress should fully be aware of its implications before it takes such action.

Although we are talking about the railroad retirement program here, it is my understanding that the Social Security system may soon be facing actuarial problems of its own; at that time, we may again be urged to look toward general Treasury revenues for assist ance. For that reason I believe we should consider this precedent with a critical eye toward the future rather than as a piece-meal approach to an isolated problem.

Therefore, I believe we should be fully aware of the policy implications involved in turning to public financing to resolve the problems of the railroad retirement system.

CLAIBORNE PELL.

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