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War on Workers: Ryan Budget targets railroad workers, retirees

CLEVELAND, April 16 — The U.S. House of Representatives has adopted federal budget legislation sponsored by Budget Committee Chairman Paul Ryan (R-WI) that would have devastating effects on the retirement security of both active and retired BLET members, as well as all railroad workers. The measure passed on March 29 by a vote of 228-191, with 10 Republicans joining all of the Democrats in voting against it.

Perhaps the most devastating portion of the Ryan Budget are the provisions that sponsors claim “would conform Tier 1 so that its benefits would equal those of Social Security, with an estimated savings to taxpayers of $2 billion over 10 years.” Enactment of this legislation would eliminate the Railroad Retirement Occupational Disability program, as well as the “60/30” provision for allowing early retirement for railroad workers at age 60 if they have 30 years of service. Under the legislation, the earliest these individuals could retire would be age 62. Annuities for spouses of these workers also would be negatively impacted in this manner. These provisions would negatively affect the annuities of almost 120,000 non-disabled employees, almost 90,000 spouses and over 62,000 occupationally disabled employees.

The Ryan Budget fundamentally misconstrues the relationship between Railroad Retirement and Social Security, and ignores the fact that all Railroad Retirement benefits above Social Security — whether Tier 1 benefits or Tier 2 benefits — are fully funded by railroad workers and their employers; none of these benefits are funded from the general treasury. Therefore, no actual budgetary savings would result from enactment of this legislation.

“The Ryan Budget’s claim that American taxpayers will realize a savings if our occupational disability and retirement annuities are gutted is so blatantly false,” BLET National President Dennis R. Pierce said, “that even the head of the carriers’ lobbying group has called out Chairman Ryan on his deception, and told him not to ‘interfere’ in our privately-funded industry pension.”

The Ryan Budget also attacks two other key components of the American social compact in a way that would negatively impact active and retired railroad workers. Under current law, new retirees receive Social Security benefits based on the growth in wages. The Ryan Budget would set initial benefits based on the growth in prices, which over time grow at a slower rate. This would harm 70% of Social Security beneficiaries by cutting benefits by roughly 16% for the average new retiree in 2050 and 28% in 2080. These cuts also would affect Tier 1 Railroad Retirement benefits.

The Ryan Budget also would end Medicare as we know it. The Medicare eligibility age would be raised to 67. This, alone, would increase out-of-pocket health care costs by $4,300 a year for nearly 1 million individuals ages 65 and 66, and would cause the costs of the GA 46000 Plan to soar. Further, the Ryan Budget replaces Medicare’s guaranteed benefits with a “premium support” payment that beneficiaries would use towards the cost of private insurance or traditional Medicare starting in 2023.

The amount of this voucher would be based on the second cheapest available plan in the area. There is no guarantee that this payment would actually cover enough of a premium’s cost to actually make the Medicare replacement health care affordable. In fact, it is more than likely that beneficiaries would be left with increased out of pocket costs, because the Ryan Budget caps the amount of the voucher at a half percent above Gross Domestic Product, which is far below the growth in health insurance costs in recent years. In fact, the Congressional Budget Office estimates that new beneficiaries could pay over $1,200 more per year by 2030 and over $5,900 more per year by 2050 under. It also would allow private insurers to cherry pick the younger and healthier beneficiaries, leaving Medicare with a disproportionate share of the oldest, sickest and costliest beneficiaries, driving up costs for the program and setting it on an unsustainable path.

“This budget is one more example of how Republican Paul Ryan and his worker-hating allies are trying to hurt middle class Americans — including the railroad workers who, with the carriers, fully fund their own pension plan,” BLET Vice President & National Legislative Representative John Tolman said. “Also included are the standard targets — Amtrak and its workers and high speed rail, by eliminating funding for high speed rail and limiting overtime for Amtrak workers. But the cuts aren’t limited to only railroad workers. The Ryan Budget also attacks the poor, the sick, the elderly and the nation’s children, while allowing the wealthy to continue to get away with not paying their fair share by extending the Bush tax cuts, retaining oil company subsidies and increasing defense spending by $228 billion.”

While the legislation is not expected to be taken up by the Senate in this session, President Pierce is warning BLET members not to take the threat lightly.

“The presumptive Republican presidential nominee already has publicly stated his support for the Ryan Budget, and Chairman Ryan is reported to be on the ‘short list’ of potential vice presidential candidates,” President Pierce said. “If those who support the Ryan Budget capture the White House and the Senate, and retain the House, this nightmare will become a reality, and our members’ economic security will be set back by decades. We need to remember this on November 6 and vote for candidates who will help working Americans.”

Monday, April 16, 2012
bentley@ble-t.org

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