Action heats up on Railroad Retirement legislation

CLEVELAND, March 16 -- As the House Committee on Transportation & Infrastructure prepares to introduce new Railroad Retirement legislation next week, negative statements from the White House could threaten speedy passage of the legislation.

The Railroad Retirement and Survivors' Improvement Act of 2001 is scheduled to be introduced on March 21 and will replace H.R. 180, which was introduced by Congressman Bud Shuster. Shuster's sudden retirement in January left H.R. 180 without a major sponsor in Congress, and the rail labor coalition supporting the measure felt it would improve the legislation's chances for passage if it were re-introduced.

The bipartisan leadership of the House Transportation & Infrastructure Committee plan to re-introduce the legislation next week, including Committee Chairman Don Young (R-AK); ranking member James Oberstar (D-MN); Jack Quinn (R-NY), chairman of the Subcommittee on Railroads; and ranking member Bob Clement (D-TN).

Unfortunately, statements contained in President George W. Bush's budget proposal, "A Blueprint for New Beginnings," give the distinct impression that the White House may stand opposed to the Railroad Retirement package.

"The railroad retirement system's pension program is not fully funded like other private industry pension plans; indeed, there is a $39.7 billion unfunded liability," Bush states in his budget proposal. "Any examination of the program should set as first priorities ending taxpayer subsidies to the program and ensuring the industry funds its workers' pensions."

Regardless of the dubious validity of these statements, it's clear that proponents of the Railroad Retirement and Survivors' Improvement Act of 2001 may face an uphill battle.

In a strongly worded letter to the House Budget Committee, however, the Committee on Transportation and Infrastructure defended the Railroad Retirement legislation and questioned the accuracy of Bush's statements.

"The Committee is disappointed by the statement concerning the Railroad Retirement system in the FY 2002 President's Budget," the letter states. "This statement implies that the Railroad Retirement system is receiving massive federal subsidies and is not capable of meeting its future pension obligations. This is not true. According to the most recent actuarial valuation, the railroad retirement system will not experience any cash flow problems for the next 75 years under the most likely economic assumptions. Railroads and their employees pay a very heavy payroll tax burden to fund the system, which, as a result, is financially sound. These payroll taxes have produced significant reserves for the system -- over six years worth of full benefit payments. This healthy reserve is one of the bases for, and would be protected by, the railroad retirement reform legislation approved 391-25 by the House last fall and which this Committee will consider in the near future."

The new bill will be identical to last year's H.R. 4844, and contains all the benefit improvements originally agreed to by rail management and labor -- long-needed improvements in the surviving spouse benefit, full retirement annuity at age 60 with 30 years of service, elimination of artificial caps on benefits, vesting after five years instead of 10, and provisions that require the carriers to insure future fund solvency with future tax increases if necessary.

If President Bush's apparent threats come to fruition, it will mark the second year in a row the Railroad Retirement legislation has been killed by partisan politics. After passing the House, last year's version of the bill had 83 Senate co-sponsors before being killed by four ultra-conservative Senators -- Majority Leader Trent Lott (R-MS), Pete Domenici (R-NM), Phil Gramm (R-TX) and Don Nickles (R-OK).

BLE members are encouraged to contact their member of Congress and ask that they co-sponsor the Railroad Retirement and Survivors' Improvement Act of 2001. Correspondence should be addressed to:

    U.S. House of Representatives
    Washington, D.C. 20515
    Telephone: U.S. Capitol, (202) 224-3121


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March 16, 2001


2001 Brotherhood of Locomotive Engineers