Congressional Record, Volume 146 Issue 103 (Thursday, September 7, 2000)

[Congressional Record Volume 146, Number 103 (Thursday, September 7, 2000)]
[House]
[Pages H7335-H7346]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

RAILROAD RETIREMENT AND SURVIVORS' IMPROVEMENT ACT OF 2000

Mr. SHUSTER. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 4844) to modernize the financing of the railroad retirement
system and to provide enhanced benefits to employees and beneficiaries,
as amended.
The Clerk read as follows:

H.R. 4844

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Railroad
Retirement and Survivors' Improvement Act of 2000''.

[[Page H7336]]

(b) Table of Contents.--

Sec. 1. Short title; table of contents.

TITLE I--AMENDMENTS TO RAILROAD RETIREMENT ACT OF 1974

Sec. 101. Expansion of widow's and widower's benefits.
Sec. 102. Retirement age restoration.
Sec. 103. Vesting requirement.
Sec. 104. Repeal of railroad retirement maximum.
Sec. 105. Investment of railroad retirement assets.
Sec. 106. Elimination of supplemental annuity account.
Sec. 107. Transfer authority revisions.
Sec. 108. Annual ratio projections and certifications by the Railroad
Retirement Board.

TITLE II--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

Sec. 201. Amendments to the Internal Revenue Code of 1986.
Sec. 202. Exemption from tax for Railroad Retirement Investment Trust.
Sec. 203. Repeal of supplemental annuity tax.
Sec. 204. Employer, employee representative, and employee tier 2 tax
rate adjustments.

TITLE I--AMENDMENTS TO RAILROAD RETIREMENT ACT OF 1974

SEC. 101. EXPANSION OF WIDOW'S AND WIDOWER'S BENEFITS.

(a) In General.--Section 4(g) of the Railroad Retirement
Act of 1974 is amended by adding at the end the following new
subdivision:
``(10)(i) If for any month the unreduced annuity provided
under this section for a widow or widower is less than the
widow's or widower's initial minimum amount computed pursuant
to paragraph (ii) of this subdivision, the unreduced annuity
shall be increased to that initial minimum amount. For the
purposes of this subdivision, the unreduced annuity is the
annuity without regard to any deduction on account of work,
without regard to any reduction for entitlement to an annuity
under section 2(a)(1) of this Act, without regard to any
reduction for entitlement to a benefit under title II of the
Social Security Act, and without regard to any reduction for
entitlement to a public service pension pursuant to sections
202(e)(7), 202(f)(2), or section 202(g)(4) of the Social
Security Act.
``(ii) For the purposes of this subdivision, the widow or
widower's initial minimum amount is the amount of the
unreduced annuity computed at the time an annuity is awarded
to that widow or widower, except that--
``(A) in subsection (g)(1)(i) `100 per centum' shall be
substituted for `50 per centum'; and
``(B) in subsection (g)(2)(ii) `130 per centum' shall be
substituted for `80 per centum' both places it appears.
``(iii) If a widow or widower who was previously entitled
to a widow's or widower's annuity under section 2(d)(1)(ii)
of this Act becomes entitled to a widow's or widow's annuity
under section 2(d)(1)(i) of this Act, a new initial minimum
amount shall be computed at the time of award of the widow's
or widower's annuity under section 2(d)(1)(i) of this Act.''.
(b) Effective Date.--
(1) Generally.--The amendment made by this section shall
take effect January 1, 2001 and shall apply to annuity
amounts accruing for months after December 2000 in the case
of annuities awarded on or after that date and in the case of
annuities awarded before that date if the annuity amount
under section 4(g) of the Railroad Retirement Act was
computed under section 4(g), as amended by Public Law 97-35.
(2) Special rule for annuities awarded before january 1,
2001.--In applying the amendments made by this section to
annuities awarded before January 1, 2001, the calculation of
the initial minimum amount under new section 4(g)(10)(ii) of
the Act shall be made as of the date of award of the widow's
or widower's annuity.

SEC. 102. RETIREMENT AGE RESTORATION.

(a) Employee Annuities.--Section 3(a)(2) of the Railroad
Retirement Act of 1974 is amended by inserting after ``(2)''
the following: ``For purposes of this subsection, individuals
entitled to an annuity under section 2(a)(1)(ii) of this Act
shall, except for the purposes of recomputations in
accordance with section 215(f) of the Social Security Act, be
deemed to have attained retirement age (as defined by section
216(l) of the Social Security Act).''.
(b) Spouse and Survivor Annuities.--Section 4(a)(2) of the
Railroad Retirement Act of 1974 is amended by striking ``if
an'' and all that follows through ``section 2(c)(1) of this
Act'' and inserting ``a spouse entitled to an annuity under
section 2(c)(1)(ii)(B) of this Act''.
(c) Conforming Repeals.--Sections 3(a)(3), 4(a)(3), and
4(a)(4) of the Railroad Retirement Act are repealed.
(d) Effective Dates.--
(1) Generally.--Except as provided in paragraph (2), the
amendments made by this section shall apply to annuities that
begin to accrue on or after January 1, 2001.
(2) Exception.--The amount of the annuity provided for a
spouse under section 4(a) shall be computed under section
4(a)(3), as in effect before the date of the enactment of
this section, if the annuity amount provided under section
3(a) for the individual on whose employment record the spouse
annuity is based was computed under section 3(a)(3), as in
effect before the date of the enactment of this section.

SEC. 103. VESTING REQUIREMENT.

(a) Certain Annuities for Individuals.--Section 2(a) of the
Railroad Retirement Act of 1974 is amended--
(1) by inserting in subdivision (1) ``or, for purposes of
paragraphs (i), (iii), and (v), five years of service, all of
which accrues after December 31, 1995,'' after ``ten years of
service'', and
(2) by adding at the end the following:
``(4) An individual who is entitled to an annuity under
paragraph (v) of subdivision (1), but who does not have at
least ten years of service, shall, prior to the month in
which the individual attains age 62, be entitled only to an
annuity amount computed under section 3(a) of this Act
(without regard to section 3(a)(2) of this Act) or section
3(f)(3) of this Act. Upon attainment of age 62, such an
individual may also be entitled to an annuity amount computed
under section 3(b), but such annuity amount shall be reduced
for early retirement in the same manner as if the individual
were entitled to an annuity under section 2(a)(1)(iii).''.
(b) Computation Rule for Individuals' Annuities.--Section
3(a) of the Railroad Retirement Act of 1974, as amended by
section 102 of this Act, is further amended by adding at the
end the following new subdivision:
``(3) If an individual entitled to an annuity under section
2(a)(1)(i) or (iii) of this Act on the basis of less than ten
years of service is entitled to a benefit under section
202(a), section 202(b), or section 202(c) of the Social
Security Act which began to accrue before the annuity under
section 2(a)(1)(i) or (iii) of this Act, the annuity amount
provided such individual under this subsection, shall be
computed as though the annuity under this Act began to accrue
on the later of (A) the date on which the benefit under
section 202(a), section 202(b), or section 202(c) of the
Social Security Act began or (B) the date on which the
individual first met the conditions for entitlement to an age
reduced annuity under this Act other than the conditions set
forth in sections 2(e)(1) and 2(e)(2) of this Act and the
requirement that an application be filed.''.
(c) Survivors' Annuities.--Section 2(d)(1) of the Railroad
Retirement Act of 1974 is amended by inserting ``or five
years of service, all of which accrues after December 31,
1995,'' after ``ten years of service''.
(d) Limitation on Annuity Amounts.--Section 2 of the
Railroad Retirement Act of 1974 is amended by adding at the
end the following:
``(i) An individual entitled to an annuity under this
section who has completed five years of service, all of which
accrues after 1995, but who has not completed ten years of
service, and the spouse, divorced spouse, and survivors of
such individual, shall not be entitled to an annuity amount
provided under section 3(a), section 4(a), or section 4(f) of
this Act unless the individual, or the individual's spouse,
divorced spouse, or survivors, would be entitled to a benefit
under the Social Security Act on the basis of the
individual's employment record under both the Railroad
Retirement Act and the Social Security Act.''.
(e) Computation Rule for Spouses' Annuities.--Section 4(a)
of the Railroad Retirement Act of 1974, as amended by section
102 of this Act, is further amended by adding at the end the
following new subdivision:
``(3) If a spouse entitled to an annuity under section
2(c)(1)(ii)(A), section 2(c)(1)(ii)(C), or section 2(c)(2) of
this Act or a divorced spouse entitled to an annuity under
section 2(c)(4) of this Act on the basis of the employment
record of an employee who will have completed less than 10
years of service is entitled to a benefit under section
202(a), section 202(b), or section 202(c) of the Social
Security Act which began to accrue before the annuity under
section 2(c)(1)(ii)(A), section 2(c)(1)(ii)(C), section
2(c)(2), or section 2(c)(4) of this Act, the annuity amount
provided under this subsection shall be computed as though
the annuity under this Act began to accrue on the later of
(A) the date on which the benefit under section 202(a),
section 202(b), or section 202(c) of the Social Security Act
began or (B) the first date on which the annuitant met the
conditions for entitlement to an age reduced annuity under
this Act other than the conditions set forth in sections
2(e)(1) and 2(e)(2) of this Act and the requirement that an
application be filed.''.
(f) Application Deeming Provision.--Section 5(b) of the
Railroad Retirement Act of 1974 is amended by striking the
second sentence and inserting the following: ``An application
filed with the Board for an employee annuity, spouse annuity,
or divorced spouse annuity on the basis of the employment
record of an employee who will have completed less than ten
years of service shall be deemed to be an application for any
benefit to which such applicant may be entitled under this
Act or section 202(a), section 202(b), or section 202(c) of
the Social Security Act. An application filed with the Board
for an annuity on the basis of the employment record of an
employee who will have completed ten years of service shall,
unless the applicant specified otherwise, be deemed to be an
application for any benefit to which such applicant may be
entitled under this Act or title II of the Social Security
Act.''.
(g) Crediting Service Under the Social Security Act.--
Section 18(2) of the Railroad Retirement Act of 1974 is
amended--
(1) by inserting ``or less than five years of service, all
of which accrues after December

[[Page H7337]]

31, 1995,'' after ``ten years of service'' every place it
occurs; and
(2) by inserting ``or five or more years of service, all of
which accrues after December 31, 1995,'' after ``ten or more
years of service''.
(h) Automatic Benefit Eligibility Adjustments.--Section 19
of Railroad Retirement Act of 1974 is amended--
(1) by inserting ``or five or more years of service, all of
which accrues after December 31, 1995,'' after ``ten years of
service'' in subsection (c); and
(2) by inserting ``or five or more years of service, all of
which accrues after December 31, 1995,'' after ``ten years of
service'' in subsection (d)(2).
(i) Conforming Amendments.--
(1) Section 6(e)(1) of the Railroad Retirement Act of 1974
is amended by inserting ``or five or more years of service,
all of which accrues after December 31, 1995,'' after ``ten
years of service''.
(2) Section 7(b)(2) of the Railroad Retirement Act of 1974
is amended by inserting ``or five or more years of service,
all of which accrues after December 31, 1995,'' after ``ten
years of service''.
(3) Section 205(i) of the Social Security Act is amended by
inserting ``or five or more years of service, all of which
accrues after December 31, 1995,'' after ``ten years of
service''.
(j) Effective Date.--The amendments made by this section
shall take effect January 1, 2001.

SEC. 104. REPEAL OF RAILROAD RETIREMENT MAXIMUM.

(a) Employee Annuities.--Section 3(f) of the Railroad
Retirement Act of 1974 is amended by striking paragraph (1).
(b) Spouse and Survivor Annuities.--Section 4 of the
Railroad Retirement Act of 1974 is amended by striking
subsection (c).
(c) Effective Date.--The amendments made by this section
shall be effective January 1, 2001, and shall apply to
annuity amounts accruing for months after December 2000.

SEC. 105. INVESTMENT OF RAILROAD RETIREMENT ASSETS.

(a) Establishment of Railroad Retirement Investment
Trust.--Section 15 of the Railroad Retirement Act of 1974 is
amended by inserting after subsection (i) the following:
``(j) Railroad Retirement Investment Trust.--
``(1) Establishment.--The Railroad Retirement Investment
Trust (hereinafter in this subsection referred to as the
`Trust') is hereby established. The Trust shall manage and
invest the assets of the Railroad Retirement Trust Fund
(hereinafter in this section referred to as the ``Fund'',
which is hereby established as a trust organized in the
District of Columbia and shall, to the extent not
inconsistent with this Act, be subject to the laws of the
District of Columbia applicable to such trusts.
``(2) Not a federal agency or instrumentality.--The Trust
is not a department, agency, or instrumentality of the
Government of the United States and shall not be subject to
title 31, United States Code.
``(3) Board of trustees.--
``(A) Generally.--The Trust shall have a Board of Trustees,
consisting of 7 members, each appointed by a unanimous vote
of the Railroad Retirement Board. The Railroad Retirement
Board may remove any member so appointed by unanimous vote.
Of the 7 members, 3 shall represent the interests of labor, 3
shall represent the interests of management, and 1 shall
represent the interests of the general public. The members of
the Board of Trustees shall not be considered officers or
employees of the Government of the United States.
``(B) Qualifications.--Members of the Board of Trustees
shall be appointed only from among persons who have
experience and expertise in the management of financial
investments and pension plans. No member of the Railroad
Retirement Board shall be eligible to be a member of the
Board of Trustees.
``(C) Terms.--Except as provided in this subparagraph, each
member shall be appointed for a 3-year term. The initial
members appointed under this paragraph shall be divided into
3 equal groups so nearly as may be, of which one group will
be appointed for a 1-year term, one for a 2-year term, and
one for a 3-year term. A vacancy in the Board of Trustees
shall not affect the powers of the Board of Trustees and
shall be filled in the same manner as the selection of the
member whose departure caused the vacancy. Upon the
expiration of a term of a member of the Board of Trustees,
that member shall continue to serve until a successor is
appointed.
``(4) Powers of the board of trustees.--The Board of
Trustees shall--
``(A) retain independent advisers to assist it in the
formulation and adoption of its investment guidelines;
``(B) retain independent investment managers to invest the
assets of the Fund in a manner consistent with such
investment guidelines;
``(C) invest assets in the Fund, pursuant to the policies
adopted in subparagraph (A);
``(D) pay administrative expenses of the Fund and the Trust
from the money in the Fund; and
``(E) transfer money to the disbursing agent to pay
benefits payable under this Act from money in the Fund and
administrative expenses related to those benefits.
``(5) Reporting requirements and fiduciary standards.--The
following reporting requirements and fiduciary standards
shall apply with respect to the Railroad Retirement Trust and
the Railroad Retirement Trust Fund (and the assets held in
such Trust Fund):
``(A) Duties of the board of trustees.--The Railroad
Retirement Trust and each member of the Board of Trustees
shall discharge their duties with respect to the assets of
the Fund solely in the interest of the Railroad Retirement
Board and through it, the participants and beneficiaries of
the programs funded under this Act--
``(i) for the exclusive purpose of--

``(I) providing benefits to participants and their
beneficiaries; and
``(II) defraying reasonable expenses of administering the
functions of the Trust;

``(ii) with the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent person
acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character
and with like aims;
``(iii) by diversifying investments so as to minimize the
risk of large losses, unless under the circumstances it is
clearly prudent not to do so; and
``(iv) in accordance with Trust governing documents and
instruments insofar as such documents and instruments are
consistent with this Act.
``(B) Prohibitions with respect to members of the board of
trustees.--No member of the Board of Trustees shall--
``(i) deal with the assets of the Fund in the trustee's own
interest or for the trustee's own account;
``(ii) in an individual or in any other capacity act in any
transaction involving the assets of the Fund on behalf of a
party (or represent a party) whose interests are adverse to
the interests of the Trust, the Fund, the Railroad Retirement
Board, or the interests of participants or beneficiaries; or
``(iii) receive any consideration for the trustee's own
personal account from any party dealing with the assets of
the Fund.
``(C) Exculpatory provisions and insurance.--Any provision
in an agreement or instrument that purports to relieve a
trustee from responsibility or liability for any
responsibility, obligation or duty under this Act shall be
void: Provided, however, That nothing shall preclude--
``(i) the Trust from purchasing insurance for its trustees
or for itself to cover liability or losses occurring by
reason of the act or omission of a trustee, if such insurance
permits recourse by the insurer against the trustee in the
case of a breach of a fiduciary obligation by such trustee;
``(ii) a trustee from purchasing insurance to cover
liability under this section from and for his own account; or
``(iii) an employer or an employee organization from
purchasing insurance to cover potential liability of one or
more trustees with respect to their fiduciary
responsibilities, obligations, and duties under this section.
``(D) Bonding.--Every trustee and every person who handles
funds or other property of the Fund (hereafter in this
subsection referred to as `Trust official') shall be bonded.
Such bond shall provide protection to the Fund against
loss by reason of acts of fraud or dishonesty on the part
of any Trust official, directly or through the connivance
of others, and shall be in accordance with the following:
``(i) The amount of such bond shall be fixed at the
beginning of each fiscal year of the Trust by the Railroad
Retirement Board. Such amount shall not be less than 10
percent of the amount of the funds handled. In no case shall
such bond be less than $1,000 nor more than $500,000, except
that the Railroad Retirement Board, after consideration of
the record, may prescribe an amount in excess of $500,000,
subject to the 10 per centum limitation of the preceding
sentence.
``(ii) It shall be unlawful for any Trust official to
receive, handle, disburse, or otherwise exercise custody or
control of any of the funds or other property of the Fund
without being bonded as required by this subsection and it
shall be unlawful for any Trust official, or any other person
having authority to direct the performance of such functions,
to permit such functions, or any of them, to be performed by
any Trust official, with respect to whom the requirements
this subsection have not been met.
``(iii) It shall be unlawful for any person to procure any
bond required by this subsection from any surety or other
company or through any agent or broker in whose business
operations such person has any control or significant
financial interest, direct or indirect.
``(E) Audit and report.--
``(i) The Trust shall annually engage an independent
qualified public accountant to audit the financial statements
of the Fund.
``(ii) The Trust shall submit an annual management report
to the Congress not later than 180 days after the end of the
Trust's fiscal year. A management report under this
subsection shall include--

``(I) a statement of financial position;
``(II) a statement of operations;
``(III) a statement of cash flows;
``(IV) a statement on internal accounting and
administrative control systems;
``(V) the report resulting from an audit of the financial
statements of the Trust conducted under subparagraph (E)(i);
and
``(VI) any other comments and information necessary to
inform the Congress about the

[[Page H7338]]

operations and financial condition of the Trust and the Fund.

``(iii) The Trust shall provide the President, the Railroad
Retirement Board, and the Director of the Office of
Management and Budget a copy of the management report when it
is submitted to Congress.
``(F) Enforcement.--The Railroad Retirement Board may bring
a civil action--
``(i) to enjoin any act or practice by the Railroad
Retirement Investment Trust, its Board of Trustees or its
employees or agents that violates any provision of this Act;
or
``(ii) to obtain other appropriate relief to redress such
violations, or to enforce any provisions of this Act.
``(6) Rules and administrative powers.--The Board of
Trustees shall have the authority to make rules to govern its
operations, employ professional staff, and contract with
outside advisers to provide legal, accounting, investment
advisory or other services necessary for the proper
administration of this subsection. In the case of contracts
with investment advisory services, compensation for such
services may be on a fixed contract fee basis or on such
other terms and conditions as are customary for such
services.
``(7) Quorum.--Five members of the Board of Trustees
constitute a quorum to do business. Investment guidelines
must be adopted by a unanimous vote of the entire Board of
Trustees. All other decisions of the Board of Trustees shall
be decided by a majority vote of the quorum present. All
decisions of the Board of Trustees shall be entered upon the
records of the Board of Trustees.''.
(b) Conforming and Technical Amendments Governing
Investments.--Subsection 15(e) of the Railroad Retirement Act
of 1974 is amended--
(1) beginning in the first sentence, by striking ``, the
Dual Benefits Payments Account'' and all that follows through
``may be made only'' in the second sentence and inserting
``and the Dual Benefits Payments Account as are not
transferred to the Railroad Retirement Investment Trust as
the Board may determine'';
(2) by striking ``the Second Liberty Bond Act, as amended''
and inserting ``chapter 31 of title 31''; and
(3) by striking ``the foregoing requirements'' and
inserting ``the requirements of this subsection''.
(c) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this
section.

SEC. 106. ELIMINATION OF SUPPLEMENTAL ANNUITY ACCOUNT.

(a) Source of Payments.--Section 7(c)(1) of the Railroad
Retirement Act of 1974 is amended by striking ``payments of
supplemental annuities under section 2(b) of this Act shall
be made from the Railroad Retirement Supplemental Account,
and''.
(b) Elimination of Account.--Section 15(c) of the Railroad
Retirement Act of 1974 is repealed.
(c) In General.--Section 15(a) of the Railroad Retirement
Act of 1974 is amended by striking ``, except those portions
of the amounts covered into the Treasury under sections
3211(b),'' and all that follows through the end of the
subsection and inserting a period.
(d) Effective Date.--The amendments made by this section
shall take effect January 1, 2001, except that the Railroad
Retirement Supplemental Account shall continue to exist until
the transfer authorized by the following sentence occurs. As
soon as possible after December 31, 2000, the Board shall
determine the balance in the Railroad Retirement Supplemental
Account and shall direct the Secretary of the Treasury to
transfer such amount to the Railroad Retirement Trust Fund
and the Secretary shall make such transfer.

SEC. 107. TRANSFER AUTHORITY REVISIONS.

(a) Railroad Retirement Account.--Section 15 of the
Railroad Retirement Act of 1974 is amended by adding after
subsection (j) the following:
``(k) Transfers to the Fund.--The Board shall, upon
establishment of the Railroad Retirement Trust Fund and from
time to time thereafter, direct the Secretary of the Treasury
to transfer, in such manner as will maximize the investment
returns to the Railroad Retirement system, that portion of
the Railroad Retirement Account that is not needed to pay
current administrative expenses of the Board to the Railroad
Retirement Trust Fund. The Secretary shall make that
transfer.''.
(b) Railroad Retirement Trust Fund.--Section 15 of the
Railroad Retirement Act of 1974, as amended by subsection
(a), is further amended by adding after subsection (k) the
following:
``(l) Railroad Retirement Trust Fund.--The Railroad
Retirement Trust shall from time to time transfer to the
disbursing agent described in section 7(b)(4) such amounts as
may be necessary to pay benefits under this Act (other than
benefits paid from the Social Security Equivalent Benefit
Account or the Dual Benefit Payments Account).''.
(c) Social Security Equivalent Benefit Account.--Section
15A(d)(2) of the Railroad Retirement Act of 1974 is amended
to read as follows:
``(2) Upon establishment of the Railroad Retirement Trust
Fund and from time to time thereafter, the Board shall direct
the Secretary of the Treasury to transfer, in such manner as
will maximize the investment returns to the Railroad
Retirement system, the balance of the Social Security
Equivalent Benefit Account not needed to pay current benefits
required to be paid from that Account to the Railroad
Retirement Trust Fund, and the Secretary shall make that
transfer. Any balance transferred under this paragraph shall
be used by the Railroad Retirement Trust only to pay benefits
under this Act or to purchase obligations of the United
States that are backed by the full faith and credit of the
United States pursuant to chapter 31 of title 31, United
States Code. The proceeds of sales of, and the interest
income from, such obligations shall be used by the Trust only
to pay benefits under this Act.''.
(2) Transfers to disbursing agent.--Section 15A(c)(1) of
the Railroad Retirement Act of 1974 is amended by adding at
the end the following: ``The Secretary shall from time to
time transfer to the disbursing agent under section 7(b)(4)
amounts necessary to pay those benefits.''.
(3) Conforming amendment.--Section 15A(d)(1) of the
Railroad Retirement Act of 1974 is amended by striking the
second and third sentences.
(d) Dual Benefits Payments Account.--Section 15(d)(1) of
the Railroad Retirement Act of 1974 is amended by adding at
the end the following: ``The Secretary of the Treasury shall
from time to time transfer from the Dual Benefits Payments
Account to the disbursing agent under section 7(b)(4) amounts
necessary to pay benefits payable from that Account.''.
(e) Certification by the Board and Payment.--Paragraph (4)
of section 7(b) of the Railroad Retirement Act of 1974 is
amended to read as follows:
``(4)(A) The Railroad Retirement Board, after consultation
with the Board of Trustees of the Railroad Retirement Trust
and the Secretary of the Treasury, shall enter into an
arrangement with a nongovernmental financial institution to
serve as disbursing agent for benefits payable under this Act
who shall disburse consolidated benefits under this Act to
each recipient.
``(B) The Board shall from time to time certify--
``(i) to the Secretary of the Treasury the amounts required
to be transferred from the Social Security Equivalent Benefit
Account and the the Dual Benefits Payments Account to the
disbursing agent to make payments of benefits and the
Secretary of the Treasury shall transfer those amounts;
``(ii) to the Board of Trustees of the Railroad Retirement
Investment Trust the amounts required to be transferred from
the Railroad Retirement Investment Trust to the disbursing
agent to make payments of benefits and the Board of Trustees
shall transfer those amounts; and
``(iii) to the disbursing agent the name and address of
each individual entitled to receive a payment, the amount of
such payment, and the time at which the payment should be
made.''.
(f) Benefit Payments.--Section 7(c)(1) of the Railroad
Retirement Act of 1974 is amended--
(1) by striking ``from the Railroad Retirement Account''
and inserting ``by the disbursing agent under subsection
(b)(4) from money transferred to it from the Railroad
Retirement Trust Fund or the Social Security Equivalent
Benefit Account, as the case may be''; and
(2) by inserting ``by the disbursing agent under subsection
(b)(4) from money transferred to it'' after ``Public Law 93-
445 shall be made''.
(g) Transitional Rule for Existing Obligation.--In making
transfers under subsections (a) and (c), the Board shall
consult with the Secretary of the Treasury to design an
appropriate method to transfer obligations held as of the
date of enactment or to convert such obligations to cash
prior to transfer. The Railroad Retirement Trust may hold to
maturity any obligations so received or may redeem them prior
to maturity, as the Trust deems appropriate.

SEC. 108. ANNUAL RATIO PROJECTIONS AND CERTIFICATIONS BY THE
RAILROAD RETIREMENT BOARD.

(a) Projections.--Section 22(a)(1) of the Railroad
Retirement Act of 1974 is amended--
(1) by adding the following sentence after the first
sentence: ``On or before May 1 of each year beginning in
2002, the Railroad Retirement Board shall compute its
projection of the account benefits ratio and the average
account benefits ratio (as defined by section 3241(c) of the
Internal Revenue Code of 1986) for each of the next
succeeding five fiscal years.''; and
(2) by striking ``the projection prepared pursuant to the
preceding sentence'' and inserting ``the projections prepared
pursuant to the preceding two sentences''.
(b) Certifications.--The Railroad Retirement Act of 1974 is
amended by adding at the end the following:

``computation and certification of account benefit ratios

``Sec. 23. (a) On or before November 1, 2002, the Railroad
Retirement Board shall--
``(1) compute the account benefits ratios for each of the
most recent 10 preceding fiscal years, and
``(2) certify the account benefits ratios for each such
fiscal year to the Secretary.
``(b) On or before November 1 of each year after 2002, the
Railroad Retirement Board shall--
``(1) compute the account benefits ratio for the fiscal
year ending in such year, and
``(2) certify the account benefits ratio for such fiscal
year to the Secretary.
``(c) Definition.--As used in this section, the term
`account benefit ratio' has the meaning given that term in
section 3241(c) of the Internal Revenue Code of 1986.''.

[[Page H7339]]

TITLE II--AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986

SEC. 201. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

Except as otherwise provided, whenever in this title an
amendment or repeal is expressed in terms of an amendment to,
or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.

SEC. 202. EXEMPTION FROM TAX FOR RAILROAD RETIREMENT
INVESTMENT TRUST.

Subsection (c) of section 501 is amended by adding at the
end the following new paragraph:
``(28) The Railroad Retirement Investment Trust established
under section 15(j) of the Railroad Retirement Act of 1974.''

SEC. 203. REPEAL OF SUPPLEMENTAL ANNUITY TAX.

(a) Repeal of Tax on Employee Representatives.--Section
3211 is amended by striking subsection (b).
(b) Repeal of Tax on Employers.--Section 3221 is amended by
striking subsections (c) and (d).
(c) Effective Date.--The amendments made by this section
shall apply to calendar years beginning after December 31,
2000.

SEC. 204. EMPLOYER, EMPLOYEE REPRESENTATIVE, AND EMPLOYEE
TIER 2 TAX RATE ADJUSTMENTS.

(a) Rate of Tax on Employers.--Subsection (b) of section
3221 is amended to read as follows:
``(b) Tier 2 Tax.--
``(1) In general.--In addition to other taxes, there is
hereby imposed on every employer an excise tax, with respect
to having individuals in his employ, equal to the applicable
percentage of the compensation paid during any calendar year
by such employer for services rendered to such employer.
``(2) Applicable percentage.--For purposes of paragraph
(1), the term `applicable percentage' means--
``(A) 15.6 percent in the case of compensation paid during
2001,
``(B) 14.2 percent in the case of compensation paid during
2002, and
``(C) in the case of compensation paid during any calendar
year after 2002, the percentage determined under section 3241
for such calendar year.''.
(b) Rate of Tax on Employee Representatives.--Section 3211,
as amended by section 203, is amended by striking subsection
(a) and inserting the following new subsections:
``(a) Tier 1 Tax.--In addition to other taxes, there is
hereby imposed on the income of each employee representative
a tax equal to the applicable percentage of the compensation
received during any calendar year by such employee
representative for services rendered by such employee
representative. For purposes of the preceding sentence, the
term `applicable percentage' means the percentage equal to
the sum of the rates of tax in effect under subsections (a)
and (b) of section 3101 and subsections (a) and (b) of
section 3111 for the calendar year.
``(b) Tier 2 Tax.--
``(1) In general.--In addition to other taxes, there is
hereby imposed on the income of each employee representative
a tax equal to the applicable percentage of the compensation
received during any calendar year by such employee
representatives for services rendered by such employee
representative.
``(2) Applicable percentage.--For purposes of paragraph
(1), the term `applicable percentage' means--
``(A) 14.75 percent in the case of compensation received
during 2001,
``(B) 14.20 percent in the case of compensation received
during 2002, and
``(C) in the case of compensation received during any
calendar year after 2002, the percentage determined under
section 3241 for such calendar year.
``(c) Cross Reference.--

``For application of different contribution bases with respect to the
taxes imposed by subsections (a) and (b), see section 3231(e)(2).''.

(c) Rate of Tax on Employees.--Subsection (b) of section
3201 is amended to read as follows:
``(b) Tier 2 Tax.--
``(1) In general.--In addition to other taxes, there is
hereby imposed on the income of each employee a tax equal to
the applicable percentage of the compensation received during
any calendar year by such employee for services rendered by
such employee.
``(2) Applicable percentage.--For purposes of paragraph
(1), the term `applicable percentage' means--
``(A) 4.90 percent in the case of compensation received
during 2001 or 2002, and
``(B) in the case of compensation received during any
calendar year after 2002, the percentage determined under
section 3241 for such calendar year.''.
(d) Determination of Rate.--Chapter 22 is amended by adding
at the end thereof the following new subchapter:

``Subchapter E--Tier 2 Tax Rate Determination

``Sec. 3241. Determination of tier 2 tax rate based on average account
benefits ratio.

``SEC. 3241. DETERMINATION OF TIER 2 TAX RATE BASED ON
AVERAGE ACCOUNT BENEFITS RATIO.

``(a) In General.--For purposes of sections 3201(b),
3211(b), and 3221(b), the applicable percentage for any
calendar year is the percentage determined in accordance with
the table in subsection (b).
``(b) Tax Rate Schedule.--

------------------------------------------------------------------------
Average account benefits ratio Applicable
--------------------------------- percentage for Applicable
sections 3211(b) percentage for
At least But less than and 3221(b) section 3201(b)
------------------------------------------------------------------------
2.5 22.1 4.9
2.5 3.0 18.1 4.9
3.0 3.5 15.1 4.9
3.5 4.0 14.1 4.9
4.0 6.1 13.1 4.9
6.1 6.5 12.6 4.4
6.5 7.0 12.1 3.9
7.0 7.5 11.6 3.4
7.5 8.0 11.1 2.9
8.0 8.5 10.1 1.9
8.5 9.0 9.1 0.9
9.0 8.2 0
------------------------------------------------------------------------

``(c) Definitions Related to Determination of Rates of
Tax.--
``(1) Average account benefits ratio.--For purposes of this
section, the term `average account benefits ratio' means,
with respect to any calendar year, the average determined by
the Secretary of the account benefits ratios for the 10 most
recent fiscal years ending before such calendar year. If the
amount determined under the preceding sentence is not a
multiple of 0.1, such amount shall be increased to the next
highest multiple of 0.1.
``(2) Account benefits ratio.--For purposes of this
section, the term `account benefits ratio' means, with
respect to any fiscal year, the amount determined by the
Railroad Retirement Board by dividing the fair market value
of the assets in the Railroad Retirement Account and of the
Railroad Retirement Investment Trust (and for years before
2001, the Social Security Equivalent Benefits Account) as of
the close of such fiscal year by the total benefits and
administrative expenses paid from the Railroad Retirement
Account and the Railroad Retirement Investment Trust during
such fiscal year.
``(d) Notice.--No later than December 1 of each calendar
year, the Secretary shall publish a notice in the Federal
Register of the rates of tax determined under this section
which are applicable for the following calendar year.''.
(e) Conforming Amendments.--
(1) Section 24(d)(3)(A)(iii) is amended by striking
``section 3211(a)(1)'' and inserting ``section 3211(a)''.
(2) Section 72(r)(2)(B)(i) is amended by striking ``section
3211(a)(2)'' and inserting ``section 3211(b)''.
(3) Paragraphs (2)(A)(iii)(II) and (4)(A) of section
3231(e) is amended by striking ``3211(a)(1)'' and inserting
``3211(a)''.
(4) Section 3231(e)(2)(B)(ii)(I) is amended by striking
``3211(a)(2)'' and inserting ``3211(b)''.
(5) The table of subchapters for chapter 22 is amended by
adding at the end the following new item:

``Subchapter E. Tier 2 tax rate determination.''.

(f) Effective Date.--The amendments made by this section
shall apply to calendar years beginning after December 31,
2000.

The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Pennsylvania (Mr. Shuster) and the gentleman from Minnesota (Mr.
Oberstar) each will control 20 minutes.
The Chair recognizes the gentleman from Pennsylvania (Mr. Shuster).
Mr. SHUSTER. Mr. Speaker, I ask unanimous consent to yield 5 minutes
of my time to the gentleman from Michigan (Mr. Smith) and that he be
allowed to control said time.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Pennsylvania?
There was no objection.
Mr. OBERSTAR. Mr. Speaker, I ask unanimous consent to yield 5 minutes
of my time to the gentleman from Michigan (Mr. Smith) for the purposes
of yielding time to others, as well for the purposes of managing 5
minutes.
Mr. SPEAKER pro tempore. Is there objection to the request of the
gentleman from Minnesota?
There was no objection.
The SPEAKER pro tempore. The gentleman from Michigan will control 10
minutes.
Mr. SHUSTER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise today in strong support of this bipartisan
measure which represents the most comprehensive modernization of the
railroad retirement system in nearly two decades.
The bill is also the fruit of an arduous 2-year labor-management
negotiating process, followed by consideration in two different
committees of the House. I particularly want to commend on the
Committee of Transportation and Infrastructure our ranking member, the
gentleman from Minnesota (Mr. Oberstar); the gentleman from Wisconsin
(Mr. Petri), chairman of the Subcommittee on Ground Transportation; and
the gentleman from West Virginia (Mr. Rahall), the ranking member, who
have all provided

[[Page H7340]]

very able and diligent assistance in putting this package together.
I also want to acknowledge and commend the bipartisan efforts of the
Committee on Ways and Means leadership. Specifically, we could not be
poised to pass such important legislation today without the work of the
gentleman from Texas (Chairman Archer); the gentleman from New York
(Mr. Rangel), the ranking member; the gentleman from Florida (Mr.
Shaw), the subcommittee chairman; and the gentleman from California
(Mr. Matsui), the subcommittee ranking member. Both committees have
shown that they can pull together to produce a major reform package
such as this one.
I will not attempt to detail the very complex bill here today, only
to touch on some of the highlights. Reducing the pension retirement age
to 60 with 30 years of service; providing for full inheritance of
pension annunities by surviving spouses and cutting the vesting
requirement in half to put it on the same 5-year basis with most other
pension plans. While increasing benefits, this bill allows for payroll
tax reductions, based on the performance of the underlying trust fund.
Having a professionally managed investment portfolio will allow
railroad retirees to benefit from returns comparable to those available
in other pension plans.
I want to stress, Mr. Speaker, that this legislation in no way
prejudges whatever decision this Congress might make with regard to
Social Security reform. This bill is addressed only to the pension or
the Tier II part of railroad retirement. Tier I, the railroad
counterpart of Social Security, is not touched in any way.
From a fiscal standpoint, when we apply common sense to this bill, it
is assuring a sound and prosperous future for railroad retirement.
First, it creates an automatic tax adjustment mechanism so that the
payroll tax rates can float up or down reflecting the performance of
the pension assets.
Secondly, this automatic adjustment mechanism is structured to assure
a minimum of 4 years of benefit reserves.
Third, by diversifying the investment of the Tier II pension assets,
it helps both rail workers and employers grow their retirement fund
more rapidly than is permitted under current law.
Mr. Speaker, this bill is a win for all, for railroad workers, for
railroad retirees, for the railroads that provide a key part of our
transport network and for the taxpayer, through enhanced fiscal
soundness of the railroad retirement system. I strongly urge its
approval.
Mr. Speaker, I reserve the balance of my time.
Mr. OBERSTAR. Mr. Speaker, I yield myself 6 minutes.
The legislation before us, Mr. Speaker, will bring substantial
benefits to the more than 1 quarter million men and women who work on
America's railroads and the more than 700,000 retirees and survivors of
retired railroad workers. At the same time, this legislation allows for
a significant reduction in the payroll taxes paid by the Nation's
railroads.
It is a win for railroads. It is a win for railroad labor. It is a
win for retirees.
I want to compliment our chairman, the gentleman from Pennsylvania
(Mr. Shuster), for the splendid work that he has done and the
cooperation extended across the aisle, as we have done so often on so
many issues in our committee.
Once again, we have brought a very contentious issue to fruition,
through the committee process, through collaboration and cooperation
and working out something that is in the best public interest.
I want to thank our ranking member on our side, the gentleman from
West Virginia (Mr. Rahall), for his leadership and working together
with railroad labor railroads and the gentleman from Illinois (Mr.
Lipinski) for the work that he did in previous years as the ranking
member on the Subcommittee on Railroads and for his continued interest
in and support of this issue and many other Members on our side and on
the Republican side who have worked so hard to bring us to this point.
This point is an historic agreement reached by railroad labor and
management after 2 years of very tough negotiations. The benefit
improvements and tax cuts are made possible by changing current law
that limits the investment of railroad retirement trust fund assets to
only government securities.
The proposed changes govern how railroad retirement trust fund assets
can be invested. The changes will not affect the solvency of the
railroad retirement system. The Tier I portion, which is Social
Security benefits, will continue to be invested only in government
securities.
Tier II, the part of the system that offers pension plan type
benefits above the Social Security benefit levels, will be eligible for
investment in assets other than government securities. The projected
increase in trust fund income from these changes are based on fairly
conservative forecasts of the rates of return that can be earned from
such a diversified portfolio, about 2 percentage points above the
return on government securities.
Most importantly, if those investments fail to perform as well as
expected, workers' pensions are further protected as this legislation
and in the agreement that underlies the legislation which requires that
the railroads absorb any future tax increase that might be necessary to
keep this system solvent. Ultimately, the Federal Government continues
to be responsible for the security of the railroad retirement system.
This legislation offers the first major benefit improvements in the
railroad retirement program in more than 25 years.
Just a few of the improvements, and I will cite the primary benefits.
First, the age at which employees can retire with full benefits is
reduced from 62 to 60 years with 30 years of service.
Second, the number of years required for vesting in the railroad
retirement system is reduced from 10 years to 5 years.
Third, the benefit of widows and widowers will be expanded.
Fourth, the limits on certain Tier II annuities are repealed.
Fifth, the bill calls for automatic future improvements if the
retirement plan becomes overfunded.
The bill allows for railroads' payroll taxes for Tier II benefits to
decline from the current level of 16.1 percent to 13.1 percent. By the
third year following passage of the bill, the railroads stand to gain
nearly $400 million a year from lower payroll taxes. These savings go
directly to the railroads' bottom lines, can be used to make the
investments they need in improving railroad infrastructure and to
improve the wages and working conditions of railway workers.
It is important for us to point out that nothing in the legislation
alters the fundamental nature of the railroad retirement program.
Benefits will continue to be guaranteed in the final analysis by the
Federal Government. This is a good bill. It is good for workers. It is
good for retirees. It is good for their survivors. It is good for the
railroads and for the national economy. I urge all Members to give it
their support.
Mr. Speaker, I reserve the balance of my time.

{time} 1615

Mr. SMITH of Michigan. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I think the question before us is should we delve into
using taxpayer money to, if you will, bail out a private pension
retirement plan for railroad workers.
Let me just quote some of the facts developed by our Committee on the
Budget, four reasons that Members should oppose this bill.
Number one may be the most important as far as the American taxpayers
are concerned. The Committee on the Budget says it will cost $33
billion of taxpayer money over the next 10 years. This bill increases
benefits and reduces contributions to the Railroad Retirement System by
$7 billion over the next 10 years.
In addition, it allows the Railroad Retirement System to cash in $15
billion in government bonds now held by the railroad industry pension
fund. These actions will reduce the budget surplus, thereby increasing
the Government's interest costs by $13 billion over that time period.
The net cost to U.S. taxpayers, including the offset, therefore, is $33
billion.
Again, with all of the pension plans in this country, many of them
facing

[[Page H7341]]

difficulty and insolvency as life spans continue to increase, it
reminds me of some of the problems with Social Security. Social
Security has some of the exact same problems as the railroad retirement
pension plan.
Let me give the second reason suggested by the Committee on the
Budget staff. This bill maintains a special subsidy available to no
other industry. Under current law, income taxes paid by railroad
retirees on their retirement benefits are transferred to the Railroad
Retirement System. Therefore, they do not pay the taxes. This subsidy,
which is available to no other industry, will cost taxpayers more than
$5 billion.
Number three, it allows the Railroad Retirement System to really raid
Social Security. I ask my colleagues to consider the fact that Social
Security is becoming insolvent, it is insolvent, and this bill in
effect takes some of that Social Security solvency additionally away.
This bill allows the transfer of funds from the railroad retirement
Social Security equivalent benefit account to the Social Security
retirement trust fund. This transfer will result in Social Security
funds being used to pay railroad retirement benefits.
Number four, I think it sets a bad precedent for Social Security
reform. Instead of creating personal accounts with individual ownership
and control over these accounts, this bill creates a government-
appointed board to invest in the stock market on a collective basis.
Under collective investments, there is no way to guarantee younger
workers that they would receive any of the higher returns earned by the
Government with their investment.
So, number one, we are bailing out to the tune of $33 billion,
according to the staff of the Committee on the Budget; number two, we
are having government go into the business of investing those funds,
and I think both precedents are dangerous as we look at Social
Security.
Let me quote some information from the Congressional Research
Service: ``This Railroad Retirement and Survivors Improvement Act,'' as
it is called, ``proposes a number of substantive changes.''
Number one, the bill would increase benefits for widows and widowers
of railroad employees. It would lower the minimum age at which workers
with 30 years of employment are eligible for those benefits. So we
reduce the requirement for benefits while we ask the American taxpayer
to bail them out, using some Social Security money. Something is wrong
with this legislation as a precedent, as a way to solve a problem that
the railroad retirees have. How many private pension funds do we really
want to go into? Government got mixed up in it. It is quasi-
governmental.
Mr. Speaker, at this time, so I will have some time to react to other
statements, 10 minutes out of the 40 minutes is given against the bill,
which I think reflects some of the positive votes as it moved through
two separate committees, I will reserve the balance of my time.
Mr. Speaker, I reserve the balance of my time.
Mr. SHUSTER. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, before I yield to my good friend from the Committee on
Ways and Means, I want to emphasize that of the $33 billion that my
good friend from Michigan talks about, the overwhelming majority of
that money is paid for by the employers and the employees.
This is a self-financing trust fund. The only part which is not is $6
billion over 10 years, which is transferred simply from government
securities to private investment funds, and indeed I should think
anybody who believes in the market and in free enterprise and
entrepreneurialism would be in support of doing that, because it is
going to generate more money.
So to say that this is going to cost the taxpayers this money is
simply not accurate, in my judgment.
Mr. Speaker, I am pleased to yield 5 minutes to the distinguished
gentleman from Florida (Mr. Shaw).
Mr. SHAW. Mr. Speaker, I thank the chairman for yielding me this
time.
The Railroad Retirement and Survivors Improvement Act makes important
changes to the Railroad Retirement System that will enhance benefits,
increase the industry's responsibility over its pension system, and set
the stage for more substantial reforms in the future that would make
the program a free-standing pension plan.
The Railroad Retirement System is divided into two tiers: The first
tier resembles Social Security, and the second tier resembles a defined
benefit employer pension plan. The second tier is very unique. It
resembles a private pension plan, but it is administered by the Federal
Government. Benefits are entitled under Federal law. The legislation
before us today deals primarily with the second tier, the industry's
pension plan.
H.R. 4844 makes many improvements to the industry's pension. First,
it allows the industry to diversify its assets portfolio by investing
in private securities. There is not one single private or state pension
system out there today that invests 100 percent of its assets in
Treasury bills.
Secondly, it allows the industry to invest its pension contributions
outside of the Federal Government and outside the Government's control.
Third, the proposal increases the industry's responsibility over the
financial soundness of its pension plan. In the past, when the system
ran into financial trouble, the Government had to bail the program out.
Under this bill, there is a mechanism which automatically adjusts the
industry's taxes if the program gets into trouble. The responsibility
and the investment risk falls on the industry. It does not fall upon
the taxpayer.
Finally, this legislation takes important steps towards converting
the system into a freestanding industry pension plan outside of Federal
jurisdiction. Under this bill, the second tier of the Railroad
Retirement System becomes more like any other defined benefit employer
plan or State pension plan. Its assets are invested in private
securities outside of the Treasury, it is governed by a board of
trustees who are bound by fiduciary principles similar to ERISA, and
also benefit checks are no longer paid by the Treasury.
In closing, I would like to emphasize that the benefit changes and
the tax changes made by this bill are paid for within the Railroad
Retirement System. The Railroad Retirement System is a self-financing
program. Like Social Security, it is entirely financed with dedicated
payroll taxes on workers and employers and the taxes that retirees pay
on the benefits. The costs of this plan are borne by the Railroad
Retirement System, not by the taxpayer.
Mr. Speaker, I would like to add here in answer to comments by the
gentleman from Michigan (Mr. Smith) that the budgetary impact is
primarily due to the fact that these Treasury bills are being cashed in
in order to make these investments. That does have a budgetary impact.
But the budgetary impact really is minimal, because we will be saving
in future years the interest that the Treasury has paid. And it is
doing something else; it is retiring much of the public debt that the
Federal Government owes, which is something that I think both parties
at least say that they support, and I certainly do.
Mr. Speaker, I would urge my colleagues to support this piece of
bipartisan legislation. I would like to say this was a rare situation
where we found ourselves in the enviable position of reaching out and
crossing the aisle to our friends in the Democrat Party. It was also
quite an experience seeing the industry and the unions coming together
to ask for these changes. Moreover this bill is a good thing for the
United States taxpayers.
Let me also add that during the debate today, certain questions have
been raised about the budgetary effects of this bill. With this
statement, I am submitting a response to these concerns. Again, I urge
my colleagues to join me in support of this legislation.

Response to Concerns

1. The bill increases railroad retirement benefits, reduces railroad
payroll taxes, and allows the industry to cash in the government bonds
in their Trust Fund. These changes will cost taxpayers $20.8 bill over
10 years ($33 billion when interest is included).
The Railroad Retirement system is a self-financing system--just like
Social Security. It is paid for with dedicated payroll taxes and taxes
that retirees pay on their benefits. The cost of the tax cuts and
benefit increases contained in this bill does not fall on the general
taxpayer. The cost is wholly paid for with taxes levied on railroad
workers, railroad employers, and railroad retirees.
The proposal allows the Railroad Retirement system to invest in
private-sector securities.

[[Page H7342]]

This means that most of the Treasury securities currently held in the
Railroad Retirement Account must be redeemed so they can be transferred
to an independent account outside of Treasury. This one-time cost of
redeeming the Treasury securities will be borne by taxpayers. However,
this is money that the General Fund owes the Railroad Retirement
system. It reflects past surpluses that the government has borrowed
from the system and must now repay.
2. The proposal will reduce the budget surplus by $20.8 billion and
increase the government's interest costs.
The bill reduces the on-budget surplus because the Railroad
Retirement system is an on-budget program. As a result, any changes to
the system will affect the on-budget surplus--just like changes to
Social Security affect the off-budget surplus.
The bill would not increase the government's interest costs. In fact,
the Treasury securities in the Railroad Retirement Account are part of
the total government debt. Once they are redeemed, the total government
debt will fall, and so will the associated interest payments.
3. The bill maintains a special subsidy available to no other
industry. Under current law, the income taxes paid by railroad retirees
on their retirement benefits are transferred to the Railroad Retirement
system instead of the U.S. Treasury. This subsidy costs taxpayers
nearly $6 billion.
This is not a subsidy, and it doesn't cost taxpayers anything. The
tax is not paid by the general taxpayer--it is paid by railroad
retirees. Appropriately, the revenues from the tax go back to the
Railroad Retirement system instead of the General Fund of the Treasury.
In the same vein, the taxes that seniors pay on their Social Security
benefits go back to the Social Security Trust Fund instead of the
General Fund.
4. ERISA standards were designed to ensure that companies properly
funded their pension plans. However, the railroad industry has a $39.7
billion unfunded liability. Instead of moving toward a funded system,
this bill allows the Railroad Industry to enjoy lower taxes and higher
benefits now in exchange for higher taxes or lower benefits in the
future.
The Railroad Retirement system is not subject to ERISA, and it is not
a funded system. Instead, it is a pay-as-you-go system where annual tax
revenues are used to pay annual benefits. The trust fund balances in
the Railroad Retirement Account are currently large enough to pay more
than 5 years worth of benefits. This is considered quite high for a
pay-as-you-go system. That's why the system can afford to cut taxes and
pay higher benefits.
Although the system can afford these changes in the short run, it may
not be able to afford them over time. As a result, the proposal
includes a provision that allows the tax rate to adjust each year based
on the system's funding situation. For the first time ever, the burden
of maintaining the system's solvency will fall on the railroad
industry--not the general taxpayer.
Many experts and commissions have recommended that the Railroad
Retirement system should be converted into a fully-funded system
covered by ERISA. However, it would be very difficult to take this step
without the industry's support. This bill is a step in the right
direction because it puts the mechanisms in place to move toward a
free-standing pension plan outside of federal jurisdiction. If this
bill is enacted, the system would resemble a private pension plan,
making it much easier to make the transition in the future.
5. The bill will reduce the solvency of the Railroad Retirement
system.
Under current law, the Railroad Retirement system is solvent over 75
years under optimistic and intermediate assumptions. The actuaries of
the Railroad Retirement Board have certified that the system remains
solvent for 75 years under the provisions of this bill.
6. The bill sets a bad precedent for Social Security reform--instead
of creating personal accounts with individual ownership and control,
this bill creates a government-appointed board to invest in the stock
market on a collective basis.
This proposal primarily affects the second tier of the Railroad
Retirement system--the part that resembles a private employer pension
plan. Because this bill mostly deals with the industry pension, not the
Social Security equivalent, the changes made by this bill cannot (and
should not) translate to the Social Security program. After all, Social
Security is a social insurance program--it is not a pension plan.
Mr. OBERSTAR. Mr. Speaker, I yield 3 minutes to the gentleman from
California (Mr. Matsui), the ranking member on the Subcommittee on
Social Security of the Committee on Ways and Means.
Mr. MATSUI. Mr. Speaker, I would like to thank the gentleman from
Minnesota, the ranking Democrat on the Committee on Transportation and
Infrastructure, for yielding this time.
I would like to commend both the gentleman from Pennsylvania (Mr.
Shuster), the gentleman from Minnesota (Mr. Oberstar), obviously my
colleague and chairman of the Subcommittee on Social Security (Mr.
Shaw), and other Members who have been working on this legislation.
This legislation is supported and sponsored by the Association of
American Railroads, which are all the railroads in the United States,
along with 60 percent of the membership of the railroad labor unions.
In my opinion, it took years and years to put together, and for Members
to vote this down now would be tragic, because this would have an
impact on 254,000 current employees of the industry, and over 700,000
families and individuals that are currently retired. This helps widows
and widowers, who will have a $300 increase in benefits, and it will
reduce the age of retirement from 62 to 60, the change we made in 1983,
and we now need to go back to age 60. So in terms of benefits to the
employees and to the industry, this is tremendous.
The reason that there is a cost, as the gentleman from Michigan (Mr.
Smith) has raised, as I think the gentleman from Florida (Mr. Shaw) has
indicated, there is a one-time cost, because what we are doing is we
are bringing in government bonds to allow the Tier II part of the
system to be invested in the private equity market.
That is not a violation of Social Security or anything like that. All
that is for, that is like a private defined benefit pension. Tier I
programs are like Social Security. Tier II is like a private pension
system. Frankly, it is the only pension system that the Federal
Government operates, because of a historic relationship with the
railroad industry and obviously with the employees. So the $15 billion
will be paid down over time. It will not be a continuing obligation to
the Federal Government.
Secondly, we received a letter dated the 18th of July, 2000, from
Steven Goss, the deputy chief actuary of the Social Security system, to
Harry Ballentine, the chief actuary; and in this letter it indicates
that there is no impact at all on the Social Security trust fund. So
the gentleman from Michigan may want to read this letter, who made the
allegation that this would diminish the Social Security trust fund. It
will have no impact at all, according to the actuaries.
We must pass this legislation. This is legislation that will help the
railroads, and also it will help the employees and current
beneficiaries and retirees.
Mr. SMITH of Michigan. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, may I ask of the chairman and yield for the answer, when
it came out of the Committee on Ways and Means, my understanding was
that there was a 4.3 cent tax on diesel fuel for railroads. Is that
reduction still in the bill?
Mr. SHUSTER. Mr. Speaker, will the gentleman yield?
Mr. SMITH of Michigan. I yield to the gentleman from Pennsylvania.
Mr. SHUSTER. Mr. Speaker, that is not included in this bill. This is
a clean railroad retirement reform bill. There is no tax treatment in
there.
Mr. SMITH of Michigan. Mr. Speaker, reclaiming my time, to help pay
for it, it was my understanding when this bill went through the
Committee on Ways and Means, they put a 4.3 cent tax on the diesel fuel
used by railroads, and somehow in this clean bill it is no longer
there.

{time} 1630

If the gentleman will continue to yield, oh, no, that has nothing to
do with it, I would say to my good friend. It was several years ago as
part of the deficit reduction package of 1993 that that tax was placed.
Mr. SMITH of Michigan. Is the gentleman saying, Mr. Speaker, that the
4.3 cents was not in the bill in the Committee on Ways and Means?
Mr. SHUSTER. The original Committee on Ways and Means bill did have
the 4.3 cent reduction in it.
Mr. SMITH of Michigan. Reclaiming my time, Mr. Speaker, since I am
short on time, let me just emphasize again that a bill of this
magnitude should not be going through on suspension. It should have a
full debate, because the

[[Page H7343]]

consequences, if it is not $33 billion if we do not include the
interest, then at least look at the CBO scoring that says $20 billion.
This legislation has been sort of promoted as a bipartisan agreement
with overwhelming support by both rail management and rail labor. Why
have they agreed so easily? I think the answer is because American
taxpayers are footing the bill. Again, CBO has scored the cost at $20
billion.
Let me go through some of the facts. The Railroad Retirement System
already has an unfunded liability of $39.7 billion. It is a pension
fund in trouble. So with three retirees in the railroad industry, with
three retirees for every worker, why would we go to the extent of not
only reducing the taxes and contributions they pay in, but increasing
the benefits they get out?
So we increase the benefits, we reduce the age for eligibility. Here
again it seems to me that it only can be this kind of solution if we
reach into the pockets of the American taxpayers. The industry would
need to increase contributions from 21 percent of wages to 31 percent
of wages for the next 30 years to cover this shortfall.
Accurate accounting shows that the industry has received at least $85
billion more in benefits than it has paid in contributions. The rail
industry has for many years, of course, received special government
subsidies that are available to no other industry. Just to mention one,
under current law, income taxes paid by rail retirees do not go to the
U.S. Treasury. They are instead transferred to the Railroad Retirement
System, costing taxpayers over $5 billion. The government also
currently pays the cost of Amtrak's social security contributions,
costing taxpayers another $150 million a year.
This kind of cost, this kind of implication, of precedent, should be
going through this Chamber with a full debate and not through a special
suspension calendar.
Let me just briefly comment in my closing minutes on specifically
what the bill does. It repeals a 26.5 cent per hour employee
contribution to supplemental annuities, it reduces employer
contributions from the current 16.1 percent to 14.2 percent, and it
expands benefits for widows and widowers. It reduces the vesting
requirement from 10 to 5 years. It repeals the current gap on payment
of earned benefits. Six, it reduces the minimum retirement age to 60
years old.
Mr. Speaker, I reserve the balance of my time.
Mr. SHUSTER. Mr. Speaker, I am pleased to yield 2 minutes to the
distinguished gentleman from Wisconsin (Mr. Petri), chairman of the
Subcommittee on Ground Transportation.
Mr. PETRI. Mr. Speaker, I thank the chairman for yielding time to me.
Mr. Speaker, I rise in support of the bill before us, the Railroad
Retirement and Survivors' Improvement Act of 2000. H.R. 4844 will
increase benefits for widows and widowers of railroad retirees, and
lower the vesting period from 10 years to 5 years, which is more
consistent with private industry plans. It will also restore the
retirement age from age 62 with 30 years of service to age 60 with 30
years of service.
Mr. Speaker, this is an excellent bill with advantages for both labor
and management as well as for the general taxpayer. I urge my
colleagues to support H.R. 4844.
Mr. OBERSTAR. Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Michigan. Mr. Speaker, I reserve the balance of my time.
Mr. SHUSTER. Mr. Speaker, I am pleased to yield 2 minutes to the
distinguished gentleman from New York (Mr. Quinn).
Mr. QUINN. Mr. Speaker, I want to take a minute to thank everybody
who has been involved in this process: the gentleman from Pennsylvania
(Mr. Shuster), the gentleman from Minnesota (Mr. Oberstar), the
gentleman from Florida (Mr. Shaw), the gentleman from California (Mr.
Matsui), the gentleman from Wisconsin (Mr. Petri), and many others not
on the floor today, the gentleman from Illinois (Speaker Hastert) being
one.
I can remember back in July where many of us went to the Speaker to
talk to him about the importance of this bill to try to get it on the
calendar. While he is not on the floor discussing it today, I think he
and others on both sides of the aisle played a huge role in getting us
here today.
I did not rise to talk about the specifics of today's bill because
whenever we talk about pension and pension plans we can get a little
bit complicated. We have people on both sides of the aisle who have
worked this issue. We have people like the gentleman from Florida (Mr.
Shaw), who has worked with rail labor and others who understood the
problems.
I rose today, this afternoon, just to talk a little bit about the
fact that we have been at it now for almost 2 years, Mr. Chairman,
talking about discussion, talking about compromise, talking about
meeting each other halfway. We are about doing something that is good
for a lot of people this afternoon, retirees, and some who will retire.
Coming from a railroad family, my father put on 35 years on the South
Buffalo Railroad back home.
There is a section here that talks about widows and widowers. This
has been a patently and basically unfair rule for too many years, that
just because a railroad worker dies, that pension for the widow or
widower remains sometimes cut by two-thirds. In the meantime, that same
family has the same mortgage bills and heating bills and taxes and
prescriptions and all those other bills that come and go day-to-day,
week-to-week, year-to-year.
I think more than anything else, Mr. Speaker, we are here to talk
about righting some wrongs, doing the fair thing for railroad workers
all across the country. I enthusiastically support H.R. 4844, and ask
all of our colleagues on both sides of the aisle to do the same thing
this afternoon.
Mr. OBERSTAR. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, not to oversimplify this issue, but to put it in very
plain terms, there is more money being collected in taxes from workers
in railroads than is necessary to pay out benefits under the current
system.
The agreement reached does equity for both the railroads and the
workers. The railroads, on the one hand, get money they can invest in
improving their infrastructure, rolling stock, and trackage, and the
workers--specifically retirees, widows and widowers, get benefits that
they would not otherwise receive. That is what this is all about.
I want to point out that there was not 100 percent agreement between
rail management and rail labor. Just after the agreement was reached,
representatives of those labor unions, the majority, that supported the
agreement and those labor unions, the minority, that opposed it, asked
for my support, each on their terms, to support their viewpoint.
I felt it would be in everyone's best interests if rail labor were
united in support of the agreement. So in attempting to reach a
consensus with all of rail labor, the gentleman from West Virginia (Mr.
Rahall) and I made a proposal to rail labor which we then made to rail
management to improve the benefit package.
We recognized we could not radically alter the agreement, but hoped
to make the proposal more palatable to those who opposed it.
Specifically, we suggested that the railroad companies allow workers to
retire at age 58 with actuarially reduced benefits, but with full
medical coverage until the employees become eligible for Medicare at
age 65.
Today, rail employees can retire at age 60 with reduced benefits.
They are not eligible for medical coverage until age 61. We thought we
had made a reasonable, modest proposal. It was considered deliberately
by railroad management, but unfortunately, we could not get the parties
on both sides to agree to coalesce around this change.
In the end, having made that effort, I concluded that this was the
best package that could be negotiated under the circumstances.
Most of rail labor is in support of this legislative package. It is
good for both sides. It is a great improvement for retirees. The
legislation ought to go forward. We ought to approve it in this body
today. I, of course, give it my full and strong support.
Mr. Speaker, enacting H.R. 4844 will bring substantial benefits to
the more than one quarter million men and women who work on America's
railroads and the 700,000 retirees and survivors of retired railroad
workers. At the same time the bill allows for a significant reduction
in the payroll taxes paid by U.S. railroads. This is clearly a win-win
proposition for

[[Page H7344]]

railroads, railroad labor, retired railroad workers and their
survivors.
This bill is the product of an historic agreement reached by railroad
labor and management following two years of often-difficult
negotiations. The benefit improvements that the two sides agreed upon
are made possible by changing the current law that limits the
investment of Railroad Retirement Trust Fund assets to government
securities. Railroad retirement is a two-tiered system: Tier I largely
mimics the Social Security system in terms of taxes and benefits, while
Tier II provides additional benefits and might be considered the
equivalent of a defined benefit employee pension plan. Tier II benefits
are financed by a combination of a 4.9 percent payroll tax on employees
and a 16.1 percent payroll tax on employers.
Analysis provided by the Railroad Retirement Board's actuary
demonstrates that the proposed changes should not affect the solvency
of the Railroad Retirement system. The Tier I portion of the program
will continue to be invested only in government securities as has long
been the case and is appropriate for the social safety net. Only Tier
II funds will be eligible for investment in assets other than
government securities. The expected improvement in income to the trust
fund is based on a fairly conservative projection of the rates of
return on such a diversified portfolio--about two percentage points
above the return on government securities. In addition, if the
investments fail to perform as well as expected, workers' pensions are
further protected as the legislation requires that the railroads absorb
any future tax increases that might be necessary to keep the system
solvent.
This legislation provides the first major benefit improvements to
retired railroad workers and their dependents in more than 25 years.
The primary improvements are:
(1) Lower retirement age. The age at which employees can retire with
full benefits is reduced from 62 years to 60 years with 30 years of
service. Today, employees who retire at age 60 or 61 have their annuity
permanently reduced by taking 20 percent or more off the Tier I
benefit. The annuities of their spouses are also reduced. Lowering the
age to 60 actually restores railroad workers to the retirement age that
existed before adjustments made back in 1983 to shore up the program's
solvency.
(2) Fewer years for vesting. the number of years required for vesting
in the Railroad Retirement System is reduced from ten to five years.
This change puts the Railroad Retirement System in line with the
pension plans of most other industries.
(3) Expanded benefits for widows and widowers. Under current Social
Security Law, a widow or widower of a deceased worker receives the full
amount of the retirement benefit previously paid to the retiree. In
contrast, a widow or widower of a deceased railroad worker is eligible
for 100 percent of the Tier I benefit, but only 50 percent of the late
retiree's Tier II benefit. The surviving spouse often experiences a
dramatic reduction in income at a time when life has already been made
more difficult. Under the proposed change, the surviving spouse's
annuity would be guaranteed to be no less than the amount the retiree
was receiving in the month before death.
(4) Cap on benefits eliminated. Currently, there is a statutory limit
on the initial benefit amount that can be paid to an employee. This
limit is computed under a complex formula based on the employee's
highest two years of Railroad Retirement and Social Security earnings
during the 10-year period immediately before retirement.

This limitation has proved to be unintentionally harsh in two
situations. The first involves employees whose lifetime pattern of
earnings deteriorated in their last 10 years before retirement due, for
example, to job loss or part-time employment.
The second situation involves employees with long railroad careers at
modest compensation levels. The Tier II benefit amount is computer
under a formula that takes into consideration not only an employee's
compensation level, but also length of service. Thus, employees with
modest earnings can build up their Tier II benefits through may years
of rail service. Because the cap takes into consideration only their
modest pre-retirement earnings and completely ignores their long years
of service, these employees may have their benefit reduced upon
retirement.
Under this legislation, the cap would be repealed for both new and
preciously awarded annuities.
(5) Automatic future improvements should the retirement plan become
overfunded. Should the plan's assets become greater than an amount
deemed necessary by the Railroad Retirement Board to pay benefits,
employees and the railroads will be able to use the surplus on a 50-50
basis to improve benefits and lower taxes. H.R. 4844 also reduces
significantly the payroll taxes paid by the railroads. This bill allows
the railroads' payroll tax for Tier II benefits to decline from the
current level of 16.1 percent to 13.1 percent. By the third year
following passage of this bill, the railroads stand to gain nearly $400
million annually from lower payroll taxes. All of these savings go
directly to the railroads' bottom lines and can be used to make
investments needed in the railroad infrastructure and to improve the
wages and working conditions of railway workers. Higher net returns
also should make railroad stocks look better to potential investors and
improve the railroads' ability to engage in equity financing. Clearly,
this is a win-win proposition for both the railroads and its workers.
While I believe this bill provides significant benefits to railroad
workers and retirees, I recognize that railroad labor is not united in
support for this bill. Two unions, the Brotherhood of Locomotive
Engineers and the Brotherhood of Maintenance of Way Employees, do not
support this legislation. They believe that the distribution of
benefits should be weighted more favorably toward railroad workers and
retirees as the monies involved are, after all, part of their overall
compensation package. They were especially interested in securing a
further reduction in the retirement age as the agreement only returned
them to the retirement age that prevailed in 1983.
Just after the agreement was reached, representatives of both those
labor unions that supported the agreement and those labor unions that
opposed it solicited my support. I felt that it would be in everyone's
best interest if railroad labor were united in support of the bill. To
work toward achieving consensus within all of rail labor, the Gentleman
from West Virginia (Mr. Rahall) and I made a proposal to railroad
management to improve somewhat the benefit package. We recognized that
we could not radically alter the agreement, but we sought to make the
proposal more palatable to those who opposed it. Specifically, we
suggested that the railroads allow workers to retire at age 58 with
actuarially reduced benefits, but with full medical coverage until the
employees become eligible for Medicare at age 65. Today, employees can
retire at age 60 with reduced benefits; they aren't eligible for
medical coverage until age 61. Mr. Rahall and I believed this was a
modest proposal, but unfortunately we were unsuccessful in getting the
parties to coalesce around this change.
Although, I would prefer to see unified labor support for this
legislation, I believe that this bill is the best that can be obtained
under current conditions and therefore I have given it my full support.
At the request of the Ways and Means Committee, we have made some
modifications of the mechanics of how these reforms would be
implemented.
Those relatively minor modifications deal with how the monies would
be administered, with the composition of the group responsible for the
investments, and with the way the benefits will be disbursed, but we
have not, in any way, altered the fundamental nature of the program.
Railroad retirement benefits will continue to be guaranteed, in the
final analysis, by the United States Government. This continues to be a
federal program and the Congress continues to have authority over it
and responsibility for it. The proposed changes do not in any way
represent a step toward privatization.
This is a good bill. It is good for workers; it is good for retirees
and their survivors; it is good for the railroads, and it is good for
the country. I urge all Members to vote for it.
Mr. Speaker, I reserve the balance of my time.
Mr. SMITH of Michigan. Mr. Speaker, I yield myself the balance of my
time.
Mr. Speaker, again I thank both the chairman and the ranking member
for the time to protest some of my concerns.
Again, nobody else in the Nation, or very few, can have a pension
system that is going broke and then reduce the contribution, reduce the
taxes that are going in by the employee and the employer, and increase
benefits, increase benefits for widows, widowers, and also reduce the
age to 60 that these individual workers are eligible for that
retirement.
Railroad workers work very hard, they put in a lot of time and a lot
of hours, but we cannot afford this $33 billion cost bill.
Mr. SHUSTER. Mr. Speaker, I am pleased to yield 1 minute to the
distinguished gentleman from Omaha, Nebraska (Mr. Terry).
Mr. TERRY. Mr. Speaker, I rise in support of the 8,000 retirees in my
district and the nearly equal number of future retirees from the
railroad industry.
One point that I want to make before I talk more is that this body
just a few weeks ago rolled back or voted to roll back the tax on
social security. The income tax on social security does not go

[[Page H7345]]

into the Treasury, either. That is how we treat retirement plans. What
this is about is fundamental fairness.
Two weeks ago, Mr. Chairman, in my hometown a gentleman with an
oxygen tank, very frail, very young, 55 to 60, comes up to me. He is
himself a railroad retiree, and says, here is my wife. We need to pass
or the Congress needs to pass railroad retirement reform so she will
have her benefits when I am no longer here to support her.
That is what this legislation is about in protecting those widows,
those families. There are plenty of letters from widows in my area.
Mrs. Lohouse, help is on the way. You should get your full benefits.
(Mr. OBERSTAR asked and was given permission to revise and extend his
remarks.)
Mr. OBERSTAR. Mr. Chairman, I yield back the balance of my time.
Mr. SHUSTER. Mr. Speaker, I yield myself the balance of my time.
The SPEAKER pro tempore. The gentleman from Pennsylvania (Mr.
Shuster) has 2 minutes remaining.
Mr. SHUSTER. Mr. Speaker, I rise in strong support for this
bipartisan bill which has been carefully scrubbed by both the Committee
on Transportation and Infrastructure and the Committee on Ways and
Means on a totally bipartisan basis.
Let me emphasize, contrary to some of the assertions or one of the
assertions that we have heard here today, the Railroad Retirement
System is not only solvent, the Railroad Retirement Board actuary has
certified that it is overfunded. Indeed, that is the reason why or one
of the reasons why we are able to move with this legislation today.
Indeed, this legislation also requires a 4-year minimum reserve in
the trust fund. The money that is paid out is money which is paid into
the system by the railroad workers and by the railroad employers, the
railroad companies.
This legislation corrects a grievous wrong, particularly as it
applies to the widows of this system. I want to say, Mr. Speaker, that
it was over 2 years ago when the gentleman from New York (Mr. Quinn)
initiated the first hearing on this issue. Thanks to his diligence and
then the follow-up of so many on both sides of the aisle, we find
ourselves here today.
I also want to emphasize that at filing time of this report we had
306 cosponsors, and we have had many, many more calls since that time
to try to cosponsor, but of course once the report is filed, one
cannot.
We have a large majority of Republicans, a large majority of
Democrats. This is a totally bipartisan bill. It is good for railroad
families, it is good for America, and I urge strong support of this
legislation.
Ms. BROWN of Florida. Mr. Speaker, H.R. 4844 is long overdue.
Railroad labor, widows and widowers will gain enhanced benefits as a
result of this self-financing legislation. I am particularly thrilled
that the 4.3 cents/gallon tax repeal is not a part of this legislation.
This provision would have essentially eroded support for the measure
and would have thrown the numbers into disarray. H.R. 4844 allows
railroad retirement assets to be invested in private securities,
reduces the payroll tax on railroads, and reduces vesting from ten to
five years for both Tier I and Tier II benefits.
The bill also increases survivor benefits to widows and widowers of
rail workers and Mr. Speaker, this is what legislation on behalf of the
people is about. I urge strong support for H.R. 4844.
Mr. WELLER. Mr. Speaker, I rise today to enthusiastically support
H.R. 4844, the Railroad Retirement and Survivors Improvement Act of
2000.
The Railroad Retirement and Survivors Improvement Act of 2000 is
historic legislation that will improve the lives of railroad workers
and their spouses. I am proud to be a cosponsor of this important
bipartisan bill and am pleased to cast my vote in favor of this
legislation today. This bill will guarantee a better standard of
retirement for the nearly 3,500 retirees in my district and for all
future retirees and their families.
Under H.R. 4844, the quality of life for widows and widowers are
significantly improved. Under current law, spouses are limited to one-
half of the deceased employee's Tier 2 benefits. However, under this
legislation, this bill increases Tier 2 benefits for widows and
widowers to 100 percent of the deceased employee's benefits on the date
of death. Thus, widowers and widows will continue to receive the same
benefits as their spouse received prior to death. Widows should not
have to face a loss of income in addition to the death of a spouse.
This bill ensures that is no longer a reality--widows will receive full
benefits under this legislation.
Additionally, H.R. 4844 reduces the years of covered service to be
vested in the railroad retirement system from the present 10 years to 5
years. Ten years is too long to wait to be vested in the railroad
retirement system, and this legislation corrects this problem. Further,
the retirement age is reduced from 62 to 60. By reducing this age,
workers are given the opportunity to retire earlier without a
corresponding loss of benefits.
H.R. 4844 also fixes the cap on the ``maximum benefit.'' Present law
limits the total amount of monthly railroad retirement benefits payable
to an employee and an employee's spouse at the time the employee's
annuity payout begins. The Railroad Retirement and Survivors'
Improvement Act of 200 removes this cap so that there is not a maximum
benefit limit.
Mr. Speaker, this is good legislation that will give working families
more retirement security. I commend Chairmen Shaw and Archer for their
leadership on this bill and ask for all of my colleagues to support
this important legislation.
Mr. SHUSTER. Mr. Speaker, I yield back the balance of my time.

{time} 1645

The SPEAKER pro tempore (Mr. Walden of Oregon). The question is on
the motion offered by the gentleman from Pennsylvania (Mr. Shuster)
that the House suspend the rules and pass the bill, H.R. 4844, as
amended.
The question was taken.
Mr. SHUSTER. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The vote was taken by electronic device, and there were--yeas 391,
nays 25, not voting 18, as follows:

[Roll No. 459]

YEAS--391

Abercrombie
Aderholt
Allen
Andrews
Armey
Baca
Bachus
Baird
Baker
Baldacci
Baldwin
Ballenger
Barcia
Barr
Barrett (NE)
Barrett (WI)
Bartlett
Barton
Bass
Bateman
Becerra
Bentsen
Bereuter
Berkley
Berman
Berry
Biggert
Bilbray
Bilirakis
Bishop
Blagojevich
Bliley
Blumenauer
Blunt
Boehlert
Boehner
Bonilla
Bonior
Bono
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brady (TX)
Brown (FL)
Brown (OH)
Bryant
Burr
Burton
Buyer
Calvert
Camp
Canady
Capps
Capuano
Cardin
Carson
Castle
Chambliss
Chenoweth-Hage
Clay
Clayton
Clement
Clyburn
Coble
Collins
Combest
Condit
Conyers
Cook
Cooksey
Costello
Coyne
Cramer
Crowley
Cubin
Cummings
Cunningham
Danner
Davis (IL)
Davis (VA)
Deal
DeFazio
DeGette
DeLauro
DeMint
Deutsch
Diaz-Balart
Dickey
Dicks
Dingell
Dixon
Doggett
Dooley
Doolittle
Doyle
Dreier
Duncan
Dunn
Edwards
Ehlers
Ehrlich
Emerson
Engel
English
Eshoo
Etheridge
Evans
Everett
Ewing
Farr
Fattah
Filner
Fletcher
Foley
Forbes
Ford
Fossella
Fowler
Frank (MA)
Franks (NJ)
Frelinghuysen
Frost
Gallegly
Ganske
Gejdenson
Gekas
Gephardt
Gibbons
Gilchrest
Gillmor
Gilman
Gonzalez
Goode
Goodlatte
Goodling
Gordon
Goss
Graham
Granger
Green (TX)
Green (WI)
Greenwood
Gutierrez
Gutknecht
Hall (OH)
Hall (TX)
Hansen
Hastings (FL)
Hastings (WA)
Hayes
Hayworth
Herger
Hill (IN)
Hill (MT)
Hilleary
Hilliard
Hinchey
Hinojosa
Hobson
Hoeffel
Hoekstra
Holt
Hooley
Horn
Houghton
Hoyer
Hulshof
Hutchinson
Hyde
Inslee
Isakson
Istook
Jackson (IL)
Jackson-Lee (TX)
Jenkins
John
Johnson (CT)
Johnson, E. B.
Jones (NC)
Jones (OH)
Kanjorski
Kaptur
Kelly
Kennedy
Kildee
Kilpatrick
Kind (WI)
King (NY)
Kingston
Kleczka
Knollenberg
Kolbe
Kucinich
Kuykendall
LaFalce
LaHood
Lampson
Lantos
Larson
Latham
LaTourette
Leach
Lee
Levin
Lewis (CA)
Lewis (GA)
Lewis (KY)
Linder
Lipinski
LoBiondo
Lofgren
Lowey
Lucas (KY)
Lucas (OK)
Luther
Maloney (CT)
Maloney (NY)
Manzullo
Markey
Martinez
Mascara
Matsui
McCarthy (MO)
McCarthy (NY)
McCrery
McGovern
McHugh
McInnis
McIntyre
McKeon
McKinney
McNulty
Meehan
Meek (FL)
Menendez
Metcalf
Mica
Millender-McDonald
Miller, Gary
Miller, George
Minge
Mink
Moakley
Mollohan
Moore
Moran (KS)
Moran (VA)
Morella
Murtha
Myrick
Nadler
Napolitano
Neal
Nethercutt
Ney
Northup
Norwood

[[Page H7346]]

Nussle
Oberstar
Obey
Olver
Ortiz
Ose
Oxley
Packard
Pallone
Pascrell
Pastor
Payne
Pease
Pelosi
Peterson (MN)
Peterson (PA)
Petri
Phelps
Pickering
Pickett
Pitts
Pombo
Pomeroy
Porter
Portman
Price (NC)
Pryce (OH)
Quinn
Radanovich
Rahall
Ramstad
Rangel
Regula
Reyes
Reynolds
Riley
Rivers
Rodriguez
Roemer
Rogan
Rogers
Ros-Lehtinen
Rothman
Roybal-Allard
Rush
Ryan (WI)
Ryun (KS)
Sabo
Salmon
Sanchez
Sanders
Sandlin
Sawyer
Saxton
Scarborough
Schakowsky
Scott
Serrano
Sessions
Shadegg
Shaw
Sherman
Sherwood
Shimkus
Shows
Shuster
Simpson
Sisisky
Skeen
Skelton
Slaughter
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder
Souder
Spence
Spratt
Stabenow
Stark
Stearns
Strickland
Stump
Stupak
Sweeney
Talent
Tancredo
Tanner
Tauscher
Tauzin
Taylor (NC)
Terry
Thomas
Thompson (CA)
Thompson (MS)
Thornberry
Thune
Thurman
Tiahrt
Tierney
Toomey
Towns
Traficant
Turner
Udall (CO)
Udall (NM)
Upton
Velazquez
Visclosky
Walden
Walsh
Wamp
Waters
Watkins
Watt (NC)
Watts (OK)
Waxman
Weiner
Weldon (FL)
Weldon (PA)
Weller
Wexler
Weygand
Whitfield
Wicker
Wilson
Wise
Wolf
Woolsey
Wu
Wynn
Young (FL)

NAYS--25

Archer
Cannon
Chabot
Coburn
Cox
Crane
DeLay
Hefley
Hostettler
Hunter
Johnson, Sam
Kasich
Largent
Miller (FL)
Paul
Rohrabacher
Royce
Sanford
Schaffer
Sensenbrenner
Shays
Smith (MI)
Stenholm
Sununu
Taylor (MS)

NOT VOTING--18

Ackerman
Callahan
Campbell
Davis (FL)
Delahunt
Holden
Jefferson
Klink
Lazio
McCollum
McDermott
McIntosh
Meeks (NY)
Owens
Roukema
Vento
Vitter
Young (AK)

{time} 1708

Mr. SHAYS changed his vote from ``yea'' to ``nay.''
Mr. EVERETT and Mr. SHADEGG changed their vote from ``nay'' to
``yea.''
So (two-thirds having voted in favor thereof) the rules were
suspended and the bill, as amended, was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
Stated for:
Mr. McDERMOTT. Mr. Speaker, I was absent and unable to vote on
rollcall No. 459.
I would have voted in favor of the motion to suspend the rules and
pass H.R. 4844.

____________________