[Congressional Record Volume 147, Number 109 (Tuesday, July 31, 2001)]
[House]
[Pages H4955-H4966]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
{time} 1845
RAILROAD RETIREMENT AND SURVIVORS' IMPROVEMENT ACT OF 2001
Mr. YOUNG of Alaska. Mr. Speaker, I move to suspend the rules and
pass the bill (H.R. 1140) 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. 1140
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 2001''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
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 National 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 (45 U.S.C. 231c(g)) 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 section
202(e)(7), 202(f)(2), or 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 widower'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) In general.--The amendment made by this section shall
take effect on the first day of the first month that begins
more than 30 days after enactment, and shall apply to annuity
amounts accruing for months after the effective date in the
case of annuities awarded--
(A) on or after that date; and
(B) before that date, but only if the annuity amount under
section 4(g) of the Railroad Retirement Act of 1974 (45
U.S.C. 231c(g)) was computed under such section, as amended
by the Omnibus Budget Reconciliation Act of 1981 (Public Law
97-35; 95 Stat. 357).
(2) Special rule for annuities awarded before the effective
date.--In applying the amendment made by this section to
annuities awarded before the effective date, the calculation
of the initial minimum amount under new section 4(g)(10)(ii)
of the Railroad Retirement Act of 1974 (45 U.S.C.
231c(g)(10)(ii)), as added by subsection (a), shall be made
as of the date of the 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 (45 U.S.C. 231b(a)(2)) is amended by
inserting after ``(2)'' the following new sentence: ``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 (45 U.S.C. 231c(a)(2)) 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 of 1974 (45 U.S.C.
231b(a)(3), 231c(a)(3), and 231c(a)(4)) 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, 2002.
(2) Exception.--The amount of the annuity provided for a
spouse under section 4(a) of the Railroad Retirement Act of
1974 (45 U.S.C. 231c(a)) shall be computed under section
4(a)(3) of such Act, as in effect on December 31, 2001, if
the annuity amount provided under section 3(a) of such Act
(45 U.S.C. 231b(a)) for the individual on whose employment
record the spouse annuity is based was computed under section
3(a)(3) of such Act, as in effect on December 31, 2001.
SEC. 103. VESTING REQUIREMENT.
(a) Certain Annuities for Individuals.--Section 2(a) of the
Railroad Retirement Act of 1974 (45 U.S.C. 231a(a)) 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 new subdivision:
``(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 (45 U.S.C.
231b(a)), 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 (45 U.S.C. 231a(d)(1)) 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 (45 U.S.C. 231a) is amended
by adding at the end the following new subsection:
``(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 title II of the Social Security Act on the basis of the
individual's employment record under both this Act and title
II of the Social Security Act.''.
(e) Computation Rule for Spouses' Annuities.--Section 4(a)
of the Railroad Retirement Act of 1974 (45 U.S.C. 231c(a)),
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
[[Page H4956]]
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 (45 U.S.C. 231d(b)) is
amended by striking the second sentence and inserting the
following new sentence: ``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 (45
U.S.C. 231q(2)) is amended--
(1) by inserting ``(or less than five years of service, all
of which accrues after December 31, 1995)'' after ``ten years
of service'' every place it appears; 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 the Railroad Retirement Act of 1974 (45 U.S.C. 231r) 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
(45 U.S.C. 231e(1)) 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)(A) of the Railroad Retirement Act of
1974 (45 U.S.C. 231f(b)(2)(A)) 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 (42 U.S.C.
405(i)) is amended by inserting ``(or five or more years of
service, all of which accrues after December 31, 1995)''
after ``ten years of service''.
(4) Section 6(b)(2) of the Railroad Retirement Act of 1974
(45 U.S.C. 231e(b)(2)) is amended by inserting ``(or five or
more years of service, all of which accrues after December
31, 1995)'' after ``ten years of service'' the second place
it appears.
(j) Effective Date.--The amendments made by this section
shall take effect on January 1, 2002.
SEC. 104. REPEAL OF RAILROAD RETIREMENT MAXIMUM.
(a) Employee Annuities.--
(1) In general.--Section 3(f) of the Railroad Retirement
Act of 1974 (45 U.S.C. 231b(f)) is amended--
(A) by striking subdivision (1); and
(B) by redesignating subdivisions (2) and (3) as
subdivisions (1) and (2), respectively.
(2) Conforming amendments.--
(A) The first sentence of section 3(f)(1) of the Railroad
Retirement Act of 1974 (45 U.S.C. 231b(f)(1)), as
redesignated by paragraph (1)(B), is amended by striking ``,
without regard to the provisions of subdivision (1) of this
subsection,''.
(B) Paragraphs (i) and (ii) of section 7(d)(2) of the
Railroad Retirement Act of 1974 (45 U.S.C. 231f(d)(2)) are
each amended by striking ``section 3(f)(3)'' and inserting
``section 3(f)(2)''.
(b) Spouse and Survivor Annuities.--Section 4 of the
Railroad Retirement Act of 1974 (45 U.S.C. 231c) is amended
by striking subsection (c).
(c) Effective Date.--The amendments made by this section
shall take effect on January 1, 2002, and shall apply to
annuity amounts accruing for months after December 2001.
SEC. 105. INVESTMENT OF RAILROAD RETIREMENT ASSETS.
(a) Establishment of National Railroad Retirement
Investment Trust.--Section 15 of the Railroad Retirement Act
of 1974 (45 U.S.C. 231n) is amended by inserting after
subsection (i) the following new subsection:
``(j) National Railroad Retirement Investment Trust.--
``(1) Establishment.--The National Railroad Retirement
Investment Trust (hereinafter in this subsection referred to
as the `Trust') is hereby established as a trust domiciled 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. The Trust
shall manage and invest its assets in the manner set forth in
this subsection.
``(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.--
``(i) Membership.--The Trust shall have a Board of
Trustees, consisting of 7 members. Three shall represent the
interests of labor, 3 shall represent the interests of
management, and 1 shall be an independent Trustee. The
members of the Board of Trustees shall not be considered
officers or employees of the Government of the United States.
``(ii) Selection.--
``(I) The 3 members representing the interests of labor
shall be selected by the joint recommendation of labor
organizations, national in scope, organized in accordance
with section 2 of the Railway Labor Act, and representing at
least \2/3\ of all active employees, represented by such
national labor organizations, covered under this Act.
``(II) The 3 members representing the interests of
management shall be selected by the joint recommendation of
carriers as defined in section 1 of the Railway Labor Act
employing at least \2/3\ of all active employees covered
under this Act.
``(III) The independent member shall be selected by a
majority of the other 6 members of the Board of Trustees.
A member of the Board of Trustees may be removed in the same
manner and by the same constituency that selected that
member.
``(iii) Dispute resolution.--In the event that the parties
specified in subclause (I), (II), or (III) of the previous
clause cannot agree on the selection of Trustees within 60
days of the date of enactment or 60 days from any subsequent
date that a position of the Board of Trustees becomes vacant,
an impartial umpire to decide such dispute shall, on the
petition of a party to the dispute, be appointed by the
District Court of the United States for the District of
Columbia.
``(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
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. The Trustee initially selected pursuant to
clause (ii)(III) shall be appointed to 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 Trust in a manner consistent with such
investment guidelines;
``(C) invest assets in the Trust, pursuant to the policies
adopted in subparagraph (A);
``(D) pay administrative expenses of the Trust from the
assets in the Trust; and
``(E) transfer money to the disbursing agent or as
otherwise provided in section 7(b)(4), to pay benefits
payable under this Act from the assets of the Trust.
``(5) Reporting requirements and fiduciary standards.--The
following reporting requirements and fiduciary standards
shall apply with respect to the Trust:
``(A) Duties of the board of trustees.--The Trust and each
member of the Board of Trustees shall discharge their duties
(including the voting of proxies) with respect to the assets
of the Trust 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 and to
[[Page H4957]]
avoid disproportionate influence over a particular industry
or firm, 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 Trust 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 Trust on behalf of a
party (or represent a party) whose interests are adverse to
the interests of the Trust, 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 Trust.
``(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 Trust (hereafter in this
subsection referred to as `Trust official') shall be bonded.
Such bond shall provide protection to the Trust 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 Trust
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 of
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 Trust.
``(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 clause (i); and
``(VI) any other comments and information necessary to
inform the Congress about the operations and financial
condition of the Trust.
``(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 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, including the Railroad Retirement Board, 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.
``(8) Funding.--The expenses of the Trust and the Board of
Trustees incurred under this subsection shall be paid from
the Trust.''.
(b) Conforming and Technical Amendments Governing
Investments.--Section 15(e) of the Railroad Retirement Act of
1974 (45 U.S.C. 231n(e)) is amended--
(1) 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 National 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''.
Amend section 105 by adding at the end the following new
subsection:
(c) Means of Financing.--For all purposes of the
Congressional Budget Act of 1974, the Balanced Budget and
Emergency Deficit Control Act of 1985, and chapter 11 of
title 31, United States Code, and notwithstanding section 20
of the Office of Management and Budget Circular No. A-11, the
purchase or sale of non-Federal assets (other than gains or
losses from such transactions) by the National Railroad
Retirement Investment Trust shall be treated as a means of
financing.
(d) Effective Date.--The amendments made by this section
shall take effect on the first day of the month that begins
more than 30 days after enactment.
SEC. 106. ELIMINATION OF SUPPLEMENTAL ANNUITY ACCOUNT.
(a) Source of Payments.--Section 7(c)(1) of the Railroad
Retirement Act of 1974 (45 U.S.C. 231f(c)(1)) 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 (45 U.S.C. 231n(c)) is repealed.
(c) Amendment to Railroad Retirement Account.--Section
15(a) of the Railroad Retirement Act of 1974 (45 U.S.C.
231n(a)) 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) Transfer.--
(1) Determination.--As soon as possible after December 31,
2001, the Railroad Retirement Board shall--
(A) determine the amount of funds in the Railroad
Retirement Supplemental Account under section 15(c) of the
Railroad Retirement Act of 1974 (45 U.S.C. 231n(c)) as of the
date of such determination; and
(B) direct the Secretary of the Treasury to transfer such
funds to the National Railroad Retirement Investment Trust
under section 15(j) of such Act (as added by section 105).
(2) Transfer by the secretary of the treasury.--The
Secretary of the Treasury shall make the transfer described
in paragraph (1).
(e) Effective Date.--
(1) In general.--Subject to paragraph (2), the amendments
made by subsections (a), (b), and (c) shall take effect
January 1, 2002.
(2) Account in existence until transfer made.--The Railroad
Retirement Supplemental Account under section 15(c) of the
Railroad Retirement Act of 1974 (45 U.S.C. 231n(c)) shall
continue to exist until the date that the Secretary of the
Treasury makes the transfer described in subsection (d)(2).
SEC. 107. TRANSFER AUTHORITY REVISIONS.
(a) Railroad Retirement Account.--Section 15 of the
Railroad Retirement Act of 1974 (45 U.S.C. 231n) is amended
by adding after subsection (j) the following new subsection:
``(k) Transfers to the Trust.--The Board shall, upon
establishment of the National Railroad Retirement Investment
Trust 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 National Railroad Retirement Investment Trust. The
Secretary shall make that transfer.''.
(b) Transfers From the National Railroad Retirement
Investment Trust.--Section 15 of the Railroad Retirement Act
of 1974 (45 U.S.C. 231n), as amended by subsection (a), is
further amended by adding after subsection (k) the following
new subsection:
``(l) National Railroad Retirement Investment Trust.--The
National Railroad Retirement Investment Trust shall from time
to time transfer to the disbursing agent described in section
7(b)(4) or as otherwise
[[Page H4958]]
directed by the Railroad Retirement Board pursuant to 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.--
(1) Transfers to trust.--Section 15A(d)(2) of the Railroad
Retirement Act of 1974 (45 U.S.C. 231n-1(d)(2)) is amended to
read as follows:
``(2) Upon establishment of the National Railroad
Retirement Investment Trust 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 and administrative expenses required to be
paid from that Account to the National Railroad Retirement
Investment Trust, and the Secretary shall make that transfer.
Any balance transferred under this paragraph shall be used by
the National Railroad Retirement Investment 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 (45 U.S.C. 231n-1(c)(1))
is amended by adding at the end the following new sentence:
``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 (45 U.S.C. 231n-1(d)(1)) 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 (45 U.S.C. 231n(d)(1)) is
amended by adding at the end the following new sentence:
``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 (45
U.S.C. 231f(b)(4)) is amended to read as follows:
``(4)(A) The Railroad Retirement Board, after consultation
with the Board of Trustees of the National Railroad
Retirement Investment 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.
Pending the taking effect of that arrangement, benefits shall
be paid as under the law in effect prior to the enactment of
the Railroad Retirement and Survivors' Improvement Act of
2001.
``(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 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 National Railroad
Retirement Investment Trust the amounts required to be
transferred from the National 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 (45 U.S.C. 231f(c)(1)) 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 National
Railroad Retirement Investment Trust 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 sections 15(k) and 15A(d)(2) of the Railroad
Retirement Act of 1974, as amended by subsections (a) and
(c), respectively, the Railroad Retirement Board shall
consult with the Secretary of the Treasury to design an
appropriate method to transfer obligations held as of the
date of enactment of this Act or to convert such obligations
to cash at the discretion of the Railroad Retirement Board
prior to transfer. The National Railroad Retirement
Investment 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 (45 U.S.C. 231u(a)(1)) is amended--
(1) by inserting after the first sentence the following new
sentence: ``On or before May 1 of each year beginning in
2003, 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
(45 U.S.C. 231 et seq.) is amended by adding at the end the
following new section:
``computation and certification of account benefit ratios
``Sec. 23. (a) Initial Computation and Certification.--On
or before November 1, 2003, 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 of the Treasury.
``(b) Computations and Certifications After 2003.--On or
before November 1 of each year after 2003, 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 of the Treasury.
``(c) Definition.--As used in this section, the term
`account benefits ratio' has the meaning given that term in
section 3241(c) of the Internal Revenue Code of 1986.''.
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 NATIONAL RAILROAD RETIREMENT
INVESTMENT TRUST.
Subsection (c) of section 501 is amended by adding at the
end the following new paragraph:
``(28) The National 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) and by redesignating
subsection (e) as subsection (c).
(c) Effective Date.--The amendments made by this section
shall apply to calendar years beginning after December 31,
2001.
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
2002,
``(B) 14.2 percent in the case of compensation paid during
2003, and
``(C) in the case of compensation paid during any calendar
year after 2003, 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--
[[Page H4959]]
``(A) 14.75 percent in the case of compensation received
during 2002,
``(B) 14.20 percent in the case of compensation received
during 2003, and
``(C) in the case of compensation received during any
calendar year after 2003, 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 2002 or 2003, and
``(B) in the case of compensation received during any
calendar year after 2003, the percentage determined under
section 3241 for such calendar year.''.
(d) Determination of Rate.--Chapter 22 is amended by adding
at the end 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
National Railroad Retirement Investment Trust (and for years
before 2002, 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 National 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
``3211(a)(2)'' and inserting ``3211(b)''.
(3) Paragraphs (2)(A)(iii)(II) and (4)(A) of section
3231(e) are 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,
2001.
The SPEAKER pro tempore (Mr. Sununu). Pursuant to the rule, the
gentleman from Alaska (Mr. Young) and the gentleman from Minnesota (Mr.
Oberstar) each will control 20 minutes.
Mr. SAM JOHNSON of Texas. Mr. Speaker, does the gentleman from
Minnesota oppose the bill?
Mr. OBERSTAR. No, I do not.
Mr. SAM JOHNSON of Texas. Mr. Speaker, I am opposed and I would claim
the time in opposition.
The SPEAKER pro tempore. The gentleman from Alaska (Mr. Young) and
the gentleman from Texas (Mr. Sam Johnson) each will control 20
minutes.
The Chair recognizes the gentleman from Alaska (Mr. Young).
Mr. YOUNG of Alaska. Mr. Speaker, I ask unanimous consent to yield 10
minutes to the gentleman from Minnesota (Mr. Oberstar) for purposes of
control.
The SPEAKER pro tempore. Without objection, the gentleman from
Minnesota will control 10 minutes of the time.
There was no objection.
The SPEAKER pro tempore. The gentleman from Alaska is recognized for
10 minutes.
Mr. YOUNG of Alaska. Mr. Speaker, I yield myself such time as I may
consume.
I strongly support H.R. 1140, the Railroad Retirement and Survivors'
Improvement Act of 2001. Thanks to the heroic efforts of the Speaker of
the House, the Honorable Dennis Hastert, we have been able to reach an
agreement on this historic legislation.
H.R. 1140 is virtually identical to the railroad retirement bill that
passed the House last year, 391 to 25, but was not taken up by the
other body. This Congress made several technical changes, such as
inserting updated effective dates. We have also included language
drafted by the House Committee on the Budget that clarifies the
authors' intent that transferring funds to the new investment trust
does not result in outlays.
To address concerns raised about protecting the investment of tier 2
pension assets from possible influence by the Federal Government, we
have also included labor and management selection process for the board
of trustees who will manage those assets.
By moving a portion of the Railroad Retirement Trust Fund out of
mandatory investment in Treasury bonds and giving it more investment
flexibility, this landmark bill will provide enhanced benefits to
railroad retirees, as
[[Page H4960]]
well as reduced taxes on railroad employers.
A 2 percent increase in the rate of return, which is quite
conservative based on historical trends, will provide the needed boost
to allow for these benefit increases and payroll tax cuts.
H.R. 1140 includes safety provisions that automatically adjust
payroll tax rates upward if historically predicted increases in
retirement fund returns do not materialize. The burden of higher taxes
will fall entirely on railroad employers, not the employees.
I would like to commend the subcommittee chairman, the gentleman from
New York (Mr. Quinn), for prompting the negotiations between labor and
management that produced this legislation.
The bipartisan comprehensive reform package we have before us today
reduces the financial burden on employers as well as the employees,
while providing an overall increase in benefits, a targeted increase
for widows and widowers of railroad retirees, and a reduced tier 2
retirement age.
Let me briefly mention an unfounded concern that has been voiced
about this bill. Many people have been told this bill involves a $15
billion first-year hit on the U.S. Treasury. Thanks to the hard work of
the Speaker of the House, the OMB and the House leadership have agreed
on legislative language that avoids this fictional outlay. This
language reflects the fact that taking the $15 billion tier 2 pension
fund out of the current approach of investing only in Treasury bonds,
and allowing professional, diversified management of the investment, is
not spending.
Mr. Speaker, the wisdom and widespread support of this bill is
demonstrated by the fact that it has 371 sponsors. And for those who
say the bill raids the Treasury, let me advise them that 30 of the 42
members of the Committee on the Budget are sponsors of the bill.
Furthermore, even the CBO admits that the scoring of this bill is ill-
suited to the type of reinvestment this bill would allow.
Mr. Speaker, this bill represents several years' effort and difficult
negotiations between railroad labor and railroad management. I commend
my colleagues on the railroading industry for their diligence and
cooperation.
I am also very pleased that the bipartisan leadership of this
committee worked cooperatively to move this legislation again in the
107th Congress. Working on a bipartisan basis in this committee has
allowed us to enact significant legislation on behalf of our
constituents. H.R. 1140 will set yet another example of this proud
record.
I thank my colleague and ranking Democrat on the committee, the
gentleman from Minnesota (Mr. Oberstar), and the subcommittee ranking
member, the gentleman from Tennessee (Mr. Clement) for their
cooperation and support.
I urge swift passage of H.R. 1140.
Mr. Speaker, I reserve the balance of my time.
Mr. SAM JOHNSON of Texas. Mr. Speaker, in deference to my colleagues
both on that side and this side, I appreciate their position on this,
but I rise in strong opposition to the Railroad Retirement and
Survivors' Improvement Act.
This bill really is a fake, a fraud and a phony. It breaks every
promise we have made to the American people and treats every other
senior citizen as a second-class citizen.
This legislation gives preferential treatment to a select few,
900,000 railroad people. It raids the Social Security-Medicare Trust
Funds. It is absurd that the Federal Government allows one group of
people to retire at age 60 while others will have to wait until they
turn 65 or in the future, age 67, and this bill does just that.
Under this fatally flawed legislation, railroad retirees will be able
to retire at age 60 and receive Social Security equivalent retirement
benefits. Every other American has to wait until at least age 65 to get
full Social Security, and 67 for those that are following us.
For the same group of railroaders, we have decided to break open the
Social Security and Medicare lockbox to give railroaders their new
benefits. Nobody can say with a straight face that this measure will
not raid the Social Security and Medicare Trust Funds.
A provision added to the bill today would direct the OMB to pretend
that the bill does not cost anything. In reality, it costs $15 billion
in the first year and an additional $7 billion over the next 10 years,
and the Committee on Transportation and Infrastructure's own analysis
cites that.
Worse, the program is already receiving subsidies from the Social
Security Trust Fund. Since 1958, the Railroad Trust Fund has needed
money. The subsidy has been nearly $84 billion, and last year alone,
the railroad retirement bilked $3.5 from the Social Security Trust
Fund. In fact, the Social Security Administration spends more money on
the railroad retirement system than it spends on all Social Security
administrative costs, not to mention this bill sets a terrible
precedent for the future of Social Security. Instead of private
accounts, it puts the government in charge.
The bill, as written, sets up a government-run investment board that
makes decisions about where the money is invested. These are not
private accounts, nor is there a private board making these decisions.
The board is controlled by six railroad insiders, with only one
representative looking out for the American taxpayer.
In short, this bill allows the government to use tax dollars to play
in the market. This is wrong. The Federal Government ought not be
involved in the stock market.
Railroad retirement benefits are substantially higher than Social
Security benefits. For instance, on average, it gives career railroad
retirement retirees more than double the amount of money per month than
all other seniors collecting Social Security.
It is wrong for the American taxpayer and the Social Security Trust
Fund to subsidize these higher benefits. It is not fair to treat one
group of retirees better than anyone else. To add insult to injury,
this bill allows felons sitting in jail to receive railroad benefits.
Why should they? Felons were eliminated from the Social Security
program in welfare reform several years ago. What is next, telling all
of the people with the letter ``J'' in their last name they can retire
at 63.5?
Lastly, the measure also violates three of President Bush's five
sacred Social Security reform proposals. One, the bill demands using
Social Security funds to subsidize other benefits. Two, the Federal
Government, disguised as the investment trust, would invest in the
private sector. Three, the bill would prohibit personal retirement
accounts for railroad employees or retirees.
Every one of the 407 Members of Congress who voted for the Medicare-
Social Security lockbox ought to vote against this bill because this
bill will raid Social Security and Medicare. Just last week the Office
of Management and Budget and the Congressional Budget Office both
scored this bill at a cost of $15 billion in its first year; but all of
a sudden today it now costs the taxpayer nothing.
How can that be? How can we cash in $15 billion of U.S. Treasury
bonds, and say that it does not have an effect on the Medicare and
Social Security surplus. I just do not understand. Are we cooking the
books?
Call your Senator if you are listening, (202) 225-3121, to stop this
fraud in America.
Mr. Speaker, I urge my colleagues to vote against raiding the Social
Security-Medicare Trust Funds, and to vote against this bill.
Mr. Speaker, I reserve the balance of my time.
Mr. OBERSTAR. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, notwithstanding the relatively hostile remarks and
misguided comments of our very otherwise thoughtful colleague from
Texas, I today brought with me my 83-year-old railroad watch, 15 size
Illinois, in memory of the railroad workers who have waited nearly that
long for justice in their retirement program.
This legislation will bring truly significant benefits to the more
than one-quarter million men and women who work on America's railroads,
and to the 700,000 retirees and survivors of retired railroad workers.
The bill allows for a significant reduction in payroll taxes paid by
the U.S. railroads. This is one of those special occasions in the
legislative arena when all parties benefit. In this case, railroads,
railroad labor, retired railroad workers, and their survivors. All of
them come out ahead.
[[Page H4961]]
This legislation, as our chairman so well expressed, is the result of
an historic agreement reached by railroad management and labor over
more than 2 years of intense, difficult negotiations. The benefit
improvements, as well as tax cuts, are made possible by changing
current law that limits the investment of Railroad Retirement Trust
Fund assets to government securities.
The proposed changes governing the Railroad Retirement Trust Fund
will not affect the solvency of the railroad retirement system. The
tier 1 program which provides Social Security benefits, will continue
to be invested only in government securities. Only tier 2 funds, the
original railroad retirement program, will be eligible for investment
in assets other than government securities.
The projected increases in Trust Fund income from these changes are
based on fairly conservative forecasts of the rates of returns that
could be earned by a diversified portfolio. That would be about 2
percentage points above the return on government securities.
But more importantly, if the investments fail to perform as well as
expected, worker's pensions are protected because the legislation
requires, as agreed to in the negotiations between management and
labor, requires the railroads to absorb any future tax increases that
might be necessary to keep the system solvent. Ultimately, the Federal
Government continues to be responsible for the security of the railroad
retirement system.
This is the first really significant benefit in 25 years, although as
I said, it seems more like 83. Those benefits are: The age at which
employees can retire with full benefits is reduced from 62 to 60 with
30 years of service; the number of years required for vesting is
reduced from 10 to 5 years; the benefits of widows and widowers are
expanded; and the limits on tier 2 annuities are repealed.
The bill calls for automatic future improvements if the retirement
plan becomes overfunded. It reduces the payroll taxes paid by
railroads. That means that for tier 2 benefits, the railroad's taxes
decline from 16.1 percent to 13.1 percent.
By the third year after passage of this bill, after enactment of this
legislation, the railroads stand to gain nearly $400 million annually
from lower payroll taxes, and that will allow them to invest that money
into needed rail and track and rolling stock improvements, and it
allows them also to improve the wages and working conditions of
railroad workers.
Mr. Speaker, we passed this bill last year, with former Chairman
Shuster and me working together on a bipartisan basis, and I want to
reflect again on the splendid working relationship we have had with the
gentleman from Alaska (Mr. Young) on bringing this legislation through
to this point.
We passed this bill last year 391 to 25. We ought to do the same this
year.
Mr. Speaker, I reserve the balance of my time.
{time} 1900
Mr. YOUNG of Alaska. Mr. Speaker, I yield 3 minutes to the gentleman
from New York (Mr. Quinn), chairman of the Subcommittee on Railroads.
Mr. QUINN. Mr. Speaker, I appreciate the gentleman from Alaska
yielding time. I also want to begin by thanking the gentleman from
Alaska (Mr. Young); the gentleman from Minnesota (Mr. Oberstar); and
the gentleman from Tennessee (Mr. Clement), my partner on the
Subcommittee on Railroads, for the work that has been done, 2 long
years now. I also want to thank the gentleman from Texas (Mr. Sam
Johnson) for his observations.
We bring this bill forward, this afternoon, Mr. Speaker, in a real
spirit of bipartisanship. A couple of our speakers have already
mentioned that this is 2 years in the works. We have back and forth
talked about the interests, particularly since the new administration
has come into town, about not confusing this issue with Social
Security. My esteemed colleague, the gentleman from Texas, suggests
that we pick out the letter J in somebody's last name for Social
Security. I would like to suggest that we use the letter J in
somebody's first name, in my father's name who was a railroad worker
for 35 years and in my grandfather's name when he came from Ireland and
began to work on the railroad when he first came to America.
I do not have a personal ax to grind in this discussion this
afternoon, Mr. Speaker; but I can tell the gentleman from Texas, I can
tell anybody else who wants to listen, that I know a little bit about
railroaders and their families. We have not tried to structure this
bill this afternoon to give anybody an unfair advantage. We have not
structured it to give anybody an opportunity to take advantage of the
Social Security fund. We are not talking, Mr. Speaker, about tier 1. We
are talking only about tier 2 money. This is the workers' own money.
This is their money.
We have described it to our friends as we have talked on the
subcommittee and we have had 380 to 400 cosponsors almost. It is like
this commonsense approach, that if you have money in the bank and you
decided to take it from the bank and put it in a mutual fund, you would
not be spending that money on a car, you would not be depositing the
money at the front doorstep of the bank, and you would not be raiding
anybody else's money, such as the Social Security system.
What we have tried to do in this bipartisan effort these last 2 years
is to strike a balance. We would like to say that we can get rail labor
and rail management together with retired workers on the railroads and
their widows and widowers to say that we will let you do what you think
is best with that portion of the money that does not affect Social
Security. The provision reflects a commonsense approach that trading in
a bank account for a retirement savings account is not the same as
taking that money in the bank account and spending it on a car. It is
just not the same.
I want to thank the Members that have worked with us these past 2
years, particularly in the last 3 or 4 months, and most particularly
the last 24 hours, to get us through a discussion with the
administration, with those people who disagree with some of the things
that we have talked about, but disagree respectfully.
Finally, I would like to thank the gentleman from Minnesota (Mr.
Oberstar) and the gentleman from Tennessee (Mr. Clement) both for their
efforts these long 2 years, particularly the last 4 or 5 months.
I urge my colleagues to vote ``yes'' when they have an opportunity
this afternoon.
Mr. SAM JOHNSON of Texas. Mr. Speaker, I yield myself such time as I
may consume.
I appreciate the comments the gentleman made, his father and previous
people in his family. I love the railroaders. They are good guys. We
ought to take care of them, but I do not think they ought to get extra
dollars. The railroad trust fund gets roughly a $300 million subsidy
from general revenues when income taxes on tier 2 private pension
equivalent, which the gentleman is talking about, are returned to the
trust fund rather than general revenue. No other Americans have the
taxes on their pensions returned to their pension funds.
The railroad retirement needed a $3.5 billion subsidy in 2000 from
Social Security to stay afloat. I just find it hard to believe that you
can say that you are looking out for them, and I hope you will, but to
drop the age limit down to 60 when Social Security is up to 65 to 67,
going to 67, it is hard to rationalize that.
Mr. Speaker, I yield such time as he may consume to the gentleman
from Michigan (Mr. Smith).
Mr. SMITH of Michigan. Mr. Speaker, there are a couple of concerns
that I have about this legislation:
One, it does mean absolutely that we are going to raid the Social
Security and Medicare Trust Fund lockbox next year. So that is a real
concern. Regardless of the kind of scoring, it is going to take the $15
billion coming from someplace. And so that is real money and that comes
out of the surplus because it is dollars that are going to be given to
this fund.
My second concern is that eventually, sometime, someplace, somewhere
down the road we take the American taxpayer off the hook and say, Look,
you're not going to be responsible for this private pension plan
anymore.
It dates back to 1934 when we started Social Security. At that time
railroaders were put under the Social Security Act. Railroaders had
already
[[Page H4962]]
started a pretty good pension forum, and so they came to Congress with
significant political influence, as they have today. They came to
Congress and said, Look, we want you to allow us to have the equivalent
of a Social Security deduction on our payroll, but we want to go into
our own private account. So by 1937, the Congress changed the law and
allowed them to have this sort of quasi-governmental retirement system.
The other problem that I think is significant, by not taking the
American taxpayer off the hook to bail out this system again, we are
looking at a situation that by 2028, the revenues coming into the trust
fund are going to be way below what is needed to meet the requirements
of benefits. The simple bottom line fact is this bill increases
benefits, it increases benefits to widowers, and says that you only
have to be 60 years old now to receive full benefits if you put the
required number of years in service.
So we increase the benefits, where in Social Security instead of 60
years old, you have got to go till 67 years old eventually down the
road. That is the bill that we passed. So we are reducing the revenues
contributed by railroad management, and we are increasing the benefits
to retirees; and we are taking $15 billion out of our surplus money.
That means we have got to go into the lockbox, and we are simply never
taking the American taxpayer off the hook.
So when these taxes are required to go up to 40 and 50 percent in the
year 2028, what do you think is going to happen in terms of the
railroaders coming back to Congress to say, Look, having that kind of a
payroll tax is impossible?
I would like to ask somebody sometime, why do we not consider taking
the American taxpayer off the hook? Let me just give Members the
statistics on what the gentleman from Texas was saying in terms of the
Federal contribution. The railroad retirement system has spent more
than it has collected in payroll taxes every year since 1957, an
average of $4 billion a year they spend in benefits more than they take
in in their payroll contribution towards that benefit plan. The
cumulative shortfall now exceeds $90 billion. But because of taxpayer
subsidies for this railroad fund, we end up with an accounting that in
the trust fund is $20 billion, $15 billion of which we are going to
take and say it is going to help solve the problems of the railroad
retirement system.
Everybody wants fairness for every pension plan. The question is, how
often, how much should the American taxpayer be asked to fund this
system? And so with interest it is the equivalent of $90 billion now
and the $15 billion is going out of the lockbox of Social Security and
Medicare.
I think the challenge for us is certainly to assist the railroad
retirees but not in the way that it is going to jeopardize the benefits
of future Social Security recipients.
Mr. OBERSTAR. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman
from Tennessee (Mr. Clement), the ranking member of the Subcommittee on
Railroads.
Mr. CLEMENT. Mr. Speaker, I thank the gentleman from Minnesota for
yielding me this time. I always refer to the gentleman from Minnesota
(Mr. Oberstar), our leader on the Democratic side on the Committee on
Transportation and Infrastructure, as our walking encyclopedia and
historian, because I do not think there is anyone who knows more about
the facts and the information than he does when it comes to some of
these tough, controversial decisions.
I want to also say to the gentleman from Alaska (Mr. Young), the
gentleman is our new chairman of the Committee on Transportation and
Infrastructure and is doing an outstanding job. He had many others
prior to him. He has gotten off to a very, very good start, not only
representing the great State of Alaska but our entire country. And to
the gentleman from New York (Mr. Quinn), who is the chairman of the
Subcommittee on Railroads, and I am the ranking Democrat, we are
working together as partners. That is somewhat unusual in the U.S.
House of Representatives for a Democrat and Republican to work so
closely together for the common good of the people of this country. We
have worked together and the Subcommittee on Railroads has been very
active. This is a prime example of something that we worked on very
hard, and we made up our mind very early that other Congresses had
tried but not been able to move this legislation, and we want to move
it.
We know that a quarter of a million men and women work on America's
railroads that will be affected by this legislation. There are 700,000
retirees and survivors of retired railroad workers that will be
affected by this legislation. H.R. 1140, the Railroad Retirement
Improvement Act of 2001, what we are talking about tonight, is
important legislation. I am pleased to be one of the original
cosponsors. We have almost every Member of Congress that has signed on
as a cosponsor.
Every week in my office, railroad workers and retirees call me about
the status of this bill. In my district, the Fifth District of
Tennessee, there are 364 active railroad workers. My district includes
1,226 beneficiaries of the railroad retirement system. This number
includes retired employees, their spouses and survivors.
This legislation is important. Let us pass it now and send it to the
U.S. Senate where hopefully they will take action.
Mr. SAM JOHNSON of Texas. Mr. Speaker, I yield such time as he may
consume to the gentleman from Connecticut (Mr. Shays).
Mr. SHAYS. Mr. Speaker, I thank the gentleman for yielding time. I
thank him for his courage and service to our country, and frankly his
courage tonight. This is not a pleasant thing that the gentleman is
having to do. He is having to basically oppose his friends. He is
having to ask for time in opposition. He is doing it because I believe
when he got elected to Congress, he wanted us to be honest with each
other. I believe when he got elected to Congress, he wanted us to tell
the truth.
The truth is quite simple. Rail management and unions came to an
agreement. It is a wonderful agreement. It is also bipartisan,
Republicans and Democrats. It is a great plan: increase the benefits,
reduce contributions to the fund, and have the taxpayers pay for it.
What a system. Why would management oppose that?
{time} 1915
The taxpayers pay. Why would the beneficiaries oppose? They will get
increased benefits, and they will contribute less. It is a wonderful
plan, so why are we not all for it? There are over 300 for it, and why
would they not be for it? They are going to have everybody call them
up, all their railroad workers, and we all have them, and they are
saying increase my benefits, take care of my needs.
So that is logical. Let us take care of their needs. It is just
dishonest. It is blatantly dishonest. It is asking the taxpayers to pay
for something that is, in fact, a private benefit.
We are going to reduce the contributions to the fund, we are going to
increase the benefits from the fund, and we are going to ask the
taxpayers to pay for it, and we all should just fall in line, fall in
step. There is a problem with that. The problem is, we have a
responsibility to run the government. We have a moral obligation to run
this government.
We reduced taxes in this government. I did. I was happy to reduce
taxes, because it seemed very clear to me why we should do it: if we
leave the money on the table, it is going to be spent, and this is one
of the great examples.
We beat our chests and say how we are protecting the Social Security
trust fund, but we are not, because right now we are going to raid it.
And we say we are going to increase the age of retirement for
beneficiaries from 65 to 67, but we are allowing railroad workers to
retire at age 60 using Social Security trust fund money.
Give me a break. I do not get it. I do not understand why we do it.
I just thank the gentleman from Texas (Mr. Sam Johnson) for
exhibiting the same kind of courage he exhibited when he was in
Vietnam, to say this is wrong, we have got to stop it, and we should
not do it. He was a hero for me for many years. I read his book, and I
am just proud to be fighting the same cause.
Mr. OBERSTAR. Mr. Speaker, I am pleased to yield 2 minutes to the
distinguished gentleman from Oregon (Mr. Blumenauer).
[[Page H4963]]
Mr. BLUMENAUER. Mr. Speaker, I appreciate the gentleman's courtesy in
sharing a few of these scarce moments with me.
I join, first of all, in expressing my appreciation to the leadership
of our committee that has focused on the health and future of America's
railroads. The gentleman from Alaska (Chairman Young), the gentleman
from Minnesota (Mr. Oberstar), the gentleman from Tennessee (Mr.
Clement), the gentleman from New York (Mr. Quinn), I think are doing an
outstanding job; and I am looking forward to working in the future with
them.
One of the important parts of their job is to modernize this pension
program. It is not Social Security. If they were part of Social
Security and had been for years, this would be a much different
situation. This is independently funded. These people are paying now
36.3 percent of total payroll into this. It is a significant tax on
industry and these individuals.
The proposal that has been worked out retains the individual
contribution, and it is still is going to be 33 percent total
investment. They are not pulling rabbits out of the hat. They are
modernizing the system with a tier 2 benefits like you would any other
modern pension program and diversifying the investment, moving beyond
low-yield bonds.
I think we are going to be able to hit the target and exceed the
target. This is certainly more conservative than the assumptions that
some people have used to justify voting for the Bush tax program, but
that is a different issue.
We have, I do think, an obligation to be honest; and I think we are
doing a good job in terms of putting forward alternative sources of
revenue, modernizing the rate of return, allowing industry to reinvest
in badly needed infrastructure, being fair to almost 1 million
participants, and bring this pension plan into the modern era.
But, please, do not confuse this with Social Security. It took us up
until a few minutes ago, and I do not know what the chair and ranking
member did to convince OMB to understand that this is a separate
program. They have done it. I am glad you could do it with OMB. I hope
you will be as successful with some of the other programs.
Mr. YOUNG of Alaska. Mr. Speaker, I yield 1 minute to the gentleman
from Nebraska (Mr. Terry).
Mr. TERRY. Mr. Speaker, I thank the gentleman for yielding to speak
on this important act for the 7500 retirees in my district.
I rise in support of this act. Why? Because these reforms in this act
allow the railroad workers to move to a pension system that, frankly,
mirrors most in the industrial world, manufacturing, teachers, firemen.
These reforms allow railroad workers to have some level of control over
their money and their pensions, being able to direct them into safe
investments and earn a greater return so they can pay them back with
better benefits.
Yes, government will continue to hold the majority of these dollars
in the tier 1, the archaic system, but at least we inch forward to a
modern system. These reforms allow for greater benefits for widows, who
now receive 50 percent of their deceased spouse's benefit. I have heard
from many widows in my district who have a great deal of difficulty
making ends meet. This act will allow these widows a little bit more
money and a lot of peace of mind.
Mr. SAM JOHNSON of Texas. Mr. Speaker, I yield myself such time as I
may consume.
Mr. Speaker, I would like to point out that there are not a lot of
other industries that have a retirement program such as this. The steel
industry does not, and teachers and other people do not either. They
pay into their own programs, but not into Social Security, for the most
part. Social Security does not finance them.
Let me make a point here that Social Security, according to the
reform proposal that was handed out that goes with this bill and that
has been occurring for a long time, tier 1 tax revenues are benefited
by the Social Security benefit account. The Social Security benefit
account also makes periodic transfers to tier 2, which is supported
also by Social Security. So to say Social Security is not involved is a
misnomer.
The fact of the matter is, the gentleman from Connecticut (Mr. Shays)
pointed out earlier that I have a military background, and I have to
tell you, I am scared to death that we are neglecting our military. If
we pass this thing, which is a $15 billion hit almost immediately,
there is not going to be any money left for our military to survive. To
me, that is what the Congress ought to be talking about, is protecting
our Nation.
I would like to add at this point that the Citizens for Sound Economy
are urging a ``no'' vote on this bill, and they say, ``Perhaps the most
troubling part of the bill is it pretends to pay for itself. The
railroad retirement trust fund currently holds $15.3 billion in
government bonds. H.R. 1140,'' that is the bill number, ``would cash
them in and set up a new railroad retirement investment trust to invest
the money in the stock market.''
They are going to score this as a key vote. I thought Members should
know that.
Mr. Speaker, I yield 1 minute to the gentleman from Michigan (Mr.
Smith).
Mr. SMITH of Michigan. Mr. Speaker, they are having a real problem
with railroad retirement, but almost every corporation and company that
is in the United States, as people live longer, as our medical
technology allows them to live longer, we end up having problems,
whether it is Social Security or other pension plans. To say that the
Federal Government should bail out this private pension plan I think is
probably an unfair imposition on the rest of our taxpayers and on the
Social Security system.
Now, Social Security right now has three workers, we are down to
three workers, for every one retiree. Thirty years ago we had 30
workers financing every one retiree. Today there are three workers
financing Social Security. Guess what it is in the railroad system?
There is one worker trying to fund three railroad retirees, one worker
in railroad trying to fund three retirees.
Mr. Speaker, that is a huge burden, but, still, they have to run
their own pension system. They cannot keep coming back to government.
Again, $4 billion every year that they pay out in benefits more than
they withhold in their taxes.
Mr. SAM JOHNSON of Texas. Mr. Speaker, I yield 2 minutes to the
gentleman from New York (Mr. Gilman).
(Mr. GILMAN asked and was given permission to revise and extend his
remarks.)
Mr. GILMAN. Mr. Speaker, I thank the gentleman for yielding me time.
Mr. Speaker, I rise in strong support of H.R. 1140, the Railroad
Retirement Survivors Improvement Act of 2001. I commend the gentleman
from Alaska (Mr. Young) for proposing this important measure.
This bill will bring much needed improvements to the 65-year-old
railroad retirement program on which our Nation's retired railroad
employees and families rely. The modernization of this program includes
steps toward the increased privatization of the program's tier 2
pension plan, which will be achieved through the establishment of a
nonprofit Railroad Retirement Investment Trust which will oversee and
invest the assets of the program's trust fund. The trust will be
managed by a panel of trustees, who have been chosen by rail management
and rail labor and that will give greater control of the program to the
men and women who benefit from it.
H.R. 1140 also contains a provision which will permit retired
railroad employees to work in non-rail jobs with no penalties to their
benefits. In addition, the bill also allows widows and widowers of
retired rail workers to collect the full amount of their deceased
spouses' pension.
It is clear that this Roosevelt-era program is due for an appropriate
restructuring that will reflect the current needs of our Nation's rail
workers and their families. Accordingly, I urge my colleagues to fully
support H.R. 1140.
Mr. YOUNG of Alaska. Mr. Speaker, I yield 1 minute to my good friend
and new colleague, the gentleman from Pennsylvania (Mr. Shuster).
[[Page H4964]]
Mr. SHUSTER. Mr. Speaker, I rise in strong support of H.R. 1140, the
Railroad Retirement and Survivors Improvement Act. This landmark
legislation will reform an antiquated retirement system, improve
benefits for railroad retirees, increase benefits for approximately
50,000 railroad retiree widows, and reduce taxes on railroad employees.
Opponents of H.R. 1140 say the bill will have a first year cost of
$15 billion and will reduce funds available for other important
programs. The truth is, truth in budgeting, and this bill should never
have been scored the way it was. We restore truth in budgeting through
this bill.
H.R. 1140 has the support of both labor and industry management and
deserves the overwhelming support of this House.
This legislation is good for railroad families, it is good for
America, and I urge the strong support for this legislation.
Mr. OBERSTAR. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, I listened with great interest to the gentleman from
Connecticut who said, ``I don't get it.'' Well, the reason he does not
get it is that he does not understand it.
The fact is that only tier 2 benefits are affected by this
legislation. You cannot get early retirement under Social Security as a
railroad worker. You have got to wait until your time under the Social
Security law. You get your retirement early under the tier 2 benefits
for railroad workers under that ancient law that predates Social
Security. We are just trying to update it.
This is not a raid on the taxpayers, for heavens sakes. We are
reducing the tax that the railroad companies pay into this system and
the workers pay into their tier 2 benefits.
So, we are trying to make it a little bit better. But it is not a
raid on Social Security. They waited their time to get those benefits.
Just read the law. When all else fails and you do not understand it,
read the bill. And the bill is very clear, we are only dealing with
railroad workers' benefits.
Mr. YOUNG of Alaska. Mr. Speaker, I yield 1 minute to the gentlewoman
from West Virginia (Mrs. Capito), a member of the committee.
Mrs. CAPITO. Mr. Speaker, I thank the gentleman from Alaska (Chairman
Young) and the ranking member, the gentleman from Minnesota (Mr.
Oberstar).
Mr. Speaker, I rise quickly to express my support for the passage of
H.R. 1140, the Railroad Retirement Survivors Improvement Act. As the
title suggests, this bill aims to provide equitable and fitting
compensation for those who have served and those who are currently
serving the railroad industry.
The move to modernize the railroad retirement trust fund is
revolutionary, yet vital. With this bill, the railroad retirement trust
fund will receive increased revenues for its beneficiaries through
investment in a diversified portfolio.
In my home State of West Virginia, almost 12,000 railroad employees,
retirees, spouses, and widows have benefitted from this plan. In my
district alone, 3,000 railroad beneficiaries would benefit from this.
Many of these people have called my office over the past few months
asking me to support this bipartisan effort. Widows of former rail
workers have told me stories about the minimum benefits they receive,
where they can barely pay their bills. Such stories should encourage us
to act and act quickly.
Over the past century, the hard work, long hours, and true dedication
of many men and women have built an effective network of rail tracks
around this country.
Mr. Speaker, I urge this body to pass this legislation.
Mr. SAM JOHNSON of Texas. Mr. Speaker, I yield myself such time as I
may consume.
Mr. Speaker, I would like to read from a letter from the U.S.
Railroad Retirement Board, from a person who is a labor member there.
{time} 1930
They ask, how do the average monthly railroad retirement and Social
Security benefits paid to retired employees and their spouses compare?
The average age annuity being paid by the Railroad Retirement Board
at the end of 2000 to career railroad employees was $1,760 a month, and
for all employees, the average was $1,300. The average age retirement
benefit being paid by Social Security was about $800 a month, and
spouse benefits averaged about $530.
So the Railroad Retirement Act does not need fixing, it needs support
monetarily, and guess where they are going to get it? They are going to
get it from the Social Security Trust Fund.
Mr. Speaker, I would like to just reiterate that the President's
proposals under this bill are violated. The bill demands using Social
Security funds to subsidize other benefits. The Federal Government,
disguised as the investment trust, would invest in the private sector,
and also the bill would prohibit personal retirement accounts for
railroad employees. Every one of us should vote against this bill.
Mr. Speaker, I yield back the balance of my time.
Mr. YOUNG of Alaska. Mr. Speaker, I yield myself such time as I may
consume.
I want to compliment everybody who has spoken tonight. I would just
suggest again that this is tier 2; it is their money, they want to
reinvest it. Yes, it is in government bonds, but it came from the
workers. I thought this body was trying to set up a system where we did
not take money from the workers to spend on other things. This is our
retirement system. This is the railroad retirement system. It only
affects tier 2.
For those people who are not on the floor tonight, I urge people
watching the show to vote for this legislation. Keep in mind, this had
371 cosponsors. I expect 380 votes on this. It is the right thing to do
for our railroads and our railroad workers.
Mr. WELLER. Mr. Speaker, I rise in strong support of H.R. 1140, The
Railroad Retirement and Survivors' Improvement Act of 2001.
The Railroad Retirement and Survivors' Improvement Act of 2001 is
historic legislation that will improve the lives of railroad workers
and their spouses. I am proud to be a cosponsor with 367 of my
colleagues of this important bill. H.R. 1140 guarantees a better
standard of retirement for the nearly 3,500 retirees in the 11th
Congressional District of Illinois which I represent and for all future
retirees and their families.
Under H.R. 1140, the quality of life for widows and widowers is
significantly improved. Under current law, spouses are limited to one-
half of the deceased employee's Tier 2 benefits. However, under this
legislation, the 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. 1140 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. 1140 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 2000 removes this cap so that there is not a maximum
benefit limit.
Further, the legislation ensures the solvency of the Railroad
Retirement Investment Trust. Through private investing, the trust fund
will grow faster while decreasing taxes assessed on railroads. Seven
private individuals will oversee the Railroad Retirement Investment
Trust, thus ensuring any possible implication of a government role in
investing is eliminated. Labor and rail management will each select
three trustees to reflect their interests, and these six trustees will
select the seventh trustee. Approximately one-quarter of all employees
in the rail industry work for commuter and passenger rail, a growing
industry. It is my sincere hope that the Trust include a representative
from all three categories of rail service: commuter, passenger and
freight from among those appointees designated for rail management.
Mr. Speaker, this is good, important legislation that will help
670,000 retirees and dependents and 245,000 active rail employees. I
ask for all my colleagues to cast their vote in favor of H.R. 1140.
[[Page H4965]]
Mr. RAHALL. Mr. Speaker, in the Third District of West Virginia, we
have 8,300 citizens who will benefit from the Railroad Retirement and
Survivors' Improvement Act of 2001. This ranks southern West Virginia
seventh in the nation.
My constituents have been calling and writing to me on an ongoing
basis, asking me when this bill will come to the House floor for a
vote. Today I hope to be able to tell them it will pass in the House
and we can send it on to the other body, where we hope it will get
speedy consideration.
I want to thank the Chairman and Ranking Member of the Transportation
Committee, Mr. Young and Mr. Oberstar, for working to bring this bill
to the floor with overwhelming bi-partisan support.
I also want to thank the Chairman and Ranking Member of the Railroad
Subcommittee, Mr. Quinn and Mr. Clement, for bringing this bill through
the Subcommittee process quickly. And I want to thank the Ways and
Means Committee for their cooperation.
My constituents have been anxious to see this bill get enacted into
law because it will double benefits for widows of railroad retirees,
reduce the retirement age from 62 to 60 years of age with 30 years of
service, and allow a person to be vested in the system after five years
of service, rather than 10 years, as currently required.
This bill includes the exact provisions of H.R. 4844, which I helped
to write last year, and which passed the House by an overwhelming vote.
My constituents were disappointed and frustrated last year when the
bill was not enacted into law, especially since it is a product of two
years of negotiation between railroad workers and management of the
railroad industry. With 368 co-sponsors in the House, this bill has
overwhelming bi-partisan support, once again.
With 71 bi-partisan cosposnors in the Senate, I look forward to its
passage on the Senate floor, and I ask President Bush to sign the bill
into law expeditiously.
Once this bill becomes law, it will enable railroad retirees and
widows to enjoy a better quality of life, by receiving the increased
benefits they worked for and deserve. They spent their working lives
paying into their retirement and they deserve to reap good benefits.
Mr. CRANE. Mr. Speaker, I rise, today, to discuss a specific issue
regarding H.R. 1140, the Railroad Retirement and Survivors' Improvement
Act of 2001, specifically, the representation of commuter rail on the
Board of Trustees for the Railroad Retirement Investment Trust that is
created by the bill. My district is served by Metra, the nation's
second largest commuter rail system in the country. Last year, Metra
provided nearly 82 million passenger trips--setting a 32-year ridership
record. Over the years, Metra has received numerous awards and
accolades for its outstanding service, and none of those would have
been possible were it not for the hard work and dedication of its more
than 2,500 employees.
These 2,500 employees of Metra join their counterparts in other
commuter and passenger rail systems around the country, and together
they account for approximately one-quarter of all employees in the rail
industry. This percentage of commuter and passenger rail employees is
only expected to increase in the near future as customer demand for
more commuter rail service grows. I have long-supported Metra and
commuter rail, and I believe their unique interests deserve a voice on
the Board of Trustees created in this legislation. Consequently, it is
my hope that the Board of Trustees will include a representative from
the ranks of commuter rail along with representatives from the other
categories of rail service--passenger and freight. Such representation
would ensure that commuter rail's interests are heard along with the
interests of the other rail industry categories. This representation
would be a substantial acknowledgement of the growing importance of
commuter rail.
Mr. ENGLISH. Mr. Speaker, this legislation represents the culmination
of years of discussions between rail management and a sizable majority
of rail labor.
I am pleased to support the Railroad Retirement and Survivors'
Improvement Act of 2001. This legislation is designed to improve
significantly the financing and benefits of railroad retirement
benefits.
H.R. 1140 improves the performance of the Railroad Retirement Account
(RRA) by enhancing employees benefits, reducing employer and employee
tax rates, and promoting financial growth of the railroad retirement
trust fund. More than 3,400 of my constituents in northwestern
Pennsylvania will benefit from reforming the current railroad
retirement system. In fact, many of those people have called my offices
urging Congress to pass this legislation that represents benefit
improvements for them and their families including:
an expansion of widow(er)s' benefit by guaranteeing no less than the
amount of the annuity that the retiree received;
liberalized early retirement which allows retirement at age 60 with
30 years of service without a benefit reduction; and
expanded vesting which means bringing this requirement consistent
with private industry practices. This entails the reductions of the
ten-year requirement to vest for Tier I and Tier II annuities to five
years.
This is a strong proposal and I urge my colleagues to support it.
Thank you Mr. Speaker. I yield back the balance of my time.
Mr. CUMMINGS. Mr. Speaker, I urge my colleagues to vote in support of
H.R. 1140, the Railroad Retirement and Survivors Improvement Act of
2001.
This legislation serves to modernize the current railroad retirement
system and will benefit hundreds of thousands of retirees, and
surviving widows and dependents. I believe that passage of this bill
would bring us significantly closer to achieving retirement security
for rail workers and retirees. Surviving spouses and dependents suffer
substantial reductions in benefits upon the death of a railroad worker
or retiree. This bill will provide a guaranteed minimum benefit for
survivors. While benefiting survivors, H.R. 1140 will also benefit
railroads by reducing payroll taxes.
This is a good piece of legislation--it's good for workers, it's good
for survivors, and it's good for the railroads. Following two years of
negotiations between railroad management and rail labor we have a bill
whose time has come.
H.R. 1140 is essentially the same legislation that we overwhelmingly
passed last year by a vote of 391 to 25. Let us be just as supportive
this time around.
I strongly urge my colleagues pass H.R. 1140.
Mr. UDALL of New Mexico. Mr. Speaker, I strongly support H.R. 1140,
the Railroad Retirement and Survivors' Improvements Act of 2001. This
critical legislation makes important improvements in the benefit
structure for retired railroad workers, especially for widows and
widowers.
After many railroad bankruptcies during the Depression, the
government assumed responsibility for workers' pensions, financed with
a special payroll tax paid by both rail concerns and their employees.
The system is now $40 billion short of what would be required to pay
benefits to all the workers who have yet to retire and their survivors.
Congress has a responsibility to provide railroad retirees and their
survivors with increased benefits, as well as making necessary changes
to update and modernize the railroad employee benefit system.
To that end, I urge my colleagues to join me in support of H.R. 1140.
More than 670,000 retirees and dependents and 245,000 active rail
employees will benefit from the improvements made by the Railroad
Retirement and Survivors' Improvement Act of 2001. Please support our
nation's railroad workers, rail retirees and spouses by supporting this
critical reform package. Vote yes on H.R. 1140.
Mr. REYES. Mr. Speaker, I rise today in strong support of the
Railroad Retirement and Survivors' Improvement Act of 2001. This bill
has almost 370 cosponsors and I urge my colleagues to vote in favor of
this bill. This bill amends the Railroad Retirement Act of 1974 and
increases benefits to railroad employees and their beneficiaries. In
addition, this important legislation provides for full annuities to
employees and their spouses at age 60 with 30 years of service. This
bill also reduces the vesting requirement for railroad retirement
benefits for employees and survivors from ten to five years of service.
This legislation is fair and must be enacted into law.
El Paso, Texas has a long history and association with the railroad.
In fact, the original Arizona & Southwestern Railroad, built in 1888-
1889 by the Copper Queen Consolidated Mining Co., a subsidiary of
Phelps Dodge Corporation, was built to transport copper from a smelter
in Bisbee, Arizona to a refinery in El Paso, Texas. The railroad and
its workers have always played an integral role in the fabric of our
city.
The Railroad Retirement and Survivors' Improvement Act of 2001
recognizes the work that our rail workers perform in service of this
country and takes into account their extremely physical work. Again,
Mr. Speaker, there are almost 370 cosponsors of this legislation
representing literally millions of people across the country. I urge my
colleagues to vote in favor of this extremely important piece of
legislation.
Mr. PETRI. Mr. Speaker, with many railroad retirees amongst my
constituents, I am pleased to rise in strong support of this
legislation.
Several years ago, as Chairman of the Surface Transportation
Subcommittee, I became aware of the need to increase the retirement
security of our nation's railroad workers. The members of the
Transportation committee worked hard to bring all the stakeholders
together to work out a comprehensive plan to reform the railroad
retirement system.
I am quite pleased that this legislation represents the product of
that work. By diversifying the investment vehicles for retirement
accounts, this legislation improves retirement
[[Page H4966]]
benefits and reduces taxes on railroad employers. This sensible
legislation is supported by both railroad management and most labor
unions.
Last year, this House overwhelmingly passed similar legislation, but
he Senate failed to act on it. Let's not make our railroad retirees and
their families wait any longer for this needed reform. I urge my
colleagues in both chambers to support quick passage and enactment of
this legislation.
Mr. YOUNG of Alaska. Mr. Speaker, I yield back the balance of my
time.
The SPEAKER pro tempore (Mr. Sununu). The question is on the motion
offered by the gentleman from Alaska (Mr. Young) that the House suspend
the rules and pass the bill, H.R. 1140, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of
those present have voted in the affirmative.
Mr. YOUNG of Alaska. 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 384,
nays 33, not voting 16, as follows:
[Roll No. 305]
YEAS--384
Abercrombie
Ackerman
Aderholt
Akin
Allen
Andrews
Armey
Baca
Bachus
Baird
Baker
Baldacci
Baldwin
Barcia
Barr
Barrett
Bartlett
Barton
Bass
Becerra
Bentsen
Bereuter
Berkley
Berman
Berry
Biggert
Bilirakis
Bishop
Blagojevich
Blumenauer
Blunt
Boehlert
Boehner
Bonilla
Bonior
Bono
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brady (TX)
Brown (FL)
Brown (OH)
Brown (SC)
Bryant
Burr
Burton
Buyer
Callahan
Calvert
Camp
Cannon
Cantor
Capito
Capps
Capuano
Cardin
Carson (IN)
Carson (OK)
Castle
Chambliss
Clay
Clayton
Clement
Clyburn
Coble
Collins
Combest
Condit
Conyers
Cooksey
Costello
Coyne
Crane
Crenshaw
Crowley
Cubin
Culberson
Cummings
Cunningham
Davis (CA)
Davis (FL)
Davis (IL)
Davis, Jo Ann
Davis, Tom
Deal
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Diaz-Balart
Dicks
Dingell
Doggett
Dooley
Doolittle
Doyle
Dreier
Duncan
Dunn
Edwards
Ehlers
Ehrlich
Emerson
Engel
English
Eshoo
Etheridge
Evans
Everett
Farr
Fattah
Ferguson
Filner
Fletcher
Foley
Forbes
Ford
Fossella
Frank
Frost
Gallegly
Ganske
Gekas
Gephardt
Gibbons
Gilchrest
Gillmor
Gilman
Gonzalez
Goode
Goodlatte
Gordon
Goss
Graham
Granger
Graves
Green (TX)
Green (WI)
Greenwood
Grucci
Gutierrez
Gutknecht
Hall (OH)
Hall (TX)
Hansen
Harman
Hart
Hastings (WA)
Hayes
Hayworth
Hill
Hilleary
Hilliard
Hinchey
Hinojosa
Hobson
Hoeffel
Holden
Holt
Honda
Hooley
Horn
Hostettler
Houghton
Hoyer
Hulshof
Hunter
Inslee
Isakson
Israel
Issa
Istook
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Jenkins
John
Johnson (CT)
Johnson (IL)
Johnson, E. B.
Kanjorski
Kaptur
Keller
Kelly
Kennedy (MN)
Kennedy (RI)
Kerns
Kildee
Kilpatrick
Kind (WI)
King (NY)
Kingston
Kirk
Kleczka
Knollenberg
Kucinich
LaFalce
LaHood
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Latham
LaTourette
Lee
Levin
Lewis (CA)
Lewis (GA)
Lewis (KY)
Linder
LoBiondo
Lofgren
Lowey
Lucas (KY)
Lucas (OK)
Luther
Maloney (CT)
Maloney (NY)
Manzullo
Mascara
Matheson
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McCrery
McDermott
McGovern
McHugh
McInnis
McIntyre
McKeon
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Mica
Millender-McDonald
Miller, George
Mink
Mollohan
Moore
Moran (KS)
Morella
Murtha
Napolitano
Neal
Nethercutt
Ney
Northup
Norwood
Nussle
Oberstar
Obey
Olver
Ortiz
Osborne
Ose
Otter
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Peterson (PA)
Petri
Phelps
Pickering
Platts
Pombo
Pomeroy
Portman
Price (NC)
Pryce (OH)
Putnam
Quinn
Radanovich
Rahall
Ramstad
Rangel
Regula
Rehberg
Reyes
Reynolds
Riley
Rivers
Rodriguez
Roemer
Rogers (KY)
Rogers (MI)
Ros-Lehtinen
Ross
Rothman
Roukema
Roybal-Allard
Rush
Ryan (WI)
Ryun (KS)
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Saxton
Scarborough
Schakowsky
Schiff
Schrock
Scott
Serrano
Sessions
Shaw
Sherman
Sherwood
Shimkus
Shows
Shuster
Simmons
Simpson
Skeen
Skelton
Slaughter
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder
Solis
Souder
Spratt
Stearns
Strickland
Stump
Stupak
Sweeney
Tanner
Tauscher
Tauzin
Taylor (NC)
Terry
Thompson (CA)
Thompson (MS)
Thornberry
Thune
Thurman
Tiahrt
Tiberi
Tierney
Towns
Traficant
Turner
Udall (CO)
Udall (NM)
Upton
Velazquez
Visclosky
Vitter
Walden
Walsh
Wamp
Waters
Watkins (OK)
Watt (NC)
Watts (OK)
Waxman
Weiner
Weldon (PA)
Weller
Wexler
Whitfield
Wicker
Wilson
Wolf
Woolsey
Wu
Wynn
Young (AK)
Young (FL)
NAYS--33
Ballenger
Chabot
Cox
DeLay
DeMint
Flake
Frelinghuysen
Hefley
Herger
Hoekstra
Johnson, Sam
Jones (NC)
Kolbe
Largent
Miller (FL)
Miller, Gary
Myrick
Paul
Pence
Pitts
Rohrabacher
Royce
Schaffer
Sensenbrenner
Shadegg
Shays
Smith (MI)
Stenholm
Sununu
Tancredo
Taylor (MS)
Thomas
Weldon (FL)
NOT VOTING--16
Cramer
Hastings (FL)
Hutchinson
Hyde
Jones (OH)
Leach
Lipinski
Markey
Moran (VA)
Nadler
Oxley
Peterson (MN)
Spence
Stark
Toomey
Watson (CA)
{time} 1956
Mr. THOMAS and Mr. TAYLOR of Mississippi changed their vote from
``yea'' to ``nay.''
Mr. BLUNT changed his 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:
Ms. WATSON of California. Mr. Speaker, on rollcall No. 305, had I not
been detained at a speaking event, I would have voted ``aye'' on
rollcall No. 305.
____________________