[Congressional Record Volume 147, Number 110 (Wednesday, August 1, 2001)]
[Extensions of Remarks]
[Page E1491]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       RAILROAD RETIREMENT AND SURVIVORS' IMPROVEMENT ACT OF 2001

                                 ______
                                 

                               speech of

                            HON. JIM NUSSLE

                                of iowa

                    in the house of representatives

                         Tuesday, July 31, 2001

  Mr. NUSSLE. Mr. Speaker, I commend the Chairman of the Transportation 
and Infrastructure Committee for his effort to address the problem of 
the railroad retirement system's solvency and to improve the benefits 
of railroad retirees and their surviving spouses. The fundamental 
problem is that there is currently only one railroad worker for every 
three beneficiaries, and that ratio is only getting worse. I agree that 
steps need to be taken to ensure the long term solvency of the railroad 
retirement system.
  However, I must share with my colleagues an important concern 
regarding this bill's potential impact on the federal budget. As 
Chairman of the House Budget Committee, I worked with the Committee 
Chairmen, House Leadership and the Administration to alleviate this 
same concern, which may have been incorrectly perceived as delaying its 
consideration on the floor.
  This bill raises a technical question about how the government should 
treat the transfer of financial assets from the railroad retirement 
account to a new trust fund for the purchase of private securities. 
Under the existing rules for estimating the cost of legislation, the 
investment of railroad retirement funds in private securities is 
considered by the Congressional Budget Office and the Office of 
Management and Budget as an expenditure and would result in $15.6 
billion in new government spending in fiscal year 2002. This is because 
the funds would no longer be held or controlled by the U.S. Treasury.
  There is another view held by many budget analysts that this 
transaction should simply be considered a means of financing the 
federal debt, and not as government spending. In other words, the 
investment of these assets would be considered a transfer of funds from 
one part of the federal government to another. Under this view, the 
investment of these bonds, which are currently in government 
securities, in private securities would have no net effect on the 
budget. I believe that this view is not unreasonable if the benefits of 
any return on investment accrue to a government-administered trust 
fund; that they are not used to finance new federal spending programs; 
and the investment decisions are walled off from political 
considerations or manipulation.
  I am, however, opposed to a provision in the bill that directs OMB 
and CBO to estimate the cost of this bill, not on the basis of what 
they objectively think it actually costs, but what the Congress thinks 
it should cost. I do not believe that Congress should arbitrarily 
substitute its judgment for that of our budget experts.
  As I support the overarching goal of restoring solvency to the 
railroad retirement system, I voted in favor of the Railroad Retirement 
and Survivors' Improvement Act of 2001. Nevertheless, I strongly 
believe that the bill requires additional work if it is to both serve 
the important needs of our country's hard working railroad employees 
and ensure that we maintain a balanced federal budget. Thus, I urge the 
President and the Congress to continue to work toward producing a final 
bill that does not tell OMB and CBO how much it costs, and which 
incorporates provisions that will protect our hard earned budget 
surplus.

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