Congressional Record, Volume 147 Issue 161 (Tuesday, November 27, 2001)

[Congressional Record Volume 147, Number 161 (Tuesday, November 27, 2001)]
[Senate]
[Pages S12036-S12043]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

COMPREHENSIVE RETIREMENT SECURITY AND PENSION REFORM ACT OF 2001--
MOTION TO PROCEED

Mr. DASCHLE. In light of this objection, I then ask unanimous consent
that the Senate proceed to the immediate consideration of Calendar No.
69, H.R. 10.
Mr. GRAMM. I object.
The PRESIDING OFFICER. The objection is heard.

Cloture Motion

Mr. DASCHLE. In light of the objection, I move to proceed to Calendar
No. 69, H.R. 10, and I send a cloture motion to the desk.
The PRESIDING OFFICER. The cloture motion having been presented under
rule XXII, the Chair directs the clerk to read the motion.
The legislative clerk read as follows:

Cloture Motion

We, the undersigned Senators, in accordance with the provisions of
rule XXII of the Standing Rules of the Senate, hereby move to bring to
a close the debate on the motion to proceed to Calendar No. 69, H.R.
10, an act to provide for pension reform and for other purposes:
Paul Wellstone, Richard Durbin, Byron Dorgan, Harry Reid, Jon
Corzine, Hillary Clinton, Blanche Lincoln, Thomas Carper, Patrick
Leahy, Tom Harkin, Benjamin Nelson, Mary Landrieu, Bill Nelson, Ron
Wyden, Charles Schumer, Bob Graham, Barbara Mikulski.
Mr. DASCHLE. I ask unanimous consent the motion be considered as
read.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DASCHLE. I will be brief I know my colleagues may wish to speak
on this issue. This bill passed with an overwhelming 384 votes in the
House. There is very, very strong bipartisan support in the Senate; 74
of our colleagues have cosponsored the bill, including a majority in
both the Democratic and Republican caucuses. All the rail unions are
united behind this bill, and it is supported by the entire railroad
industry. It represents the first time in 25 years that labor,
management and retirees have agreed on a set of changes to the system.
The reason is pretty simple. Most Members recognize we want to give
railroad retirees the same opportunity as other retirees in the private
sector, the opportunity to maximize their investment opportunities for
retirement purposes. This bill would simply give them as many different
options as we already provide to others in the private sector.
As a result of increased returns from these investments, it would
provide enhanced benefits for railroad retirees and reduce retirement
taxes for railroad companies. Among other things, it would expand
benefits for surviving spouses, provide a retiree health insurance plan
and reduce the vesting requirement to five years. These are important
changes that should be made.
Enactment of this bill is long overdue. It is a good bill. It
deserves our support. I am disappointed we are not able to move to it
this afternoon. I will schedule a cloture vote on Thursday. We will do
all we can to ensure that the legislation is considered and passed. It
deserves our support, as it was given support in the House. We will do
all we can to see that happens.
I yield the floor.
The PRESIDING OFFICER (Mr. Carper). The Senator from Texas.
Mr. GRAMM. Mr. President, in the 24 years I have served in Congress,
I have seen many ideas debated; some of them good, some of them bad. I
guess we are all prone, on the spur of the moment, to overstate things,
but I think I can say without any fear of contradiction that of all the
bills I have ever seen on which cloture has been filed, this comes
closest to simply being an overt effort by two established and powerful
special interests to literally pilfer the retirement fund that is
available for railroad retirees, and the backing for that retirement
fund.
Part of our problem in debating a bill such as this is that there is
a natural tendency in a partisan body when, in this case railroads and
railroad unions get together, everybody sees this as an opportunity to
jump on the bandwagon. I don't know that I would state it as any first
law of political behavior, but normally when business and labor get
together on something, it is generally an effort to reach deeply into
the pockets of the American taxpayer. That is what the provision before
us is, in reality.

[[Page S12037]]

We have a retirement trust fund which has built up for railroad
retirement, principally as a result of the action we took when railroad
retirement was going broke and when Social Security was going broke. My
colleagues will remember that we passed a bill changing the retirement
age, setting up a procedure where the retirement age would rise--in the
case of railroad retirement from 60 to 62; in the case of everybody
else's retirement, from 65 to 67. We made other changes. In the
process, back in the mid-1980s, we were able to bring some degree of
temporary solvency to both these programs.
The net result in railroad retirement is that we have built up a
trust fund for railroad retirement of $19.2 billion. I remind my
colleagues and everybody in the country who is listening to this debate
that we talk about Social Security being in deep trouble now because we
started out with 42 workers per retiree, and we are down to 3 workers
per retiree. And we are heading over the next 30 years to 2 workers per
retiree.
Obviously, when you have two workers supporting one retiree, you are
talking about a very heavy burden.
In railroad retirement, we have one worker supporting three retirees.
Every problem we have in Social Security, multiply it by 9, and you
have some index of the problem in railroad retirement. Also, you have
the implicit taxpayer guarantee behind that program.
What has literally happened? What gave rise to the bill that is now
before us in the form of a cloture motion is that railroads, facing
some financial difficulty, got together with the railway unions and
basically said: We have built up a base of financial assets--in this
case Treasury bonds--of $19.2 billion. So what we should do is take $15
billion of that money out of the retirement program and roughly give
half of it to the railroads and give half of it to the retirees. And,
in the process, commit the taxpayer to deal with the problem if
insolvency is faced in the future.
What we have before us is literally an effort by two powerful vested
interests to take $15 billion of the $19.2 billion in the railroad
retirement trust fund and literally divide it up, with roughly half of
it going to the railroads and roughly half going to the employees of
the railroads and the retirees. In fact, the Railroad Retirement Board,
in their data, in analyzing this proposal, has basically concluded
that the net result of this will be that $15 billion will be taken out
of the retirement trust fund over the next 17 years. So what the
proposal before us does is pilfer $15 billion.

Obviously, people have some shame; not much, but they have a little.
So rather than saying we are simply going to steal this $15 billion and
we are going to get 74 Members of the Senate to applaud when we steal
it, they came up with a clever ruse. The clever ruse is to say: Look,
let's take this $15 billion and invest it. Instead of having it in
Government bonds, we will invest it in stocks and bonds. So as a result
of this new investment and the new rate of return that we will get, we
will be able to do some things to help the railroads and to help the
employees.
The problem is, before any investment is ever made, they are lowering
the retirement age. They are cutting taxes on the employers. They are
expanding benefits for employees, and when you add it all up, even with
a higher rate of return that they hope to gain over the next 25 years,
the trust fund will be $28.7 billion lower under this new proposal than
it would be under current law. The $15 billion in question would be
completely pilfered over the next 17 years. These are not my numbers.
These are the numbers of the Railroad Retirement Board.
What does the bill do? First of all, it immediately cuts taxes on
railroads that they are paying in to support these retirement programs.
It cuts their tax rate from 16.1 percent to 14.75 percent, and it does
that next year. Then it cuts it again in calendar year 2003, to 14.2
percent. So the net result is that in very short order, $4 billion from
the retirement trust fund is transferred from the trust fund to the
railroads.
I remind my colleagues that beginning this year, based on the Social
Security solvency bill we passed in the early 1980s, the retirement age
for American workers is starting to go up. We are moving from 65 to 67,
the age that you have to be to draw full Social Security benefits. We
are in the process of the largest increase in the retirement age in
American history beginning this year. But what do you think the bill
before us does for people who work for railroads?
At the very instant that we are raising the retirement age for
everybody else from 65 to 67, remarkably, almost unbelievably, we lower
the retirement age for people who work for railroads from 62 to 60.
Survivors of railway workers already get substantially better
benefits than survivors from Social Security, but we raise those
benefits. We change the vesting requirements. The net result is that
over 17 years, roughly $7.5 billion is taken out of the railroad
retirement trust fund and is given to the railroads. Roughly $7.5
billion is taken out of railroad retirement and given to beneficiaries
by lowering the retirement age, by raising survivor benefits, by
changing the vesting requirements--in essence, increasing benefits. $15
billion is pilfered over a 17-year period under this bill.

You might say, well, this is sort of a victimless crime because the
railroads are for it, and the railroad retirees are for it. It is their
$19.2 billion. They are pilfering $15 billion, and it was their money
to begin with. So where is the victim? In fact, 73 Members of the
Senate signed on to the bill. It is obvious that has been the question.
Where is the victim?
The victim, as is usually the case when powerful vested interests get
together, is the taxpayer. The taxpayer stands in line to cover
shortfalls in the future.
It is true that in the future, up to a point, you can raise the tax
on the railroads. There is no provision for requiring employees to give
back these benefits, or to pay higher taxes.
Does anyone here doubt that when $15 billion is pilfered over the
next 17 years, when the day of judgment comes and there is no money to
pay railroad retirement benefits, especially if the very optimistic
projections that are being made don't turn out to be correct in terms
of the retirement fund, who is going to be paying the money that has
been pilfered? The taxpayers.
I know there are others who want to speak. Let me just say that it is
not every day that you have a proposal to pilfer $15 billion from a
retirement trust fund and have 73 Members of the Senate cosponsor it.
It is not every day that you get railroads and railway unions together
in support of something. But, look, when each one is getting $7.5
billion, that is a lot of incentive.
This is about as bad a public policy as you could possibly propose.
How in the world can anybody justify that at the very moment when
everybody else's retirement age is rising to 67, we are going to lower
the retirement age for those working for the railroad from 62 to 60?
How could anybody stand up in any city or town in America and justify
raising the retirement age to make Social Security solvent when its
trust fund is many times bigger per retiree and bigger in billions of
dollars than the railroad retirement trust fund? How can anybody
justify raising the retirement age on the great mass of workers in
America and lowering it for a privileged few? How can anybody justify,
when you have a retirement program that has one worker for three
retirees, adding benefits and cutting taxes when everybody knows that
the retirement program is potentially insolvent?
That is the problem before us. If the bill is in fact brought up, if
cloture is obtained, then I think there have to be some changes. I do
not per se object to investing the money. I think there have to be
protections for the railroad worker to be sure the Government doesn't
direct the investments to benefit some interests other than the worker.
There needs to be some firewall between the investment committee and
the Government.
Then we need to look at the proceeds of these investments and ask
ourselves: Are they needed to pay benefits in the future? In that case,
they should be retained. If they are not needed, giving some of it back
to the railroads and giving some of it back to the workers, I think,
you could justify. But how do you justify giving all of their money
back until any money is earned?
Finally, how in the world can we justify lowering the retirement age
for railroad retirement workers at the

[[Page S12038]]

very moment that we are raising it for everybody else?
This is a very bad bill, in my opinion. It is special interest at its
worst. I know there are relatively few people who are against it. But
people who are against it feel very strongly about it. So we intend to
resist.
I hope someone out in the country will take a look at these numbers I
am talking about. You have to have some pause when the Railroad
Retirement Board, which oversees the retirement fund, clearly says that
in 17 years, if this bill is passed, there will be $15 billion less in
the trust fund than if the bill is not passed, and $7.5 billion has
gone to the railroads and $7.5 billion has gone to railroad workers.
Yet the liability and the solemn commitment of the Federal Government
to these retirees has not changed.
So if they have gotten $15 billion richer, and the commitment has not
changed, who is $15 billion poorer? The same person is always poorer
when special interests get together to benefit themselves; that is, the
American taxpayer.
That is why I am opposed to this bill.
I yield the floor.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. NICKLES. Mr. President, I compliment our colleague from Texas on
his statement, and I will add a few comments.
I earlier told the majority leader that there would be strong
objection to moving forward with this bill. I am disappointed that he
did. After the tragedy of September 11, many of us thought it would be
very much in our Nation's best interests for us to be working together
to try to pass legislation that is in our national interest. We passed
emergency legislation. We passed antiterrorism legislation. We passed
spending bills, a lot of which, in some cases, we thought were maybe
overly generous. Yet we wanted to do that in a very bipartisan way.
Unfortunately, the majority leader is now moving forward with some
legislation which, I think we have informed him, leaves a lot to be
desired and which doesn't fit into any national criteria as far as a
national emergency. It is purely and simply a special interest bill
designed and written by special interests.
This bill wasn't written by the Finance Committee. It deals with
taxes. I am on the Finance Committee. This bill had no input by the
Finance Committee. Not one member of the Finance Committee has had any
input in this bill. This is a bill written by and for special
interests. They did a pretty good job. They benefit themselves by at
least $15 billion. They benefit themselves by increasing benefits,
cutting taxes, and keeping Uncle Sam as the guarantor of the benefit.
Senator Daschle said something about wanting to provide the railroad
companies and employees the same opportunity as every other private
pension plan so they can invest their funds in the marketplace and
enjoy good rates of return. I welcome that but take away the Federal
guarantee. We can do that. I don't care if they make early retirement
at age 50. I will be happy to let the employees and the railroads work
out whatever benefit package they so desire as long as they are liable.

What they did in this case, as Senator Gramm eloquently pointed out,
greatly increases their benefits. They cut the payroll taxes to pay for
those benefits, and they say Uncle Sam is still liable. That is what I
disagree with. They increase benefits far and above what almost any
other pension plan in America has.
Name another private pension plan that has a 100-percent survivor
benefit. Social Security doesn't do that. For Social Security, if you
are a survivor, you get maybe a 50-percent benefit. Not in this
package. For Social Security, you don't get full retirement benefits at
age 60. You get full retirement at age 65. Senator Gramm mentioned that
it is going to 67. This bill says you get full benefits at age 60.
Again, maybe that is fine, if the railroad companies and employees
want to pay for that. But they have asked us to pay for it. We are
liable. Some say: Wait a minute. They have a scheme in here that says
even though their payroll taxes go down and their benefits go up, we
think maybe it will all work out. But if it doesn't, Uncle Sam is still
liable. We still have a law on the books saying these benefits are
going to be paid.
Why don't we privatize this system and allow the employees and the
railroad companies to come up with whatever retirement system they
want? God bless them. It would be a generous system. I love the
railroad companies. I love the railroad employees. Let them work out
whatever they mutually desire to get us off the hook.
Why should some poor company in Delaware or Oklahoma or Texas have to
guarantee benefits that greatly exceed any benefits they provide and
they are liable for it as taxpayers? Then somebody said: Wait a minute.
Isn't this $15 billion that we are transferring to them their money?
No, not really. They may claim it is in a trust fund. I have looked it
up.
For the life of the railroad retirement system, the total amount of
money paid out in benefits exceeds all the payroll tax contributions by
employees and companies by about $90 billion. That means Uncle Sam has
been putting in and subsidizing a lot of money for the railroad
retirement system since its inception. Basically, it is a pay-as-you-go
system. It has problems because the number of active workers in
relation to retirees has declined. So it has a significant problem, as
any payroll system, any pension system would have if they were stupid
enough to go on a pay-go system.

Private plans do not go pay-go. Private systems have actuaries. They
want to have funds, real funds, that are really invested. You could say
let's go private. We can do that. The administration has offered to do
that. There are many of us who are willing to work with the railroads
and the employees of the railroads to come up with a truly private
pension system but not a Government guarantee that says: Hey, let's
increase benefits, cut payroll taxes, make great big guarantees.
Government, you guarantee it all. And then, oh, incidently, if there is
a problem a few years down the road, Uncle Sam, that is your problem
because it is a benefit stipulated by law of the books. As to this
proposal, even the railroad's own actuaries think it would be a
problem.
Looking at the payroll taxes, they reduce payroll taxes significantly
in the immediate few years, and then they expect that by the years 2020
and 2021 the payroll taxes will go up about 69 percent. In other words,
under their own scheme, they say: Oh, we are going to have lots of
problems. Well, that is somebody else's problem.
Wait a minute. Whose problem is it? Right now it would be the Federal
taxpayers' problem because the Federal taxpayers would still be liable.
So I strongly object to this bill and will work very aggressively to
see that this bill does not become law. I will be happy to work with
people. The unanimous consent request that was offered said let's move
this bill with no amendments. Wait a minute. If we are going to move
this bill, we will have lots of amendments. Every Senator is entitled
to offer amendments. I may want to have an amendment that says, let's
eliminate the Government guarantee. Let's make it purely private. Why
have tier 1 benefits that are supposedly the equivalent to Social
Security--that is what everybody says in railroad retirement--but they
offer benefits much greater than Social Security.
In Social Security, the normal retirement age is 65. The normal
retirement age in the railroad system right now is 62; and they take it
to 60. But yet we tell all of our constituents, your normal retirement
age is 65--and now it is going to 67--but just the opposite in this
bill. All the while we do it by cutting payroll taxes. And there are a
lot of other benefit enhancements. A survivor benefit of 100 percent?
There may be some, but I have not found any private pension plans that
will allow survivor benefits of 100 percent. But I am all for it as
long as they pay for it. Great. If a private company and their
employees have a benefit system that says, here are your benefits for
your retirement system--so much on an annuity, so much per month, or
whatever--if you pass away, your survivor gets the same amount, fine,
as long as they pay for it.
I think what is wrong is if they start asking us to pay for it, if
they ask us to guarantee it. If they want us to make that the law of
the land, where the Federal Government is ultimately

[[Page S12039]]

liable for it, then that is wrong. That is what is in the bill before
us.
So I am just amazed. We have asked for hearings on the bill. This
bill has never had a hearing in the Senate, and a good reason is that
people would be embarrassed. People would be embarrassed when you
started asking interesting questions, difficult questions to the CEOs.
They do not want to appear before the Finance Committee. The actuaries
do not want to appear before the Finance Committee answering why we
should guarantee benefits that are far in excess of everybody else's
private pension system.

Why don't we truly privatize it? Then they can invest 100 percent of
their money in any investment they so desire. I would love for that to
happen. Let them invest. I hope they make great returns. But to give
$15 billion--and they pretend that is their money when, in reality, for
every year that the railroad retirement system has been in existence,
more money has gone out to beneficiaries than has come in in payroll
taxes. That means Uncle Sam has been paying a lot, subsidized the
system a lot, I believe to the tune of about $90 billion since the
1930s.
So to say, oh, we want that $15 billion, that is really ours, so we
can go out and invest it just like everybody else does, kind of leaves
a little bit short the idea that Uncle Sam has been subsidizing this
system for a long time. We still underwrite it and guarantee it. It is
still part of the law of the land.
Let's change that. Let's allow the railroad retirees and the active
employees and the railroads to have whatever pension system they want,
desire, and can afford, but let's not pass a law that says we will
increase your benefits, cut your taxes, and thank you very much; Uncle
Sam will guarantee the outcome now and forevermore. I think that is a
serious mistake.
We have asked other countries, we have encouraged other countries, to
move towards a market system, to move towards the private sector, to
move to entrepreneurship, and yet, with the railroad companies, we
maintain this absurd idea that Government knows best, Government should
control it, Government should own it, and Government should dictate it.
I think we should get out of that. I want to turn them loose. I want
the employers and employees to work out whatever is mutually
advantageous and affordable and let them pay for it. Those are big
companies. Those are big unions. Those are people with good jobs. Let's
make sure they have their own good pension system, and let them pay for
it and not be asking Uncle Sam to be guaranteeing it now and
forevermore.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Republican leader.
Mr. LOTT. Mr. President, I thank Senator Gramm and Senator Nickles
for their comments and for their knowledge of the legislation. They are
on the Finance Commitee, which has jurisdiction in this area. They know
the details of what is in the bill. A lot of us have not had the time
or are not on the committee of jurisdiction to study it as closely as
they have.
It is interesting to note that this legislation has been around for
at least a year. The Finance Committee could have had hearings and
could have marked it up.
I think some of the major problems that have been pointed out by the
two Senators who just spoke could have been worked out through an
amendment process in the Finance Committee.
But lo and behold, to the surprise of a lot of people, we are being
told now that the Democrats want to set aside the stimulus package and
move over to railroad retirement. Where is the emergency? We are at war
and we are in a recession. We ought to be working on the Defense
appropriations bill and an economic stimulus package. And yet we are
going to delay one until--it appears, I guess, the Defense
appropriations bill will not come up before next week. If we move over
to this railroad retirement legislation, which many Senators support in
concept, it will put the stimulus package on a sidetrack, on the back
burner.
I think the timing is just not right. We have been through 2\1/2\
months of difficult times. We have dealt with it in a bipartisan,
nonpartisan way. It has not been easy, but we found a way to come
together, and yet now, when we get to the point of discussing, How do
we provide an instant, positive impact on the economy, how do we pass a
stimulative package that will have economic growth effects and job
creation, we cannot come together.
The House acted in a way in which, obviously, many in the Senate do
not agree. But the Finance Committee, instead of doing as we have
always done in the past, coming together in a bill that has bipartisan
votes, overwhelmingly, as we did earlier this year in the tax package,
had a totally partisan vote, right down partisan lines, on a package
that I guess is around $60 to $65 billion and is $51 billion in
expenditures as it is offered.
So the Finance Committee reported out a partisan bill and then added
$15 billion for so-called homeland security that has not been requested
by the President or his administration. There have not been hearings on
it. Just voila, it was added to this package. And to make matters
worse, now we are being told we should get off this and go to a bill
that is clearly not going to help us in the war effort or in
stimulating the economy--a railroad retirement bill. Then, after that,
we are going to go to an agriculture bill. Supposedly, the Democratic
leader will try to do that. And there are going to be objections to
that. There are all kinds of problems in that bill. It will take quite
some time. And then, and only then, would we go to the Department of
Defense appropriations bill? And what happened to the stimulus package?
To further the effort to see if we can't come together, I have just
been talking about some compromises we could work out. Everybody agrees
we need additional unemployment compensation. Nobody wants to block
that. The President has recommended and we are prepared to go with 13
weeks of unemployment compensation on top of the 26 weeks that is
already in the law. We recognize that for people who have lost their
jobs who had insurance coverage but who may have lost their insurance
coverage, we have to find a way for them to get that coverage. We are
prepared to do that.
We are prepared to add to the national emergency grant fund $5
billion for the States to use to provide health insurance coverage or
other related assistance. If in fact we have a State where there has
not been a significant increase in unemployment, they could use it for
other health-related issues. The Governors and the States would like
that very much.
One of the ways to make sure we have an immediate impact on the
economy--next month, not in the next 6 months or a year--is to take a
serious look at a proposal by Senator Domenici and Senator Bond and
others--an approach that has even been talked about favorably by the
ranking Democrat in the House, Congressman Rangel--to have a payroll
tax holiday. Say for the next month employees and employers would not
have to pay the payroll tax. Substitute that for the rebate checks and
for the alternative minimum tax retroactive features. It is about an
equal amount of money. It would have an immediate impact on money that
workers would have in their pockets and that employers could benefit
from, the 6.2 percent they have to pay. It would have an effect next
month at Christmastime.
If we are really serious, we can come up with alternatives that will
stimulate the economy. I challenge Senator Daschle and our colleagues
on both sides of the aisle, let's look for some attractive
alternatives. I prefer we have a 30-percent bonus for depreciation, but
we could compromise at 20 percent if it is there for multiple years--3
years.
There is the art of getting this done. After 2\1/2\ months of finding
a way to make it happen in case after case, counterterrorism,
assistance for cleanup and disaster assistance, with aviation security,
while they may not have been perfect at all, we accomplished them and
the American people had a very positive reaction.
Now, right before Christmas, we are going to start drifting toward
not being able to come to a conclusion on an economic growth package.
This would be a mistake.

[[Page S12040]]

While I clearly have a long history of being supportive of the
railroad industry, the workers in the railroad industry--I support
trying to have a viable railroad industry in this country; I have been
supportive of Amtrak even to the criticism of some of my colleagues on
this side of the aisle--I think if we start moving into this area in
the way that is being suggested, if we try to bring this bill up and
basically just push the stimulus off the table, that will be a mistake.
I oppose that.
I would be willing to work in the Finance Committee to come up with a
bill that would get the job done properly, but not this bill and not in
this way, and not at the expense of the stimulus package and completing
our work in the appropriations area, particularly the Department of
Defense. We are at war. We have an economic slowdown bordering at least
on a recession. That is what we should focus on. Help our troops in the
field and help our workers in their jobs.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Mr. President, I rise to compliment the Republican
leader. I am speaking in terms of what I see him doing today. The
Republican leader has concluded that for some reason the Democratic
leader wants to take the economic stimulus package away from the
Senate.
Instead of continuing with it, if it is as important as everyone
says, we have a whole new piece of legislation requiring very lengthy
debate when, as a matter of fact, whether you are for it or against it,
it can be done in due course. It need not be done today or the day
after tomorrow or next week. As a matter of fact, it could be done as
the first or second item of business next year, and it would make no
difference whatsoever.
Instead, what will make a difference, in addition to taking care of
our troops--and our military in every respect will soon get an
appropriations bill; if nothing else happens, that will happen; that
issue is going to be taken care of, that big commitment--the second and
equally as important commitment is to stimulate the American economy so
that the working men and women who are unemployed can look out there at
America and say: They are hiring people back. We were just reading the
new statistics and instead of 800,000 jobs lost, we have an increased
250,000 or 300,000. We are on the way up, so that everyone who
participates in this economy, from the smallest equity owner and the
smallest employee in the American free enterprise system to a highly
paid high-tech employee--so that they can all receive encouragement
from their Government to spend, to buy things they might need.
A very simple way to do it, along with the wonderful ideas that have
been worked out heretofore by Senators on both sides of the aisle--I
will speak for the way you get money into the hands and pockets of
American working men and women and their employers. That is called the
payroll tax holiday. Perhaps it would be fairer to call that the
Domenici piece and say that is what my amendment was trying to do.
The other items our distinguished minority leader brought forward are
part of the various stimulus packages that have been discussed. Some
are in the centrist package wherein one of the leaders was Olympia
Snowe coming up with some of these great ideas. They are hers. They are
centrist Senators. Some of them--not too many--are in the Democratic
bill that is pending that would be replaced. But there are not very
many that are comparable; there are a few.
It is absolutely imperative that we ask honestly and forthrightly of
those who know the American economy what will do the most good to put
America back to work.
The best social program in the world remains even today a good, solid
job. There is no social welfare program in America that comes anywhere
close to that. People who get good jobs, steady jobs, steady paychecks,
for the most part have health insurance and the like.
So what is the best thing for American working men and women with
children and families and who want to buy a car so they can start going
to the mountains or taking their children out camping, whatever it may
be? For them to have confidence in the economy and have money to spend;
you can't beat those two in America. If you can find confidence in the
American people and money in their pockets, you have a vibrant American
economy.
You can't have everybody employed because that does not work in our
system. But we were down to 3.9 percent unemployment for a significant
period of time. Everybody was very thrilled.
Yesterday we received an economic evaluation from a very powerful
group that said this economic downturn has been of long duration. I
myself have spoken in the Chamber monthly or every 6 weeks or so; I
said the economy started coming down 13 months ago. That is now
verified by experts. It started then.
I also kept saying, don't argue about the word ``recession'' or is it
there yet; it is not good. And if it isn't there yet, it will be there
in a couple months. Why don't we get on with doing something to help
the economy.
Yesterday that same very powerful economic group said we have been in
a recession since March. We don't have to argue anymore; we are in a
recession. Whether we stay there for a few more months or 6 months or a
year is very important. The sooner we can start coming out of it and
get closer to neutral, where we are not growing and not going up or
down, then we will break out of that and start down the positive track
of recovery, which means more jobs, more opportunity, more confidence,
and more money in the pockets of our people.
Our distinguished Republican leader said to a group of us, we ought
to talk about the fact that we don't need to go on to another bill; we
ought to stay hitched to the economic recovery plan, the stimulus
package, and get it done.
I will send to the desk the principal components of the proposal he
and I and others have put forth today. It is called ``Amendment to
House Stimulus Bill.'' It is there for people to read and puruse.
I ask unanimous consent that it be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Amendment to House Stimulus Bill, November 26, 2001

A. Stimulus proposal for rewarding work:
1. Marginal Rate Cuts: Accelerate into 2002 reduction of
the 28% tax bracket to 25%.
B. Stimulus for encouraging investment:
1. Bonus Expensing: Enhance expensing of capital
expenditure with 20% bonus depreciation (3-year sunset).
2. AMT Repeal: Repeal corporate alternative minimum tax on
a prospective basis.
C. Relief for low and middle-income Americans:
1. Payroll Tax Holiday: Offer workers one-month (December)
holiday from Federal payroll taxes while holding federal
trust funds harmless.
D. Expand the safety net for working Americans:
1. Extended Unemployment Benefits. Provide additional 13
weeks of unemployment benefits to worker who exhaust their
standard benefits after September 11.
2. Additional National Emergency Grants. Provide governors
with additional $5 billion in Emergency Block Grants for
health insurance coverage and other related assistance.
Total first year stimulus and assistance: $100 Billion.

Mr. DOMENICI. Mr. President, this would be a $100 billion stimulus in
the first year, and if we include the holiday for 1 month, when the
American people will begin to see hope, when the paychecks go up, even
if it is only for 1 month, and when their employers get to keep 6.2
percent in their treasury to use for other things, what could be
better?
I urge our Democratic friends to take a look at it. This Senator has
talked to many Democrats prior to today about this proposal, maybe as
many as 15. As a general matter, most of them thought it was an
exciting idea. I will not go beyond that because far be it appropriate
for me to characterize it beyond saying they certainly gave me
encouragement.
I do not believe people are free today to go to meetings and speak
their piece because they are all tied up in entanglements of
commitments. They have commitments to the old package, to the new
package, to the centrist package, to the Democratic package that came
out of committee. Unless you can get on board the group that supports
one of those, you cannot get a package for America.
The lines established for those various groupings in the Senate
should

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disappear, and those who lead them should go to a meeting, be it with
the Democratic leader or both leaders, and say: Let's ask the Finance
Committee to put forth a bipartisan effort for the next few days. Here
are all the issues. They are all boiled down to five or six issues. The
rest is detail.
I believe if they went there with the right spirit--that we really
need to do this, that it is far more important than anything else other
than to make sure we appropriate the money needed for our military
around the world and at home--we will not let the American people down.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. NELSON of Nebraska. Mr. President, I ask unanimous consent that
the order for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Johnson). Without objection, it is so
ordered.
Mr. NELSON of Nebraska. Mr. President, I rise in strong support of
this legislation, a bill to substantially revise and modernize the
railroad retirement system, a system that was established in the dark
days of the Great Depression. I also commend our leadership for
bringing this important matter before the Senate in the closing days of
this session. The fact that this body is willing to take the time to
consider this measure during these critical days highlights the
importance of this issue to both rail labor and management. Swift
passage of the bill is essential to the continued vitality of our rail
industry, and I urge the Senate to act on it without delay.
Two of the giants of our Nation's rail industry have roots in my
State of Nebraska. The headquarters of the Union Pacific Railroad is
located in Omaha. And the Burlington Northern maintains a major
presence in the State, with over 8,500 employees in Nebraska alone. One
stretch of Burlington's line located in Nebraska is the busiest rail
segment in the world; coal unit trains traverse Nebraska constantly,
providing energy to meet the Nation's needs.
In this case, management and labor of the Union Pacific Railroad and
the Burlington Northern have worked cooperatively over a period of
several years to develop this legislation and to build wide support for
it here in Congress. The House has acted on it overwhelmingly, in three
separate votes, and it is now time for the Senate to move it forward.
It enjoys strong bipartisan support in both Chambers, and we simply
cannot afford to delay the bill when we all know it will pass easily,
especially when we have so much other important work to do, and so
little time in which to do it. It is time for the Senate to act.
This bill introduces tried and true investment techniques into the
railroad retirement system. It represents a way to make better use of
the resources built up by the contributions of rail employees and
employers to the system. Approximately $17 billion in retirement funds
will, for the first time, be invested as normal, modern pension plans
are, diversified among different types of investments, instead of
locked into safe but low-yield Federal bonds. This simple change will
permit the opportunity for better benefits and lower contributions for
our rail workers, and give the industry the opportunity to take more
responsibility for its own pension system.
For the first time, the law will now automatically regulate the
amount of contributions going into the system in response to the
actuary's estimate of the amount of reserves in the system. Under
present law, if reserves falter, the Congress must step in and create
new legislation to either reduce benefits or raise taxes, or both--a
cumbersome mechanism to accomplish an unpopular task. This bill
provides a much more streamlined means of dealing with such a
contingency, without Government involvement. Industry and labor both
support this automatic provision, because they know that the investment
markets, in the long run, will be more productive for the system than a
steady diet of only Federal bonds.
One of the most compelling arguments for this legislation is that it
will improve the lot of widows and widowers of retired railroad
employees. Under current law, they watch their monthly compensation
decline by two-thirds once their spouse passes away. This is not only
antiquated, it is an unbearable burden on some of our elderly. It is a
throwback to a time when the system was in difficult straits and could
not afford more. Today the system can afford to do better than this, if
railroad retirement reform is enacted. The bill will provide the
surviving spouse 100 percent of what the deceased former rail employee
was entitled to in his or her own right. There are 50,000 retirees
affected in one way or another by this one provision.
There is one other important element of the bill. The industry will
now be permitted to reduce the very heavy payroll tax burden it now
carries to provide benefits under the system through a 3-percentage-
point drop in contributions, phased in over three years. This aspect of
the bill will remove a real disincentive to hire new employees or to
replace those who retire. It will free up capital for other worthwhile
expenditures. And as we continue to strive to reach agreement on an
economic stimulus package, we all can recognize that this benefit is
especially important during this time of economic downturn.
I do not intend to go into all the improvements and the modernization
that has been written into this bill at this time. There will be
adequate time for a full explanation of the bill as debate progresses.
But I want to once again stress the need for the Senate to move this
measure forward. The Nation's railroad retirees and their families need
us to act. The Nation's rail industry can help our economic recovery if
we act. And the Nation's citizens expect us to act.
I appreciate the opportunity to make these important points today,
and I urge the Senate to act as quickly as possible.
The PRESIDING OFFICER. The Senator from Delaware.
Mr. CARPER. Mr. President, I ask unanimous consent to address the
Senate for 10 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CARPER. Mr. President, I had the privilege of presiding over the
Senate during the last hour and listening to debate on two measures,
including the measure the Senator from Nebraska has raised, the change
in the railroad retirement system. We had considerable discussion on
the economic stimulus package which has been debated in the Senate and
passed in the House. I will take a few minutes and share a word about
each of these.
The Senator from Nebraska was a Governor and a former insurance
commissioner of his State. In my previous life, I served as Governor of
my State and also State treasurer. During that period of time we
established the first cash management system for the State of Delaware.
We had good, sound, progressive policymaking with respect to pension
investments. We took a pension system that was not funded, a pay-as-
you-go system, fully amortized it and strengthened the State's
financial condition considerably. Basically, the State had money in
accounts that did not earn much at all, the equivalent in some cases of
Treasury rates, and we ended up developing a policy that enabled us to
invest those moneys at market rates in things other than U.S. Treasurys
or CDs of the bank.
Part of what is proposed in this railroad retirement plan is: Take
the money that has been set aside, paid into by the railroads
themselves and by the railroad employees; that can only be invested in
U.S. Treasury obligations. Let's give them the opportunity--not
imprudently, but under the kinds of safeguards we have in Delaware,
Nebraska, and South Dakota, as well, for State pension moneys--to
invest those moneys on behalf of railroad employees, pensioners, and
their survivors, in something other than U.S. Treasury obligations.
If you look at the performance of mutual funds, the stock market, the
corporate bond market, over time they will outperform Treasurys. Under
that plan, given a prudent investment policy, we will be able to see a
higher rate of return from those investments than currently realized in
the investments under the current railroad retirement plan.
We could have a good debate, and we ought to, about some other
aspects of

[[Page S12042]]

this bill--which I cosponsored and I very much want to see come to the
floor for debate and discussion. Some of our colleagues have raised
concerns about reducing the retirement age for those under the railroad
retirement plan from 62 to 60.
We could have a legitimate discussion over whether that reduction
should be a graduated reduction to see if the money in the pension fund
holds up. We could have a good discussion and debate about that. We
ought to. We could have a good discussion about the issue of whether or
not we ought to reduce all at once the payroll tax paid by the
employers by the railroads. Maybe that is a reduction that should be
phased in over a longer period of time. Again, this is a perfect issue
to debate and seek middle ground. We should have a debate over whether
or not the survivor benefits should go immediately to 100 percent of
the benefit of the deceased railroad retiree or whether that, again,
should be phased up over time.
Railroad retirement is not Social Security. It is not the same as
Social Security. I don't believe it was ever intended to be. Railroad
retirement predates Social Security and has been around longer than
Social Security. There are two aspects of railroad retirement, one
called tier 1, which is comparable to Social Security.
But another aspect is called tier 2, which provides, if you will,
more of a private sector dimension. What we have in railroad retirement
is a hybrid of Social Security and a private pension plan.
People say we cannot make some of the changes that are envisioned
here with the railroad pension plan because they are not consistent
with what we are doing in Social Security. A lot of private retirement
plans let people retire at age 60. A lot of private retirement plans
allow employees to retire with benefits after 30 years of service. A
lot of them provide that benefit at age 60 with 30 years of service,
and that is what is being proposed here.
We can, I guess, debate for some time whether or not this is the
right time to bring this issue up. It is not a partisan issue. It has
been suggested it is partisan and divisive. It is not a partisan issue.
I believe 380 Members of the House voted for this bill earlier this
year. There are 74 cosponsors to the measure in the Senate. The
cosponsors come from both sides of the aisle. This is not a partisan
issue. This is a bipartisan issue which seems to enjoy pretty good
support in both Houses of the Congress, and also has the
attractiveness, at least to me, that both rail labor and the railroads
themselves support this bill.
Enough on this measure. We are going to have a vote on cloture. We
will have an opportunity to vote whether or not to move to the bill. I
hope we do, and I hope when we do we will have an opportunity to
actually discuss and debate some of the issues that our Republican
friends have raised earlier this afternoon. I think we can find some
middle ground that augurs well for those who are working in the
railroad industry, those who are retired from the railroad industry and
for their survivors, and one that is not unfair to the taxpayers of
this country.
Let me mention one other thing before I yield my time and that is on
the economic stimulus package. This is a debate and an issue which
cries out for a reasonable compromise. Several of the elements of a
reasonable compromise have been suggested today. I want to go back to
them, if I may.
Senator Domenici, along with Senator Corzine and others, has come
forward with I think a perfectly reasonable proposal on a payroll tax
holiday whereby for 1 month neither employers nor employees would pay
the Social Security payroll tax. The employees would keep that money in
their paychecks. It would help people who are poor and also people who
are not poor, but it would disproportionately help people at the lower
end of the income spectrum. In addition, the employers would not pay
their share of the payroll tax. It would help those businesses that are
small and those that are not so small. I think disproportionately it
might help those that are small more than those that are large. That
idea, the idea of a payroll tax holiday for 1 month, if it were offered
in lieu of the proposal to provide additional payroll tax rebate
checks, in lieu of an expedited reduction in the 27 percent rate, and
in lieu of an expedited expansion of the 10-percent bracket--that idea
could be a very good compromise to bring Republicans and Democrats
together.
The payroll tax holiday has the added virtue, frankly, of helping
States. Like other employers, States pay payroll taxes for their State
employees. If they had a 1-month holiday, it would help most States. My
State is not hurting as badly as others. The unemployment rate is well
below average, but we are hurting too, and my guess is so is South
Dakota and others. A payroll tax holiday would also provide money in
the pockets of people who are very likely to spend it, and we need some
of that stimulus.

Another of the elements I want to mention today to provide a bridge
between Democrats and Republicans on economic stimulus deals with what
is called bonus depreciation, accelerated depreciation for capital
investments that are made over the next 1, 2, or 3 years. Several
principles were outlined for us in an agreement adopted earlier this
fall by Democratic and Republican leaders of the House and Senate
Budget Committee. Among those principles that were agreed to are these:
the economic stimulus package should have an immediate impact; it
should not have a long-term adverse consequence for a balanced budget;
and it should be temporary in nature. The leaders of the budget
committees agreed that all measures in the stimulus package should
sunset in one year, to the extent practicable. If we take those three
criteria and look at this notion of accelerated depreciation in order
to stimulate capital investment, I think a compromise lies between what
the House has agreed to and what the Senate is contemplating.
If you look at the history of the last 12 months or so in this
country as our economy has wound down, one of the things that has
happened is we have seen a drying up of capital investment. There is a
proposal offered by our Republican friends that says let's provide a
30-percent writeoff, 30-percent bonus depreciation for investments made
over a 3-year period for companies that make those kinds of
investments.
Senator Baucus, in his proposal, said we should provide a 10-percent
depreciation bonus over a 12-month period of time. There is plenty of
room to compromise between 10 percent and 30 percent, and I suggest 20
percent might be that compromise for accelerated depreciation, bonus
depreciation if you would. As for the time period, we should stay true
to the 1-year figure, as Senator Baucus has proposed and as the budget
committee leadership suggested.
The third measure I have to offer as a compromise between Democrats
and Republicans deals with a proposal I heard from Senator Collins of
Maine and Senator Lieberman of Connecticut that we adopted in the
Congress before I got here, in 1993. It is a proposal to encourage
investment in small cap companies, those whose capitalization is $50
million or less. Those who hold investments in these companies--
securities issued by those companies, issued for 5 years--the 1993 law
promised a reduction by one-half in the capital gains tax. As it turns
out, because of the alternative minimum tax that is in place, the
practical effect of the incentive offered by the 1993 law is for the
most part moot. There is just not much of an incentive anymore,
especially when the capital gains rate is taken down to 20 percent.
I offer this. Look at a proposal offered by Senator Collins,
cosponsored by Senator Lieberman, to make the 1993 law work. That
proposal says let's make the 1993 law work by taking away the effect of
the alternative minimum tax for those who make investments in
accordance with the 1993 law.
Those are three potential compromises which I think might bring us a
little closer together as we try to work out some compromises. I hope
we can get to work on this Railroad Retirement Act and hammer something
out on that as well.
I yield my time.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Mr. President, I appreciate the remarks of the Senator from
Delaware. I agree it is something on which we need to move forward.

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