[Congressional Record Volume 152, Number 99 (Tuesday, July 25, 2006)]
[House]
[Pages H5765-H5766]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         RAILROAD RETIREMENT TECHNICAL IMPROVEMENT ACT OF 2006

  Mr. LaTOURETTE. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 5074) to amend the Railroad Retirement Act of 1974 to 
provide for continued payment of railroad retirement annuities by the 
Department of the Treasury, and for other purposes.
  The Clerk read as follows:

                               H.R. 5074

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Railroad Retirement 
     Technical Improvement Act of 2006''.

     SEC. 2. DISBURSEMENT AGENT.

       Section 7(b)(4) of the Railroad Retirement Act of 1974 (45 
     U.S.C. 231f(b)(4)) is amended so that subparagraph (A) reads 
     as follows:
       ``(A) The Secretary of the Treasury shall serve as the 
     disbursing agent for benefits payable under this Act, under 
     such rules and regulations as the Secretary may in the 
     Secretary's discretion prescribe.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Ohio (Mr. LaTourette) and the gentlewoman from Florida (Ms. Corrine 
Brown) each will control 20 minutes.
  The Chair recognizes the gentleman from Ohio.


                             General Leave

  Mr. LaTOURETTE. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days in which to revise and extend their remarks 
and include extraneous materials on H.R. 5074.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Ohio?
  There was no objection.
  Mr. LaTOURETTE. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I strongly support this bipartisan legislation. In 2001, 
after several years of intense labor management negotiations, the most 
comprehensive reform of the railroad retirement system in nearly 2 
decades was enacted. The ERISA-type investment trust in which Tier II 
pension assets are invested has been performing extremely well. Payroll 
tax rates have gone down for both the railroads and workers, benefits 
have increased and the investment trust has experienced a nearly 50 
percent growth in asset value in those 5 short years.
  At the time of the 2001 legislation, we included a retirement that 
Tier II pension benefit checks be issued through a private contractor. 
This rested on the belief, since proven wrong, that this would be more 
efficient than continuing the use of the Treasury for this purpose.
  In fact, the Railroad Retirement Board, the trustees of the 
investment trust and the Congressional Budget Office have all found 
that by using an outside disbursing agent, actually costs to the 
program are increased by $2 million a year more than they would have 
been if we had used the Treasury.
  As a temporary expedient, the mandate to use an outside disbursing 
agent has been legislatively postponed in appropriations measures since 
2001, but is it is obviously time to make the correction permanent. 
H.R. 5074 does this by amending the permanent Railroad Retirement Act 
to designate the U.S. Treasury as the disbursing agent for the 
benefits.
  This legislation has been fully bipartisan from the outside. I 
particularly want to commend the chairman of the full committee, Mr. 
Young, the ranking member of the full committee, Mr. Oberstar, and my 
ranking member on the subcommittee, Ms. Brown, for their leader in 
moving this bill forward expeditiously. It means greater efficiency for 
a system that is critical to the well-being of the Nation's retired 
railroad workers and deserves the endorsement of the House.
  Mr. Speaker, I reserve the balance of my time.
  Ms. CORRINE BROWN of Florida. Mr. Speaker, I yield myself such time 
as I may consume.
  Mr. Speaker, I want to thank my chairman for his strong leadership on 
the committee. I am proud that our Railroad Subcommittee has been 
dedicated to protecting and improving the retirement benefit the hard-
working employees who are part of the railroad retirement system. Too 
often we look at an industry and we forget about the devoted men and 
women who are working very hard every day to serve their customers.
  This legislation teaches us a very valuable lesson, particularly as 
we begin to debate legislation sunsetting Federal agencies. We learn 
that sometimes government can do better and cheaper than the private 
sector can. I want to repeat that. Sometimes government can do better 
and cheaper than the private sector can.
  In 2001, the Railroad Retirement and Survivors Improvement Act made 
several changes to the railroad benefit system, including requiring the 
Railroad Retirement Board to contract with a private firm for 
distributing Tier II benefits. However, the Railroad Retirement Board 
quickly learned that an outside company would cost $3 million more than 
using the U.S. Treasury Department.
  Since the 2001 legislation was enacted, the Appropriations Committee 
has provided a waiver for this requirement, but this bill would 
permanently make the U.S. Treasury Department the distribution agent 
for Tier II railroad retirement benefits and end the need for this 
yearly benefit.
  This plan was proposed by the Railroad Retirement Board and the 
Railroad Retirement Investment Trustees and is supported by both 
railroad management and labor. I urge my colleagues to support speedy 
passage of this legislation.

[[Page H5766]]

  Mr. OBERSTAR. Mr. Speaker, I rise in strong support of H.R. 5074, the 
Railroad Retirement Technical Improvement Act of 2006. This 
legislation, requested by the Railroad Retirement Board (Board), amends 
the Railroad Retirement Act to provide for continued payment of 
railroad retirement annuities by the U.S. Department of the Treasury.
  Although the Railroad Retirement Board could use a private, 
nongovernmental disbursing agent for payment of railroad retirements 
benefits, as outlined in the Railroad Retirement and Survivors' 
Improvement Act of 2001, the Board has determined that utilizing a 
private disbursing agent would cost considerably more than continuing 
to have the Treasury Department make the payments. The annual cost of 
paying railroad retirement benefits through the Department of Treasury 
is about $800,000. In contrast, initial procurement inquiries have 
indicated that the first-year costs of paying railroad retirement 
benefits under contract with a private disbursing agent would be more 
than $3 million and, approximately $2.3 million in each subsequent 
year.
  These substantial costs would be borne by the railroad retirement 
trust funds, which were established to support the disability, 
retirement and survivor benefit programs provided for railroad workers 
and their families under the Railroad Retirement Act. The Board 
believes that using a nongovernmental disbursing agent would diminish 
service to its railroad worker beneficiaries.
  Finally, the Railroad Retirement Board and the Board's Inspector 
General believe that using a nongovernmental disbursing agent would 
make it more difficult to collect incorrect payments and other Federal 
debts because the agent would not have the considerable debt collection 
tools of the Treasury Department.
  For all of these reasons, the Railroad Retirement Board has sought 
and received deferrals of the private disbursing agent requirement via 
annual appropriations acts in prior years.
  This legislation amends the underlying statute to authorize the 
continued use of the Department of the Treasury for such disbursements.
  At the time of consideration of the Railroad Retirement and 
Survivors' Improvement Act in 2001, I had reservations about the claims 
that a private disbursing agent would save money. The Board's estimates 
that the private sector would cost millions of dollars more per year 
have confirmed my suspicions. In this case, as in many others, despite 
claims of ``the private sector can do it better and cheaper'', the 
facts show that the government is able to do the job most efficiently, 
effectively, and cheaply. I am pleased that we are able to revisit this 
issue today.
  I strongly support the bill and urge my colleagues to support it.
  Ms. CORRINE BROWN of Florida. Mr. Speaker, I yield back the balance 
of my time.
  Mr. LaTOURETTE. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Ohio (Mr. LaTourette) that the House suspend the rules 
and pass the bill, H.R. 5074.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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