H. R. 5624 would repeal the dual-benefit restriction, enacted by Public Law 234, 82d Congress, which requires a reduction in Railroad Retirement Act benefits based on untaxed service before 1937 where the annuitant or his spouse is entitled also to benefits from the old-age and survivors insurance system.

H. R. 5625 would (1) provide full annuities after 35 years of service, regardless of age, or at age 60 after 30 years' service; (2) change the 1924-31 base period for determining average monthly compensation to the 5 highest years during the period before 1937; (3) increase all annuities and pensions by 15 percent; (4) base minimum benefits for persons with 30 years' service on the 5 years of highest earnings; and (5) repeal the dual benefit restrictions. The Railroad Retirement Board has estimated the cost of the bill at $235 million a year, or 4.7 percent of taxable payroll.

H. R. 5631 would provide full annuities regardless of age for employees with 30 years' service and whose employment has been terminated by reason of abandonment of a railroad.

H. R. 5854 would change the permissible retirement age from 65 to 60 and provide payments of $95 a month to widows regard

less of age.

H. R. 5936 would create a new benefit for dependent sisters of unmarried retired railroad workers patterned after the existing spouses' benefit.

In considering these proposals to liberalize benefits under the railroad retirement system we believe that the following points are important:

1. Study by Joint Committee on Railroad Retirement Legislation: During 1952 the Joint Committee on Railroad Retirement Legislation, under the chairmanship of Senator DOUGLAS, made a broad review of all aspects of the railroad retirement system, including its relationship to the old-age and survivors insurance system. The committee's report is expected to be available soon. It would appear desirable to postpone all legislation in this area until this report and its conclusions can be thoroughly studied and until experience under Public Law 234, 82d Congress, can be assessed.

2. Coordination with old-age and survivors insurance system: While the railroad retirement system is a staff pension system for a particular industry, it also embodies important social insurance features. In addition, it is now closely linked to the oldage and survivors insurance system as the result of Public Law 234, 82d Congress, and earlier amendments coordinating survivorship benefits under the two systems. Therefore, in studying legislation to amend the Railroad Retirement Act it is essential to consider the possible effect, directly or indirectly, on the old-age and survivors insurance system. For example, H. R. 5624 and H. R. 5625 would repeal the so-called dual benefit restrictions enacted by Public Law 234, 82d Congress, and thereby reduce coordination between the two systems. Similarly, the various proposals in the bills for new or very liberal benefits (such as for early retirement) may set a precedent for increasing social-security system benefits.

3. Financial situation of the railroad retirement system: The policy of the Congress since the inception of the system has been to maintain it on a self-supporting basis. However, the system is not now solidly financed. According to the fifth actuarial valuation, which has recently been completed, the present cost of benefits under the Railroad Retirement Act is 13.41 percent of taxable payroll. Since the combined employee and employer tax rate for maintenance of the system is only 12.5 percent of payroll, the valuation shows a present deXCIX- -618

The various bills here under consideration would cost from a few million dollars to as much as $235 million a year, but none of them provides for any additional revenues to meet the added cost of the new or liberalized benefits. As a consequence they would increase the present deficit of the system. For the foregoing reasons the Bureau of the Budget recommends against favorable consideration of these bills by the committee.

Sincerely yours,

ROWLAND HUGHES, Assistant Director.

Mr. WOLVERTON. Mr. Chairman, I yield such time as he may desire to the gentleman from New York [Mr. RADWAN].

Mr. RADWAN. Mr. Chairman, I want to add my voice in support of H. R. 356 which is before us. I have introduced a similar bill, perhaps identical with the measure before us.

October 1, 1952, his check was reduced from $117.55 to $86.05. In other words, $31.50 was arbitrarily taken away from him. We all know that if that should happen under a private insurance arrangement, immediate suit would be brought, and the amount would be reinstated.

I am not here saying that this may not have an adverse effect on the fund. Of course it may. However, there are ways by which this fund can be protected. One of them is by changes of investment. There is a very low rate of interest paid into this particular fund in comparison with other Government investments. The rate of interest has increased. That field is being explored.

There are other ways in which they can probably build up this fund to a degree where there will be no question about its solvency. There is absolutely no question about its present solvency. As the gentleman from Pennsylvania [Mr. VAN ZANDT] indicated, there is over

creasing by hundreds of millions of dollars each year. There is no indication that those increases will not continue.

This bill particularly affects those railroad workers who have earned the right to both railroad and social security benefits. It is supported nevertheless $3.6 billion in it, and it has been inby all railroad workers, including those who are not affected by it at the present time. It is a fair and just bill, and a distinct improvement in our present railroad retirement law. It corrects a gross injustice that was written into the law in 1951 and referred to as the "dual benefit" provision or the "social security offset."

A railroad worker pays a high rate for his pension and there is absolutely no reason why each and every participant should not have the benefit of everything he is paying for. everything he is paying for. In this case, where a railroad worker has earned and paid for a social security benefit as well as for a railroad retirement benefit, by all that is fair, he should have full benefit of both. At the present time, if

a retired employee has earned a $90 monthly railroad retirement benefit and following this he earned, let us say, a $40 monthly social security benefit, he is permitted to keep his full social security benefit but his railroad retirement benefit is reduced by the $40 which he receives as social security. This does not make sense and I repeat, Mr. Chairman, that a retired railroad employee, who earns both benefits, should receive and enjoy the benefits rightfully belonging

to him.

Mr. WOLVERTON. Mr. Chairman, I yield 3 minutes to the gentleman from Massachusetts [Mr. HESELTON]

Mr. HESELTON. Mr. Chairman, I doubt very much if I can be of any great doubt very much if I can be of any great assistance. I think practically everything has been said that needs to be said on both sides of this issue. However, I would like to explain why I am supporting the bill, and why I believe others can in all good conscience support it.

It has been said here that this is a matter of simple justice. To my mind, that is the whole issue here before us. Let me give you an illustration.

Mr. Smith worked 15 years under social security and 15 years under railroad retirement, and when he retired he was awarded a pension of $117.55. That was a pension which he was told was for the rest of his life. After the amend

Finally, let me quote one sentence from the testimony of Mr. Murray Latimer, who I believe is as expert in this field as anybody in the entire country:

This is the first time in the history of all of the world in which men given benefits by a law of a national government have ever had those benefits reduced.

We have done that. I urge that it is our great obligation to change that this afternoon.

Mr. WOLVERTON. Mr. Chairman, I yield 2 minutes to the gentleman from Indiana [Mr. BEAMER).

Mr. BEAMER. Mr. Chairman, my interest in H. R. 356 is a continuing interest in behalf of all workers on the Nation's railroads. The 82d Congress, which was my first term in the United States Congress, was not my first contact with problems of interest to railroads and railroad employees. I had come into contact with their legislative problems when I was a member of the Indiana General Assembly. Even before that time, I had a wide acquaintanceship and even a family relationship with railroad employees.

matter of railroad retirement pension Consequently, when the complicated legislation came before our House Interstate and Foreign Commerce Commit

tee, I attempted to place myself, so to speak, in the shoes of these railroad employees who some day would be depending upon this pension fund. I wanted to secure their thinking and their desires and accordingly I sent several hundreds of letters to these railroad employees and asked them four different questions.

Some 65 or 70 percent of these railroad employees responded. All but six stated that they did not want the railroad retirement and social security funds combined. These 6 apparéntly had sent my letter on to some national officer officer because those 6 replies were worded exactly the same and were the only ones that differed from the other

several hundred who spoke for themselves. When the employees spoke for themselves in this manner I was convinced that this was their true and honest thinking. It was on the basis of these letters that I voted and worked for railroad employees in the 82d Congress. I feel confident from the many letters and personal contacts that I have had with these same people since that time that they were appreciative of this opportunity to speak for themselves. I voted the sentiment of these people as it was displayed in the several hundreds of letters that I received.

In the 1951 amendments to the Railroad Retirement Pension Act there was this provision that was written into the act:

The railroad annuity or pension of an individual, and the annuity of his spouse, if any, shall be reduced beginning with the month with which such an individual is, or on proper application, would be entitled to an old age insurance benefit under the Social Security Act.

This clause was the result of the partial combination of the railroad-retirement fund with the social-security fund, which repeatedly has been protested by many, many railroad employees.

This is the so-called social-security offset, and testimony this year before our committee has revealed the fact that it has worked a hardship on more than 30,000 retired railroad workers.

H. R. 356 would repeal this portion of the 1951 amendment. It certainly seems fair to all railroad employees because they now are the only group that are not permitted to receive dual benefits. Even the members of the Railroad Retirement Board were very frank in testifying that they were eligible to receive the maximum benefits under their railroad retirement pension fund, to which they had contributed, and also to receive the full benefits under the Federal employees retirement fund to which they also had been contributing. H. R. 356 will remove this discrimination which affects more than 30,000 retired railroad workers.

It also eliminates a condition that seems to me to apply a penalty which is retroactive against workers who, in good faith, and according to existing law, sought to increase their retirement income by supplementing their railroad annuity with a social-security benefit toward which they have also contributed.

H. R. 356 will again make it possible for retired railroad employees to seek and secure employment covered by social security after age 65 because it will be necessary for them to pay the payroll tax under social security and this new legislation would make it possible for these deserving people to increase their pension fund which is needed so badly in

these times of high living costs.

The Railroad Retirement Act is selfsupporting. In fact, the railroad employee pays 64 percent of his total income and railroad management pays the same amount. Consequently, this amendment does not add any cost to the United States taxpayers. H. R. 356 thus will be of benefit to all people but especially to those retired railroad employees who believe in thrift and industry even

in their retired days in the latter years of their lives.

Mr. WOLVERTON. Mr. Chairman, I yield 10 minutes to the gentleman from Pennsylvania [Mr. VAN ZANDT).

Mr. PHILLIPS. Mr. Chairman, will the gentleman yield for a question?

I have been asked several times what effect these amendments proposed in the bill have upon the actuarial condition of the fund from which the money is taken and whether or not the additional payments would in any way affect that fund. Could the gentleman answer that?

Mr. VAN ZANDT. Yes; I will answer that question during the course of my remarks.

Mr. PHILLIPS. I thank the gentle

man.

Mr. VAN ZANDT. Mr. Chairman, I deeply appreciate the action of the House Committee on Interstate and Foreign Commerce and the Rules Committee in making possible consideration of my bill, H. R. 356.

This bill which was introduced by me in the 82d Congress and which was reintroduced by me on January 3, 1953, is designed to repeal the restrictions imposed by the 1951 amendments to the Railroad Retirement Act against the payment of dual benefits to retired railroad employees who have qualified for such benefits under the Railroad Retirement and Social Security Acts.

By way of explanation, when the House was considering amendments to the Railroad Retirement Act in 1951, a provision denying payment of dual benefits was defeated on the floor of the House. Later it was added by the conference committee, with the result that ference committee, with the result that the day before Congress adjourned in the fall of 1951, it was forced to accept the conference report or lose the opportunity to liberalize the Railroad Retiretunity to liberalize the Railroad Retirement Act and increase benefits.

When the provision of the 1951 amendments prohibiting dual benefits was originally before the House, its advocates stated that it would save money for the railroad retirement fund and thereby help finance the additional expenditures necessary to pay the 15 percent increase to the retired railroader, a monthly benefit to his spouse and 333 percent increase to widows and surviving children.

In other words, the additional cost of these 1951 amendments was to be borne in part, by penalizing some 30,000 retired railroad employees who met all the requirements of eligibility for earned benefits under the Railroad Retirement and Social Security Acts.

When this provision was being debated on the floor of the House, I strongly opposed it on the grounds that it was grossly unfair, highly discriminatory, and that sooner or later, Congress would

have to recognize the injustice inflicted upon thousands of retired railroaders entitled to dual benefits.

Since the enactment of this provision denying dual benefits, experience has proved the truth of my assertion, because never in all my years of close contact never in all my years of close contact with the thousands of active and retired railroaders who live in my congressional district, have I received so much violent criticism as has resulted from the enact

ment of the provision in the 1951 amendments to the Railroad Retirement Act prohibiting the payments of dual benefits.

In order to put this discussion in simple language and to emphasize the fact that there is a principle involved, let me illustrate the injustice and discrimination that have resulted from the application of this prohibition against dual benefits.

Let us consider Mr. X, employed by the Pennsylvania Railroad Co. as a mechanic and who retired at the age of 65 after having met all the requirements of the Railroad Retirement Act.

After Mr. X's application was duly processed by the Railroad Retirement Board and his eligibility established for retirement benefits, he received a letter from the Chairman of the Railroad Retirement Board which read, in part, as follows:

Based upon your application and the evidence of record, an annuity under the Railroad Retirement Act has been approved in your favor, payable during your lifetime and in the monthly amount of $83.50.

In addition, Mr. X received a certificate of annuity inscribed as follows:

Having retired from employer service and otherwise qualified, you are entitled to receive an annuity as provided by and subject to the conditions of the Railroad Retirement Act.

Mr. X, having adjusted himself to living on $83.50 monthly, which was increased to $100.20 by the 1948 amendments to the Railroad Retirement Act, was approached during the early days of World War II by a private manufacturer, building equipment for the war effort, and asked to accept employment. The private manufacturer received Mr. X's name from the Railroad Retirement Board, which at that time was actively recruiting retired railroad employees for private industry as part of the great effort made in World War II to fully utilize the manpower of our Nation.

Mr. X, with the approval of the Railroad Retirement Board, accepted employment with a private manufacturer

and left his home to travel to a distant State.

war and establishing his entitlement to After working throughout the earned social-security benefits by complying with all provisions of the Social Security Act, he became eligible under the Social Security Act for a monthly benefit of $45.20.

Therefore, Mr. X, as a retired employee of both a railroad and a private manufacturer, then held a contract with the Railroad Retirement Board entitling him to $100.20 monthly, payable during his lifetime. He also had a contract with the Social Security Administration to monthly benefits of $45.20. These comreceive for the remainder of his life, bined monthly benefits amounted to $145.40.

Let me repeat again that Mr. X, as a retired employee of a railroad and a private manufacturer, then held valid contracts with the Railroad Retirement Board and the Social Security Administration guaranteeing him specified monthly benefits for the remainder of his life.

In the fall of 1951, Congress amended the Railroad Retirement Act effective October 30, 1952, to provide a 15-percent increase to all annuitants with the result that Mr. X was then eligible to receive $115.24 from the Railroad Retirement Board.

In addition to the amendments that increased benefits by 15 percent and otherwise liberalized the law, Congress also approved the so-called dual benefit amendment providing that retired railroad employees who were drawing benefits based on service prior to 1937 should have their benefits reduced by the by the amount of the social-security benefit they were receiving.

In the case of Mr. X, he was receiving monthly benefits from the Railroad Retirement Board of $115.25 plus $45.20 monthly from social security.

Because of this amendment denying dual benefits and the fact that Mr. X had service prior to 1937, the Railroad Retirement Board deducted from his $115.24 the $45.20 he was getting from social security, thus leaving him a monthly benefit of $70.04 from the Railroad Retirement Board.

In other words, Mr. X, instead of receiving a combined monthly benefit of $160.44 to which he was entitled, he was penalized by having the $45.20 he was receiving from social security, deducted from his railroad-retirement annuity of $115.24, leaving him a monthly railroadretirement annuity of $70.04.

As a result of this transaction, the Railroad Retirement Board saved $45.20 monthly at the expense of Mr. X, and since there are about 30,000 other Mr. X's in the same category, it is proper to say that this group of retired railroaders was singled out by Congress and made to bear the cost of the other 1951 amendments to the Railroad Retirement Act. Let me add that this highhanded and discriminatory method of financing the 1951 amendments was used as an excuse and that such action would eliminate the necessity of increasing payroll taxes.

In plain words, when Mr. X retired from the Pennsylvania Railroad, he had a contract with the Railroad Retirement Board that said:

During your lifetime you will receive a monthly amount of $83.50.

In the fall of 1951 when Congress approved an amendment to the Railroad Retirement Act prohibiting dual benefits, it arbitrarily altered the contract that Mr. X had with the Railroad Retirement Board and without his knowledge or consent. Therefore, instead of Therefore, instead of receiving the $83.50 the contract stipulated, his lifetime annuity was reduced to $70.04.

Many of you will remember that during the 82d Congress earned social-security benefits were increased on an average of $5 monthly. In the case of Mr. X,

his $45.20 monthly benefit under the Social Security Act was increased to $50.20. But this $5 he was entitled to under the Social Security Act was deducted from the $70.04 revised annuity he was receiving from the Railroad Retirement Board. In other words, Mr. X was the victim of another violation of a contract and instead of receiving $83.50

guaranteed to him for his lifetime, it is now whittled down to $65.04.

Mr. Chairman, I am not worried about the cost of repealing the amendment prohibiting dual benefits as provided for in my bill H. R. 356. My sole concern is the principle involved.

As I mentioned in the beginning of my remarks, when Congress adopted the provision in the 1951 amendments to the Railroad Retirement Act denying dual benefits to those entitled to them, it abrogated a contract that some 30,000 retired railroad employees had with the Railroad Retirement Board.

Mr. Chairman, according to the Railroad Retirement Board, the cost of H. R. 356 will be $385 million or in payroll tax, an increase of fifteen one-hundredths of 1 percent.

In this connection, let me point out that the balance in the railroad retirement fund in May 1952, was $2,776,005,917. At the end of May 1953 the balance in the retirement fund was $3,052,716,320 which means that in the period

of

12 months, the fund increased $276,710,403.

In the hearings of March 2, 1953, before the House Committee on Interstate and Foreign Commerce concerning the railroad retirement fund, Mr. Matscheck, an actuary employed by the Railroad Retirement Board, had this to say when asked about the annual increase of the railroad retirement fund over expenditures:

As I tried to explain, for many years-10, 15, or 20 years-there will be collections in excess of expenditures. Thereafter, there will be expenditures for benefit payments which will be exceeded by the amount of taxes collected, but the interest on the reserve account will make up that shortage.

Mr. HARRIS. Mr. Chairman, will the gentleman yield?

Mr. VAN ZANDT. I yield to the gentleman from Arkansas.

Mr. HARRIS. I should like to advise the gentleman that a few days ago the interest on the retirement fund was computed and placed in the fund itself, to the extent of more than $80 million, added to the retirement fund.

Mr. VAN ZANDT. That is correct and should the expenditures exceed the income a larger interest yield is possible by increasing the interest rate.

Mr. HARRIS. Perhaps that is true. Mr. VAN ZANDT. When Mr. Matscheck was asked how far ahead he was looking when he said there will be expenditures for benefit payments which will exceed the amount of taxes collected but the interest on the reserve account would make up the shortage, he replied:

Indefinitely, or to use the actuary's expression "in perpetuity," meaning almost as long as 150 or 200 years.

At the same hearings, Mr. Horace W. Harper, member of the Railroad Retirement Board, when speaking about the disparity between the income of 122 percent which is derived from payroll taxes and the figure of 14.1 percent which pated payroll tax, said: represented the amount of the antici

We found ourselves willing to take that sort of a disparity because it was small enough to offer no immediate danger to the fund.

In answer to another question as to the current soundness of the fund, Mr. Harper replied:

It is so regarded, so much so that there is no real danger implicit in the continuance for a period. The difference between 14.1 percent and 12.5 percent is not substantial enough to offer any threat to the solvency of the fund for a number of years.

If Mr. Matscheck who is an actuarial expert, and Mr. Harper, who is a member of the Railroad Retirement Board, have no fear of the disparity between 12.5 percent and 14.1 percent I cannot understand the anxiety of opponents to this bill who are crying that the $385 million estimated to be the cost of this bill will wreck the retirement fund.

To further alleviate the fears of the opposition, I would like to call attention to the following statement, appearing on page 15 of the fifth actuarial evaluation of the retirement fund released by the Railroad Retirement Board April 1953:

Subject to the assumptions upon which the valuation was based, the cost calcula

tions show that the level tax rate required after 1951 to finance adequately the benefits of the railroad retirement system should be 13.41 percent of taxable payroll. Since the effective rate of the existing tax schedule is about 122 percent, a deficiency of .9 percent of payroll is indicated.

Mr. Chairman, if the fifth actuarial report reveals that 13.41 percent of taxable payroll is necessary to finance the Railroad Retirement Act and the cost of H. R. 356 is fifteen one-hundredths of 1 percent by adding it to the 13.41 percent we have the figure of 13.56 percent which is less than the original estimate of 14.1 percent mentioned by Mr. Matscheck and Mr. Harper. Therefore, since Mr. Matscheck and Mr. Harper both take the position that there is no real danger in the disparity between 12.5 percent and 14.1 percent, how can the cost of H. R. 356 in any manner affect the solvency of the retirement fund?

I would like to take issue with the spokesman for the opponents of H. R. 356 when they say that 80 percent of the railroad employees who pay half of the taxes for the support of the railroad-retirement system are opposed to this bill.

A recent check of the Interstate Commerce Commission form M-300 for March 1953, reveals that 1,286,614 persons were employed by the class I railroads of the United States.

According to the Interstate Commerce Commission, as of the middle of March 1953, the employees engaged in transportation, such as train and engine service, constitute 20.85 percent of the total number of railroad employees. This group, composed of enginemen and trainmen, from the standpoint of organized labor, are represented by the Brotherhood of Locomotive Engineers; Brothof Locomotive Firemen and erhood Enginemen; Order of Railway Conductors; the Brotherhood of Railroad Trainmen; and the Switchmen's Union of North America. In a few words, they are known in railway labor circles as the "OPS."

The nonoperating groups are represented by the Railway Labor Executives' Association, a combination of unions representing various classes of employees

such as

JULY 17, 1953.

Congressman JAMES VAN ZANDT,
United States House Office Building,
Washington, D. C.:

The International Association of Machinists, a labor organization of over 800,000 members, which represents the machinists, machinists' helpers, and apprentices on every railway carrier in this country, after due study and consideration, wholeheartedly supports the enactment of H. R. 356 which has, as its purpose, the repeal of that provision which at present denies dual-benefit provisions under our retirement laws.

A. J. HAYES,

International President.

It must be recognized that the International Association of Machinists represent not alone railway machinists and their helpers, but those outside the railroad industry. industry. From a dependable source, I am told that the International Association of Machinists have 80,000 members employed on the railroads of America as machinists, helpers, and apprentices.

I should like to read another telegram I received from Mr. Robert Oliver, assistant to the president and coordinator of legislative activities, Congress of Industrial Organizations, commonly known as the CIO. The telegram reads as follows: JULY 20, 1953.

Today many workers earn and pay for benefits under the Railroad Act and the Social Security Act. When this happens, they are not permitted to collect both benefits. This is because part of section 3b of the Railroad Retirement Act prevents the payment of so-called dual benefits. H. R. 356 would amend the Railroad Retirement Act to permit workers to collect their earned benefits. On behalf of the one million and thousands of members in CIO unions on ships, ferryboats, maintenance of ways and yards, we endorse H. R. 356 and urge its speedy adoption.

ROBERT OLIVER,

car

Assistant to the President and Coordinator of Legislative Activities, Congress of Industrial Organizations. Your attention is called to the fact that the CIO is speaking for crafts employed in the railroad industry which includes employees on ferryboats, floats, maintenance-of-way, boilermakers, car-builders and many other crafts employed in the railroad shops and roundhouses. The CIO attained the right to speak for these employees covered by the Railroad Retirement Act as a result of employee elections held under the Railway Labor Act.

I have another telegram from Mr. David J. McDonald, president, United Steelworkers of America, which reads as follows:

JULY 22, 1953.

In behalf of the more than 10,000 steelworkers who are employed in and about the properties of steel companies on connect

356.

DAVID J. MCDONALD, President, United Steelworkers of America.

I have another telegram from Mr. Culbert Bowen, president of the Railway Patrolmen's International Union, A. F. of L., who represents the patrolmen and police on the railroads of the Nation. Mr. Bowen's telegram reads as follows: JULY 23, 1953.

The Railway Patrolmen's International Union, A. F. of L., representing patrolmen and police on all the railroads wholeheartedly supports the action of your bill H. R. 356 to repeal the unfair provisions of section 3-B of the Railroad Retirement Act which does deny retired railroad workers the pensions they are entitled to if they have earned social-security benefits in other employment.

CULBERT BOWEN, President.

At this point it is pertinent to state that the records of the Interstate Commerce Commission disclose that some 350,000 employees of the railroads such as executives and officials, professional and subprofessional assistants, supervisory officers, roadmasters, general foremen, and so forth, do not belong to labor organizations and therefore have not expressed themselves regarding H. R. 356.

When taking into consideration that there has been practically no mail in opposition to H. R. 356 and the fact that the operating brotherhoods, the International Association of Machinists and the CIO heartily support H. R. 356, I say in all fairness that the statement to the effect that 80 percent of all railroad employees oppose this legislation, should be taken "with a grain of salt."

The majority of you know that I come from a railroad district and that I am a railroad man myself. Rubbing elbows almost daily with railroad employees, I can tell you that they want the Railroad Retirement Act as it was originally intended, to be separate and distinct at all times from social security.

Therefore, I hope that H. R. 356 will be approved and thus enable Congress to redeem itself for breaking faith with thousands of retired railroad employees.

The CHAIRMAN. The time of the gentleman from Pennsylvania has expired. Under the rule all time has expired. The Clerk will read.

The Clerk read as follows:

That section 3 (b) of the Railroad Retirement Act of 1937, as amended, is hereby further amended, effective October 30, 1951, by striking the last paragraph thereof.

With the following committee amendment:

Page 1, line 6, insert a new section to read as follows:

"SEC. 2. In the case of any deceased individual whose death occurred before the first day of the first month following the month in which this act is enacted, so much of any annuity or pension payment as is due such individual by reason of the enactment of the first section of this act shall be paid only—

"(1) to the widow or widower of the deceased, if such widow or widower is living on such first day; or

"(2) if there is no such widow or widower, to the child or children of the deceased if

such child or children are living on such first day.

For the purposes of this section, the terms 'widow', 'widower', and 'child' have the same meanings as those assigned to such terms by section 5 (1) (1) of the Railroad Retirement Act of 1937, as amended."

Mr. HARRIS. Mr. Chairman, I rise in support of the amendment.

Mr. Chairman, I realize the hour is getting late and some Members, I am sure, would like to get away as soon as possible. I wish, therefore, to make but a few brief remarks.

In the first place, we have had enough experience in this House to understand that when we get into general debate those in control of the time on many occasions find themselves in a position they are not able to give time to those who might desire it. This unusual situation we have had here today might lead some of you to assume that none of the members of the committee on the Democratic side are supporting this bill. I can assure you that assumption is not the fact. The fact that we did not have an opportunity to speak on this in general debate in no way indicated that several or in fact a majority of the members of the committee on the Democratic side are not wholeheartedly in support of this bill. I can understand, and I know the other members of the committee understand very well, the position our beloved chairman when he said he could not give us any time during general debate. It is not a fair situation. I shall try to see it does not happen again.

This matter, Mr. Chairman, very frankly speaking, is the result of the old fight we had 2 years ago when the 1951 amendments were adopted. This was one of the provisions which was involved during the course of the consideration of amending of the Railroad Retirement Act. It might be recalled that I offered the substitute to the bill we had then for consideration on the floor of the House. The substitute I proposed did not include the provision which would work what I thought to be a gross inequity on these railroad people.

May I say the 10-year integration with social security was involved in the course tegration provision of the railroad reof that fight. I was opposed to the intirement with the Social Security Act. I was opposed to the provision which these 30,200 people so estimated would have taken from them the amount that they would draw should they qualify under social security or even entitled to qualify for, from the amount of railroad retirement that they were entitled to receive and have been receiving since retirement.

The House adopted my substitute and it went to conference. The conferees in trying to compromise these controversial matters, brought back to the House their recommendation. As has been said, that was on the day before the Congress adjourned; consequently, in order to get the bill approved and since the conference approved it the House accepted and thus we have this provision under consideration today as a part of the Railroad Retirement Act.

Let me repeat again what this does. Under the act there is estimated 30,200

railroad people who had prior service credit, meaning prior service to 1937 when the Railroad Retirement Act became effective. Those are the only ones involved in the consideration of this bill we have here. No one else is affected at all.

Mr. HINSHAW. I think the gentleman better add the widows of those people.

Mr. HARRIS. Yes, the widows, of course; when they were brought in under the act of 1946. Then, of course, that added to the liability of the fund.

I hope members of the Ways and Means Committee will listen to this will listen to this statement.

The CHAIRMAN. The time of the gentleman from Arkansas has expired.

(On request of Mr. WOLVERTON and by unanimous consent Mr. HARRIS was given 5 additional minutes.)

Mr. HARRIS. Mr. Chairman, I apologize to the committee but I want to see if I can straighten out some of the things in this debate.

With the adoption of the amendment to the Social Security Act of 1950, any person who had 6 quarters, I believe, and reached a certain age could qualify for benefits under the Social Security Act. After that action it was decided by some that the Railroad Retirement Act should be amended and that there was an opportunity to take advantage of the provision of the Social Security Act in behalf of the Railroad Retirement Act and add some funds, therefore, strengthen the Railroad Retirement Act insofar as that fund is concerned. That is the reason for the integration, that is the reason the 10-year men were transferred to social security and over $80 million to the credit of the Railroad Retirement Act. This was at the expense of social security. In fact, the integration meant some $800 million to railroad retirement.

Here is transaction with these priorservice employees of railroad retirement. Consequently they said, if you retire or have retired and are drawing retirement under the Railroad Retirement Act, and can qualify under the Social Security Act, the amount you draw from your social-security payments would be deducted from the amount you have been drawing or will draw from your railroad retirement.

Now that is the problem we have here. We say that is certainly an injustice, it is an inequity to these 30,000 and more people, and consequently when they had this money deducted from their checks, the Congress began to hear from them.

Then, the Social Security Act was amended again last year to give every beneficiary an additional $5. The Railroad Retirement Act again enhanced its fund from the Social Security Act beIcause it took $5 more from the railroadretirement annuity for each annuitant. It reduced his retirement by that much; that is what we are here to correct.

Now, Mr. Chairman, there has been a lot of talk about these people never having paid any taxes, that is, those with prior-service credit. Certainly they did not pay taxes, but, as everybody knows, when there was agreement to the 1937 Retirement Act, it was agreed they

would be taken care of; I say that is an agreement that should be kept. That is my opinion of it.

There is a lot of talk about endangering the fund. Let me give you a little history. In 1946 I supported the railroad-retirement amendments that the gentleman talked about a moment ago. We provided these additional benefits. They were adopted on the basis of a payroll of, I believe, about $3,600,000,000. The actuaries said, "Oh, if you go any higher than this, it will endanger the fund" but they missed it. Certainly I think they were justified in being conscrvative, but in 1948, without adding to the fund, we increased the benefits by 20 percent and they said, "We cannot go any higher than that." But you know what happened. The soundness of the fund itself increased, even though we gave them 20 percent more benefits out of the same fund. In 1951, when we had the original Crosser bill, it was estimated by the Railroad Retirement Board that it would cost 14.16 percent of payroll. The amount contributed was 12.50. But the proponents of the bill said that would not endanger the fund, even though it was over 12 percent above the amount that was being collected. But what happened? When the House got through with it, when the House passed it, amending it with the substitute I proposed, it was estimated by the Railroad Retirement Board that it would cost about 14.71 percent of payroll. Now it was estimated, as we passed it, that it would cost 14.71 percent of payroll; but when it came back from conference it was estimated that the figure, as it was finally adopted, would cost 14.41 percent of payroll, and yet no one said there was any danger to the fund or it was not sound actuarially.

But, when we gave another boost to the social security of $5 payment, it was estimated then that the fund was 14.11 percent of the payroll. Still, there was no concern about the soundness of the fund, but when the Railroad Retirement Board reported a few days ago the fifth actuarial report, do you know what they said? They said that under the railroad retirement fund actuarially the cost was 13.41 percent of the payroll.

I do not know anything about actuarial problems but I do know this: If the actuaries themselves who have told us now for the last 7 or 8 years about what the future of this program would be have missed it anywhere from 12 to 2 percent, then how can they say that fifteen one-hundredths of 1 percent would endanger the fund at this time? I think that is just too ridiculous to consider.

Mr. LANHAM. Mr. Chairman, will the gentleman yield?

Mr. HARRIS. I yield to the gentleman from Georgia.

Mr. LANHAM. Do all of the 30,200 employees involved draw social security? Mr. HARRIS. Yes. There are others with prior service who do not.

Mr. LANHAM. As to those that do not, is anything deducted from their pension?

Mr. HARRIS. Not at all.

Mr. LANHAM. It seems manifestly unfair, then, to deduct from those who have worked.

Mr. HARRIS. That is what I have tried to point out to the membership of this House.

Mr.

Mr. WILLIAMS of Mississippi. Chairman, I move to strike out the last word.

Mr. Chairman, like the gentleman from Arkansas who just addressed the Committee, I assure you that all the committee members on the Democratic side were not opposed to this legislation. As a matter of fact, two of the Members on our side-the gentleman from Texas [Mr. THORNBERRY] and I-introduced bills identical to H. R. 356, under consideration today.

I realize, as does the gentleman from Arkansas, that the distinguished ranking minority member of our committee, our former chairman, has many problems in meting out time in general debate to members on his side on measures coming from our committee. I realize that he had many requests for time today from Democratic members of our committee. So many, in fact, that he just did not have any left for the ones who were in disagreement with his views. But I do not mind, because I feel the same way he does.

Two years ago when we were considering the railroad retirement bill that we are now trying to correct, my distinguished chairman, in his argument, said:

My answer to anyone who thinks that I must be unfriendly to him because I cannot agree with him on some subject is to be found in four lines which Edwin Edmund Markham shortly before he departed this life gave me in his own handwriting. These are the lines:

"He drew a circle that shut me out,
Heretic, rebel, a thing to flout;
But Love and I had the wit to win;
We drew a circle that took him in."

The circle that he drew today was around general debate, but he would not let us in. That is why we must resort to use of the 5-minute rule to present our side.

As I see this legislation it is not a complicated matter. It is a simple matter of right and wrong-of righting a wrong that was committed 2 years ago.

Here we have two separate and distinct retirement systems, both of them contributory on the part of the eventual beneficiary: The Railroad Retirement Act, financed by money paid in by the employees of the railroads, and the social-security system on the other hand, from nonrailroad employers and the employees. Both are administered by the Federal Government. Both have separate funds. Both have separate laws under which they operate. They have their separate and individual schedule of benefits and contributions, and are administered by different agencies. Yet, the two systems were tied together in 1951, much to the dismay of rail employees. I recognize that perhaps neither of these systems, with their present schedule of benefits, is actuarially sound. That being true, then I believe it is the duty of the Congress to attack these deficiencies individually and separately, by correcting social security to make it stand alone, and by correcting the Railroad Retirement Act to make it stand alone. Both should be