-8

goes up automatically and if railroad retirement is already a family income maintenance system, until the Congress changes everything, benefits should be increased by the same percent. To do anything less will be an injustice to the working man and will have destroyed the explicit promise of the Commission not to interfere in the collective bargaining

process.

Senator CRANSTON. Thank you very much. That was very helpful, and I certainly appreciate your presence.

We will now proceed with Lester P. Schoene, representing the Congress of Railway Unions and the Railway Labor Executives' Association.

STATEMENT OF LESTER P. SCHOENE, CONGRESS OF RAILWAY UNIONS AND THE RAILWAY LABOR EXECUTIVES' ASSOCIATION, ACCOMPANIED BY J. TAYLOR SOOP, EXECUTIVE SECRETARY, RAILWAY LABOR EXECUTIVES' ASSOCIATION; AND DONALD S. BEATTIE, SECRETARY AND TREASURER, CONGRESS OF RAILWAY UNIONS

Mr. SCHOENE. My name is Lester P. Schoene. I am a lawyer and a member of the firm of Bernstein, Alper, Schoene & Friedman, with offices at 818 18th Street NW., Washington, D.C. I have been engaged in the practice of law here in Washington since 1944. My specialty has been representing railway labor organizations and this representation has involved rather substantial experience in the various aspects of the Railroad Retirement Act. From 1937 to 1942 I was general counsel to the Railroad Retirement Board.

I appear this afternoon on behalf of both the Congress of Railway Unions and the Railway Labor Executives' Association. Both of these organizations are federations of unions representing employees in the railroad industry. Together they represent all the organized railroad employees that are represented by standard labor organizations.

I have enumerated in my statement the names of all the organizations that are affiliated with these two federations. I will not read them into the record, but I would appreciate it, Mr. Chairman, if this statement itself could be copied into the record.

Senator CRANSTON. Yes, that will go in the record at the conclusion of your testimony.

Mr. SCHOENE. I believe I can shorten my testimony considerably, sir. I realize it is getting late, and I would like to direct myself very specifically to the precise question that is before this committee, namely, why should you enact a 20-percent increase in benefits at this time.

I submit to you this is a matter of simple equity among our beneficiaries. It has not been brought out so far in the hearing, but the fact is that right now on the basis of legislation Congress has already enacted, almost one-third of the beneficiaries under the Railroad Retirement Act have gotten a 20-percent increase in benefits.

The reason is that under the Railroad Retirement Act we have what is called the overall social security minimum benefit provision. Under that provision everyone under the railroad retirement system is guaranteed a minimum benefit equal to the amount of benefit or additional benefit that he would have gotten if railroad employment had been covered by social security.

There are about 255,000 beneficiaries under the Railroad Retirement Act who get that minimum benefit. They are basically the aux

iliary beneficiaries, that is to say, the widows, children, or shortservice employees.

The bulk of our beneficiaries fall into the other two-thirds who do not have this benefit. In addition to the 255,000 beneficiaries, who already have this 20-percent increase, there are approximately 30,000 wives who will get about a 20-percent increase as a result of the social security legislation. The reason for that is that there is a maximum on spouses' benefits under the Railroad Retirement Act which limits that benefit to no more than could be paid to a spouse in that month under the Social Security Act.

By increases in social security benefits all spouses paid under that maximum get their benefits increased almost 20 percent, so we have altogether about 285,000 people who get, beginning September 1, under the Railroad Retirement Act an increase of 20 percent in benefits.

The problem this committee has to decide is will that same 20-percent increase be extended to the other two-thirds who are the longservice workers, the career workers in the industry.

In addition to that I would like to call your attention to something Mr. Dennis has already mentioned, but I think needs to be mentioned again.

As a result of the social security amendments which this Congress has already passed, our people every employee in active service-will be subjected on January 1, before you will get a chance to consider, and give proper attention to the report of the Railroad Retirement Commission, to an increase in his contributions.

Most of our people-not all of them, of course-today earn the maximum of taxable and creditable compensation. On January 1, 1973 their contributions will be increased by $17.62 per month.

Gentlemen, our constituents in this matter are also some of your constituents. I do not believe that we can live with a situation in which one-third of our beneficiaries have on the books right now an increase of 20 percent in their benefits, and at the same time say to our people in active service, "you are going to be subjected on January 1, 1973, to a $17.62 increase in contributions", and not at the same time. say to them, "you will all get the same 20-percent increase that has been granted to the social security people."

I am not going to go into any discussion about the financial situation of the railroad retirement system. I have some disagreements with some of the other people about this, but it is a very complicated matter, and I believe you will have plenty of time at the next session of Congress to consider this.

We are not asking that the 20-percent increase be made permanent, any more than we are asking that the existing 15- and 10-percent increases be made permanent. They all expire next June 30, and between now and then you will have plenty of opportunity in which to give thorough consideration to the benefits and the financing on a long-term basis of this entire system.

But you are confronted with an immediate question of great urgency, and I urge you to report favorably on the bill that you have before you; that is, S. 3852.

Senator CRANSTON. Thank you very much.

In regard to that last statement, do you see any likelihood that the increase would not become permanent if they were granted?

Mr. SCHOENE. I would hope very much that they will become permanent. What I am saying to you is that you are not making them permanent by what we are asking you to do now.

Senator CRANSTON. Thank you very much. I deeply appreciate your making your testimony so brief, and your entire statement will appear in the record.

(The prepared statement of Mr. Schoene follows:)

STATEMENT OF LESTER P. SCHOENE BEFORE
THE SUBCOMMITTEE ON RAILROAD RETIREMENT
OF THE COMMITTEE ON LABOR AND PUBLIC
WELFARE, UNITED STATES SENATE, ON S. 3852

Mr. Chairman and Members of the Subcommittee:

My name is Lester P. Schoene. I am a lawyer

and a member of the firm of Bernstein, Alper, Schoene & Friedman, with offices at 818 Eighteenth Street, N.W., Washington, D.C. I have been engaged in the practice of law here in Washington since 1944. My specialty has been representing railway labor organizations and this representation has involved rather substantial experience in the various aspects of the Railroad Retirement Act. From 1937 to 1942 I was General Counsel to the Railroad

Retirement Board.

I appear this afternoon on behalf of both the Congress of Railway Unions and the Railway Labor Executives' Association. Both of these organizations are federations of unions representing employees in the railroad industry. Together they represent all the organized railroad employees that are represented by standard railway labor organizations.