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sooner, but that danger is not immediate

the situation.

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we still have time to rectify

This leads to my second point. The Commission report recommends

a complete revamping of the railroad retirement system. Since part of

this change involves the economics of our collective bargaining in the future,

I would like to place this increase in perspective. If the 20% increase is granted, the Commission has projected that the fund will go broke in 13 years instead of 16 or 17 years. That, on the basis of current conditions, is probably true. The Commission, however, has neglected to take into account the economics of collective bargaining. I am confident that by the time this bill expires in July, 1973 labor and management will have negotiated the changes necessary to bring financial soundness to the system.

In order to establish our purpose and intent in this matter I point to the fact collective bargaining sessions dealing with a revised pension program have already been established. On September 11, 12, & 13 a management team headed by William Dempsey and six representatives of the CRU and RLEA will commence preliminary negotiations. We anticipate bargaining on this issue until we reach agreement. At that time, if agreement is reached, we will make joint recommendations to Congress in line with the basic recommendations of the Commission. We obviously have shown our good intent in taking these steps; we rely on neutrality to get to that point.

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My basic proposal is very straightforward - to increase railroad retirement annuities by the same percentage amount, twenty percent, on a temporary basis, the same as was provided for Social Security. First of all this would continue a historical precedent established by the Congress itself. In the past fourteen years Congress has enacted five percentage increases in Social Security annuities. Within one year of passage Congress allowed the same percentage increase, to the railroad retirement system in four instances. The only time Congress has not granted the same percentage increase to rail workers was in 1968 under unique circumstances. The tax bases of the two systems had been tied together in 1965 and Congress gave the 13% Social Security increase to those covered under the 110% guarantee and developed a table increase in benefits for the rest. This produced approximately a 10% benefit rise. This was the only time Congress did not strictly adhere to the flat percentage increase and was done to correct the changes made in the tax bases. While this is but one example of the close inter-relationship between Railroad Retirement and Social Security, it is indicative of how closely related they have become in the minds of the public, and especially in the minds of men and women who work on the railroads. They know that they have received the same percentage increases as those granted to everyone else over the years and they have come to expect the same now. Many of my members will want to know, if the majority recommendation of the Commission on this issue is supported, why Congress

S

has changed its mind in the middle and denied them what it has granted them

in the past.

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Working men and women understand their own equities in these

situations. They know of something called the Financial Interchange.

They know how much they pay into their own retirement fund and how much their fellow workers in other industries pay. They have recently been told that as a result of changes made in 1951 they have been under Social Security, to a degree, since 1937. Some of them have been covered under the Overall Minimum of 110% since 1959. In the minds of working men and women, the question is not whether I as an individual have been counted "in perpetuity" or have even been counted inaccurately. Railroad workers have placed their trust in Congress in the past and Congress has been equitable in granting the same percentage increases.

And even though I have been sitting as a member of that Commission, I still think as a working man. I can see the logic that if we have agreed to the changes which the Commission will recommend that everything should change at once on changeover date. If we are going to change the system I see logic in changing benefits, formulas, tax rates, and so on all at one time. That is equitable.

I can not see the logic in piecemeal changes in past practice before the Commission has issued its report and Congress has had a chance to study it and take action. I say we should continue the equities which Congress maintained in the past and which rail workers have come to expect. After the Commission has reported, and Labor and Management have con

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cluded their own negotiations, then Congress will have an abundance of current information that would be useful in considering the total package for reforming the Railroad Retirement system.

As a member of the Commission on Railroad Retirement, I am concerned about the whole retirement system; as a working man I am concerned about the effect of any changes on my members before the report is acted upon by Congress. In the first instance

as a Commission

member I accept the fact that the current system is liable to go broke by 1987 or 1988, unless certain changes recommended by the Commission are made.

estimate that if the full twenty percent is applied to all rail workers the plan might go broke a few years sooner. Since my fellow Commissioners have already agreed to change the system, that point does not appear important. However, on a current basis there is still approximately $5,500,000,000 (5 1/2 billion dollars) in the fund and even after the temporary twenty percent increase is accomplished there will be no material reduction in the fund during the next 10 months.

So far I have been talking as a Commission member and about the possible effects of a benefit increase. Now I would like to talk as a working man and the established facts of benefits and contributions.

Under current law every time Social Security taxes are raised our taxes automatically go up. As things stand now in January, 1973 our

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people will start paying 10.25% of their pay into the retirement fund. For many of our people that will be a monthly contribution of $92.25! If we don't do anything else from here on in by January 1, 1974 the wage base will go up to $12,000 and our people will be paying $102.50 per month.

This is a rate nearly double that paid by workers covered under Social Security. They will pay 5. 5% beginning January, 1973 with a maximum of $49.50 while our people will be paying 10.25% and on January 1, 1974 with a $12,000 wage base their maximum will be $55.00 as compared with the $102.50 for railroad employes.

My people people who work and pay these huge amounts ask the question, that if we have to pay almost twice as much as Social Security why don't we get twice as much as Social Security? The Commission has even acknowledged that the railroad retirement system has been changed into a family income maintenance program. But do we get annuities that are twice as high as Social Security? No! As of September 1 the average benefit for an individual worker retiring under Social Security will be $161. Two times that would amount to $322, while the average benefit for a single worker under railroad retirement, including supplemental benefits, will be only $289. The same ratios hold true for married workers: $270 per month under Social Security contrasted with $393 a month under railroad

retirement.

The logic of my working people is that if the contribution rate