-6-7

If any general increase is to be provided now, prior to deliberate and balanced consideration of the forthcoming report of the Commission on Railroad Retirement, such increase should be no more than a passthrough of the dollar amounts by which social security benefit levels were increased by the recent enactment of Public Law 92-336. In dollar terms, this would treat railroad retirement beneficiaries the same as Congress recently provided for social security beneficiaries, averaging $27 per month for employee annuitants now on the benefit rolls and $31 per month for an employee retiring in September 1972.

Such dollar-equivalent increase would go to all railroad retirement beneficiaries other than those covered by the minimum guaranty provisions of the Railroad Retirement Act. This latter group comprising about

have already

30 percent of all beneficiaries and consisting mostly of widows, other survivors, and some relatively short-service employees been provided benefit increases by virtue of the recent 1972 amendment of the Social Security Act (P. L. 92-336). Thus, the dollar amount passthrough we are suggesting would assure that all railroad beneficiaries will receive an increase on a fair basis.

This dollar pass-through, similar to the procedure followed in the 1968 amendment to the Railroad Retirement Act, would not substantially

affect the financial condition of the railroad retirement account either for

better or for worse as compared with the situation prior to the recent social security amendment. It would, therefore, serve to hold the line on an interim basis against further impairment of railroad retirement financing, pending careful consideration of the Commission's report on the condition and needed restructuring of the railroad retirement system.

Senator CRANSTON. You were our last witness, and you have been very patient for the afternoon. Do you have any other comments on the testimony you have heard earlier today from others?

Mr. BEHLING. Yes; I do have one other that almost slipped my mind.

There have been references and I think there were questions from you earlier this afternoon-in regard to the projections of employment levels. I think it probably would be just as obvious to you as it is to me that there is no man on earth or woman either who could with precision tell us precisely what the railroad employment level will be to the year 2000. It overtaxes human ingenuity in forecasting ability to do that.

Nevertheless, I am sure it will continue downward. At just what rate I do not know frankly. But, and this is the point I want to come to, whether it declines greatly or not so greatly does not have much effect on the central conclusion that this Railroad Retirement Act is headed for serious trouble and headed for bankruptcy.

I offer you this as evidence. The actuary of the Railroad Retirement Board, Mr. Cowan, who has spoken here today, has been using an employment level, extended indefinitely, of 575,000 persons.

The Railroad Retirement Commission, following a different path of forecasting, projects that it will be reduced to 300,000 or maybe a little more or a little less by the year 2000.

Yet the actuarial studies of the Railroad Retirement Board and the actuarial studies of the Railroad Retirement Commission agree that the fund is destined under present circumstances and trends to be broken in about 16 or 17 years without any further increase in benefits by way of the bill currently before you.

So the employment level does not have that much to do with it, and it is a matter on which reasonable men can differ when you are trying to look 30 years ahead.

Senator CRANSTON. What is your own view of what the future employment levels are likely to be?

Mr. BEHLING. It is a question that has teased my mind a great deal. The best I can do, Mr. Chairman, is envision for the next 10 years that I think it is likely it will decline at a rate somewhere around 2 percent per year. Beyond that I am willing to confess my limitations as a forecaster.

I can see so many variables working that it might level out, it might decline further. I doubt very much whether it would increase. Senator CRANSTON. What is your position on the 5 percent cost-ofliving increase proposed by the administration?

Mr. BEHLING. Mr. Chairman, I am very happy to see the Office of Management and Budget recognize that in the circumstances of this fund a hasty and, we think, premature 20-percent increase would be an imprudent thing to do.

We have suggested the pass-through which you have heard earlier this afternoon from Mr. Cowen would average out to an increase of about 12 or 13 percent, whereas the Office of Management and Budget has said, "take it easy, and 5 percent is as far as you should go."

We are not going to renege on what we have said about the passthrough, but I must say that I do admire the prudent approach of the Office of Management and Budget, and I think that our offered passthrough is decidedly liberal in the circumstances.

Senator CRANSTON. What would be the position of management with respect to the possibility of bearing a fair share of the necessary tax increase needed to fully finance the 15-percent, 10-percent, and 20-percent increases if they were made permanent?

Mr. BEHLING. I said on the House side-I answered a virtually identical question, Mr. Chairman-that we stand ready to bear our one-half share of the costs of the 15 percent of 1970 and the 10 percent of 1971, and to make this fund whole.

We must think of future employees and not fellows like myself who could selfishly say, "broke in 15 years? Should I care? I will be taking care of myself."

But what about the young fellows, those in their 20's and 30's and 40's? They have a stake in this, too, and this is an intergovernmental problem, and we recognize our share of responsibility with respect to it.

But I urge you that we recognize our responsibility in terms of what has already been enacted, do not compound our problem by going for this 20-percent increase. It will enormously complicate the problem of setting this railroad retirement fund to rights. It will also enormously further complicate our hope for successful bargaining with the unions commencing next month.

Senator CRANSTON. One final question. On those technical amendments in H.R. 15922, do you think it is important to act on them now, or should we wait until we can do it in the light of the Commission report?

Mr. BEHLING. It is a separate issue as far as I can see. It is completely noncontroversial. I see no reason to hold it up.

It seems to me that it is the sort of thing-I do not pretend to be a parliamentarian-but I would think it is a matter that could easily go through on unanimous consent.

Senator CRANSTON. Do you think we should proceed now without waiting to consider them in the light of the Commission report? Mr. BEHLING. Yes.

Senator CRANSTON. Thank you very much. I thank each of you for your presence and your interest, and we now stand adjourned. We will set forth in the record at this point, prior to the appendix, a statement of the National Retired Teachers Association and the American Association of Retired Persons in support of S. 3852.

(The information referred to follows:)

STATEMENT OF

THE NATIONAL RETIRED TEACHERS ASSOCIATION

AND

THE AMERICAN ASSOCIATION OF RETIRED PERSONS

BEFORE THE

SUBCOMMITTEE ON RAILROAD RETIREMENT

OF THE

SENATE LABOR AND PUBLIC WELFARE COMMITTEE

UNITED STATES SENATE

TO PROVIDE A TEMPORARY 20 PERCENT INCREASE

IN

RAILROAD RETIREMENT BENEFITS

S. 3852

AUGUST 8, 1972

Mr. Chairman, speaking on behalf of the thousands

of retired railroad employees who must rely upon railroad

retirement as their sole source of income, the National Retired Teachers Association and the American Association of Retired

favorable action on this legislation be expedited.

The most important problem facing older Americans today is the lack of economic security in retirement. As delegates to the Income Section of the 1971 White House Conference on Aging put it: "There is no substitute for income if people are to be free to exercise choices in their life style."

Unfortunately, Mr. Chairman, not only does our society coerce the aging into ever earlier retirement with policies and practices of age discrimination and mandatory retirement, but it rewards them with poverty when they get there. Nothing can justify such cruel and unusual punishment for the crime of growing old.

The widening hiatus between retirement and employment incomes, the prevalence of poverty and near poverty among millions of older Americans, and the absence of prospects for any substantial improvement in the income position of retirees, make the status of retirement unattractive. Retirees who have made their contributions to the present standard of living should be guaranteed an equitable share of the fruits of that standard such guarantee can only be provided through government programs such as railroad retirement and Social Security.