Just a few months ago, there was legitimate alarm that the Railroad Pension System would soon run out of money. Without legislative action, rail industry pensions would have been reduced by 40 percent beginning this October. In addition, a second crisis has arisen. The Railroad Unemployment and Sickness Insurance System was so insolvent that the interest on its debt to the Rail Pension Fund would exceed its income. It was time to act and act in a spirit of bipartisan cooperation.
This bill will prevent the drastic rail pension reductions that would otherwise have been necessary to save the system from insolvency. According to the Railroad Retirement Board’s actuary, it’ll assure the solvency of the Railroad Pension System, at least until the end of the decade. This will be accomplished through real contributions and sacrifices on the part of all parties involved and through Federal participation.
In February, railroad labor and management requested financing changes that provided a sound starting point for designing a solution to the problem. The process of negotiation and compromise needed to devise legislation that would be acceptable to all parties involved railroad employees, railroad management, railroad retirees, and the American taxpayer, and it was long and arduous.
While recognizing the real contributions proposed by the rail-sector participants, Congressman Broyhill, Senator Hatch, and others joined the administration in pointing to the need for further improvements to make the bill fair and equitable to all involved. The Ways and Means Committee recognized the need for additional rail-sector contributions and for measures to address the Rail Unemployment and Sickness Program funding crisis. With the strong leadership of Chairman Rostenkowski, subcommittee chairmen Pickle and Ford, and the active cooperation of Representative Florio, major improvements were made in the bill. Without their important work and Senator Dole’s prompt action in the Senate, we wouldn’t be signing this bill today.
None of us would pretend that this bill is perfect. It is a compromise, a reconciliation of differences with a common concern for the need to assure timely payment of full rail pensions to 1 million railroad retirees, the majority of whom are elderly. But given the need for prompt action, it is acceptable to the administration.
While I would have preferred a bill that also resolves the long-term financing problems of the Railroad Unemployment and Sickness Program, this bill will at least put us on the road to real reform of that troubled system.
In the interest of all railroad retirees, I want to thank the people who played such an important role in the development of the legislation. There are so many people who deserve credit for this effort — the members of the Energy and Commerce Committee, the Ways and Means Committee, the Senate Finance Committee, the Labor and Human Resources Committee; and the leadership of the Senate and the House and railroad labor and management were all instrumental. As was the case with the Social Security Commission, the spirit of bipartisanship displayed by all who were involved was the key to developing an acceptable solution.
And now I am pleased to sign the Railroad Retirement Solvency Act of 1983 into law.