Hon. FRANK CARLSON, DEPARTMENT OF AGRICULTURE, Chairman, Post Office and Civil Service Committee, United States Senate. DEAR SENATOR CARLSON: This is in response to your request of March 12 for our views concerning S. 3121, a bill to amend the act of June 19, 1948, to provide for censuses of manufactures, mineral industries, and other businesses, relating to the year 1954. This bill provides that censuses of manufactures, of mineral industries, and of other businesses, including the distributive trades and service establishments be taken in 1955 relating to the year 1954. Originally it was planned to take these censuses in 1954 relating to the year 1953. The Department of Agriculture relies upon these censuses for basic material which is of great importance to agricultural marketing We understand that the reason for postponing these censuses until 1955 is that funds are not available to take them this year. For that reason the Department of Agriculture is in favor of the amendment. The Bureau of the Budget advises that, from the standpoint of the program of the President, there is no objection to the submission of this report. Sincerely yours, TRUE D. MORSE, CHANGES IN EXISTING LAW In compliance with subsection (4) of rule XXIX of the Standing Rules of the Senate, changes in existing law made by the bill, as reported, are shown as follows (new matter is printed in italics, existing law in which no change is proposed is shown in roman): SECTION 1 (A) OF THE ACT OF JUNE 19, 1948 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) the Director of the Bureau of the Census, hereinafter referred to as the Director and the Bureau, respectively, is authorized and directed to take, compile, and publish the censuses of manufacturers, of mineral industries, and of other businesses, including the distributive trades, service establishments, and transportation (exclusive of means of transportation for which statistics are required by law to be filed with a designated regulatory body), in the year 1949 and every fifth year thereafter, and each such census shall relate to the year immediately preceding the taking thereof: Provided, That the census of manufacturers shall not be taken in 1949. The censuses herein provided for shall include the United States and its Territories and such possessions as may be determined by the Director with the approval of the Secretary of Commerce: Provided further, That the censuses of manufactures, of mineral industries, and of other businesses, including the distributive trades and service establishments, directed to be taken in the year 1954 relating to the year 1953, shall be taken instead in the year 1955 relating to the year 1954. O 83D CONGRESS 2d Session SENATE { REPORT No. 1476 AMENDING THE RAILROAD RETIREMENT ACT OF 1937, SO AS TO ELIMINATE REDUCTIONS OF ANNUITIES AND PENSIONS IN CERTAIN CASES MAY 28 (legislative day, MAY 13), 1954.-Ordered to be printed Mr. GOLDWATER, from the Committee on Labor and Public Welfare, submitted the following REPORT [To accompany S. 2178] The Committee on Labor and Public Welfare, to whom was referred the bill (S. 2178) to amend the Railroad Retirement Act of 1937, as amended, having considered the same, report favorably thereon with an amendment and recommend that the bill as amended do pass. This bill is a companion bill to H. R. 356 which passed the House of Representatives July 24, 1953. PURPOSE OF THE BILL This bill would amend the Railroad Retirement Act of 1937, as amended, by repealing the last paragraph of section 3 (b) thereof (commonly called the dual-benefit provision) and would be effective as of October 30, 1951, the date this provision became a part of the law. The last paragraph of section 3 (b) reads as follows: The retirement annuity or pension of an individual, and the annuity of his spouse, if any, shall be reduced, beginning with the month in which such individual is, or on proper application would be, entitled to an old-age insurance benefit under the Social Security Act, as follows: (i) in the case of the individual's retirement annuity, by that portion of such annuity which is based on his years of service and compensation before 1937, or by the amount of such old-age insurance benefit, whichever is less, (ii) in the case of the individual's pension by the amount of such old-age insurance benefit, and (iii) in the case of the spouse's annuity, to one-half the individual's retirement annuity or pension as reduced pursuant to clause (i) or clause (ii) of this paragraph: Provided, however, That, in the case of any individual receiving or entitled to receive an annuity or pension on the day prior to the date of enactment of this paragraph, the reductions required by this paragraph shall not operate to reduce the sum of (A) the retirement annuity or pension of the individual, (B) the spouse's annuity, if any, and (C) the benefits under the Social Security Act which the individual and his family receive or are entitled to receive on the basis of his wages, to an amount less than such sum was before the enactment of this paragraph. HOW THE DUAL-BENEFIT PROVISION OPERATES This provision requires a reduction in the railroad benefit by that portion of the annuity based on years of service and compensation before 1937 or by the amount of any old-age benefit to which the railroad annuitant is entitled under the Social Security Act, whichever is smaller. The provision operates so that the annuity payable to the railroad annuitant who has had no creditable service before 1937 is unaffected by his entitlement to any old-age benefit. But the annuity payable to an employee who does have creditable railroad service prior to 1937 is reduced to the extent of any old-age benefit to which he simultaneously may be entitled under the Social Security Act (or would be if he filed for it) even though he receives no payment under that act because of employment. The annuity, however, may not be reduced below the amount payable on railroad service after 1936 alone. Accordingly, any old-age benefits which the employee may have earned have the effect of nullifying part or all of the credit otherwise allowed for railroad service rendered before 1937. The annuitant is, however, allowed full credit for railroad service on which he paid full taxes. If the dual-benefit restriction is applied to an employee who was entitled to receive a railroad annuity on October 29, 1951, it may not operate to reduce the sum of the railroad and social-security benefits which the employee and his family are entitled to receive for any month to an amount below the corresponding sum on that date. PERSONS AFFECTED There are an estimated 38,000 persons affected by this provision out of a total of 280,000 retired employees and 540,000 persons who are now receiving benefits under the law. This is approximately 13 percent of the retired employees and about 7 percent of the total beneficiaries under the act. A total of 11⁄2 million workers are in active service in the railroad system today. THE COMMITTEE AMENDMENT The committee amendment to the bill merely corrects a typographical error in the bill in the reference to the provision of the Railroad Retirement Act defining the terms "widow", "widower", and "child". These terms are defined in section 5 (1) (1) of the act rather than in section 5 (1). INTEREST IN THE LEGISLATION Since the dual benefit provision was enacted, Members of Congress and of this committee have been besieged by letters of complaint from affected individuals and organizations representing annuitants and pensioners. The widespread interest in the repeal of this provision is indicated by the fact that in this Congress some 18 bills were introduced in the House and 4 in the Senate (S. 1355, S. 1776, S. 1911, and S. 2178) to accomplish this purpose. The bills differ somewhat in detail but are the same in principle and objective. BACKGROUND TO THE ENACTMENT OF THE DUAL BENEFIT PROVISION The so-called dual-benefit ban was one feature of a comprehensive law enacted in 1951 (Public Law 234, 82d Cong.) which provided additional and more liberal benefits to railroad annuitants and their survivors. Among other things, the 1951 amendments increased all annuities and pensions by 15 percent, provided a spouse's benefit of 50 percent of the annuitant's benefit up to a maximum of $40 a month, and increased survivor benefits an average of 33% percent. Notwithstanding these increased costs to the fund, Congress did not provide for increasing the payroll tax to meet the additional cost of the liberalizing amendments. Ways were sought to effect sufficient savings to permit enactment of the liberalizing legislation without damage to the solvency of the retirement fund. The dual benefit prohibition was advanced as one of several means of accomplishing a saving. It must be noted, however, that effective January 1, 1952, the payroll tax rate was increased from 6 to 6% percent by reason of provisions contained in Public Law 372, 79th Congress, 2d session. WHY THE DUAL BENEFIT RESTRICTION SHOULD BE REMOVED Undoubtedly there is merit to the proposition that double credit for untaxed prior service is undesirable. That argument is not properly applicable here, however, inasmuch as railroad retirement tax payments are weighted to contain an allowance toward the cost of service prior to 1937 when the railroad retirement law went into effect. Thus it follows that retirees under the railroad retirement system have paid something into the fund to cover years of service rendered prior to the enactment of the railroad retirement law and it cannot properly be said that they are receiving benefits which they have not at least in part purchased with payroll deductions. Two and one-half years of experience have demonstrated that when Congress adopted the so-called dual-benefit ban, it was not aware of and could not have appreciated its full significance and impact. The committee has now reexamined this provision in the light of its effect on retired annuitants and pensioners since 1951 and has concluded that there have been unintended results from the 1951 provision which recommend its immediate repeal. The repeal of this provision will increase the cost to the system. The Railroad Retirement Board has estimated that additional disbursements will be $11 million a year for the first 10 years after repeal; $15 million a year for the next decade; $9 million a year for the third; $3 million a year for the fourth and steadily decreasing amounts thereafter until about the year 2000, after which additional disbursements resulting from repeal will cease. The aggregate additional disbursements will be $385 million. The cost in terms of a level percentage of payroll assumed to be $5 billion annually is 0.15 percent. There is presently a level cost deficiency of 0.91 percent. Enactment of S. 2178 would increase the deficit to an estimated 1.06 percent. While opponents of the repeal of this legislation, including the Board, laid great stress on the possible danger to the fund in the enactment of this legislation, none was able to state any persuasive reason for fearing that the relatively small cost of repeal would destroy the solvency of the fund. In connection with these percentages it is |