BLE Focus

Winter 2000
Volume 107 - No. 4

BLE Focus

Legislative Issues

In 2000, several key pieces of BLE-endorsed legislation were halted in both the House and Senate by the Republican controlled Congress. Unfortunately, both houses are still controlled by essentially the same leadership as in the previous Congress, although the margin of control is slimmer. This means that the BLE will have to undertake a united effort at all levels if it is to succeed in winning meaningful legislation on behalf of its members.

Two key pieces of legislation exemplify the problem of Republican control in the 106th Congress: H.R. 4844 and H.R. 3091. Both bills would have provided much needed improvements in the quality of life for BLE members and their families, and it is an outrage that our interests took a back seat to the political agendas of a handful of Congressional leaders.

H.R. 4844

This bill, which became a political football in the final days of the regular session of Congress, was known as the "Railroad Retirement and Survivor's Improvement Act of 2000." It would have reduced the vesting requirement under the Railroad Retirement system from 10 years to five, eliminated the actuarial reduction for those who retire prior to age 62, increased surviving spouses' annuities, and eliminated the Railroad Retirement maximum.

The BLE had opposed this legislation early on because of a $430 million annual windfall for the industry, in the form of a 3% reduction in Tier II contributions and the elimination of the Supplemental Annuity Tax. Also, early drafts of the bill would have permitted the private investment of Tier I funds, and a number of BLE questions about the bill's provisions had gone unanswered.

The bill appeared to privatize Tier II in several respects. First, the Railroad Retirement Investment Trust - the entity that would manage and invest the assets of the Railroad Retirement Trust Fund (containing all Tier II revenues not needed to pay current administrative expenses of the Railroad Retirement Board and all Tier I revenues not needed to pay current benefits) - was not subject to Title 31 of the United States Code. Thus, the Trust would not have been a government agency, as the Railroad Retirement Board currently is, and it was unclear whether the Trust would be as secure as the Railroad Retirement Board is today.

Second, payment of Railroad Retirement benefits would no longer have been made by the U.S. Treasury, at the direction of the Railroad Retirement Board. Instead, the Railroad Retirement Board, in consultation with the Railroad Retirement Investment Trust, would have retained a non-governmental financial institution to serve as disbursing agent for benefits. The disbursing agent would have received Tier I and Dual Benefit Payment benefits from the Treasury, at the direction of the Railroad Retirement Board, and Tier II and Supplemental Annuity benefits from the Railroad Retirement Trust Fund, and would have made payments to all annuitants.

Third, there remained a question concerning investment of Tier I - or Social Security Equivalent Benefit Account (SSEBA) - funds. Today, that portion of SSEBA required to pay current benefits is kept liquid, and no Railroad Retirement funds may be invested, except in securities backed by the full faith and credit of the federal government. Section 107(c) of the bill would have required the transfer of that excess into the Railroad Retirement Trust Fund, and appeared to keep the present limitation on investment. Thus, there were questions as to why the transfer provision was necessary.

There also was a series of questions concerning liability and enforcement that were only vaguely addressed. Although the Railroad Retirement exemption from reserve requirements contained in the Employee Retirement Income Security Act of 1974 (ERISA) was to be continued and the bill's language addressed procuring liability insurance for trustees, it was unclear who would have standing to bring a lawsuit against the trustees.

Despite these flaws, the legislation quickly picked up steam, passing the House Transportation and Infrastructure Committee by a voice vote. Then, while being considered by the Ways and Means Committee before coming to the House floor for a vote, the deal was sweetened for the carriers by the addition of a provision that would have repealed a 4.3 cent diesel fuel tax, generating another $170 million annually. This amendment, which the BLE strongly opposed, was stripped from the bill before it was moved to the House floor, where it was passed by a 391-25 margin.

After House passage, the BLE reluctantly agreed to support the bill. BLE leaders did so to head off a clash over whether locomotive engineers would receive improved early retiree health benefits that had been negotiated by the 11 unions sponsoring the legislation.

The decision to support the bill was announced during the national wage/rules negotiations between the BLE's National Wage Committee and the National Carriers' Conference Committee (NCCC) in Washington, D.C. It resulted from the NCCC's offer to extend the benefit improvements immediately to the BLE and its members, while talks continued on the full range of matters covered in the parties' Section 6 notices.

BLE International President Edward Dubroski, in commenting on the announcement, said that supporting the bill was a necessary and prudent measure at the time.

"The margin of the House vote sent a very clear message about the strength and depth of Congressional support for this measure," Dubroski said. "Because the health insurance improvements contained in the package are collectively bargained, rather than legislated, we found ourselves in a position whereby those improvements could be jeopardized for locomotive engineers who plan to retire prior to age 61 in the new year. That risk was unacceptable."

When H.R. 4844 reached the Senate, the political games began in earnest. Despite winning the co-sponsorship of 83 Senators, Republicans Pete Domenici of New Mexico, Phil Gramm of Texas and Don Nickles of Oklahoma successfully prevailed upon Majority Leader Trent Lott of Mississippi (who was endorsed for reelection by the UTU) to hold the bill from consideration by the full Senate.

Then, to add insult to injury, Senate Republicans attached the diesel fuel tax repeal measure to a separate tax bill, H.R. 2614.

The opposition by ultra-conservative Senators was based on two factors. One was a desire to completely privatize the Railroad Retirement system as a prelude to a plan to privatize Social Security.

The other concerns the fact that - under the federal government's unitary budget scoring system - transfers of Railroad Retirement funds from the U.S. Treasury to the new Railroad Retirement Trust Fund could be scored as a reduction in assets on the federal books. Sources said that Gramm, reportedly being considered as Secretary of the Treasury in a Bush Administration, wanted to keep those assets on the federal books to offset tax cuts promoted by Bush's campaign.

In the end, H.R. 4844 died a quiet death as Congress adjourned for the elections, and there was little likelihood that it would be revived for consideration in the lame duck session scheduled for December.

Look Ahead to 2001

Given the fact that four Senators were able to override the wishes of their 83 colleagues who co-sponsored the measure, there is serious concern whether the four Senate seats picked up by the Democrats on Election Day will have a significant impact on the balance of power in the upper chamber.

To be sure, the industry's appetite has been whetted by the potential for huge savings contained in H.R. 4844. However, further complicating the issue was the October 4 introduction of H.R. 5387 by Republican Congressman Nick Smith, of Michigan's 7th District. H.R. 5387 was drafted to completely privatize Tier II and fold Tier I taxes and benefits into the Social Security system.

Curiously, the Smith proposal, which currently has no co-sponsors, would do exactly what the industry first proposed when Railroad Retirement negotiations began nearly three years ago. It remains to be seen whether the carriers will shift their strategy from the changes proposed under H.R. 4844 to the Smith model.

In any event, the struggle for Railroad Retirement reform is far from over. The BLE's battle plan continues to focus on winning the best improvements possible, and preventing the industry from filling its pockets at our members' expense. The direction that the fight will take is unclear, given the Republican sweep of the national elections.

H.R. 3091

H.R. 3091 was introduced by Rep. Steven LaTourette (R-Ohio) on October 18, 1999. The bill would have provided the first substantive changes to the Hours of Service Act in over 30 years, and was specifically targeted to provide meaningful countermeasures for fatigue.

Under the bill, any crew member who works or is required to be available for work for seven consecutive days would have had the option to take up to 72 consecutive hours off, during which time the railroad could not order him/her to report for duty.

The bill was referred to the House Transportation & Infrastructure Committee, and eventually picked up 202 co-sponsors. However, it languished in committee, where Chairman Bud Shuster (R-PA) kept it from consideration.

The bill was a response to BNSF's imposition of a draconian Availability Policy in late 1999. It required extra employees to be subject for duty at least 126 hours per week, and required regular employees - even those on 6- and 7-day assignments - to work nearly every single day their assignment was scheduled.

After this policy was introduced, there was a near-strike, a federal injunction, and an arbitrator who declined to throw out the policy because no one had been victimized yet. Then, when 150 demonstrators - mostly BLE members and their families - used BNSF's corporate headquarters as a backdrop to publicize their plight on the evening news, it became clear that the fight was on.

H.R. 3091 is the key to keeping pressure on the carriers to agree to fatigue relief. There must be a minimum, uniform standard throughout the industry if BLE members are to reclaim control over their personal lives. In spite of the BLE's efforts thus far, BNSF's replacement for the disgraced Availability Policy is still not what it should be. Instead of having to be available at least 126 of 168 hours per week, BNSF engineers can now be unavailable for up to 42 of 168 hours per week.

However, having a half full glass instead of a half empty glass is not even a good beginning. The health and safety of BLE members and other railroad workers demands that the fight continue.

Look ahead to 2001

With Republicans still in control of the House, it will be a battle to escape the clutches of the still-Republican controlled Transportation & Infrastructure Committee. The 107th Congress needs to be greeted with an aggressive campaign on this issue.

This campaign must secure enough additional House co-sponsors for H.R. 3091 to overpower Chairman Shuster's stalling tactics. It has to include a strategy to build swift and comprehensive support for the measure in the Senate. And it must bring to the attention of federal agencies and the public the dangers associated with fatigue.

It will require a fight that has the support and participation of all BLE members. If everyone pulls his or her weight, the combined pressure on the Congress and the carriers will provide the foundation for movement that will improve our quality of life.

Back to Winter 2000 Journal