Max Baucus: “I support the motion to take up H.R. 10 so we can consider the retirement bill as an amendment. Let me explain why this…”

“I support the motion to take up H.R. 10 so we can consider the retirement bill as an amendment. Let me explain why this bill is necessary and then I will respond to some of the criticisms that were made yesterday. By way of background, the Federal railroad retirement system has served railroaders and their families for 65 years. Its roots reach back to the 1930s, in a struggle to find answers to the hardships that resulted from the Great Depression. Today, the system provides benefit payments to more than 673,000 retirees and other beneficiaries. The railroad retirement system actually has two components. Tier 1 is largely equivalent to Social Security. Tier 2 provides additional benefits and is equivalent to a private pension plan. Both are funded by taxes that are paid entirely by railroad companies and railroad workers. Let me stop here and stress a critical point. Every single change that we make in this bill applies only to tier 2. Again, tier 2 is equivalent to a private pension program. In other words, we are only addressing how railroad retirement operates as a private pension plan. We are not making any changes to the part of the program that is largely equivalent to Social Security. So where do things stand? At one point, the Railroad Retirement system was in deep trouble. Just like the Social Security system. In fact, in 1983, we had to permanently cut benefits and increase taxes, in order to get the system back on its financial feet.”