Railroad Retirement

A. Keep What We Have. Social Security "reform" appears to be a high priority for the 1999 Congress. Since 1974, Tier I of Railroad Retirement has paralleled Social Security in regulation and application while Tier II has remained independent. Because we took care of the issues now facing Social Security in 1974 and 1982, at current levels of employment Railroad Retirement is fully funded for the next 75 years.

Unfortunately, a large pot of money in a fully funded pension, especially one linked to Social Security, may prove to be a tempting target for Social Security "reformers" who may try to raid Railroad Retirement to prop up Social Security, particularly in light of rail management's desire to reduce its contributions to your pensions. Due to the link to Social Security, responsible rail labor may be drawn into a false panacea of high risk, high cost "privatization" being promoted by large banking interests who seek to profit handsomely by speculating with Social Security (and possibly Railroad Retirement) dollars.

B. 55/30 Retirement, Spousal Annuity. Railroad Retirement analysts project that 55/30 retirement would require annual contributions equivalent to an additional 7.8 percent of your salary. Increased spousal annuity would require an additional .7 percent. Someone--either you or the railroad--has to pay the additional bucks into Railroad Retirement. A rail management seeking to reduce its Railroad Retirement contributions is unlikely to be generous.

Historically, changes in Railroad Retirement are negotiated with management and approved by Congress. With bargaining for the next national contract impending and with the threat to existing benefits posed by Social Security "reform," 55/30 retirement as well as spousal annuity are open for discussion as part of a complete package.

Remember, all rail crafts contribute to and benefit from Railroad Retirement. All crafts must therefore approve any changes. While BMWE is committed to achieving 55/30 retirement, some other crafts only pay lip service to the idea, approving 55/30 retirement only if there is no additional cost to the employee or the railroad. To get 55/30 retirement in 1999 or the near future, other craft members must also be convinced of its value despite additional expense.

C. Military Veterans. BMWE will seek to close the legal loophole that prevents 20-year military veterans now employed by railroads from receiving railroad unemployment insurance when laid off or railroad sickness benefits when ill or injured.

Surface Transportation Board (STB)

The STB, successor to the Interstate Commerce Commission (ICC), must approve railroad mergers, track abandonments, and freight rates. This is the body that has abrogated BMWE collective bargaining agreements as part of approving mergers such as that of C&NW and UP. In 1998 BMWE prevented the reappointment of Republican Gus Owens and chair Linda Morgan, both of whose decisions had hurt BMWE members.

As of January 1, 1999, the three member STB board will have only one member, Linda Morgan, an unappointed holdover. Some question exists whether the STB can act in the absence of a quorum of at least two members.

In 1999 BMWE will seek to have the Clinton administration appoint three board members who understand rail labor issues and who do not function as wholly owned subsidiaries of rail management.

Contract Sanctity

As part of the Surface Transportation Board reauthorization process, BMWE will seek legislation prohibiting the STB from abrogating freely negotiated collective bargaining agreements when approving mergers and/or other transactions sought by rail management.

Rail Safety

BMWE will again seek legislation to put teeth in rail safety regulation to improve your chances of coming home at night and of retiring healthy. In 1997, BMWE and responsible rail labor prevented rail management from securing a watered down rail safety bill which would have cut the limited protection you now have.

National Contract

Section 6 notices of intent to bargain a new national contract can be served November 1, 1999. Historically, BMWE contracts are imposed by Congress or negotiated under threat of Congressional intervention. Familiarizing non-railroaders to our way of life takes time. It's not too early to begin educating the power brokers, Congress, who will set your salary and affect your family life for the next decade.

Rail Management's Legislative Agenda

Rail Safety Bill. After BMWE and other responsible rail unions successfully blocked passage of the toothless, unenforceable, purported "Rail Safety" bill promoted by management in 1997, the carriers in 1999 want to negotiate a joint bill, acceptable to both management and responsible rail labor before presenting any rail safety bill to Congress for passage.

Railroad Retirement "Reform." As part of Social Security "Reform" Congress plans to consider in 1999, rail management wants to find a way to increase the rate of return from Railroad Retirement taxes it pays into the system -- in effect saying privatize and play the stock market -- and to reduce management's level of contribution. Management does not seek to reduce the level of benefits for existing employees but contemplates a two tier system whereby new hires would pay more into a private plan for the same benefits while management pays less. (Note: In two tier systems, new hires eventually outnumber--and outvote--older employees who have better pension. Two tier systems also virtually guarantee internal employee friction.) Management acknowledges that Railroad Retirement "Reform" is unlikely to pass without support by responsible rail labor, but may attempt to coerce labor into supporting a management initiative by threatening to go to Congress unilaterally if we don't agree to changes.

Deregulation. The Union Pacific "meltdown" of 1996-97 and the Surface Transportation Board's ill-considered "bottleneck" decision brought shippers together in a coordinated, well financed campaign for railroad deregulation, claiming that each of the four major railroads in effect exercises monopoly control over a portion of the country and each has abused its monopoly power to set freight rates. The proposals on the table do not fully return the industry to pre-1980 Staggers Act (when, as old timers remember, there were three times as many gandies and far fewer contractors). Deregulation will probably be attached to the STB reauthorization bill which the Senate Commerce Committee is scheduled to hear in February 1999.

Rail management considers "open access" a serious threat. Under "open access," any railroad operator, even short lines or "competitors" could run over any other railroad's track to service a customer or deliver cargo. In effect, open access would separate each major railroad into two operations--essentially two separate companies--one of which owned and maintained roadbed, charging a fee to any party which ran over the tracks (a fee based on cost of track and bridge repair and maintenance), and one of which delivered freight over these tracks in true competition with all other rail carriers. The shippers are willing to settle for much less than what rail management says the shippers want on "open access."

Presumably, the same safety standards which now apply to trains operating over a "competitor's" track under existing trackage right agreements would apply to "open access" arrangements.

Eliminate Fuel Tax. For U.S. deficit reduction, all commercial carriers have paid 4.3 cents tax per gallon of fuel purchased. In 1997, with the federal deficit "eliminated," the trucking industry tried to eliminate this tax for trucks but succeeded only in getting the tax on truck fuel shifted from the general fund to the highway trust fund which builds roads for trucks. Rail management argues that because railroads maintain their own roadbeds, this fuel tax should be eliminated rather than converted to a roadbed maintenance fund. In effect, despite a half century record of inadequate maintenance of track, rail management is saying "Trust me!" to us, to the shipping/traveling public, and to the government--in effect asking us to trust them to actually invest the $10+ million cost savings elimination of this tax represents in roadbed rather than pipelining this money into shareholder profits and thereby into their own pockets.

Truck Size and Weight. In 1999 the trucking industry will seek increases in federally mandated weight limits on commercial trucks, allowing them to more directly compete with rail carriers. Higher weight limits, which require no new construction, increases truck productivity faster than longer truck lengths which the industry preciously sought. Heavier trucks wear out highways more quickly, increasing the burden on taxpayers like us.

Kyoto Global Climate Treaty. Signed as a symbol of international environmental good will, the Kyoto Treaty restricts production of "greenhouse gases" such as carbon dioxide from fossil fuels such as coal and oil. The U.S. Constitution requires such treaties to be approved by the U.S. Senate (NAFTA seems to have slipped through without appropriate approval).

At press time, the votes to approve the Kyoto Treaty don't exist in the Senate. Rail management, fearing a loss in coal hauling profits, seeks BMWE's help in blocking Senate approval of the Kyoto Treaty. Yet, coal trains wear out track at a rate even rail management has trouble ignoring. The United Mine Workers also oppose the Kyoto Treaty.

------ Karl P. Knutsen