80TH CONGRESS 2d Session } SENATE { REPORT No. 1574 AMENDING THE RAILROAD RETIREMENT ACT OF 1937, AS AMENDED, AND THE RAILROAD UNEMPLOYMENT INSURANCE ACT, AS AMENDED JUNE 9 (legislative day, JUNE 1), 1948.—Ordered to be printed Mr. TAFT, from the Committee on Labor and Public Welfare, submitted the following REPORT [To accompany S. 2782] The Committee on Labor and Public Welfare, to whom was referred S. 2782 (introduced by Mr. Taft, for himself, Mr. Aiken, Mr. Ball, Mr. Smith, Mr. Morse, Mr. Jenner, Mr. Ives, Mr. Thomas of Utah, Mr. Murray, Mr. Pepper, Mr. Ellender, and Mr. Hill) to amend the Railroad Retirement Act of 1937, as amended, and the Railroad Unemployment Insurance Act, as amended, and for other purposes, having considered the same, report favorably thereon, without amendment, and recommend that the bill do pass. GENERAL STATEMENT This bill is the outgrowth of the hearings held by a subcommittee of this committee on May 19, 20, and 21, 1948, on the following bills: S. 994, S. 2055, S. 2228, S. 2300, S. 2423, S. 2437, and S. 2438. Some of these bills proposed increases, and others decreases, in benefits under the Railroad Retirement Act of 1937, as amended, and the Railroad Unemployment Insurance Act, as amended. The bill S. 994 provided also for a reduction in the contributions, now payable by employers in accordance with the Railroad Unemployment Insurance Act on compensation up to $300 a month, from the present 3 percent rate to a rate of one-half percent if the balance in the railroad unemployment insurance account, as of September 30 of any year, is $350,000,000 or more, the rate to be increased, however, by one-halı percent for each $50,000,000 by which the balance in the account is less than $350,000,000, graduating back to the 3 percent rate whenever such balance is less than $150,000,000. The bill S. 2438, on the other hand, proposed an increase in unemployment insurance benefits by 25 percent. The bill S. 2437 proposed increases in all retirement annuities and pensions by 20 to 25 percent, averaging 20.4 percent. The same bill provided also a guaranty that if the total of all taxes paid by an employee for the maintenance of the railroad retirement system, plus a slight amount in lieu of interest, exceeds the total of all benefits under the act paid to him, and to others with respect to his death, the difference should be paid to a designated beneficiary, or a statutorily specified survivor, or his estate. During the hearings on these bills, the Association of American Railroads, representing the great majority of railroads in the country, opposed the bills seeking to increase benefits under the acts, and favored the proposal in the bill S. 994 to reduce the contribution rate for the maintenance of the Railroad Unemployment Insurance Act. On the other hand, the Railway Labor Executives Association, representing the great majority of railroad employees in the country, opposed the bills designed to reduce taxes and contributions for the maintenance of the Railroad Retirement Act and the Railroad Unemployment Insurance Act, respectively, and favored the bills S. 2437 and S. 2438 which proposed to increase the benefits under the Retirement Act and the Unemployment Insurance Act, respectively. Following the hearings, however, these two groups resolved their differences by agreement, which is supported also by the Brotherhood of Locomotive Engineers and the Brotherhood of Railroad Trainmen, and which resulted in their joint approval of S. 2782. The Railway Labor Executives Association accepted the amendments to the Railroad Unemployment Insurance Act contained in S. 2782 in view of the agreement by the Association of American Railroads to accept the amendments to the Railroad Retirement Act contained in the pending bill; and also because of the added assurance against depletion of the reserve in the railroad unemployment insurance account resulting from the provisions in the bill that the balances in the account (which are determinative of the contribution rate) be within a range of $450,000,000 to $250,000,000, instead of $350,000,000 to $150,000,000 as proposed in the bill S. 994. Except for the provision in the bill S. 2782 for a uniform increase by 20 percent in annuities and pensions, rather than for a graduated increase totaling 20.4 percent as provided in the bill S. 2437, the two bills are substantially alike. The Railroad Retirement Board filed a report on the bill S. 2437 on May 14, 1948, stating that the proposed increases in benefits therein provided were very essential and could be obtained without requiring an increase in the tax rates now payable by employees and employers in equal shares for the maintenance of the railroad retirement system. The Board also filed a memorandum containing a detailed analysis and interpretation of the bill S. 2437, which, except for the slight difference in the distribution of the increases in benefits, is equally applicable to the bill S. 2782. On the 4th of June 1948 the Railroad Retirement Board filed a favorable report on the bill S. 2782 in which it made applicable its discussion on the bill S. 2437 to the bill S. 2782, and reiterated its opinion that increases in the benefits under the Railroad Retirement Act were needed and could be obtained without endangering the soundness of the railroad retirement system. The report submitted by the Railroad Retirement Board on S. 2782 is as follows: JUNE 4, 1948. Hon. ROBERT A. TAFT, Chairman, Committee on Labor and Public Welfare, United States Senate, Washington 25, D. C. DEAR SENATOR TAFT: Pursuant to your request of June 2, 1948, this is a report on the bill S. 2782, introduced by you and various other Senators, on June 1, 1948, and referred to your committee for consideration. The Board favors the enactment of the bill. Sections 1 and 3 of the bill provide a uniform increase by 20 percent in all annuities (other than the survivor annuities under sec. 5 of the Railroad Retirement Act of 1937) and pensions, payable in calendar months following the calendar month after the month of enactment of the bill. Section 2 of the bill provides a guaranty that with respect to any employee who will have died on and after January 1, 1947, if the total of the taxes he had paid for the maintenance of the railroad retirement system plus a slight amount in lieu of interest exceeds all benefits under the Railroad Retirement Act paid to him, and to others with respect to his death, the difference should be paid to a designated beneficiary, or a statutorily specified survivor, or his estate. Except for the provision in the bill for a uniform increase by 20 percent in retirement annuities and pensions rather than a graduated increase totaling 20.4 percent, this bill is substantially the same as the bill S. 2437 on which the Board reported on May 14, 1948. You are referred to that report for a showing that the proposed increases in benefits are very essential and can be obtained without endangering the soundness of the railroad retirement system. Sections 4 through 8 of the bill provide for a reduction in the contribution rate, payable by employers for the maintenance of the Railroad Unemployment Insurance Act on pay roll up to $300 a month, from the present 3 percent rate to a rate of one-half percent if the balance in the railroad unemployment insurance account as of September 30 of any year is $450,000,000 or more, the rate to be increased by one-half percent, however, for each $50,000,000 by which the balance in the account is less than $450,000,000, and to graduate back to 3 percent when such balance is less than $250,000,000, and a reduction in the amount to be credited to the railroad unemployment insurance fund from the present 10 percent of the contributions collected to 0.2 percent of the total compensation on which such contributions are based. In the light of the testimony offered on the bill H. R. 6766, which is identical to the bill S. 2782, on June 2, 1948, before the House Committee on Interstate and Foreign Commerce, the Board favors enactment of the bill S. 2782. This report has not been cleared with the Bureau of the Budget. Sincerely yours, WILLIAM J. KENNEDY, Chairman. ANALYSIS OF S. 2782 INCREASE IN RETIREMENT ANNUITIES AND PENSIONS Sections 1 and 3 of this bill provide a uniform increase by 20 percent in all retirement annuities and pensions. LUMP-SUM PAYMENTS TO DESIGNATED BENEFICIARIES Section 2 provides a guaranty that, with respect to any employee who will have died on and after January 1, 1947, if the total of all the taxes he had paid for the maintenance of the railroad retirement system, plus a slight amount in lieu of interest, exceeds the total of all the benefits under the Railroad Retirement Act paid to him, and to others with respect to his death, the difference should be paid to a designated beneficiary, or a statutorily specified survivor, or his estate. With respect to the death of an employee prior to January 1, 1947, there was a similar provision in effect prior to the 1946 amendments to the Railroad Retirement Act (Public Law 572, 79th Cong., 2d sess., approved July 31, 1946). ADJUSTMENT OF TAX RATES UNDER THE RAILROAD UNEMPLOYMENT INSURANCE ACT Sections 4 through 8 of the bill provide for a reduction in the contribution rate, payable by employers for the maintenance of the Railroad Unemployment Insurance Act on compensation up to $300 a month, from the present 3-percent rate to a rate of one-half percent if the balance in the Railroad Unemployment Insurance Account, as of September 30 of any year, is $450,000,000 or more (as of April 30, 1948, the balance was $928,274,759), the rate to be increased by onehalf percent, however, for each $50,000,000 by which the balance in the account is less than $450,000,000, graduating back to the 3-percent rate whenever such balance is less than $250,000,000; and for a reduction in the amount to be credited to the Railroad Unemployment Insurance Fund from the present 10 percent of the contributions collected to 0.2 percent of the total compensation on which such contributions are based. The change in the method for determining the amount for administrative expenses is made necessary by the reduction in the contribution rate from 3 to one-half percent of compensation. While, under the present law, 10 percent of 3 percent of compensation produced more than was required for administrative expenses (as of April 30, 1948, the balance in the administrative fund was $12,252,250), 10 percent of one-half percent of compensation would be certain to produce an amount very much below that required for such purposes. In order to avoid the latter result and, at the same time, avoid providing more than is necessary for such expenses, an effort is made by the bill to provide what, at the present time, appears to be a reasonable solution. For example, on a $5,000,000,000 taxable pay roll (it is in excess of that at the present time), the total of 3 percent contributions under the present law would be $150,000,000 and 10 percent of that, or $15,000,000 (which is equal to 0.3 percent of $5,000,000,000) would be deposited in the administrative fund, subject to the provision that, if as of June 30 of any year, the amount in the fund exceeds $6,000,000, the excess is to be transferred to the account. But on a contribution rate of one-half percent of compensation, the total collected, in this example would be not $150,000,000 but only $25,000,000, and 10 percent of that, or only $2,500,000, would be deposited in the fund under the present law. Under the bill, however, the amount which would be deposited in this example, after the bill is enacted, would be 0.2 percent (instead of 0.3 percent) of $5,000,000,000, or $10,000,000 instead of $15,000,000. CONCLUSION The committee is in full accord with the Board's opinion as to the desirability and financial feasibility of amending the Railroad Retirement Act and the Railroad Unemployment Insurance Act in accordance with the provisions of the pending bill. The committee is also in accord with the Board's analysis and interpretation of S. 2437, which, except for the differences in distribution of the increase in benefits, is equally applicable to the pending proposal. The committee therefore unanimously approves S. 2782 and, in view of its noncontroversial character, urges the prompt enactment thereof. O 80TH CONGRESS 2d Session } SENATE { REPORT No. 1575 AUTHORIZING THE ESTABLISHMENT OF INTERNSHIPS IN THE DEPARTMENT OF MEDICINE AND SURGERY OF THE VETERANS' ADMINISTRATION JUNE 9 (legislative day, JUNE 1), 1948.-Ordered to be printed Mr. TAFT, from the Committee on Labor and Public Welfare. submitted the following REPORT [To accompany S. 2793] The Committee on Labor and Public Welfare, to whom was referred the bill (S. 2793) to authorize the establishment of internships in the Department of Medicine and Surgery of the Veterans' Administration, having considered the same, report favorably thereon without amendment, and recommend that the bill do pass. EXPLANATION OF BILL Authority is granted by this bill to the Administrator of Veterans' Affairs to establish internships in the Department of Medicine and Surgery as a supplement to the highly successful residency program. This bill contemplates the establishment of intern service in the veterans' hospitals comparable to that generally found in first-class private, State, and county hospitals and in Federal institutions such as the Army, Navy, and Public Health Service. Such a program would place the Veterans' Administration in a very favorable position. in regard to the other first-class hospitals in securing the services of medical graduates and offering the most promising interns full-time professional careers in the Department of Medicine and Surgery. Internship training applies to persons who have received the degree of doctor of medicine but who are not prepared to engage in practice until they have completed a training course, usually of 1 year's duration, in a hospital under the immediate supervision of licensed practitioners. One of the most successful innovations authorized in the act creating the Department of Medicine and Surgery was the so-called residency program. This program contemplates a system under which younger doctors, associated with the great medical schools, have accepted |