Don Nickles

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from Texas (Mr. Gramm) is necessarily absent.

Mr. NICKLES. I move to lay that on the table. The motion to reconsider was laid upon the table.

Mr. NICKLES

Mr. NICKLES. Mr. President, I am pleased the Senate has just confirmed Joe Heaton, an outstanding individual and a superb attorney, to be U.S. district court judge for Oklahoma's Western District. President Bush could not have made a finer selection to serve our country as a district court judge. Joe Heaton is exceptionally well qualified and will prove to be a great asset to the judicial system in Oklahoma and our country. Joe graduated from Northwestern State College in his home town of Alva, OK, in 1973. Even before his graduation, Joe's commitment to public service was already evident. While still in school, he was elected to the Alva City Council and later was elected to serve as council president. Following graduation from college, Joe attended the University of Oklahoma School of Law where he excelled, making Oklahoma Law Review and Order of the Coif. He was also on the Dean's honor roll and won American Jurisprudence Awards in Constitutional Law and Conflicts of Law. Upon his graduation from law school Joe continued to dedicate himself to public service, this time coming here to Washington to serve as Legislative Assistant to Senator Dewey Bartlett. Returning to Oklahoma in 1977 he practiced law with the prestigious firm of Fuller, Tubb & Pomeroy. He is respected by his colleagues as an ``honorable and trustworthy leader and friend.'' While engaged in civil practice, Joe was elected to the Oklahoma House of Representatives where he served until 1992. In this capacity as a State legislator, Joe served as the Republican leader for 3 years. His fellow legislators have described him as possessing the qualities needed on the Federal bench. In 1991, I was pleased to recommend Joe's appointment to serve as U.S. attorney for the Western District of Oklahoma. He joined the U.S. attorney's office as a special assistant U.S. attorney and served in that capacity until 1992 when he became the U.S. attorney. In 1993, Joe returned to private practice until 1996 when then U.S. attorney, Patrick Ryan, asked him to return to the U.S. attorney's office. For the next 2 years, Joe was acting U.S. attorney while Mr. Ryan was in Denver in connection with the Oklahoma City bombing trials of Timothy McVeigh and Terry Nichols. Once again, Joe exhibited his strong commitment to serving Oklahoma and the Nation. Joe and his wife Dee Anne are very active in their church where Joe serves as an Elder. They are proud of their two sons, Andrew and Adam. I congratulate Joe and his family on his having earned the position for which President Bush has selected him. I thank Chairman Leahy and Ranking Member Hatch for their work on Joe Heaton's nomination. I applaud the Senate for confirming him as he will make an outstanding judge who will work diligently to administer justice while serving as a Federal district court judge.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from Texas (Mr. Gramm) and the Senator from North Carolina (Mr. Helms) are necessarily absent.

Mr. NICKLES

Mr. NICKLES. Madam President, I make a point of order that the Daschle amendment No. 2170 violates section 302(f) of the Congressional Budget Act.

Mr. NICKLES. Madam President, for the information of our colleagues, it is anticipated we will be voting at 10 o'clock. We may try to shorten that somewhat. It is anticipated we will have two votes, one on a motion to waive a Budget Act point of order, as entered by Senator Baucus, and also on final passage of the Railroad Retirement Act. I notify our colleagues that probably in the next 20 minutes or so we will be voting on these two measures, for them to plan accordingly. I make a budget point of order because we didn't have any funding. The $15 billion in outlays we are getting ready to pass was not in the budget. Granted, this bill has a lot of support. It had a lot of support when we passed the budget, but it was not included. It was not included in the House budget. It was not included in the Senate budget. We had a budget. The budget we agreed upon said we were going to have so much in spending. This was not part of it. So we have to waive the budget if we are going to pass it, or a budget point of order lies, or else we are just breaking the budget. The reason I raise this point is that Congress in the last several months has been, in my opinion, pretty irresponsible. We have had spending grow dramatically, and yet many people are saying it is not enough. Some people are saying, because of the disaster on September 11, we need a lot more money for this and for that. Some of us need to kind of total it up. I don't think we have totaled it up. Spending is growing dramatically. I looked at the amount of money we spent in fiscal year 2000, last year. It was $584 billion in total discretionary spending. In 2001, the year we just completed, it was 640. That was a 9.6-percent increase for domestic spending. For nondefense spending, that was 14-percent growth over the previous year. That is a big increase. Nondefense spending last year, the year we just completed in September, grew at 14 percent. President Bush's budget said let's have spending grow, total discretionary spending, up to $679 billion. That was a 6-percent increase. After the disaster of September 11, we had a bipartisan agreement to get the budget agreed to of $686 billion. In addition to that, President Bush agreed to the $40 billion, money for New York, for Virginia, for defense. That was an additional $40 billion. Add the $40 billion to the $686 billion; that is $726 billion. That is a growth in outlays of 13.3 percent. And that is still not enough. It doesn't include the $15.3 billion we are talking about that will be required outlays for railroad retirement. If you add that together, that is another 15.6 percent. Somebody said that doesn't count because we have scorekeeping. We said we are going to put language in here: don't count it. The fact is, you are going to have outstanding publicly held debt that is going to grow by $15.3 billion as a result of this bill. The fact is, we will be borrowing that $15.3 billion; Treasury will borrow additional money. It is not coming out of the surplus. It is not even coming out of Social Security. It is coming out of publicly held debt. We are going to borrow more money, and we are paying about $1 billion per year every year, maybe every year forever, to pay for this bill. The 10-year cost in interest expense is going to be about $10 billion. Our colleagues should know that. The amount of outstanding publicly held debt as a result of passage of this bill will be growing. I think people have not looked at that. Then there are a few other items in the mill. When we take up the DOD appropriations bill, I understand Senator Byrd has an amendment to add an additional $15 billion for homeland defense and other things on top of it. We haven't considered that yet, but that is in the mill. We have already passed airline assistance. I didn't add that. That had outlays of about $5 or $6 billion, loan guarantees for up to another 10. We don't know how that will score. It depends on how many will default. But there is additional exposure there as well. We have a stimulus package that was reported out of the Finance Committee, two-thirds of which was spending, mostly outlays. Some of it was for unemployment compensation, some of it for cash payments to people who didn't pay taxes. But the net result of that stimulus bill that passed out of the Finance Committee and that we considered on the floor was about an additional $50 billion in outlays. We have an agriculture bill we will be considering probably later today. It has additional outlays. And we have a victims compensation fund that was part of the airline bailout bill that no one knows, no one in the genius of this body who authorized and passed that legislation, how much it is going to cost. It could cost billions of dollars. We don't know how much the insurance companies are going to pay. We don't know what kinds of rewards are going to be made to the survivors and to the victims of the September 11 disaster. It could cost billions. Congress legislated that little package. I was part of the negotiations in the final hours. No one has a clue how much it is going to cost. It could be in the multibillions of dollars. My point is, if you add all these numbers, we may be looking at spending growth in the 20- or 24-percent range. It is as if there is no budget whatsoever. I raise a budget point of order. That is why we have a budget. A budget doesn't do any good if you are not going to use a point of order. Unfortunately, in many cases people in the Budget Committee haven't felt inclined to use it. We waive budgets in cases of national emergency. I supported the $40 billion that was included. We believed that was a national emergency. We were attacked. Let's give money for defense of our country to go after those persons who attacked the United States. I am all for that. Let's assist people who need the help in New York and Virginia and Pennsylvania. We supported that. We waived the budget to do it. Maybe we will waive the budget to do railroad retirement. I expect we probably will. The special interest groups have everybody on board this bill regardless of how much it costs, regardless if it may bankrupt the fund. The railroad retirees and their own accountants say the trust fund balance goes down to almost 1 year of payments in several years, almost bankrupting the fund. How does it do that? It greatly increases benefits, and it cuts payroll taxes. It leaves Uncle Sam as still guaranteeing the benefits. I would be all in favor of the railroads and the employees making whatever kind of deal they want to make for their benefits. If it is more generous than any other retirement plan in America, so be it, as long as they don't ask for taxpayers to guarantee it and pay it. Unfortunately, they are asking for both. They want one of the most generous retirement benefits in the country: 100 percent retirement at age 60, 100 percent survivor benefits. That is great. But they also want us to pay for it if the fund goes broke, and even their own projections have it almost going broke. Then to say now, yes, and we want to waive the budget--the budget doesn't count? If we are going to have a budget, let's use it. Let's abide by it. Let's have unanimous votes if we are going to waive it for cases of national emergency. This is not a national emergency. That is the reason I made the budget point of order. I urge my colleagues to support it. I don't want to see our colleagues on the floor next year, or maybe even a month from now, saying: Where did the budget surplus go? We are now in deficits. Where did it go? It must have been those Republicans. They passed a tax cut. That tax cut, in the first year, was $37 billion. Let's see, I totaled up $40 billion for emergency spending, $15 billion for airlines, $15 billion for railroads, and $15 billion that Senator Byrd is trying to pass. No telling how much spending will be in the so-called stimulus package. When you add it up, there is going to be much more of a spending problem than a tax cut problem. My colleagues may say: Wait a minute, did I vote to waive the budget? Did I vote for that extra spending? This is deficit spending. We are going to borrow an additional $15 billion. We are going to have to waive the budget to do so. I urge my colleagues to vote ``no'' on the motion to waive the budget point of order.

Mr. NICKLES. Mr. President, I want to clarify a few points. This $15 billion transfer in the outstanding publicly held debt is not a wash. That is $15 billion added to the deficit, added to national debt. We are going to have to borrow about $1 billion a year, maybe forever, to pay for this. The Senator from Montana said this legislation makes benefits conform with the norm. It is not the norm in the private sector pension benefits to get a 100-percent pension benefit at age 60. That is not the norm. Nor is it the norm to have survivor benefits equal 100 percent. That is not the norm. They are very generous benefits. I do not begrudge them having generous benefits. I just do not want to have taxpayers pay for them when and if the fund goes broke, and even under their projections it almost goes broke. Why? Because we increase benefits and cut the taxes and also we keep the Federal guarantee, and we have to waive the Budget Act to do it. We did not put this money in the budget. We should have. I urge my colleagues not to waive the budget act provisions. I ask for the yeas and nays on the motion.

Mr. NICKLES. Mr. President, how much time is remaining?

Mr. NICKLES

Mr. NICKLES. Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. NICKLES

Mr. NICKLES. Mr. President, I do not want to inflate anything. I am very particular on being factual. I want to correct a mistake I made in my earliest debate. This came up, frankly, when those of us who had some concerns about the legislation were informed of it on Monday and we were to debate it on Tuesday. I cited from memory that this fund had actually paid out more every year than it had taken in, to the tune of about $90 billion. That was not factually correct. The facts are the fund has paid out more than it has taken in every year since 1957. For the last 43 years, it has actually received payroll taxes, contributions from employees, and it has made benefit payments. The benefit payments have exceeded payroll taxes and company contributions every year for the last 43 years, so I was correct from 1957 on. I wanted to state that, and I will insert that in the Record as well. I want to be factually correct. I want my colleagues to understand that when I state that 20 years from now there is going to be a big problem if we do not do something because we are getting ready to set up a system that allows this fund to almost go bankrupt, almost to where they cannot pay the benefits before we let the tax increase trigger. Some people have said: This is self-funding. This is great. We are going to keep these fund balances between four and six times annual payments for the next 75 years. If the trust fund balances go up, they make good investments, they invest in a lot of stocks that did exceptionally well, great; they can have payroll tax cuts. If they do poorly, if they get below that four, we will have automatic payroll tax increases on the employer, not the employee. Fine, if that works. Under the middle assumption, the tax increases are not triggered until well after the fund is depleted because they use a 10-year average. So they are on a sliding-down scale before the tax increases trigger, so the fund almost goes bankrupt. It goes down to about 1.3 annual payments before they have the tax increases, and then they are in serious trouble. Somebody said this is the law; this does not allow general fund financing, which is one of the reasons I happened to be concerned about it. Somebody asks: Why are you so concerned? Ultimately the Federal Government could be liable. You say: Why? Let me read a couple statements. I like to think the railroad companies would take care of their employees, and if they did, I couldn't care less what benefits they pay. If this were out of the Federal system, they could pay whatever benefits they want. I do not care if they have retirement at age 40 if they pay for it and the Federal Government is not liable for it. I do not care if they have early retirement. I do not care if they have a spouse benefit that exceeds 100 percent if they pay for it. What I disagree with strongly is if they greatly increase benefits and underfund the system and then say: If this does not work out, taxpayers, you pick up the cost. Why should we be asking people in Minnesota or Oklahoma who make $40,000 a year or $20,000 a year to increase their taxes to pay benefits for people who make a lot more money than they do and enable them to retire at age 60 when people in Oklahoma do not get to retire until they are 65 or 67 and then they receive benefits far greater than people in Oklahoma receive. I do not want the people of Oklahoma to have to pay taxes for them to do that. I will read a couple quotes. Supporters insist the amendment places responsibility on future benefits on the railroads in the event investments do not work out. I will read what the railroad industry thinks of its responsibility. This is a quote from the United Transportation newsletter dated May of 2000: The legislation also requires that the railroads would be responsible if the trust fund falls below a certain level. If this happens, a tax would automatically be placed solely on the carriers in order to replenish the fund. In order to add a final assurance to the integrity of the fund, it is still bound by the full faith and credit of the United States Government. They would be required to pay the obligations of the fund if, for some reason, the other safety nets in place were insufficient. Earlier this year, the Lincoln Journal Star--on 8/15 of this year-- stated: Other unions and the Association of American Railroads are promoting the bill as a self-financed shoo-in. In fact, the U.S. government would still back the retirement fund, acknowledged Obie O'Bannon, vice president of legislative affairs for the association. But, he pointed out, the ``automatic tax ratchet'' would require the railroads to kick in more money any time the fund's balance is below four times annual benefits, so that's protection that would mean all U.S. railroads would face insolvency before the Federal liability applies. I don't want the railroad to go insolvent, but I don't want the Federal liability to apply either. I don't want our taxpayers across the country to have to bail this system out because we did a crummy job of legislating in 2001, and in 20 years we say: Well, we made a mistake. Darn, Senators Gramm and Nickles were right. Now the railroad companies are faced with a huge tax increase they cannot pay. The fund is raising towards insolvency. Taxpayers, would you please give a supplemental. Let us raid a little more from Social Security-- which they do under this bill, as well. There is about a $2 billion transfer from Social Security to help pay tier 2 benefits. That is interesting. I thought we would protect Social Security. But we have a Social Security bailout for the bill. Maybe we will address that shortly. How else do we fix the fund? Are we going to write a check? Is the Federal Government going to write the check? I don't know. Some people in the unions say that is what we will do. Some in management say that is what we will do. I don't think that is the solution. Let me read the last sentence of the vice president of legislative affairs for the Association of American Railroads: All railroads would face insolvency before the federal liability applies. I don't want the railroads to become insolvent, nor do I want the Federal taxpayers to become liable for all the generous benefits. These benefits, in comparison to retirement benefits in the private sector, are very generous--overly generous. Find other private pension systems that offer full retirement at age 60. You won't find very many. Find other pension systems that offer spousal benefits or survivor benefits at 100 percent. You won't find very many. I doubt the department stores offer these kinds of benefits. Manufacturing companies don't offer these benefits. Yet we are getting ready to do it. Now I read that if it doesn't work out, taxpayers ``will bail us out.'' I won't be in the Senate, or I doubt I will be in the Senate, 20 years from now, but if I am, I guarantee I will be opposing a taxpayer bailout of this industry. And conversely, I hope there will be others opposing this. This will happen. It is a prediction. It will be in the Congressional Record. I hope I am wrong. I hope they find investments that do enormously well. They might find good investments such as Intel, 10 years ago, going up in multiples. They might also find investments such as Enron. I am concerned. Everybody indicated this is not so bad. I have not raised this on the general issue of debate. This investing in private funds is a good idea. I love for private individuals investing for themselves to buy parts of different companies. I am reluctant to think: What will this board invest in? Mr. President, $15 or $16 billion is a lot of money. What companies will they buy? Are they going to be politically correct? Would they buy Microsoft? Our Government was suing Microsoft. I guess they still have suits pending against Microsoft. Maybe that is not politically correct. What about tobacco? Our Government in the previous administration was going after tobacco. Philip Morris was a good investment the last year. Microsoft was a good investment the last year. Would they be buying utility companies? A lot of utility companies are being sued for a lot of different reasons. Do they have to wash their hands from investments? I have concerns when you have a board comprised of rail management representatives, union representatives, and they select one additional person they mutually agree upon to invest billions and billions. I have reservations about that. That is not what I raised this issue on. For the information of colleagues, we will vote on the Gramm amendment and the Nickles amendment starting around 4:30. For the information of our colleagues, we will have the joint prayer service, which we desperately need, starting at 5 o'clock. The amendment I am offering says, before we allow the trust funds to be depleted on such a steep decline, if a 5-year average gets below 4 years, annual payments trigger the tax increases at that time instead of using the 10-year average. That would keep this a lot more shallow. It will keep the fund probably well above 2 or 3 in the annual balance statement, certainly above 2--not allowed to dip down so deep. That is for the protection of the railroad retirees and for the protection of taxpayers, to make sure we will not have to do what the United Transportation Newsletter said: We can always fall back on the full faith and credit of the U.S. Government. I hope that doesn't happen. I will work energetically to see it doesn't happen. If we keep the trust balance more level, it will not happen. I urge my colleagues to support the amendment that would say, instead of having a 10-year lookback before you trigger an automatic tax increase, do it over 5 years so we don't allow the trust fund balances to go as low as they are now projected to by the railroads' own actuaries of the pension plan. I yield the floor.

Mr. NICKLES. The Senator said I took the most pessimistic assumption. I correct him. All my statements and the charts are on the middle assumption, not the most pessimistic assumption. The most pessimistic assumption says this bill has real problems. I did not use that. I used the middle assumption.

Mr. NICKLES. Will the Senator yield for a question?

Mr. NICKLES. Will the Senator yield for a question?

Mr. NICKLES. This compares present law to this bill, under those assumptions. Present law under the employment assumption, the middle assumption, shows in current law a trust fund balance of $19.3 billion today and $34 billion in the year 2025. Under the Daschle amendment, or the bill we have before us, we start at $19.3 billion, and in 25 years we end at $8.5 billion. In other words, the trust fund is only about-- well, it is 75 percent below where it is today, or where it would be under current law. That is assuming a 21-percent payroll tax in the last few years. So even with enormous payroll tax increases, the fund is still in serious jeopardy of being able to pay benefits, being able to provide security and assurances that there is going to be money there for retirees who maybe worked most of their lives and depend on it. I have put this in the Record because I want people to see it. I want railroad management companies to look at these scenarios and realize, OK, we are trading current law for this. This may be a great deal for them for the intermediate time. People may say: Why are you doing this? Railroad companies will save a few hundred million dollars a year--over 10 years, $4 billion; over 15, 17 years, $17.5 billion. Their taxes are going to be cut. I will put that into the Record. Their taxes are going to be cut over $400 million and that gets larger every year. That is what the companies get by reducing the payroll tax from present law, $16.1 billion, to 13.1 percent, and then it eliminates another supplemental benefit tax that boils down to, I think, 26 cents an hour. They eliminate both of those taxes and save about $400 million a year-- ``they'' being maybe a dozen railroad companies. They save $400 million a year. What do the employees get? The employees get a pretty good deal. They get a deal because they have tier 1 benefits that are supposed to be equal to Social Security; they pay the same tax. The Social Security tax is equal to 6.2 percent for employees, 6.2 percent for the employer. They pay the identical tax, same tax as everybody else in America. But they don't get the same benefit. Under Social Security benefits, people receive their full retirement benefits at age 65, which is going to age 67. Under railroad retirement, they get to receive 100 percent benefit now at 62. This bill makes that 60. They pay the same tax with more benefit. You get zero if you retire at age 60 under Social Security. If you retire at 62 under Social Security, you get 80 percent of the benefit you were expected to receive at age 65. That 80 percent is being reduced under current law to 70 percent over the next several years. So under Social Security, a person who retires at 62, many years from now, gets 70 percent; and under railroad retirement, they get 100 percent benefit at age 60--and they pay the same taxes. There is a big difference there. What about the survivor benefit? That is a great big benefit increase for railroad retirees. It costs money. How much does it cost? Guess what. It costs about $4 billion a year over the next 10 years. They also have another little benefit: tier 2 benefits, non-Social Security benefits, the other railroad retirement benefits, a survivor benefit equal to 100 percent of what the employee was receiving. That is pretty nice because in most private pension systems the survivor receives 50 percent. I wish they could pay that much and more. Who is going to have to pay the bill? What are those benefits? They add up to $4 billion over the next 10 years. That is about $400 million per year in a couple of years. So it totals about $4 billion over the next 10 years. It just happens to come out even that the railroad companies and employees come out with the same amount of benefit. That is what they mutually agreed upon. Well, what they didn't do, in my opinion, they didn't protect the fund. The fund goes almost bankrupt before this triggering mechanism to make sure the fund stays solvent is kicked in. That is not to get too technical, but they have a 10-year lookback average before, and if that average gets below 4 years' annual payments, then they have an automatic tax increase. That waits too long and allows the fund to go down to 1.3 annual payments before the tax is really kicked in-- maybe it is kicked in in the last couple years, but it doesn't catch up. So the fund is in jeopardy. The payments are in jeopardy. The whole concept of paying railroad retirement is in serious jeopardy because we didn't do a good enough job, when we created this change, to make sure it would be solvent. So I have an amendment--really a simple amendment--that says instead of looking back over 10 years, look back over 5 years. I think it is a reasonable amendment, one that if the railroad employees could look at, they would support in a minute, absolutely, totally, completely. It is a good provision to try to make sure there will be a trust fund there instead of allowing it to dip so low. I urge my colleagues to support the amendment. I yield the floor.

Mr. NICKLES. Mr. President, I ask unanimous consent the pending amendment be laid aside and I call up amendment No. 2175.

Mr. NICKLES. Mr. President, I compliment Senator Gramm for reading the bill and trying to do something to protect the integrity of the trust fund. He has said, No. 1, if we are going to give them $15 billion, let's make sure we don't spend down the principal. And, No. 2, let's only spend the interest or the dividends from that trust fund to provide new benefits. I support him in that. I compliment him for that. I also have an amendment that wants to protect the integrity of the trust fund. The trust fund, by any of the scenarios--I will show the charts in just a minute--the trust funds goes way too low. The bill's stated objective is to keep the trust fund equal to but somewhere between four and six times the annual payment to beneficiaries. That is their goal. That is their objective. Unfortunately, the bill before us, under the middle assumption, doesn't even come close to that. As a matter of fact, the trust fund goes all the way down to about 1.3 annual payments. In other words, it almost goes bankrupt. It barely has enough to make 1 year's payments of benefits. That is not a good deal for taxpayers, and it is certainly not a good deal for railroad retirees. I don't think it is a good deal for the railroad companies because they are going to be socked with a very large tax increase. I will use the chart Senator Baucus has. I think it illustrates it. We start out with about 6 years of benefits under today's standard, but when we pass this bill, in a period of about 20 years, we go down to just a little over 1 year's balance. In other words, we take a fund-- and I will insert this in the Record. Actually, I will insert for all three assumptions. Under the assumption I will talk about, the employment assumption No. 2, the one in the middle, we start with a balance this year of $19.3 billion. And under current law, that goes to $34 billion. Under the bill we are getting ready to pass--and I can count votes; frankly, I could count votes before this week started--that trust fund balance goes from $19 to $8.4 billion. Instead of being $34 billion, it goes to $8.4 billion. That is the bill we are getting ready to pass. I wish I could wake up all my colleagues, most of whom have not read this bill, most of whom had nothing to do with drafting the bill. This is the first time I can recall in my 21 years in the Senate that we have had a bill that was totally written by special interest groups. In this case, railroad unions and management got together and said: Here is our bill, don't touch it. Don't have a hearing on it. They didn't have a hearing in the House. We didn't have a hearing in the Senate. I asked for a hearing in the Senate Finance Committee. We did not get it. We had a markup but it was already railroaded. There were not going to be any amendments. There was one amendment adopted in the House or the Senate. That was the amendment dealing with scoring. We are not going to count it. It didn't say we will waive the Budget Act. It said will not count it, which I think is even worse than just waiving the Budget Act. Why have a Budget Act if you are going to have $15.3 billion in budget outlays and it doesn't count? We just had a vote on that by Chairman Domenici and ranking member Conrad, and we lost. We lost that vote. So the special interest groups are together. And they said: Let's leave it in. They didn't request that amendment. It is interesting; that was put in by the House. So that was the only amendment they put in. It was a bad amendment in my opinion. We are going to accept that, and we are going to keep the bill. We will not touch it. I think we are making a mistake. You ask: Why are you still fighting this? You know this bill is going to pass? Sure, I do. But I want to make a statement. I want to show that we can do a better job. We are not beholden to the special interest groups. We are beholden to taxpayers. This is a Federal statute. We are changing Federal law. How many CEOs of the railroad companies or how many union members were elected to the Senate? I don't know, but they wrote the law. They wrote the bill that is going to become law. I don't think they did a very good job. If I thought they did a good job, maybe I would cosponsor the bill. I don't think they did a good job. History will tell. I will make a prediction. I am not going to be here in 20 years. I guess if I was as studious and healthy as Senator Thurmond, maybe I could be. If I was fortunate enough to be reelected by the people of Oklahoma, maybe I could be. Agewise it is possible, but it is not possible after consulting with my spouse. But 20 years from now, if not well before that, Congress is going to have to readdress this issue because we are going to have a big problem. As this chart shows--I am borrowing Senator Baucus's chart, and I thank him--we are going from 6 years of benefits down to a little over 1, we think. That is in 20-some years. Then Senator Baucus said: Wait a minute. Way out in the outyears, it goes way up. Who knows? I know they are going to have problems when we get into the year 2021, 2022, 2023, 2024, 2025 and 2026. It goes way down. The trust fund actually falls by 65 percent. When you have that trigger, payroll taxes have to go way up. Payroll taxes have to go up by 69 percent. That is because in the bill we say if it triggers at a certain point, we are going to have a tax increase, a tax increase that is paid by the railroad companies. And it goes from 13.1 percent to 22.1 percent. Senator Gramm said they are having problems. They have shrunk their labor force significantly. They are not going to be able to handle that kind of increase. They will come back to Congress and say: Here, it is yours. The trust fund is broke. It didn't work out very well, so pay our employees. And because the Railroad Retirement Act is a Federal statute, it becomes an entitlement. Many people here say it is not that. No, they won't be coming back to us. I predict that within 20 years they will be coming back to Congress and saying: We need a fix. We need a little bump. We need a little transfusion. Maybe the transfusion will be from Social Security. They are already getting it. I wonder how many of our colleagues know that they get billions of dollars from Social Security, basically from tier 1 going into tier 2, to pay their benefits. It is in the bill. I have an amendment that will address that. Possibly we will consider that soon. Right now I offer an amendment that I urge my colleagues to look at, consider, and hopefully pass. The triggering mechanism to have a tax increase is if the trust fund goes so low that there will be a tax increase. If you actually get low enough to pay benefits for 4 years, you have a tax increase. It is automatic. It is in the bill. It would become law soon. OK. That makes sense. But you ought to have some kind of triggering mechanism so if we keep the trust fund balanced, we won't be coming to the taxpayers for general revenues. What is wrong is the calculation. You look back over 10 years to figure that average. By looking over 10 years, if you just see the revenue estimates, they estimate that the trust fund balance goes from a high, somewhere in the neighborhood, under present law, of about $27 billion. Under the Daschle bill or the railroad bill we are getting ready to pass, the railroad trust fund runs about $23 billion. Then the next several years it falls to 19, 18, 17, 16, 13, 12, 10, 8. You are looking at a 10-year average. If you look at a 10-year average and you are averaging 8 and averaging 20, maybe it won't trigger the tax increase until about the year 2021, 2022, 2023. In other words, it allows the fund to fall from about 6 years' payments down to a little over 1 before the tax increase is triggered. That is too late. That doesn't allow the trust fund to have enough time to recharge, to build, to have a cushion to earn interest or to earn dividends. In other words, we allow this dip to go too low. The effect of my amendment would be to smooth that out. Possibly it would smooth out the payroll tax increase. In other words, instead of looking back over 10, we would look over 5. So your average, once you got on the decline, it would say, if we get much lower, we will have to have a tax increase sooner to keep that fund from going so low. That is too big of a dip. That is too dangerous for railroad employees or retirees to have the fund balance dip down as low as 1.3 annual payments. This is under the middle scenario. If you look under the pessimistic scenario, it goes in the red. Under the pessimistic scenario, the whole trust fund goes totally in the red by the year 2022. It will not be able to make payments. It will need either general revenue funds or it will have to cancel increases or suspend payments or whatever. In other words, there is a scenario here where the fund is totally broke in 20 years. That is not acceptable. I don't think it is acceptable. I think we should protect railroad retirees. We have too much of a variable by using a 10-year average before you have a trigger for a tax increase. So my suggestion is, let's make it over a 5-year average. If you get on a down slope, the trust fund starts falling in value, we won't have to wait another 8 years before you trigger a tax increase. That is the essence of my amendment. It is a friendly amendment. It is not an amendment to gut the bill. It is not an amendment to say we don't want railroad retirement and we are not going to have railroad retirement. It is an amendment that says they put together a deal that was negotiated between labor and the employees or the unions. They may have cut a good deal for the employers, basically saying let the fund go almost bankrupt before you trigger a tax increase. We will do that in 20 years. Guess what. Everybody running those companies will all be retired by then, and Members of Congress will all be gone by then. Let somebody else worry about that. So these big tax increases are not triggered--it is interesting, they are not triggered until 15 years from now, but then they are pretty big. It is not a 10- percent increase in payroll taxes, not a 20-percent increase; they keep the tax rate basically at 13.1 percent for about the next 15 years and, bingo, you go from 13.1 percent to 22.1. That is a 69-percent increase in payroll taxes. I just can imagine--as a matter of fact, I will make this prediction: When this happens 15, 20 years from now, somebody is going to come back--the railroad companies will say: We can't afford that. That will bankrupt us. They will basically say: Taxpayers, you handle it or liquidate the railroad so they can pay these benefits. You are in that kind of scenario. That will happen. That is too Draconian of an increase because we allowed the trust fund to get too low before we triggered the changes. I say, let's trigger the tax increase. Instead of over a 10-year average, do it over a 5-year average. That makes a lot more sense. We are not holding these funds to fiduciary standards. I have an amendment to do that. We don't hold them to fiduciary standards that we do all other multiemployer plans. Maybe we should. I have told some of my colleagues who have been voting and saying they want to take up the bill, all right, we are on the bill. I want to consider the bill. They say let's consider amendments. Well, this is an amendment. This is an amendment that would help the security of the trust fund, make sure it doesn't get down too low. We would have the automatic trigger moved up a little bit. That is the essence of the amendment. Instead of letting the fund dip down quite so low--before it goes down too low, below the threshold of four times annual payments, we would trigger the tax increase a little earlier so it doesn't go down quite so low. That is the essence of the amendment. We want to save the trust funds so the funds will be there to make the payments and not bankrupt the railroads at the same time. Now, maybe if, in the interest in this bill, the railroad companies and the unions would have come before Congress and said, yes, let's have a hearing on this bill, I could have asked them questions. My guess is the railroad unions would say, yes, I like that idea. They would probably say I like that idea because we don't want to jeopardize our payments. If somebody is retired at age 60, and they happen to be age 80 and they are reading the reports, they would say, the trust fund went down to almost bankrupt. They can barely make payments this year. They are not going to get a lot of comfort over that. So the idea is, let's try to make greater protection of the trust fund. Mr. President, I want to have printed in the Record a table that I have compiled, my staff, of the three various employment assumptions, 1, 2, and 3. I ask unanimous consent that this table be printed in the Record.

Mr. NICKLES. Mr. President, I ask for the yeas and nays.

Mr. NICKLES. I announce that the Senator from Texas (Mrs. Hutchison) is necessarily absent.

Mr. NICKLES. I announce that the Senator from Texas (Mrs. Hutchison) is necessarily absent.

Mr. NICKLES. Mr. President, I will ask unanimous consent to have printed in the Record the ``Railroad Retirement and Survivors Improvement Act of 2001 Progress of the Railroad Retirement and Social Security Equivalent Benefit Accounts under Employment Assumption II.'' It basically says let's transfer $1.586 billion in from Social Security, or the tier 1 fund, into the tier 2 fund. Social Security is subsidizing tier 2 benefits. I also state to my colleagues, a real solution would be if tier 1 is supposed to be equivalent to Social Security, and people want that--and then as Senator Baucus says, tier 2, if they want to subsidize Social Security for a lower retirement, they can do that--let's just put them under Social Security so we do not intermingle these funds. There is a little raiding going on. Under this bill, there is about $2 billion, then, $80-some million almost every year, and then it increases to almost $100 million every year that is transferred from tier 1 to tier 2. I do not like it. We are raiding the Social Security fund. I ask unanimous consent to have this table printed in the Record.

Mr. NICKLES. Mr. President, we can solve that by putting all railroad employees, like we put all new Federal employees, under Social Security. We did it. We put Members of Congress under Social Security. To me, it would help this problem so we would get away from this little financial wiggling that has been going on with this fund for a long time. Also, I ask unanimous consent to have printed in the Record a table that I have that shows the benefits for employees and the benefits for railroad companies, or management, on a year-to-year basis. I alluded to this in my statement, but I wanted to have the facts with these charts substantiating my oral comments.

Mr. NICKLES. Mr. President, this amendment is to help protect the solvency of the trust fund. As the chart shows, the trust fund falls under the middle scenario. The trust fund falls from about 6 years' of payments. There is enough money in the trust fund to pay 6 years' worth of benefits. Under that scenario, if we pass this bill, which we are going to do, it goes down to about 1.3. I keep hearing 1.6. I believe it is 1.3--barely enough to pay 1 years' benefit. That is because we use a 10-year average looking back. The fund has to fall so far before the tax increase is triggered. Under this amendment, we strike the 10 years and say let us make it 5. As the fund balance starts to fall under the railroad retirement assumption, it falls all the way down to $8 billion. We pay $8 billion in benefits right now. I am saying, let us not let it go quite that low. Let us look back over 5 because if it starts falling, that fund gets below the 4 years' payments--enough to pay for 4 years' worth of benefits--if it gets below that, let us have the tax increase triggered then. Not 10 years, it will be 5 years out. That will keep the fund solvent for railroad retirees. It will decrease the pressure on the railroad companies later on. It also gives some protection to taxpayers. It will decrease the likelihood that there will be a bailout or a necessity for a bailout to be falling on general revenues or general taxpayers in the year--whether it is 2015, 2017, or 2021, I do not know. Let us not let the fund go all the way down to almost 1 year's payment before we trigger a tax increase. Let us do it a little bit earlier. Let us use the 5-year average instead of the 10-year average. I used to do this work. Anybody who talks to their actuary will say that makes a lot of sense. Waiting for a 10-year average would be absurd. I yield the floor.

Mr. NICKLES. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from Texas (Mrs. Hutchison) is necessarily absent.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from Texas (Mrs. Hutchison) is necessarily absent.