Eastern Railroad Discussion > George Bush Sr. and RR Retirement

I was talking to a railroader the other day, and he said that Bush Sr. tried to raid RR retirement to shore up Social Security. Any truth to that?

Victor A. Baird
http://www.erstwhilepublications.com

https://www.nytimes.com/1983/03/27/us/financial-crisis-threatens-benefits-for-a-million-retired-railroad-workers.html

I don't recall Bush trying it but both Al Gore and Paul Ryan have expressed a desire to do this in the past.   There are snakes on both sides of the aisle.  

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wabash2800 Wrote:
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> I was talking to a railroader the other day, and
> he said that Bush Sr. tried to raid RR retirement
> to shore up Social Security. Any truth to that?
>
> Victor A. Baird
> http://www.erstwhilepublications.com

Right, it was not Bush, neither of the twits who did don't realize that railroad retirement is funded by the railroaders and the railroads, and is not a Ponzi scheme. It invests every dime of income to make it grow, so it will be there for everyone who has earned and paid for the benefits. Furthermore Social Security dept only administers Railroad Retirement checks because Railroad Retirement preceeded Social Security, and futher railroad retirement HAS bailed Social Security out in the past....and the payback is that SS has to do all our paperwork and write our checks for us since they will never have the cash to pay us back. And they can't touch a dime of our money without OUR say so as NONE of it is in the general fund. We maintain our own accounts. 

And I hope that never changes !

From the article linked here it appears that Reagan tried it first. And that at the time RR retirement was in trouble.

Victor A. Baird
http://www.erstwhilepublications.com



Edited 1 time(s). Last edit at 12/10/18 15:48 by wabash2800.

Reagan and Bush  tack on 25% each to tier 1 and clinton tack on 35% to tier 1 making 85% of tier 1 taxable...

Actually it was the US House under Bush 41... and both the House and Senate under Bush 41 were democrat controlled.   Runaway spending by the house had them looking for pots to pilfer because the alternatives were to cut military, increase debt, or raise taxes (all of which Bush had said he wouldn't do, then had to backslide on the taxes part which led to Clinton being elected).

1992 also saw a serious recession in real estate, savings and loan collapse, etc. And the massive cost of the first Gulf War.

Doing the right thing is not always the best course politically.

To be clear, I continue to favor a hard wall between social security and railroad retirement.

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Which is the equivalent of Social Security.  
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> Reagan and Bush  tack on 25% each to tier 1 and
> clinton tack on 35% to tier 1 making 85% of tier 1
> taxable...

CP8888 Wrote:
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>                          
>                          
>                       
> Which is the equivalent of Social Security.  
> --------------------------------------------------
> -----
> > Reagan and Bush  tack on 25% each to tier 1
> and
> > clinton tack on 35% to tier 1 making 85% of tier
> 1
> > taxable...
Tier 1 mirrors Social Security, and uses more or less the same allowance formulas. Tier 2 is equivalent to a traditional corporate retirement plan and it has it's own allowance formulas. And we now also have access to 401ks as do many other people in other industries. To the extent that we get good retirement bennies it's because we pay dearly for them...as much as one half of my gross goes to retirement and tax withholding. 

engineerinvirginia Wrote:
To the extent that we
> get good retirement bennies it's because we pay
> dearly for them...as much as one half of my gross
> goes to retirement and tax withholding. 

We Retired RR employees thank you for that. I also "paid in" for
many years, and my family now receives a livable Pension. It's
probably the greatest benefit I have ever received. Many thanks
again, and welcome to you-- when your Retirement time comes.

One of the issues with a "traditional pension" is that it rests on sometimes shaky foundations.

For an employee of a publicly owned corporation, a defined benefit pension plan (a fixed amount for life) requires the company and sometimes the employee to set aside reserves. Some companies do, others leave the accounts largely unfunded. If the company goes under, a federal agency will pay a % of the amount promised, rarely the entire benefit. Funding is based on an actuary's estimate of how much the plan assets will earn for each of the next 40-50 years, the discount rate, etc.  Many of these plans are now closed to new members.

A defined contribution plan like a 401k accumulates money contributed by an employee and the company. Your individual bucket is what's available at retirement. If the company goes belly up, you still "own" the assets in the bucket, with interest.

Some municipal and many state employees are in extremely underfunded defined benefit pensions, and there's a lot of discussion in the bond rating agencies about what happens when IL NJ and others implode.

(This is obviously a 50,000 foot view of the issue.  I haven't looked at the railroad corporate pension plan balances in a while, but that could be an interesting exercise when the new 10-K and proxy forms come out.)

CSX602 Wrote:
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> (all of which Bush had said
> he wouldn't do, then had to backslide on the taxes
> part which led to Clinton being elected).

Bush clearly stated that to choose between keeping his promise or helping the nation, the only rational moral choice was to choose to help the Nation. I and many others would hardly call that backsliding. Only if all politicians (or at least a majority) would act like that this county would be so much better.