Legislative Update September 2012

Amtrak and High Speed Rail

In a report released in early July, Amtrak announced an updated plan for high-speed train travel on the East Coast that envisions 37-minute trips between Philadelphia and New York after a $151 billion redevelopment of the Northeast Corridor. This faster service would be phased in gradually as Amtrak improves existing tracks, signals, bridges, and power lines, and builds a separate high-speed corridor between Washington and Boston to accommodate trains traveling at 220 miles per hour. The segment between New York and Washington is expected to be completed by 2030, and the route between New York and Boston by 2040. Amtrak says the costs of building the new rail system would be offset by 40,000 construction jobs a year for 25 years, 22,000 new permanent jobs, and increased revenue and productivity for East Coast employers. Amtrak plans to acquire 40 more Acela Express passenger cars, which will increase capacity by 40 percent on the fastest trains they now operate.

It’s no secret that Amtrak is dependent on annual appropriations from Congress for its survival. Amtrak reduced cost estimates in its new plan by combining proposals for upgrading the existing corridor and building the high-speed line. The railroad now calls for spending $3 billion to $4 billion a year during peak construction years and delaying some spending beyond 2040, when ticket revenues of $4.86 billion a year are anticipated to be rolling in from 43.5 million passengers. “If federal, state, and local governments pay to build the new high-speed rail system, the revenues from the trains will more than pay for the costs of operating and maintaining them. Amtrak is projecting a $928 million operating surplus by 2040, which could be used to pay back money borrowed for construction. Amtrak needs to build political and popular support for funding and building this proposed high-speed corridor.”  With incremental projects now underway, like the $450 million effort to increase train speeds between Trenton and New Brunswick, the railroad hopes to demonstrate its ability to get bigger and faster.

The outcome of the November election, however, could spell real trouble for Amtrak. On August 28, the Republican National Convention in Tampa, Florida, approved its platform to eliminate funding for Amtrak passenger rail service, privatize airport security screening wherever possible, and stop the use of money earmarked for highway construction and other purposes. The platform includes many provisions that were pushed by Republicans in the House during recent negotiations over the new $105 billion transportation bill that was approved by lawmakers in June. An excerpt from “We Believe in America,” the 2012 Republican platform, states:

“Amtrak continues to be, for the taxpayers, an extremely expensive railroad. The public has to subsidize every ticket nearly $50. It is long past time for the federal government to get out of way and allow private ventures to provide passenger service to the northeast corridor. The same holds true with regard to high-speed and intercity rail across the country.”

And here is what BLET President Pierce has to say on this matter:

“Adopting a policy that calls for the outright demise of Amtrak is an eye-opener for all railroad workers in the United States. The fate of our Railroad Retirement system is tied to steady employment levels in the railroad industry over a long period of time. The sudden elimination of 20,000 Amtrak jobs could likely sound the death knell for Railroad Retirement as we know it.”

Railroad Retirement Under Attack

As reported back in May, the attack on Railroad Retirement proffered under Congressman Paul Ryan’s budget  (House Congressional Resolution 112) is a huge issue to consider as national election time draws closer. We fought hard in an unprecedented coalition of the carriers, retirees, and the rail labor unions for the changes that were made to Railroad Retirement in 2001. No taxpayer funds are used for our retirement plan; therefore, there would be no budgetary savings as the Ryan Budget purports. If enacted, the Ryan Budget would:

  • Eliminate the “60/30” provision, which allows railroad employees to retire with full benefits at 60 years of age with 30 years of service;
  • Eliminate the Railroad Retirement Occupational disability program for rail workers who can no longer perform their railroad duties due to disability;
  • Increase the minimum retirement age for railroad workers to 62 years of age with a reduction in benefits;
  • Increase the minimum age for spousal annuities with a reduction in benefits;
  • Eliminate Medicare as we know it and increase the Medicare eligibility age to 67 with drastically reduced coverage;
  • Increase the annual out-of-pocket medical costs paid by railroad retirees and cause the costs of railroad retiree health insurance under GA46000 to soar; and
  • Replace Medicare’s guaranteed benefits with a voucher system that is not guaranteed to cover the cost of equivalent care currently provided under Medicare.

Presidential candidate Mitt Romney has repeatedly stated his support for the Ryan Budget, and now has named Paul Ryan as his running mate in the upcoming election. President Pierce made the following statement back in May: “If those who support the Ryan Budget capture the White House and the Senate, and retain the House, this nightmare will become a reality, and our members’ economic security will be set back by decades. We need to remember this on November 6 and vote for candidates who will help working Americans.”

As an organization, we are not allowed to get involved in politics or tell our members how to vote; however, it is the job of our National Auxiliary Legislative Department to do what we can to make sure our members are educated about the issues. Enough said!

Medicare

The same proposed Ryan Budget that would have extremely detrimental effects on our Railroad Retirement would also put an end to Medicare as we know it, replacing Medicare’s guaranteed benefits with a capped voucher that beneficiaries could use to purchase their own health insurance. A publication entitled “Medicare Watch – Your Weekly Medicare Consumer Advocacy Update” reported on August 9, 2012:

“The proposal would also establish block grants for Medicaid, meaning the government would provide a capped amount of funding to states for the program. The proposal cuts Medicaid by over $800 billion. These changes would significantly increase costs and decrease access to care for Medicare and Medicaid beneficiaries.”

“In response to the Ryan budget proposal, the House Energy and Commerce Committee has analyzed the impact the proposal would have in all 405 congressional districts. The Energy and Commerce Committee details the ways in which the proposal reduces access to care for millions of Medicare and Medicaid beneficiaries across the country. For example, in New York’s 18th Congressional District, older adults and people with disabilities would spend an extra $95 million in prescription drug costs over the next 10 years. Similarly, nearly 100,000 Medicare beneficiaries in New York’s 8th Congressional District alone would no longer be able to access free preventive services.

“While policymakers claim the goal of Chairman Ryan’s budget proposal is to save the government money, it shifts costs to Medicare beneficiaries and does little to address the real cause of increased Medicare spending: rising costs in the health care sector overall. According to the Congressional Budget Office, over time, proposals similar to the one Chairman Ryan introduced would double out-of-pocket costs for people with Medicare. Policies that aim to save money in the Medicare program should be based on solutions that preserve access to affordable health care and protect beneficiaries from the burden of added out-of-pocket health costs.”

Source: http://www.medicarerights.org/issues-actions/medicare-watch-archive/2012-30.php.