Following the committee’s unanimous approval of the Railroad Employee Equity and Fairness (REEF) Act (S.1274), the Senate Budget Committee heard testimony from its author, United States Sen. Deb Fischer (R-NE), backing the bill’s protections for railroad employees.
Currently, the law requires the Railroad Retirement Board (RRB) to begin reducing railroad unemployment and sickness benefits by 5.7 percent as of May 10, 2023. The Railroad Unemployment Insurance Act (RUIA) is funded entirely by railroad employers and workers, but Fischer claimed that benefits are being unfairly pilfered for federal budget cuts, meaning that the funds paid into the RUIA for both unemployment and sickness benefits are then used to offset federal spending instead of supporting the individuals who paid into it.
“As a member of the Commerce, Science, and Transportation Committee, I’ve heard from railroad workers about the effects these cuts are already having. I’ve spoken with them about the ways these cuts are disadvantaging them and creating instability in the industry — especially because more cuts are coming over the next several years,” Fischer said in testimony. “Railroad Unemployment Insurance Act benefits are the only federal benefits program entirely funded by the railroad industry and the special payroll taxes and surcharges the industry collects — with no payments from taxpayers. So these sequestration cuts are doing nothing to curb the spending of taxpayer funds. They’re only hurting rail workers.”
A temporary version of the REEF Act was included in the COVID-19 relief bill of 2020, but its provisions only lasted until May 10, 2023. That puts the railroad benefits back on the sequestration chopping block through fiscal year 2030, unless REEF passes. That, in turn, could turn workers away from the industry, according to Fischer, which would hurt the economy as a whole.
“But more importantly, we must protect our railroad employees and their livelihoods,” Fischer said. “They deserve the benefits they’ve earned by committing their careers to the railroad, in many cases for years or decades. Rail workers shouldn’t be penalized for doing work that is necessary to our economy and transportation network.”
This effort was cosponsored by U.S. Sens. Amy Klobuchar (D-MN) and Sherrod Broad (D-OH). If passed, it will permanently exempt payments made from the Railroad Unemployment Insurance Account from sequestration under the Balanced Budget and Emergency Deficit Control Act of 1985.