ADJUSTMENT IN ANNUITIES UNDER FOREIGN SERVICE RETIREMENT AND DISABILITY SYSTEM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP66B00403R000300050001-4
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 7
• Document Creation Date: December 23, 2016
• Document Release Date: February 21, 2014
• Sequence Number: 1
• Publication Date: January 27, 1964
• Content Type: OPEN SOURCE

Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300050001-4
'51)11?du-
1964 frus-r CONGRESSIONAL RECORD - SENATE 1063
Article entitled "Civil Rights Bill Criti-
cized," published in the Missoulian on
October 21, 1963; article entitled "Farm Bu-
reau Official Attacks Pending Civil Rights
Measure," published in the Daily navalli
Republican, Hamilton, Mont., on October 21,
1963; and letter addressed to Senator MET-
CALF, written by the Assistant Attorney
General, Civil Rights Division, relating to
the pending civil rights bill
By Mr. BURDICK:
Editorial entitled "Aiding Our Own," pub-
lished in the Mandan, N. Dak., Pioneer of
January 11, 1964, dealing with the rural
? areas development program.
Article entitled "The Sleeping Prince,"
written by Larston D. Farrar and issued by
Farrar's News Features, being a tribute to
the late President Kennedy.
By Mr. MUNDT:
Resolutions adopted by the South Dakota
Reclamation & .Water Development Asso-
ciation, at the 26th annual State convention,
January 8-9, 1964, at Huron, S. Dak.
1
ADJUSTMENT IN ANNUITIES UND R
FOREIGN SERVICE RETIREMENT
AND DISABILITY SYSTEM
Mr. MANSFIELD. Mr. President, I
move that the Senate proceed to the
consideration of Calendar No. 795, S.
745.
The PRESIDING OFFICER. The bill
will be stated by title for the information
of the Senate.
The LEGISLATVE CLERK. A bill (S. 745) ,
? to provide for adjustments in annuities
under the Foreign Service retirement
and disability system.
The PRESIDING OFFICER. The
question is on agreeing to the motion
of the Senator from Montana.
The motion was agreed to; and the
Senate proceeded to consider the bill,
which had been reported from the Com-
mittee on Foreign Relations with amend-
ments on page 3, line 10, after the word
"State", to strike out "is authorized and
directed to" and insert "may in his dis-
cretion"; on page 4, after line 22, to
insert a new section, as follows:
SEC. 9. No part of the moneys now or here-
after contained in the Foreign Service retire-
ment and disability fund shall be applied to-
ward the payment of any increase in annuity
benefits resulting from the enactment of this
Act, except those benefits provided by sec-
tion 10, until and unless an appropriation
is made to such fund in an amount which
the Government actuary estimates to be
necessary to prevent an immediate increase
in the unfunded liability to said fund.
And, on page 5, after line 5, to insert
a new section, as follows:
SEC. 10. Title VIII of the Foreign Service
Act of 1946, as amended, is amended by add-
ing the following:
1 PART 3-00ST-or-LIVING ADJUSTMENTS
OF ANNUITIES
SEC. 882. (a) On the basis of determination
made by the Civil Service Commission pur-
suant to section 18 of the Civil Service Re-
tirement Act, as amended, pertaining to per
centum change in the price index, the fol-
lowing adjustments shall be made:
(1) Effective April 1, 1964, if the change in
the price index from 1962 to 1963 shall have
equaled a rise of at least 3 per bentum, each
annuity payable from the fund which has a
commencing date earlier than January 2,
1963, shall be increased by the per centum
rise in the price index adjusted to the nearest
one-tenth of 1 per centum.
(2) Effective April 1 of any year other than
1964 after the price index change shall have
equaled a rise of at least 3 per centum, each
annuity payable from the fund which has a
commencing date earlier-than January '2 of
the preceding year shall be increased by the
per centum rise in the price index adjusted
to the nearest one-tenth of 1 per centum.
(b) Eligibility for an annuity increase un-
der this section shall be governed by the com-
mencing date of each annuity payable from
the 'fund as of the effective date of an in-
crease, except as follows:
(1) Effective from the date of the first in-
crease under this section, an annuity pay-
able from the fund to an annuitant's sur-
vivor (other than a child entitled under sec-
tion 821(c) ), which annuity commenced the
day after the annuitant's death:shall be in-
creased as provided in subsection (a) (1) or
(a) (2) if the commencing date 'of annuity to
the annuitant was earlier than January 2 of
the year preceding the first increase.
(2) Effective from its commencing date, an
annuity payable from the fund to an annu-
itant's survivor (other than a child entitled
under section 821(c) ), which annuity com-
mences the day after the annuitant's death
and after the effective date of the first in-
crease under this section, shall be increased
by the total per centum increase the annui-
tant_ was receiving under this section at
death.
(3) For purposes of computing an annuity
which commences after the effective date of
the first increase under this section to a
child under section 821(c), the items 8600,
$720, $1,800 and $2,160 appearing in section
821(c) shall be increased by the total per
centum increase allowed and in force under
this section and, in case of a deceased annu-
itant, the items 40 per centum and 50 per
centum appearing in section 821(c) shall be
increased by the total per centum Increase
allowed and in force under this section to
the annuitant at death. Effective from the
date of the first increase under this section,
the provisions of this paragraph shall apply
as if such first increase were in effect with
respect to computation of a child's annuity
under section 821(c) which commenced be-
tween January 2 of the year preceding the
first increase and the effective date of the
first increase.
(c) No increase in annuity provided by
this section shall be computed on any addi-
tional. annuity purchased at retirement by
voluntary contributions.
(d) No increase in annuity provided by
this section shall apply to amounts being
paid under authority of section 5 of Public
Law 84-503, as amended, or any other law
authorizing annuity grants to widows.
(e) The monthly installment of annuity
after adjustment under this section shall be
fixed at the nearest dollar.
So as to make the bill-read:
Be it enacted by the Senate and House
of Representatives of the United States of
America in Congress assembled, That an-
nuities paid from the Foreign Service re-
tirement and disability fund on the date of
enactment of this Act, based on service per-
formed by annuitants Which terminated
prior to October 16, 1960, shall be adjussted
under the provisions of section 821(b) of
the Foreign Service Act of 1946, as amended,
relating to the formula for reduction in
annuity to provide for a surviving widow,
as though such provisions had been in effect
on the date of the annuitant's separation
from the Service, and in accordance. with
the following:
(a) An annuitant who at time of retire-
ment was married to a wife who is still
living, whether or not he so elected at time
of retirement or subsequently, may within
ninety days of enactment of this Act, elect
to provide the maximum survivor annuity,
and if the maximum be less than $2,400 the
annuitant may elect up to $2,400;
(b) The annuitant's current full annuity,
exclusive of annuity increases, shall be used
as a base, and the amounts of annuity in-
creases which have been granted, either at
time of retirement or subsequent thereto,
shall not be affected by such adjustments;
(c) If, during the ninety-day period fol-
lowing enactment of this Act an annuitant
dies without having made a new election in
accordance with the provisions of this- Act,
leaving a wife to whom he was married at
time of retirement, benefits shall be payable
to her as though the maximum benefit had
been elected, except that such annuity shall.
not be less than $2,400, unless the annuitant
has certified in writing his intention of not
making anew election under the provisions
of this Act.
Sm. 2. If a former participant whose serv-
ice was terminated prior to October 16, 1960,
and who elected a deferred annuity, dies
before becoming eligible to receive an an-
nuity, the annuity of the surviving widow,
if eligible under the terms of the law in
effect upon his separation from the Service,
shall be computed under the provisions of
section 821(b) of the Foreign Service Act of
1946, as amended.
SEC. 3. In any case where an annuitant
who retired prior to October 16, 1960, dies
prior to enactment of this Act, leaving a
widow to whom he was married at time of
retirement who is not entitled to receive an
annuity under the Foreign Service retire-
ment and disability system, and who is not
receiving benefits as a widow under the
Federal Employees' Compensation Act, the
Secretary of the State may in his discretion
grant such a widow an annuity of $2,400
per annum; or in cases where such widows
are receiving less than $2,400, the annuity
shall be increased to $2,400.
Src. 4. No annuity shall be payable from
the Foreign Service retirement and disability
fund to the widow of an annuitant whose
services terminated prior to October 16,
1960, who did or did not provide for a widow
survivor at time of retirement, or subse-
quently, and who elects not to avail himself-
of the provisions of this Act: Provided, That
this section shall not operate to deny to a
widow an annuity previously provided by her
husband or granted otherwise by law.
SEC. 5. No annuity for a survivor shall be
computed on any additional annuity pur-
chased with voluntary contribution's pur-
suant to the provisions of section 881 of
the Foreign Service Act of 1946, as amended.
SEC. 6. The provisions of this Act shall
not apply to annuitants recalled to duty
under section 520 of the Foreign Service
Act of 1946, as amended, who are separated
subsequent to October 16; 1960.
SEC. 7. The following provisions of law are
hereby superseded, except in no event shall
existing annuity increases provided therein
be reduced by the enactment of this section:
(a) Section 2 of Public Law 82-348 (66
Stat. 81).
(b) Sections 4 and 5 of Public Law 84-
503 as amended by section 2 of Public Law
86-612 (70 Stat. 125; 74 Stat. 371).
(c) Sections 1(a) and 1(b) of Public Law
85-882 (72 Stat. 1705). -
SEC. 8. Any adjustment in annuity pro-
vided by this Act shall commence on the
day of the month following the expiration of
ninety days after enactment, and the
monthly rate payable after such adjustment
shall be fixed at the nearest dollar.
SEC. 9 Nci' part of the moneys nownr here-
after contained in the Foreign Service re-
tirement and disability fund shall be applied
toward the payment of any increase in an-
nuity benefits resulting from the enactment
of this Act, except those benefits provided
by section 10, until and unless an appropria-
tion is made to such fund in an amount
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1064 CONGRESSIONAL RECORD ? SENATE
which the Government actuary estimates
to be necessary to prevent an immediate in-
crease in the unfunded liability to said fund.
SEC. 10. Title VIII of the Foreign Service
Act of 1946, as amended, is amended by add-
ing the the following:
PART J?COST-OF-LIVING ADJUSTMENTS OF
ANNUITIES
SEC. 822. (a) On the basis of determina-
tion made by the Civil Service Commission
pursuant to section 18 of the Civil Service
Retirement Act, as amended, pertaining to
per centum -change in the price index, the
following adjustments shall be made:
(1) 'Effective April 1, 1964, if the change
in the price index from 1962 to 1963 shall
have equalled a rise of at least 3 per centum
each annuity payable from the fund which
has a commencing date earlier than January
2, 1963, shall be increased by the per centum
rise in the price index adjusted to the
nearest one-tenth of 1 per centum.
(2) Effective April 1 of any year other
than 1964 after the price index change shall
have equaled a rise of at.least 3 per centum,
each annuity payable from the fund which
has a commencing date earlier than Jan-
uary 2 of the preceding year shall be in-
creased by the per centum rise in the price
index adjusted to the nearest one-tenth of
I per centum.
(b) Eligibility for an annuity increase
under this section shall be governed by the
commencing date of each annuity payable
from the fund as of the effective date of an
increase, except as follows:
(1) Effective from the date of the first
increase Under this section, an annuity pay-
able from the fund to an annuitant's sur-
vivor (other than a child entitled under sec-
tion 821(c) ), which annuity commenced the
day after the annuitant's death, shall be
increased as provided in subsection (a) (1)
or (a) (2) if the commencing date of an-
nuity to the annuitant was earlier than
January 2 of the year preceding the first
Increase.
(2) Effective from its commencing date,
an annuity payable from the fund to an
annuitant's survivor (other than a child
entitled under section 821(c)), which annu-
ity commences the day after the annuitant's
death and after the effective date of the
first increase under this section, shall be in-
creased by the total per centum increase the
annuitant was receiving under this section
at death.
-(3) For purposes of computing an an-
nuity which commences after the effective
date of the first increase under this section
to a child under section 821(c), the items
$600, $720, $1,800 and $2,160 appearing in
section 821(c) shall be increased by the
total per centum increase allowed and in
force under this section and, in case of a
deceased annuitant, the items 40 per centum
and 50 per centum appearing in section
821(c) shall be increased by the total per-
centum increase allowed and in force under
this section to the annuitant at death. Ef-
fective from the date of the first increase
under this section, the provisions of this
paragraph shall apply as if such first increase
were in effect with respect to computation
of a child's annuity under section 821(c)
which commenced between January 2 of
the year preceding the first increase and the
effective date of the first increase.
(c) No increase in annuity provided by
this section shall be computed on any addl.-
. tional annuity purchased at retirement by
voluntary contributions.
(d) No increase in annuity provided by
this section shall apply to amounts being
paid under authority of section 5 of Public
Law 84-503, as amended, or any other law
authorizing annuity grants to widows.
(e) The monthly installment of annuity
after adjustment under this section shall be
fixed at the nearest dollar.
GERMANENESS OF DEBATE
The PRESIDING OFFICER. As Sen-
ators are aware the adoption on Thurs-
day last of the rule providing for ger-
maneness of debate for a limited period
during the daily sessions of the Senate
makes an entirely new and radical
change in its parliamentary procedure.
The Chair will take advantage of this
occasion to express the hope that, dur-
ing the time the Senate is operating un-
der the rule, the cooperation of the Mem-
bers may be given in an effort to bring
about its proper observance. ?
Mr. DIRKSEN. Mr: President, a par-
liamentary inquiry.
The' PRESIDING OFFICER. The
Senator will state it.
Mr. DIRKSEN. Will the Chair take
it upon himself to determine in any case
whether a Senator is speaking to the
question before the Senate, and indicate
to him that he is out of order, if ,he be
out of order, or is the rule of germane-
ness a rule which can be enforced only
when another, Senator brings it to the
attention of the Chair on a point of
order?
The PRESIDING OFFICER. The
present occupant of the Chair is of the
opinion that the Chair would have the
right, under rule XIX, to call any Mem-
ber of the Senate to order, but it would
be more appropriate for the point of
order to be raised from the floor. The
present occupant of the Chair would
usually? require that the point of order
be made from the floor by a Member of
the Senate.
Mr. DIRKSEN. To amplify the rul-
ing of the Chair, this is not actually a
self-enforcing rule, and will be enforced
only if a Senator makes a point of order.
Is that correct?
The PRESIDING OFFICER. It is the
same as any other situation that would
arise under rule X1::1E, but it would be
enforced, in accordance with the cus-
tomary procedure, by reason of a point
of order being raised from the floor. It
is not self-enforcing. ?
Mr. DIRKSEN. I gather, 'then, that it
would be in order at any time, when a
Senator is not "addressing himself ger-
manely to the business at hand, to take
him off his feet by a point of order made
by any other Member of the Senate.
The PRESIDING OFFICER. - He
would have to yield for such a point of
order. His consent is not required, and
he would have to suspend until the point
of order as to germaneness was ascer-
tained.
Mr. DIRKSEN. Then he can be taken
off his feet by a point of order?
The PRESIDING OFFICER. Under
rule XIX, he can.
Mr. MANSFIELD. I suggest the ab-
sence of a quorum.
The PRESIDING OFFICER. The
clerk will call the roll.
The legislative clerk proceeded to call
the roll.
Mr. MANSFIELD. Mr. President, I
ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
?
January 2'7
ADJUSTMENT IN ANNUITIES UNDER
FOREIGN SERVICE RETIREMENT
AND DISABILITY SYSTEM
The Senate resumed the consideration
of the bill (S. 745) to provide for adjust-
ments in annuities under the Foreign
Service retirement and disability system.
Mr. MANSFIELD. Mr. President,
what is the pending business?
The PRESIDING OFFICER. The
pending business is Senate bill 745.
Mr. MANSFIELD. Is the Senate now
operating under the Pastore rule of ger-
maneness?
The PRESIDING OFFICER. That is
correct; the Senate is operating under
the Pastore' germaneness rule, adopted
on last Thursday.
Mr. MANSFIELD. Mr. President,
what is the length of time during which
the rule will apply?
The PRESIDING OFFICER. Under
the language of the resolution, the dura-
tion of time is 3 hours, starting at 12
o'clock and 46 minutes p.m.
Mr. MANSFIELD. Mr. President, the
purpose of S. 745 is to provide for ad-
justments in annuities under the For-
eign Service retirement and disability
system.
This bill would authorize about 164
Foreign Service officers who retired prior
to October 16, 1960, and who provided.
annuities for their widows, to provide the
annuities at the same cost as officers
who retired after that date. This means
the annuities can be increased and the
cost to the retired officers reduced.
The bill also authorizes another group
of about 116 Foreign Service officers who
retired before October 16, 1960, and who
made no provision for their widows, to
elect the maximum annuity for their sur-
viving widows in accordance with present
law.
In addition, S. 745 would authorize
an annuity of $2,400 for about 27 wid-
ows who now have no annuity whatso-
ever and any other widows who Would
have no annuity if, assuming S. 745 is
enacted, their husbands died before they
could avail themselves of its provisions.
By way of background, prior to the
enactment of Public Law 86-723, which
became effective October 16, 1960, the
Foreign Service retirement system pro-
vided that the annuity payable to a sur-
viving widow could not exceed 25 per-
cent of a retired Foreign Service officer's
average basic salary for the 5 years next'
preceding his retirement. Moreover, the
annuity which he received was reduced
by 50 percent of the amount of the an-
nuity which he elected to provide for his
widow.
Since enactment of Public Law 86-723,
however, an annuity payable to a surviv-
ing widow can be as much as 50 percent
of the amount which the retired Foreign
Service officer receives as an annuity. In
addition, the annuity of the retired For-
eign Service officer who elects to provide
an annuity for a widow survivor is re-
duced by 21/2 percent of any amount up
to $2,400, plus 10 percent of any amount
over $2,400, which he specifies as the base
for the survivor benefit.
Obviously, Mr. President, this discrep-
ancy in the cost of survivorship annuities
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156.4
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CONGRESSIONAL RECORD ? SENATE?
is so great that it constitutes an injus-
tice to those who retired prior to October
16, 1960. For this reason, the Committee
on Foreign 'Relations felt justified in
reporting S. 745 favorably to the Sen-
ate, and it is my hope that it will be ap-
proved without delay.
Mr. President, I wish to point out that
S. 745 provides that no increase in an-
nuity benefits resulting from the enact-
ment of this bill shall be paid until and
unless an appropriation is made for that
purpose. This provision would put the
benefits of this bill on a pay-as-you-go
basis, thus preventing further increases
in the unfunded liability which has ac-
crued to the Foreign Service retirement
fund.
Mr. President, I suggest the absence of
a quorum.
The PRESIDING OFFICER. The
clerk will call the roll.
The legislative clerk proceeded to call
the roll.
Mr. HUMPHREY. Mr. President, I
ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. With-
out objection, it is so ordered.
Mr. HUMPHREY. Mr. President, it
Is our understanding that the Senator
from Ohio [Mr. LAusciTz] and the Sena-
tor from Delaware [Mr. WILLIAMS] have
comments they wish to make in refer-
ence to certain sections of the Foreiga
Service retirement bill. Possibly they
will be able to draft an amendment that
would be helpful in the consideration of
the bill.
The Senator from Alabama [Mr.
SPARKMAN] , who handled the bill for the
committee, is necessarily detained on of-
ficial business at the White House and
therefore cannot be resent. Therefore,
I shall ask Senators to proceed with a
discussion of their attitude on the bill
and a little later, when the Senator from
Alabama returns, I am sure we will be
able to proceed to some conclusion on the
bill.
Mr. WILLIAMS of Delaware. Mr.
President, will the Senator yield?
Mr. HUMPHREY. I yield.
Mr: WILLIAMS of Delaware. I have
no objection to proceeding, but we have
the situation in the Senate that the Sen-
ator from Ohio [Mr. LAUSCHE] and I, who
are in agreement on the amendment, are
the only ones who will listen to our argu-
ments.
Mr. HUMPHREY. X shall listen very
attentively.
Mr. WILLIAMS of Delaware. I am
sure the Senator from Minnesota will be
persuaded very quickly.
Mr. HUMPHREY. I may be a little
more difficult than that, but I shall be
cooperative with the Senator from Dela-
ware.
Mr. WILLIAMS of Delaware. I am
willing to proceed, but I wonder if it
would not be well to declare a recess.
Mr. HUMPHREY. Mr. President, I
suggest that the Senator proceed. We
shall be in touch with the Senator from
Alabama.
Mr. LAUSCHE. Mr. President, in re-
spect to the bill?S.745?the Senator
from Delaware [Mr. WILLIAms] and I
filed dissenting views. The bill contem,
plates amending the Foreign Service re-,
tirement law as it now appears on the
statute books.
The Foreign Service Retirement Act
was passed in 1924. At that time it was
established on an actuarially sound basis.
The Government contributed to the re-
tirement fund a percentage of the em-
ployees' pay. The employees contributed
an equal amount. Thus, when the law
was enacted, the Government and the
employees felt that the program was ,
established on a statistical basis and
would continue to remain actuarially
sound, and that in the end it would pro-
vide a reasonable annual annuity for re-
tired employees.
. That was the situation which prevailed
in 1924. But those who drafted the law
were not at all conscious of the prospect
that, as time went on, demands would be
made for the liberalization of the provi-
sions in the law. Thus, since the law
was adopted, as the record will show,
there have been 11 instances in which
liberalized conditions and payments were
made. The liberalization began in 1939
and continued through 1960.
Today the Senate is to act on a bill
further to liberalize the law. My own
belief is that if the people of the coun-
try actually knew what has happened
with this fund, they would rise in vigor-
ous protest against the present status of
It. They will not learn of it because the
newspapers will not carry the news that
to maintain the fund in a sound condi-
tion today requires a contribution of 29.7
percent of the payroll-29.7 percent of
the payroll will have to be paid into the
fund if it is to be actuarily sound.
When the law was enacted, the amount
paid in by the Government was 5 per-
cent, and 5 percent was paid into the
fund by the employees. I ask Senators
to ponder that fact for a moment. On
the basis of senatorial pay, if our retire-
ment fund were to remain actuarily
sound and Senators had to pay in ap-
proximately 30 percent of their pay, 30
percent of $22,500 would have to be paid
into the fund. I have not computed the
amount, but pretty close to $7,000 would
have to be paid into the fund in order to
maintain its actuarial soundness.
That cannot be done. Neither the
Government nor individuals are in a po-
sition to contribute that much money to
the fund.
I have heard it is contemplated having
the Government pay 23.2 percent of the
aggregate payroll of the Foreign Service
employees, while the employees would
pay 61/2 percent. That is shocking, and
the taxpayers cannot endure it.
I notice that the Senator from Oregon
[Mr. MORSE] and the Senator from Con-
necticut [Mr. Rxincorr] have just en-
tered the Chamber. I wish to state for
their benefit that the retirement fund,
If it is to be maintained actuarially sound
under present liberalized conditions and
payments, requires contributions of 29.7
percent of the payroll.
These are not my words. They are a
quotation from a letter I received from
those in charge of the fund.
If the Government pays into the fund
23.2 percent and the employee pays into
the fund 6.5 percent, I submit that a
very inequitable situation is allowed to
exist.
1065
Mr. WILLIAMS of Delaware. ,Mr.
President, will the Senator yield?
The PRESIDING OFFICER (Mr. Mc-
INTYRE in the chair) . Does the Senator
yield?
Mr. LAUSCHE. I yield.
Mr. WILLIAMS of Delaware. What
the Senator has just pointed out with
reference to the foreign service retire-
ment fund applies equally to the entire
civil service retirement fund, which
affects all Government employees?those
on the payroll and all those who have
been on the payroll.
As the Senator has pointed out, it
would require an annual contribution on
the part of the Government today of
about 21 percent of the payroll to make
the fund solvent. A contribution of 21
percent by the Federal Government
means, even without a further liberaliza-
tion, will cost the taxpayers of the
Nation $21A billion annually to keep the
fund solvent. This is without any fur-
ther liberalization.
In my opinion this retirement system
should be kept on an equal matching
basis. To do otherwise would only in-,
vite unwarranted increases with no
regard as to cost.
When this system was started several
years ago the civil service retirement
fund was solvent. Today it is not sol-
vent, except as it is anchored to the Fed-
eral Treasury and except as the tax-
payers will underwrite the cost.
The pending bill endorses a new prin-
ciple which, if enacted, would cost this
year about $1,300,000. This is just a be-
ginning. In reality, if the principle were
extended across the whole civil service
retirement fund, it would cost several
hundred million dollars. If Congress is
to provide these benefits for 116 em-
ployees in one group, 164 in another, and
27 in another?and those are the figures
we have?there could be no valid argu-
ment against extending to the 2.5 mil-
lion Federal employees the same benefits
It would then cost an additional $400
or $500 million to extend the new formula'
to the whole retirement system.
This is just the opening wedge. If Con-
gress approves this formula today there
will be no sound argument against the
extension of it. We shall have provided
an opening wedge for a program that
will cost $400 or $500 million a year.
Mr. LAUSCHE. I concur fully in what
the Senator from Delaware has said.
The principle that is sought to be estab-
lished would inevitably have to be ap-
plied to the regular civil service em-
ployees retirement fund. If there were
applied to the entire civil service retire-
ment fund the principle which the bill
contemplates applying to the Foreign
Service retirement fund, how much did
the Senator from Delaware say the cost
would be?
. Mr. WILLIAMS of Delaware. I was
advised it would cost between $400 and
$500 million a year. Under existing law
with respect to both the regular civil
service retirement and the Foreign Serv-
ice retirement, when a man retires and
designates his wife to be a beneficiary
he takes a reduction in retirement hene-
fits which is actuarily enough to offset
the additional cost.
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1066 CONGRESSIONAL RECORD ? SENATE
Under the present bill 116 employees
retired and did not think enough of their
wives to declare them beneficiaries if
they became widows, but instead they
asked for the full retirement benefits
themselves. Notwithstanding their ne-
glect, however, this bill will extend full
retirement benefits to their widows. Yet
the husbands had not declared them to
be beneficiaries.
If that is to be our policy how could
it be argued that employees in the postal
service or other Federal agencies could
not likewise elect to take higher re-
tirement benefits during their lifetime
and then, when they died, have Congress
come along and say, "We will take care
of the widows just as though you had
declared them beneficiaries."
It would cost $400 or $500 million a
Year to provide such benefits for widows.
Let me refer to page 1 of the committee
report.
In addition, S. -745 would authorize an
annuity of $2,400 for about 27 widows who
now have no annuity whatsoever and any
other widows who would have no annuity
if, assuming S. 745 is enacted, their husbands
died before they could avail themselves of its
provisions.
Why cannot these husbands take care
of their wives now? In the first place, -
why do we refer to them as "widows"
before their husbands have died? I have
always thought that a wife is not a widow
until the husband has died. The hus-
bands have the responsibility of desig-
nating their wives as annuitants. I have
no objection to applying this principle
retroactively, to permit husbands who
have retired to make the election, pro-
vided they take a reduction. We can
'amend the bill to provide that a man-may
make an election retroactively to cover
his wife provided that the husbands will
pay back into the .Federal retirement
fund the excess annuity which they have
already collected as the result of not
having made such election in the begin-
ning. If they have drawn the additional
money over the years they should pay
it back. They should only get what they
would have obtained had they made the
election originally.
I am willing to give them the right to
make this election retroactively. How-
ever, I do not believe they should be paid
for not having protected their wives in
the first place.
If that is done, we shall open up the
whole civil service retirement fund to a -
new abuse. Why do it for one class, and
not for the other?
Mr. LAUSCHE. Mr. President, I
? thank the Senator from Delaware. I
am now directing my attention to the
second paragraph of the report under
the heading "purpose of the bill";
The bill also authorizes another group of
about 116 Foreign Service officers who retired
before October 16, 1960, and who made no
provision for their Widows, to let the maid-
mum annuity for their surviving widows in
accordance with present law.
The Senator from Delaware referred
to this item.
The bill contemplates allowing retired
? officers of the Foreign Service who did
? not designate their wives as beneficiaries
in the event the retiree died before the
wife, and thus received increased annui-
ties, to make such a designation now.
There may be persons who have re-.
tired from a State service, who probably
were asked, "Do you want to make your
wife a beneficiary in the event you die
before she dies? If you do, you will re-
ceive less money as your annuity; but
if you do not, you will receive more
money."
That is the identical situation which
prevails in the Federal Government. It
is a matter of not designating their wives
and receiving a greater annuity, or des-
ignating their wives and receiving a lower
annuity.
One hundred and sixteen of them have
said, "I want the larger annuity, and I
will not designate my wife as a benefi-
ciary."
The bill as it is written gives them the
right now to designate the wife as a bene-
ficiary; yet it makes no provision requir-
ing retirees to pay back the increased
annuity which they have received.
One hundred and sixteen of them, who
did not designate their spouses to be
the recipients of annuities in the event
the retiree died first, have received
$1,300 million by way of increased pay.
That would be $9,000 apiece. The bill
contemplates allowing them to retain
that excess pay -and now to designate
the wives as beneficiaries.
Mr. MORSE. Mr. President, will the
Senator yield?
Mr. LAUSCHE. I wish to finish this
point first. Then I shall be glad to yield.
I am a lawyer, and I sat on the bench
for 10 years. If this is the concept of
justice in Congress, the body which cre-
ates law, God help the administration of
law and justice in the United States.
THE GERMANENESS Rosy
Mr. MORSE. Mr. President, will the-
Senator yield to me, with the under-
standing that what I am about to say will
follow his speech? I should like to make
an insertion in the RECORD and speak for
not more than 30 seconds.
Mr. LAUSCHE. I will not challenge
the Senator's right to do that. However,
is the rule of germaneness in effect?
Mr. MORSE. I forgot all about the
?rule of germaneness.
Mr. LAUSCHE. I will not object.
Mr. MORSE. Although I was against
it, I will respect it. I shall come back
later, and, instead of speaking for 30 sec-
onds, I will speak for 30 minutes.
Mr. LAUSCHE. If no objection is
made, when an irrelevant matter is
sought to be introduced, is it automati-
cally barred under the rule?
The PRESIDING OFFICER. The
rule is not self-enforcing. In other
words, the Chair will not take the initia-
tive.
Mr. LAUSCHE. If objection is not
raised, the matter may be presented. Is
that correct?
The PRESIDING OFFICER. That is
correct.
Mr. LAUSCHE. I- raise no objection.
Mr. HUMPHREY. I must raise objec-
tion, much as I regret to do so, because
I wish to see the rule applied in its pris-
tine purity for at least a few days.
Mr. MORSE. I cannot agree more
with the Senator. I will make it 3 hours.
January 27
Mr. LAUSCHE. If we are to allow the
designation of a surviving spouse as a
beneficiary, it would seem, in fairness to
the taxpayer, and with due recognition
of the meaning of justice, that those
who have received $1,300,000 in ex-
cess of what they were entitled to re-
ceive should be required to pay that
money back into the Treasury.
I suppose that constitutionally we
have the right to do what it proposed in
the bill. Apart from the Constitution,
it is pertinent to ask: What right have
we as Senators to give taxpayers' money
away under the circumstances which
prevail in the situation before us?
The Senator from Delaware has stated
that if this situation is allowed to prevail
with respect to the Foreign Service fund,
retirees covered by the civil service re-
tirement fund will justifiably ask for
Identical treatment. I do not know how
many? retirees are under the civil service sk
retirement fund. I am quite certain that
among them are persons who have not
designated their spouses as surviving
beneficiaries.
Suppose all of them were to say, "We
want a law passed, similar to the one
passed for the benefit of Foreign Service
employees, to allow us now to keep all the
excess payments which we received, but
Permitting us now to designate our
spouses as beneficiaries." May I ask the
Senator from Delaware if it is this cate-
gory to which he had reference when he
said that the cost would be $415 million?
Mr. WILLIAMS of Delaware. No, only
partly so. The point is, as the Senator
from Ohio has said, that if we pass the
bill and allow those in the Foreign Serv-
ice who failed to designate spouses as
beneficiaries to receive these benefits
retroactively we should do so for all ,civil
service employees who are in similar posi-
tion.
Then there is another category;
namely, the overwhelming number of
employees who did designate their
spouses as beneficiaries. It is not fair to
the 90 percent who did designate their
spouses as surviving beneficiaries, with a
reduction of 20 or 25 percent in their re-
tirement check.
We cannot say that the employee who
designated his spouse as the beneficiary
is to get 25 percent less retirement ben-
efits than the man who ignores his re-
sponsibility to protect his wife.
Ultimately we shall have to provide
such benefits to all the 2,500,000 em-
ployees on the rolls today, plus those
who have already retired. It would cost
around $400 or $500 million a year to pro-
vide this additional benefit to all Govern-
ment workers.
If it is proposed to give a special $9,000
bonus, as the Senator has pointed out?
and that is what it boils down to?for
these 116 employees, why not provide it
for all 2,500,000 employees? If that were
to be done, a huge sum of money would
have to be spent.
Mr. MORSE. ?Mr. President, will the
Senator from Ohio yield for a question
on the bill?
Mr. LAUSCHE. I yield.
Mr. MORSE. I have been scanning
the bill. In the opinion of the Senator
from Ohio, does the bill put the Foreign
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1964 CONGRESSIONAL RECORD ? SENATE
Service annuitants in a preferred posi-
tion over many other classes of Federal
employees?
Mr. LAUSCHE. In one respect, as
now contemplated, allowing at this time
a retiree to designate his wife as a bene-
ficiary, even though he failed to do so
when he retired, and therefore received
increased pay, it would put him in a
preferential position.
But more than that, as to those who
did designate their wives, and thus re-
ceived a smaller annuity, should they not
have the right to say, "Treat us in the
same manner as 'you are treating the
116 who did not designate their wives"?
When the bill came before the com-
mittee for hearings, it was rather cdr-
sorally sent through the committee.
Ample hearings to obtain information
, were not held. I am now giving the re-
- sults of 2 months of labor on my part?
the writing of letters and the making of
calls to the Department of Labor.
In addition, as stated in the report on
page 1, the bill?S. 745?would author-
ize an annuity of $2,400 for about 27
widows who now have no annuity what-
soever. In that category, the retiree
never designated his wife as the bene-
ficiary. He elected to take larger pay-
ments. Now it is proposed to make those
widows the beneficiaries of payments of
$2,400 a year. I should like to see that
done; but why should these 27 be selected
when probably 5 million widows through-
out the country similarly need direct re-
lief or help? That is another situation.
So far as concerns paragraph 1 of
the "Purpose of the Bill," I think that
provision is sound. Paragraph 1-reads:
S. '745 would authorize about 164 Foreign
Service officers who retired prior to October
16, 1960, and who provided ..rinuities for
their widows, to provide the annuities at
the same cost as officers who retired after
that date.
That phase is equitable. If the ,officer
retired before 1960, why should his bene-
fits be less than those of a person who
retired after 1960?
Mr. MORSE. In the opinion of the
Senator from Ohio, does not legislation
on this subject also raise for appropriate
consideration the policies that are being
followed in connection with the whole so-
cial security program? In the whole so-
cial security program, as the Senator has
pointed out, literally millions of people,
including widows, do not receive any-
where near the benefits which the bill
seeks to provide. Is not that true?
Mr. LAUSCHE. It is positively true.
The principle would become applicable
to every retirement fund operated by
the Government. If we liberalize in this
instance, and even liberalize beyond the
extent of fiscal ability to carry the pro-
gram into effect, we likewise must do
so with respect to the social security and
civil service retirement funds.
Mr. MORSE. I thank the Senator
from Ohio.
Mr. LAUSCHE. I said a while ago
that when this fund was established, the.
structure was of such a- nature as to in-
sure its financial stability. The amounts
paid in by the Foreign Service employee
?
together with the amounts paid in by
the Government were adequate to sup-
port the fund. It might therefore be
asked, Why is the fund now inadequate?'
It is with reference to the answer to that
question that I now wish to direct my
attention. The first liberalization of
the fund was introduced in 1939. That
liberalization provided that officers who
had served 30 years could retire at age
60 on a reduced annuity. The retire-
ment age was reduced. When the re-
tirement age was reduced, the burden on
the fund was increased. Thus, the first
assault on the stability of the fund took
place in 1939. Also in 1939, survivor an-
nuities for wives were first provided. I
agree with what was done. I agree that
a retiree ought to make provision for his
spouse. In the original bill, an em-'
ployee in the Foreign Service could not
designate his spouse as a surviving bene-
ficiary. But when the change was made,
no thought was given to increasing the
amount of contribution to the fund.
The conditions were liberalized, but the
contributions remained unchanged. So
twice in 1 year a successful assault was
made upon the integrity of the fund.
Then, in 1941, the act was changed, so
as to permit retirement at age 50, with
30 years of service. That was one Of the
real attacks on the fund; retirement un-
der those circumstances was permitted,
even though the individual was capable
of taking another job the day after he
resigned. That happened time and
again.
When that liberalization was made, no
requirement to increase the contribu-
tions was imposed upon either the Gov-
ernment or the employees.
But in 1946, voluntary retirement was
permitted at age 50, with 20 years of
service. The taxpayers had to carry the
load of that liberalization; no amend-
ment to. require increased contributions
by the Government and the employees
was adopted.
If such had been proposed, the meas-
ure probably would not have been passed
in 1946. What a liberal arrangement:
the right to retire with substantial re-
tirement pay at age 50, after 20 years of
service.
Mr. HUMPHREY. Mr. President, will
the Senator from Ohio yield?
Mr. LAUSCHE. I am glad to yield.
? Mr. HUMPHREY. What was the rate
of retirement pay?
Mr. LAUSCHE. It was reduced, but
it was still substantial.
? Mr. HUMPHREY. Yes.
Mr. LAUSCHE. But if the Senator
from Minnesota contends that what was
done was sound, I ask why the fund is
insolvent now.
Mr. HUMPHREY. Mr. President, will
the Senator from Minnesota yield
further?
Mr. LAUSCHE. I yield.
Mr. HUMPHREY. The difficulty is
that most of the funds are without ade-
quate capital, because the Government
does not keep up its prescribed pay-
ments. That is the regrettable fact.
Mr. LAUSCHE. That is not a fact;
the Senator is not conversant with the
situation. Even if the Government paid
the $284 million which it owes, the Gov-
ernment's contribution and the em-
ployees' contributions would have to be
1067
increased to 29.7 percent of their sala-
ries; and I say that is improvident and
impossible of achievement, and the mere
suggestion is an offense to one's intel-
ligence. I have previously heard the
argument that the Government has not
paid its share.
Mr. HUMPHREY. And of course that
is true.
Mr. LAUSCHE. That is true; but the
letter I have received shows that even
though the Government pays $284 mil-
lion to keep the fund solvent, the em-
ployees and the Government must pay
into the fund 29 percent of the salary.
Mr. HUMPHREY. But that is for
the long-range program of the annuity
system or of the pension system. I think
there is no doubt that increased pay-
ments will have to be made into the
fund if there are to be increased bene-
fits. The bill does provide, as the Sen-
ator properly points out, some in-
creased benefits. I think a case can be
made for the Senator's amendment
which relates to certain elections to be
made?at the time of retirement?as to
the benefits to be provided; and the
Senator from Ohio has already made
that point.
Mr. LAUSCHE. The point I am try-
ing to make is that in the course of 24
years, 11 liberalizations were made, with-
out any requirement that the contribu-
tions be increased. so as to maintain
the fiscal stability of the fund.
I have already mentioned the one
made in 1946: voluntary retirement at
age 50, with 20 years of service.
In 1946 came the fifth liberalization:
disability retirement was liberalized, so
that when a participant in the system
became disabled, if he had at least 5
yearsNf service, his annuity would be
calculated on the basis of a minimum
of 20 years of service.
I point out to the Senator from Dela-
ware that, with respect to that liberali-
zation, regardless of where the disability
occurred?whether at work in the For-
eign service, or on a highway, or any-
where else, the Foreign Service em-
ployee thus became entitled to the bene-
fits of this provision.
Mr. WILLIAMS of Delaware. Mr.
President, will the Senator from Ohio
yield?
Mr. LAUSCHE. I yield.
Mr. WILLIAMS of Delaware. This
represents an increase of approximately
400 percent in the benefits without any
corresponding increase in the contribu-
tions by either the employees or the Gov-
ernment. As the Senator from Ohio has
pointed out, that is one of the reasons
why the fund is insolvent today and why
it will be bankrupt?down to zero?by
1977, unless Congress takes action.
Without any liberalization, by 1977 the
fund will be completely bankrupt, under
existing law.
Mr. LAUSCHE. The statement made
by the Senator from Delaware is abso-
lutely correct. I assume that his state-
ment that the liberalization was in the
area of 400 percent is correct, because
when the law was enacted, it required
contributions of 5 percent, whereas it
now requires contributions of 30 percent.
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1068 CONGRESSIONAL RECORD ? SENATE
Mr. WILLIAMS of Delaware. I was
speaking of item 5. Under the law prior
to 1946 if a man with 5 years of experi-
ence became disabled his annuity was
computed on the basis of his pay during
those 5 years.
In 1946 the law was again amended
Providing that upon disability a man
with 5 years of service would get credit
for a full 20-year period. This repre-
sents a 400-percent increase.
All of these increases have been piled
up, one on top of the other. As to each
one, it was said at the time of its enact-
ment, "This is only a small cost, and we
shall deal with the whole later on in the
years to come."
These successive increases add up to
a bankrupt retirement fund; yet instead
of facing this situation the committee
just reports out more bills, each time
further liberalizing the benefits.
Mr. LAUSCHE. Mr. President, the
sixth liberalization also occurred in 1946;
at that time the law was amended so as
to provide that the annuity would be
based on the officer's 5-year average sal-
ary next preceding retirement, rather
than on his salary for the 10 years next
preceding retirement. So if the salaries
of Senators are increased to $37,000 a
year, as has been proposed, and if the
salaries of judges of the Supreme Court
are increased to $60,000, and if the sal-
aries of Cabinet members are increased
to $35,000, this provision would have ap-
plicability in principle.
In 1946 the law required that the an-
nuity be calculated on the basis of the
average salary during the 10 years im-
mediately preceding retirement.
It was changed to provide that the an-
? nuity shall be calculated on the basis of
a 5-year average salary. Thus, instead
of being required to work 10 years to
have an annuity as a Senator calculated
on the basis of a contemplated increase
to $35,000, I would be required to work
only 5 years on that item.
Liberalization No. 7. In 1955, it was
changed by way of liberalization to the
best 5-year average next preceding re-
tirement. If we should fall into a period
of economic depression and it became
necessary to reduce salaries under the
amendment made in 1955, the employee
would be entitled to have the average
of his 5 highest salary years used as the
premise for figuring his retirement an-
nuity.
Liberalization No. 8. In 1956; the limi-
tation on years of service on which an
annuity could be based was raised from
30 to 35 years, thus allowing 70 percent
of the highest 5-year average salary as
an annuity. Under the law, an em-
ployee of the Foreign Service can draw
70 percent of his highest 5 years of sal-
ary, provided he has worked 35 years.
Mr. President (Mr. NELSON in the
Chair) , I do not know what their aver-
age salaries are, but under the law they
are entitled to draw 70 percent of the
highest 5-year average salary as an
annuity.
In the discussions which have been
held on the floor of the Senate dealing
with the cost to the Government of hir-
ing new employees, I have used the
measurement that $6,000 is about the
average salary. I know that the For-
eign Service is much higher than the
$6,000 average.
Liberalization N. 9: In 1960, the
retirement system was changed to pro-
vide that Foreign Service staff personnel,
after they have served 10 years in the
Foreign Service, would become par-
ticipants in the Foreign Service retire-
ment system. This liberalization meant
that a new category was allowed to come
within the provisions of the law. They
were not originally directly connected
with the Foreign Service, and therefore
were not covered. But in 1960, it was
declared that staff personnel, after they
served 10 years in the Foreign Service,
were permitted to become participants.
Prior to that time, they were covered by
the civil service retirement provisions.
But that payment is less than that of the
Foreign Service, so they worked them-
selves into the Foreign Service coverage.
Liberalization No. 10. In 1960, sur-
vivor annuities were provided for chil-
dren. When the bill was initially passed,
it covered only the worker. qubsequently,
it was liberalized to cover the wives and
husbands of workers. In 1960, it was
liberalized, as I have indicated, to also
make provision for children.
This is laudable. It is consonant with
the highest concepts of charity and serv-
ice to a family. But, looking at it
realistically, it is thoroughly apparent
that when these liberalizations were
made, unless additional contributions
were made to the fund, the fund could
not survive, but would eventually become
bankrupt.
Liberalization No. 11. Also in 1960, the
act was amended to provide for recoin-
putation of annuities of those who
applied prior to 1956, to allow those with
more than 30 years to be given added
credit for the difference up to 35 years.
That is the end of the series of assaults
that were made upon the financial in-
tegrity of this fund, except for the bill
now pending before the Senate, which
will be the 12th liberalization without
any increased contributions in the fund,
rendering it more unsettled and unstable
than ever.
The Senator from Delaware [Mr.
WILLIAMS] has pointed out that if the
bill is passed, its provisions will become
the precedent for arguments to be made
advancing the application of similar con-
cessions, definitely with respect to the
civil service retirement fund. With
respect to the social security fund, it is
a delight to know that one can draw
retirement pay having some semblance
in amount to the needs of the recipient.
Although we rejoice, we should also
recognize that unless the funds are kept
actuarially sound, they will eventially
become insolvent. Those who receive
their benefits will get out more than they
have paid in. Those who come along in
the future will be likely to find that the,
basket is empty.
If and when that occurs?and it will
occur with reference to the Foreign Serv-
ice retirement fund?the proposal will be
made to the taxpayers of the United
States that the fund needs for its suste-
% fiance 29.7 percent of the Foreign Serv-
ice payroll. If we, the workers, are to
January 27
pay in 50 percent of the 29.7 percent, it
will cost 14.85 percent of our payroll.
I, as a worker, cannot afford that, and I
would ask to be spared the responsibil-
ity of paying in that much money. But
I would ask the taxpayers to allow me to
pay in 61/2 percent while they pay in
23.2 percent. We may be able to estab-
lish that principle in Congress. We
would not put it over if the question had
to be debated in every forum in the
country.
If the subject were discussed in the
squares of the various municipalities and
in service clubs, the Senate would never
pass a bill which would require the Gov-
ernment to pay into the fund 231/2 per-
cent while the workers pay 6.2 percent.
If we pass the bill, what would we do
with regard to social security? What
would we do with relation to the civil
service employees' retirement program?
If we should allow such conduct to con-
tinue, what would happen to a medicare
program if and when a medicare bill
should be passed? Supposedly it would
begin on an actuarily sound basis. Per-
haps every 2 or 3 years liberalizations
would be made. Into-what proportions
would the burden of the Government
grow?
It will be argued by the proponents of
the bill that it would involve a very
small sum of money. That is a fact,
Not much is involved by way of pay-
ments. But the principle involved is a
serious one.
In conclusion, I point out that the
limitation of 5 percent of salary up
to $9,000 provided by the 1924 act was
changed to $10,000 on February 23, 1931;
it was changed to $13,500 on August 13,
1946; and removed altogether on Au-
gust 5, 1955.
When the law was adopted in 1924,
it required contributions of 5 percent
of the salary.
As I said a moment ago, to keep the
fund sound would now require a con-
tribution of 29.7 percent. At the present
time employees are paying 61/2 percent
a year and the Federal Government is
paying 61/2 percent of the aggregate sal-
ary. But those contributions will not
do, because the fund cannot be sustained
in that way.
On that basis I urge that the bill be
rejected. It ought not to pass. It is
not just; it is not fair; it can only con-
tribute to the fiscal disability under
which the Government is already suffer-
ing.
Mr. President, I suggest the absence
of a quorum.
The PRESIDING OFFICER. The
clerk will call the roll.
The legislative clerk proceeded to call
the roll.
Mr. WILLIAMS-of Delaware. Mr.
President, I ask unanimous consent that
the order for _ the quorum call be re-
scinded.
The PRESIDING OFFICER. Without
objection, it is so ordered.
Mr. LAUSCHE. Mr. President, I
move to recommit the bill to the Com-
mittee on Foreign Relations.
The PRESIDING OFFICER. The
question is on agreeing to the motion of
the Senator from Ohio.
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1964 CONGRESSIONAL RECORD ? SENATE
Mr. McNAMARA. Mr. President, I
suggest the adsence of a quorum.
The PRESIDING OFFICER. The
clerk will call the roll.
The legislative clerk called the roll.
Mr. HUMPHREY. Mr. President, I
ask unanimous consent that the order
for the quorum call be suspended.
The PRESIDING OrieiCER. With-
? objection, it is so ordered.
MESSAGE FROM THE HOUSE
A message from the House of Repre-
sentatives, by Mr. Bartlett, one of its
reading clerks, informed the Senate that,
pursuant to section 194 of title 14 of the
United States Code, the Speaker had ap-
pointed MI'. GARMATZ, of Maryland, Mr.
LENNON, of North Carolina, and Mr.
GLENN, of New Jersey, as members of the
Committee on Merchant Marine and
Fisheries.
The message announced that the
House insisted upon its amendments to
the bill (S. 298) to amend the Small
Business Act of 1958, disagreed to by the
Senate; agreed to the conference asked
by the Senate on the disagreeing votes
of the two Houses thereon, and that Mr.
PATMAN, Mr. RAINS, Mr. MULTER, Mr. BAR-
RETT, Mr. KILBURN, Mr. WINDALL, and
Mr. HARVEY of Michigan were appointed
managers on the part of the House at
the conference.
ENROLLED WILLS SIGNED
The message also announced that the
Speaker had affixed his signature to the
following enrolled bills, and they were
signed by the President pro tempore:
H.R. 1959. An act to authorize the trans-
portation of privately owned motor vehicles
of Government employees assigned to duty
in Alaska, and for other purposse;
HR. 3368. An act to authorize the Admin-
istrator of General Services to convey by
quitclaim deed a parcel of land to the I?ex-
ington Park Volunteer Fire Department, Inc.;
and
ER. 4801. An act to amend subsection 506
(d) of the Federal Property and Administra-
tive Services Act of 1949, as amended, re-
garding certification of facts based upon
transferred records.
ADJUSTMENT IN ANNUITIES UNDER
FOREIGN SERVfCE RETIREMENT
AND DISABILITY SYSTEM
The Senate resumed the consideration
of the bill (S. 745) to provide for adjust-
ments in annuities under the Foreign
Service retirement and disability sys-
tem.
Mr. HUMPHREY and Mr. GORE ad-
dressed the Chair.
Mr. HUMPHREY. Mr. President,
does the Senator wish to speak on this
particular bill?
Mr. GORE. No.
Mr. HUMPHREY. I must regretfully,
state that the new rule of germaneness
will be in effect until a later hour. Will
the Chair state the time?
The PRESIDING OFFICER. Until`
3:46.
Mr. HUMPHREY. And since this rule.
is in its early days of application, as I
said a few moments easlier, I think we
No. 18-4
should retain it in its pristine purity
until it is later adulterated by Senate
practice.
I am sure the Senator is about to
come forth with an amendment.
Mr. GORE. I certainly am.
Mr. HUMPHREY. I thought that was
the case, but I shall not yield for that
purpose right now.
Mr. GORE. Mr. President, is the
senior Senator from Tennessee or the
senior Senator from Minnesota recog-
nized?
The PRESIDING OFFICER. The
Senator from Minnesota had the floor.
Mr. HUMPHREY. That is correct. I
shall be more than happy to yield to the
Senator from Tennessee in a moment
for the purpose of his offering a non-
germane amendment to test the rule of
germaneness.
The arguments made against this par-
ticular bill relate, of course, to its more
generous provisions concerning one
group of Foreign Service officers in the
number of 116 who retired before Octo-
ber 1960.
At that time the retirement benefits
were not as generous as they are now,
and the payments into the retirement
fund in relation to these benefits were
considerably higher.
Also, this group of 116, to which the
provisions of the bill refer, made no
provision for their widows. In other
words, because of the cost of the retire-
ment benefits for the individual Foreign
Service officer, the process of election of
beneficiary, or of those who were to be
the recipients of an annuity, was limited
to the actual Foreign Service officer
rather than the officer and his surviving
widow.
As the report on the bill (S. 745) indi-
cates, the bill would authorize an an-
nuity of $2,400 to about 27 widows who
now have no annuity whatsoever. It
would also apply to any other widows
who would have no annuity. If S. 745
were enacted, they could avail them-
selves of its provisions.
The latter is a sort of saving clause,
since it is possible that if the bill were
made public law, some officers would not
have time to make the election or se-
lection provided for in the proposed leg-
islation.
I have discussed the bill with members
of the staff of the Foreign Relations
Committee who have been closely asso-
ciated with the development of the leg-
islation. I can well understand the con-
cern of the Senator from Ohio and of
the Senator from Delaware. There is
much merit in the argument that has
been made.
However, the bill has been before the
Foreign Relations Committee, not once,
but several times. As I recall?and I
stand corrected if I am in error?hear-
ings were held on the bill before the
Foreign Relations Committee in previous
Congresses. After a number of hear-
ings during the 88th Congress, the For-
eign Relations Committee reported the
bill to the Senate, with minority views.
Three of our colleagues in the Senate
have expressed dissent or opposition to
the bill in minority views.
1069
The bill has the approval of the De-
partment of State and of the Bureau
of the Budget. That means, of course,
that it represents the views of the ad-
ministration. I believe it would be fair
to say that, with the approval of the
Bureau of the Budget, the cost items
have been carefully evaluated; and that
with the State Department approval
the equities involved and the sense of
justice involved have been given careful
consideration.
The report is very explicit with refer-
ence to the various sections Of the bill.
There is included in the report a section-
by-section analysis. Also, some ex-
amples are given in the report, which I
believe are rather helpful in under-
standing this complicated piece of pro-
posed legislation. For example, the re-
port points out that prior to the enact- -
ment of Public Law 86-723, the most
recent revision of the Foreign Service
Retirement Act, the Foreign Service re-
tirement system provided that the an-
nuity payable to a surviving widow could
not exceed 25 percent of a retired For-
eign Service officer's average basic sal-
ary for the 5 years next preceding his
retirement.
In other words, if a Foreign Service
officer received $12,000 a year, the most
the widow could receive would be $3,000.
This presumes that there would be a 5-
year period immediately prior to the
retirement in which the Foreign Service
officer's salary would not have been less
than $12,000 a year.
If he had elected, under the retirement
system, to have his wife included in the
annuity, the widow would be entitled to
$3,000.
The same revision in the law, known
as Public Law 86-723, provided that an
annuity payable t6 a surviving widow
could be as much as 50 percent of the
amount which the retired Foreign Serv-
ice officer received as an annuity.
In addition, the annuity of the retired
Foreign Service officer who elects to pro-
vide an annuity for a widow survivor is
reduced by 21/2 percent of any amount
up to $2,400, plus 10 percent of any
amount over $2,400, which he specifies
as the base for the survivor benefit. -
The committee report gives an exam-
ple of this situation, which I believe will
help clarify it. It indicates why there
was a need for the provision contained
in the pending bill.
To illustrate, according to the formula
in effect for those who retired prior to
October 16, 1960, a Foreign Service offi-
cer whose so-called high-five average
salary was $12,000 a year would, on the
basis of 30 years' service, receive an an-
nuity of $7,200. This is calculated on the
basis of 2 percent times 30 times $12,000.
That amounts to $7,200. That is the
formula. The maximum annuity he
could provide for his surviving widow
was 25 percent of $12,000, or $3,000. The
cost to him for such a widow survivor
annuity was $1,500, or one-half of the
annuity provided for her. Therefore,
his reduced annuity would then be only
$5,700. That is for his widow and for
himself. ? -
Further, on the basis of the same fig-
ures set forth in the report, under the
Declassified and Approved For Release 2014/02/21: CIA-RDP66B00403R000300050001-4