CIVIL SERVICE RETIREMENT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP71B00364R000500170003-2
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 18
• Document Creation Date: December 9, 2016
• Document Release Date: August 30, 2000
• Sequence Number: 3
• Publication Date: October 3, 1969
• Content Type: OPEN

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October 3, 1969 CONGRESSIONAL RECORD -SENATE 11$47
by $100 for each dependent of the taxpayer estate of the decedent, but this paragraph The term `institution of higher education'
other than his spouse during such year. shall not apply if (within the time and in means--
"(2) SCHEDULE OF MAXIMUM CREDITABLE ?the manner and form prescribed by the Sec- "(A) an educational institution (as defined
CHARGES: REGULATIoNs. The Secretary or his retary or his delegate) there is filed- in section 151(e) (4) ) -
delegate shall prescribe regulations setting "(A) a statement that such amount has "(I) which regularly offers education at
forth a schedule of maximum charges eligi- not been allowed as a deduction under sec- a level above the twelfth grade; and
ble for credit under subsection (a) in such Lion 2053, and (ii) contributions to or for the use of
defined categories of expenses for medical "(B) a waiver of the right to have such which constitute charitable contributions
care as may be necessary to assure credit amount allowed at any time as a deduction within the meaning of section 170 (c); or
only of reasonable expenses pursuant to this under section 2053. 1 (B) a business or trade school, or tech-
section. The secretary or his delegate shall "(2) APPLICATION WITH OTHER cR nical institution or other technical or vo-
also prescribe such additional regulations as The credit allowed by subset a tto th cational school in any State, which (1) is
may be necessary to carry out the provisions taxpayer shall not ex the amount of legally authorized to provide, and provides
of this section. the tax imposed the taxpayer for the within that State, a program of postsecond-_OW (3) REDUCTION OF CREDIT.-The credit un- taxable year bey, is chapter, reduced by the ary vocational or technical education de-
der subsection (a) as limited by paragraphs sum of the edits allowable under this sub- signed to fit individuals for useful employ-
(1) and (2) of this subsection shall be re- part (o than under this section and sec- ment in recognized occupations; and (ii)
duced by an amount equal to 1 percent of Lions 39 and 41). is accredited by a nationally recognized ac-
the amount by which the adjusted gross in- ? DISALLOWANCE OF EXPENSES As DEDUC- crediting agency or association listed by the
come of the taxpayer for the taxable year T N.-No deduction shall be allowed under United States Commissioner of Education;
exceeds $25,000. tion 2.13 (relating to medical, dental, etc., and (iii) has been in existence for two years
(c) DEFINITIONS.-For purposes of this expenses) or section 214 (relating to expenses or has been specially accredited by the Com-
section- for care of certain dependents) for any ex- missioner as an institution meeting the
"(1) The term "expenses" for "medical ense of medical care which (after the appli- other requirements of this subparagraph.
care" means amounts paid- o n of subsection (b)) is taken into ac- "(3) ' STATE.-The term `State' includes, in
"(A) for the diagnosis, cure, mitigation, in determining the amount of any addition to the several States of the Union,
treatment, or prevention of disease, or for credit owed under subsection (a). The the Commonwealth of Puerto Rico, the
the purpose of affecting any structure or preceding tence shall not apply to ex- District of Columbia, Guam, American Sa-
function of the body, penses of m care paid by any taxpayer moa, the Virgin Islands, and the Trust Ter-
"(B) for transportation primarily for and who, under regu 'ons prescribed by the ritory of the Pacific Islands.
essential to medical care referred to in Secretary or his del elects not to apply "(4) FAMILY MEMBER.-The term 'family
subparagraph (A), or the provisions of this sec with respect to member' means the taxpayer, his spouse or
?(C) for insurance (including amounts such expenses for the taxa ear. any of his dependents (as defined in sec-
paid as premiums under part B of title XVIII "EXPENSES OF HIGHER EDU ION tion 152).
of the Social Security Act, relating to sup- "(d) SPECIAL RULES-
"SEC. 41. (a GENERAL RULE.-Th shall
n medical insurance for the aged) be allowed to an individual, as a edit SHIPS "(S) AND VETERANS' FOR CERTAIN SCHOLAR-
covering ary g medical care referred to in sub- ' BENEFITS.-The amounts
against the tax imposed by this chapter or otherwise taken into account under sub-
paragraphs (A) and (B).
"(2) In the case of an insurance contract the taxable year, an amount, determin section (a) as expenses of higher education
under which amounts are payable for other under subsection (b), of the expenses of f any individual during any period shall
than medical care referred to in subpara- higher education paid by him during the reduced (before the application of sub-
graphs (A) and (B) of paragraph (1)- taxable year to one or more institutions of s on (b)) by any amounts received by
no amount shall be treated as paid higher education in providing an education such individual during such period a&--
NA) no
insurance to which paragraph (1) (C) above the twelfth grade for any family mem- (A a scholarship or fellowship grant
applies unless the charge for such insurance ter. (within the meaning of section 117(a) (1) )
section 117 is not includible in
" b) LIMITATIONS- which u der
t
t
(
rac
is either separately stated in the con
AMOUNT PER FAMILY MEMBER. The
, 11(l)
or furnished to the policyholder by the in- credit under subsection (a) for expenses of "(B) ned cational assistance allowance un-
suraB) the amo n a taken into otate o statement, higher education of any family member paid (
"(B) the amount taken nto account as the taxable year shall be an amount der chapte 34 or 35 of title 38 of the United
States Code
t during
ll
no
the amount paid for such insurance sha
equal to the Sum of-
exceed such charge, and "(A) 75 percent of so much of such ex- "(2) NO CREDIT AND RECREATIONAL, ETC.,
"(C) no amount shall be treated as paid ses as does not exceed $200, COURSES.- mounts paid for expenses of
higher ed anon of any individual shall be
ified pen
for such insurance If the amount spec
" B 25 percent of so much Of such ex-
in the contract (or furnished to the policy- ( ) taken in account under subsection (a)-
any in a seo- penses as exceeds $200 but does not exceed "(A) f the case of an individual who is a
I.__ .__-__
e . om
c
p
orate statement) as the u- a "(C) 10 percent of so much of such ex-
suraece is unreasonably large in relation $500 but does not exceed gree, 04Y to the extent such expenses are
to the total charges under the contract. penses as exceeds attrib able to courses of instruction for
$1,500. whit credit is allowed toward a bacca-
"(3) Subject to the limitations of pars- "(2) REDUCTION of CREDIT.-Tile credit un- lour to or higher degree, and
graph (2), premiums paid during the taxable der subsection (a) for expenses of higher B) in the case of an individual who is
year by a taxpayer before he attains the age education of any family member paid dur- t a candidate for a baccalaureate or higher
of 65 for insurance covering medical care ing the taxable year as determined under egree, only to the extent such expenses
(within the meaning of subparagraphs (A) paragraph (1) of this subsection shall be are attributable to courses of instruction
and (B) of paragraph (1)) for the taxpayer, reduced by an-.amount equal to 1 perce necessary to fulfill requirements for .the
his spouse, or a dependent after the taxpayer of the amount ley which the adjusted g ss attainment of a predetermined and identified
attains the age of 65 shall be treated as ex- income of the t payer for the taxabl year education, professional, or vocational objet
penses paid during the taxable year for in- exceeds $25,000. tive.
-atone which constitutes medical care if "(C) DEFINITION -For pur pgf,
s of this "(3) APPLICATION WITH OTHER CREDITS.-The
premiums for such insurance are payable section- credit allowed by subsection (a) to the tax-
(on a level payment basis) under the con- " 1) EXPENSES OF HIGHER EDUCATION.-The
tract for a period of 10 years or more or un- ( payer shall not exceed the amount the tax
r
term `expenses of higher education' means- imposed d on the taxpayer r for the taxable year
til the year in which the taxpayer attains "(A) tuition and fees required for the en- by this chapter reduced by the sum of the
the age of 65 (but in no case for a period of rOilment or attendance of a student at a credits allowable under this subpart (other
less than 5 years). level above the twelfth grade at an institu- than under this section and sections 37 and
"(4) The determination of whether an tion of higher education, and 39).
individual is married at any time during the "(B) fees, books, supplies, and equipment "(e) DISALLOWANCE OF EXPENSES AS DEDUC-
taxable year shall be made in accordance required for courses of instruction above the TION.-No deduction shall be allowed under
with the provisions of section 6013(d) (re- twelfth grade at an institution of higher section 162 (relating to trade or business ex-
lating to determination of status as husband education. penses) for any expense of higher education
and wife). Such term does not include any amount paid, which (after the application of subsection
"(d) SPECIAL RULES- directly or indirectly, for meals, lodging, or (b)) is taken into account in determining
"(1) TREATMENT OF EXPENSES PAM AFTER similar personal, living, or family expenses. the amount of any credit allowed under sub-
DEATH.-Fbr purposes of subsection (a), ex- In the, event an amount paid for tuition or section (a). The preceding sentence shall not
penses for the medical care of the taxpayer fees includes an amount for meals, lodging, apply to the expenses of higher education of
which are paid out of his estate during the or similar expenses which is not separately any taxpayer who, under regulations pre-
1-year period beginning with the day after stated, the portion of such amount which scribed by the Secretary or his delegate, elects
the date of his, death shall be treated as paid is attributable to meals, lodging, or similar not to apply the provisions of this section
by the taxpayer at the time incurred. The expenses shall be determined under regula- with respect to such expenses for the taxable
preceding sentence shall not apply if the tions prescribed by the Secretary or his dele- year.
amount paid is allowable under section 2053 gate. "(f) CARRYOVER OF EXCESS CREDIT-Any
as a deduction in computing the taxable "(2) INSTITUTION OF HIGHER EDUCATION.- amount by which the credit otherwise allow-
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S"1t84e CONGRESSIONAL RECORD - SENATE October 3, 1969
able under this section for the expenses of to confirm that I steadfastly support this
higher education of the taxpayer paid dur- nomination and earnestly hope and trust
ing the taxable year exceeds the tax which that the Senate Judiciary Committee and
would be imposed on the taxpayer for such the Senate will proceed with dispatch to ap-
taxable year by this chapter in the absence of prove the nomination.
this section reduced by the amount of credit I am conversant with the various allega-
allowed for expenses of higher education of tions that have attended this nomination. I
any other family member paid during such have most carefully examined the record.
taxable year shall be allowed as a credit for There is nothing whatsoever that impeaches
expenses of higher education of the tax- the integrity of Judge Haynsworth. There is
payer deemed to be paid during the first, sec- no question as to his competence as a Judge.
ond, third, fourth, fifth, sixth, seventh, There is no proper faulting of his posture
eighth, ninth, or tenth succeeding taxable vis-a-vis Civil Rights or Labor.
years, in that order and to the extent such It would be very wrong to allow unfounded
expenses were not deemed paid in a prior allegations to deny this country of the dis-
taxable year, in the amount by which the tinguished service of Judge Haynsworth on
tax which would be imposed on the tax- the Supreme Court. I Intend to do all that I
payer for such succeeding taxable year by can to secure his confirmation.
this chapter in the absence of this section I hope you will make the contents of this
reduced by the amount of credit allowed for letter known to your colleagues. I have sent
expenses of higher education of any other a copy to Chairman Eastland and to Senator
family member paid during such succeed- Hruska, ranking Republican member of the
ing taxable year exceeds the amount of Committee, where this nomination is pres-
credit allowable under this section for the ently lodged.
expenses of higher education of the tax- Sincerely,
payer paid during such suceeding taxable RICHARD M. Nixon.
year plus the amount of credit allowable
under this section for such expenses paid
during any taxable year earlier than the
current taxable year but deemed to have been
paid during such succeeding taxable year,
subject, however, to all limitations imposed
by this section on the amount of credit al-
lowable for such suceeding taxable year.
"(g) REGULAT'ION'S-The Secretary or his
delegate shall prescribe such regulations as
may be necessary to carry out the provi-
sions of this section."
SEC. 3. The table of sections for subpart A
of part IV of subchapter A of chapter 1 of
the Internal Revenue Code of 1954 is
amended by striking out the last item and
inserting in lieu thereof the following:
"See. 40. Medical Expenses.
"Sec. 41. Expenses of Higher Education.
"Sec. 42. Overpayments of Tax."
SEC. 4. The amendments made by section 2
and 3 of this Act shall apply to taxable years
beginning after December 31, 1971.
PRESIDENT NIXON STEADFASTLY
SUPPORTS HAYNSWORTH NOMI-
NATION
Mr. HRUSKA. Mr. President, at the
request of the minority leader, with
whom I have discussed the matter, I
wish to have inserted in the CONGRES-
SIONAL RECORD a letter which he, Chair-
man EASTLAND of the Judiciary Commit-
tee, and I have received from President
Nixon this afternoon.
The letter deals with the President's
nomination of Judge Haynsworth to be
an Associate Justice of the Supreme
Court and it states flatly and unequivo-
cally the President's steadfast support
of the nomination.
In view of the false and completely un-
founded rumors concerning Mr. Nixon's
position in this matter, I ask unanimous
consent that the letter be printed in the
RECORD.
There being no objection, the letter
was ordered to be printed in the RECORD,
as follows:
THE WHITE HOUSE,
Washington, October 2, 1969.
Hon. HUGH SCOTT,
Minority Leader,
U.S. Senate,
Washington, D.C.
DEAR HUGH: I have noted speculations as
to my intentions respecting the nomination
of Judge Haynsworth to the Supreme Court.
In order that there be no misunderstand-
ing on the part of anyone. I send this letter
CONCLUSION OF MORNING
BUSINESS
Mr. MANSFIELD. Mr. President, is
there further morning business?
The PRESIDING OFFICER. Is there
further morning business? If not, morn-
ing business is closed.
COMMITTEE MEETINGS
SENATE SESSION
Mr. MANSFIELD. Mr. President, I ask
unanimous consent that all committees
be permitted to meet during the session
of the Senate today.
The PRESIDING OFFICER. Without
objection, it is so ordered.
ORDER FOR ADJOURNMENT UNTIL
MONDAY, OCTOBER 6, 1969
Mr. MANSFIELD. Mr. President, I ask
unanimous consent that, when the Sen-
ate completes its business today, it stand
in adjournment until 12 o'clock noon on
Monday next.
The PRESIDING OFFICER. Without
objection, it is so ordered.
Mr. MANSFIELD. Mr. President, I
suggest the absence of a quorum, with
the time not to be taken from either side.
The PRESIDING OFFICER. Without
objection, it is so ordered.
The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. MANSFIELD. Mr. Pre ask
unanimous consent that the Senate pro-
ceed of the consideration of the un-
finished business.
The PRESIDING OFFICER. The bill
will be stated by title.
The LEGISLATIVE CLERK. A bill (S. 2754)
to amend subchapter III of chapter 83
of title 5, United States Code, relating to
civil service retirement, and for other
purposes.
The PRESIDING OFFICER. Is there
objection to the present consideration of
the bill?
There being no objection, the Senate
proceeded to consider the bill.
The PRESIDING OFFICER, Who
yields time?
Mr. MANSFIELD. Mr. President, I
suggest the absence of a quorum, with
the time not to be taken from. either side.
The PRESIDING OFFICER. Without
objection, it is so ordered. The clerk will
call the roll.
The bill 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. Without
objection, it is so ordered.
Mr. MANSFIELD. Mr. President, a
parliamentary inquiry.
The PRESIDING OFFICER, The Sen-
ator from Montana will state it.
Mr. MANSFIELD. Is the Senate now
operating on limited time?
The PRESIDING OFFICER. The Sen-
ator from Montana is correct, The Sen-
ate is operating on limited time of 30
minutes, with 15 minutes to a side.
Mr. HOLLAND. The pending business
is S. 2754 and the pending question is
the point of order on section 207 of the
bill, the point of order having been raised
by the Senator from Delaware (Mr.
WILLIAMS) in which he stated that the
matter is a revenue measure and should
therefore originate in the House.
Mr. McGEE. May the Senator from
Wyoming state that it was his under-
standing, when that ruling was requested
last evening, the Presiding Officer ruled,
on advice of the Parliamentarian, that
there would be no ruling on that matter,
that it was a constitutional question, not
a jurisdictional question.
The PRESIDING OFFICER. The Chair
ruled, when the point of order was raised.
that it was a constitutional question and
the Chair would refer it to the Senate.
That is the matter now before the
Senate.
Mr. McGEE. That is the pending mat-
ter, not the jurisdictional question
whether the bill belongs in committee,
but-
The PRESIDING OFFICER. The point
of order is the question. The Chair has
no authority to rule oil a constitutional
question,
Mr. McGEE. So the decision now is on
the constitutional issue of whether this
is a tax measure not originating in the
House. Is that the thrust of the constitu-
tional question?
The PRESIDING OFFICER. The Sen-
ator is exactly correct.
Mr. McGEE. I thank the Presiding
Officer.
The PRESIDING OFFICER. Who
yields time?
Mr. HOLLAND. Mr. President, will the
Senator yield to me for 1 minute in
order to address a parliamentary inquiry
to the Chair?
Mr. McGEE. I yield.
The PRESIDING OFFICER. The Sen-
ator from Florida will state the inquiry.
Mr. HOLLAND. It is my understand-
ing that this is a point of order based
on the constitutional question, and as
such has to be submitted to the Senate
as a whole for a ruling.
The PRESIDING OFFICER. The Sen-
ator is correct.
Mr. HOLLAND, It is a point of order
based on the constitutional question.
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October 3, 1969 CONGRESSIONAL RECORD - SENATE S 11849
The PRESIDING OFFICER. The Sen- gestions we received was one to increase namely, Federal employees. It should be
ator from Florida is correct. the amount of income eligible for the our concern to know what the cost would
Mr. HOLLAND. I thank the Presiding retirement income credit. This thought be when applied to all retired persons,
Officer. was expressed by Mr. Ernest Giddings whether they worked for a State govern-
The PRESIDING OFFICER. Who speaking for the American Association. ment or the Federal Government, or were
yields time? of Retired Persons and the National Re- retired under private pension plans.
Mr. WILLIAMS of Delaware. Mr. Pres- tired Teachers Association. An amend- That being the case, I think the Sen-
ident, I yield myself 3 minutes. ment to the Tax Reform bill reflecting ator from Delaware is right. The Senate
The PRESIDING OFFICER. The Sen- this suggestion is already pending before would be doing a futile thing in originat-
ator from Delaware is recognized for 3 the Committee on Finance. ing revenue legislation. I do not think
minutes. The proper way to go about changing the House would go along with it, and
Mr. WILLIAMS of Delaware. Mr. Pres- the tax treatment of retired persons is I think we would be wise to strike that
ident, when the Senate adjourned last to let that matter be considered by the section from the bill.
night, the question before us was whether committee which has jurisdiction over Mr. COOPER. Mr. President, will the
S. 2754 was subject to a point of order the tax system. That committee is the Senator from Delaware yield?
on the ground that it included a tax Committee on Finance, not the Commit- Mr. WILLIAMS of Delaware. I yield.
amendment originating in the Senate. tee on Post Office and Civil Service. Mr. COOPER. If the amendment
In my judgment there is no question Section 207 of S. 2754 is a tax provision should be constitutional-and I do not
about it. The bill excludes the first $3,000 originating in the Senate. In my opinion believe it is; I agree with the Senator-
of civil service pension from Federal in- the point of order against it must be and it should be enacted, would Members
come tax calculation for every individual sustained. By all means, whatever tax of the Senate have the privilege of de-
retired under the civil service program. consideration we give to those living on ducting an ,additional $3,000 as a tax
They would pay a lower tax because of pensions should be extended to all Amer- exemption?
the committee amendment and the Fed- ican citizens, regardless of the source Mr. WILLIAMS of Delaware. Yes, if
eral revenues would be reduced because from which their pensions are derived. the bill is enacted as it is at present. Any
of it. To my way of thinking that is a They should be given equal treatment. Member of the U.S. Senate as well as
revenue measure pure and simple. Mr. President, I yield 5 minutes to the other Government employees would be
The existing tax law contains provi- Senator from Louisiana. entitled to another $3,000 tax exemption,
sions designed to relieve the tax burden Mr. LONG. Mr. President, there is no which would not apply to other retired
on retired persons. The principal provi- doubt in the mind of the Senator from persons.
sion is the retirement income credit. It Louisiana that this proposal is an effort Mr. COOPER. Municipal and State
applies to everyone living on retirement to originate a revenue bill in the Senate and private pensioners would not have
income whether it consists of a civil serv- of the United States, and as such, is the same privilege?
ice pension, a teacher's, policemen's, or clearly unconstitutional. There is a ques- Mr. WILLIAMS of Delaware. That is
firemen's pension, or a pension received tion of committee jurisdiction, but that right. The argument I have made is that
under a private pension plan. It treats does not concern the Senator from Lou- to the extent that we can afford to
all retirees alike. It gives them the isiana in view of the fact that the Con- liberalize retirement tax credit, it should
equivalent of tax, exemption on $1,524 stitution provides that all revenue bills be done for all American citizens and not
of retirement income if they are single, must originate in the House. That means for any one group.
and $2,276 if they are married and the it must be a revenue bill when It origi- Mr. COOPER. I agree with the Sen-
spouse is .also age 65. These figures are nated there. It cannot be made into a ator on the merits and on the constitu-
equivalent to the maximum social secur- revenue bill in the Senate. Therefore, tional issue. The section should be
ity benefit which was payable in 1964. It the House should, and I am confident defeated.
was calculated roughly to equate the tax would, insist that this provision of the Mr. WILLIAMS of Delaware. I think
treatment of those living on taxable re- bill violates the Constitution and send it the merits overshadow the constitutional
tirement benefits with the tax treatment back to us. But the Senate should not question. Yet they are both involved. But
of those receiving tax-free social security put itself in the position of sending such to get to the issue, we are raising it on
payments. a bill to the House. the constitutional question.
Under present law a married couple As the Senator from Delaware has The PRESIDING OFFICER. Who
living off a civil service pension could pointed out, if this provision were en- yields time?
receive $6,047 per year-more than $500 acted, it would discriminate against other Mr. McGEE. Mr. President, has the
month-and be absolutely tax free retired persons, such as school teachers, Senator from Delaware given up the
per under the retirement income credit. That policemen, firemen, and others retired floor?
is present law. If they have dividend in- on private plans. Mr. WILLIAMS of Delaware. Yes.
they could be wholly tax We are trying to work out an arrange- Mr. McGEE. Mr. President, I would
come exempt of on $200 $6,247. The House bill, ta tax ment in the Finance Committee whereby like to make two observations in regard
pending before the Senate Finance Coo- all retired people are treated the same. In to the comments which have been made.
that way we will not have to have other It has been suggested that this is dis-
minmorece, would attractive to make the them. Under existing it a law mar- even groups come before us saying that we criminatory legislation inasmuch as it
x4ed couple over age 65 would be tax must provide the same benefits for favors Government employees and leaves
of $6,732.50 them as we have provided Government out schoolteachers, State employees, and
exempluspt pto on n another i retirement dividend income end income, employees, because we have discrimi- other retired people. I think that argu-
they have it, for tax exemption for a nated in favor of ourselves and Govern- ment needs to be compared to another
gross amount of $6,932.50. ment employees. discrimination. In the social security
S. 2754, under section 207, would create By approaching this problem in the program and in the railroad retirement
a third instance of special tax treatment way the Finance Committee is approach- program the retirees already have the
for a single gle group of retired persons. It mg it-and we are conducting hearings- benefit of such a tax exemption, because
for create new we would hope to reduce taxes for all re- it aleady exists. Federal employees have
would uld complicate u the law and
tired people and achieve- justice for all been discriminated against and "selected
diveriminations. It the added law another a new $ of them. out" for this special consideration.
tax exemption, Mr. President, to bring It There is legislation before us, the Tax This provision is submitted in this
up close to the $10,000 exemption for one Reform Act of 1969, which we hope particular piece of legislation simply as
group of retired people only, not all em- would contain equitable and just tax a matter of long overdue, equitable treat-
ployees, but only those fortunate enough treatment for all retired persons, and ment, in light of the record that has
to have been employees of the U.S. Gov- would not select one particular group. already been written.
ernment. No one who would be supporting the But there are basically two funda-
The Senate Finance Committee is now measure that has come from the Post mental issues here. One is the constitu-
engaged in consideration of the Tax Re- Office and Civil Service Committee could tional one-whether this is a revenue bill
form Act of 1962. Yesterday we took hope to know what the cost would be, in the terms of the Constitution. I have
testimony from representatives of the because he is in a position to know only been advised that, as one examines the
Retired Civil Employees. Among the sug- what the cost would be for one class, pertinent section of the Constitution, he
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S 11850 CONGRESSIONAL RECORD - SENATE October 3, 1969
finds that there shall be no bills for the
raising of`revenue except those originat-
ing in the House. This bill does not raise
any revenue. And. In a decision in 1897,
in the case of Twin City Bank against
Nebeker, that point was sustained. There
fore, it is at least open to controversy
whether there is a constitutional basis
for objection.
But objection has been raised on a
second ground as well, and that is the
point in regard to the legitimate juris-
diction of the committee over this bill-
whether it belongs in the Committee on
Post Office and Civil Service or whether
it properly belongs in the Committee on
Finance.
On this point, an identical bill was
introduced by me earlier this year. That
bill was referred by the parliamentarian
to the Committee on Post Office and
Civil Service. So this is not a onesided
case.
We have been waiting now for 100
years for some action on this matter.
We have had no action coming. Our re-
sponsibility in the Committee on Post
Office and Civil Service is to see to the
welfare of those in the civil service, to
try to achieve some kind of equity, If
It is reasonable: We believe this pro-
posal is reasonable. It is our responsibil-
ity. It has been "bucked" back to us
several times. So I would raise serious
question about the onesidedness of the
issue at stake here.
I would only say that the time is long
past when the benefit of this kind of
legislation properly ought to be given
to all of the Federal Civil Service retirees
in this country.
I have been in consultation with the
parliamentarian and with some consti-
tutional lawyers. I realize the contro-
versy In the case, but I wanted to make
sure the record was clear that the con-
troversy is not an open-and-shut case,
as it has been represented as being by
the raising of the point of order.
In the interest of moving ahead on
this matter, I would like to ask, if I may,
the chairman of the Finance Committee
if he could recommend to us any way in
which we could move with dispatch in
Mr. McGEE. Yes, there was serious
consideration given to that, and it was
thought that we would then open up
another can of worms. It was felt that
the complications outweighed the advan-
tages of that selecting out process.
Mr. WILLIAMS of Delaware. Mr. Pres-
ident, will the Senator yield?
Mr. LONG. Mr. President, the Senator
asked me a. question, if he will yield to
me to respond.
Mr. McGEE. Yes.
Mr. LONG. I was merely going to say
that we Intended to have legislation on
this subject in the Tax Reform Act of
1969, H.R. 12370, and when that bill is
before us in December, the Senator could
quite appropriately move to do exactly
what he is seeking to do here; and, for
all I know, we might decide to do what
the Senator is recommending when we
get into executive session on that meas-
ure.
As I say, the committee has taken
testimony on it, and the Senator would
have no problem, at that point, about
revenue measures originating in the
House of Representatives, because the
Tax Reform Act, of course, is a revenue
bill that did originate in the House of
Representatives. Thus the Senator's
amendment, of course, would be appro-
priate to it, and it could be considered at
that time.
Mr. McGEE. As the chairman of the
Committee on Finance has stated, he
and I have discussed this matter pri-
vately. We have no intention of trying
to invade someone else's territory, and I
should like at this point to pose a ques-
tion to the Senator from Delaware: If
we were to agree to withdraw the pro-
vision, because of the various judgments
that have been rendered and our further
study of it overnight, is he willing to
withdraw his point of order on this par-
ticular section?
Mr. WILLIAMS of Delaware. If the
Senator himself wishes to move to strike
that provision, section 207, from his bill
I would withdraw the point of order so
that he could do it.
But, Mr. President, I do wish to make
just this point in relation to the question
asked by the Senator from New Hamp-
that, for only these who are on the Gov-
ernment payroll, Including Members of
Congress.
On what basis did the members of the
Senate Civil Service Committee think
that Members of Congress are entitled to
a $3,000 tax exemption on their pensions
above that allowed private citizens?
That Is the reason I say that even on
Its merits this should not be done, and
that If Congress is going to establish any
such exemption as that, by all means it
should be afforded to all retired em-
ployees alike.
I think it should be pointed out clearly
that we are not dealing just with those in
the lower-income groups, because they
are not affected one iota. Under existing
law even without the House bill, married
cou,ples are not paying any tax at all
if they are drawing pensions of $5,000 to
$6,000. So let us keep the record straight.
Mr. McGEE. I, thank the Senator from
Delaware for his comments. I yield now
to the Senator from Hawaii.
Mr. FONG. Mr. President, before the
distinguished Senator from Wyoming
asks to withdraw this provision from the
bill, I should like to ask him a few ques-
tions.
Is it not true that all payments under
social security, to recipients of social
security pensions, are exempt from the
income tax?
Mr. McGEE. That is correct.
Mr. FONG. And the maximum amount
that could be paid to a recipient would
be $218, under the new law?
Mr. McGEE. That is correct.
Mr. FONG. if a recipient receives so-
cial security payments, and if his wife
should be of a certain age, she would also
receive a certain amount, which would be
about $105?
Mr. McGEE. $105, that is correct,
Mr. FONG. So when we combine the
two, $218 and $105, the couple would
receive $323 from the Federal Govern-
ment as a payment under social security,
which would be entirely exempt from
income tax?
Mr. McGEE. That is correct.
The PRESIDING OFFICER. All time
of the Senator from Wyoming under the
unanimous-consent agreement has ex-
pired.
Mr. McGEE. Mr. President, may I ask
my colleague from Delaware if he will
yield me 2 minutes, so that the Senator
from Hawaii may finish his statement?
I yielded to him on my time.
Mr. WILLIAMS of Delaware. Yes, if
I have it.
Mr. FONG. I ask the Senator from
Wyoming if it is not true that, instead
of giving preferential treatment to the
Federal retiree, we are trying to put
him on an equal basis with retirees under
social security.
Mr. McGEE. That is the purpose of
this legislation.
Mr. FONG. The person who works for
the Federal Government does not have
social security. Is that correct?
Mr. McGEE. That is correct.
Mr. FONG. All others who work for
private enterprise do receive social se-
curity benefits?
Mr. McGEE, That is correct.
nuitants in this regard. shire: I believe the Senator from Wyo-
Mr. COTTON. Mr. President, before ming said that his principal concern was
that, will the Senator yield for a quick for those hundreds of thousands of civil
question, for information? service retired employees in the $3,000,
Mr. McGEE. Yes. $4,000, and $5,000 brackets. I call his at-
Mr. COTTON. I have been reading the tendon to the remarks I made earlier,
report. I want to make sure that this pointing out that under existing law a
$3,000 exemption comes after, that it civil service retired employee drawing a
does not take the place of, the exemp- pension of around $500 per month, or
tion we already have for the money that $6,000 per year, is not paying any income
has been paid in. tax at all and is not affected one iota by
Mr. McGEE. That is right. It comes this provision of the bill. It is.only those
after the exemption already existing. who are above that bracket who would
This provision is not intended to benefit gain some benefit.
the Senate or Senators or any others So, as we talk about this bill let us
who happen to be well off in the retire- be sure we know what we are talking
ment system. It is addressed to the about. We are not talking about tax relief
900,000 Federal retirees who are trying for those who are drawing pensions be-
to exist on $3,000, $4,000, or $5,000. low $500 per month or even, under the
Mr. COTTON. Was any consideration House bill as it is reported, those drawing
given in committee to leaving out Mem- pensions as high as $7,200 a year, or $600
bers of Congress from this provision in a month, for they are already, exempted
view of the fact that we recently voted from tax under H.R. 13270 as it came
ourselves what seemed to be quite an from the House of Representatives. This
adequate increase? . is a $3,000 exemption over and beyond
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October 3, 1969 CONGRESSIONAL RECORD - SENATE
Mr. FONG. So when they retire, they
are paid under social security, and the
amount they receive will be exempted
from taxation?
Mr. McGEE. That is correct.
Mr. FONG. So what we are trying to
now is put them on a equitable basis with
that of the social security retirees?
Mr. McGEE. That is correct.
Mr. FONG. I thank the Senator.
Mr. McGEE. I thank my friend for
his contribution and his exercise of wis-
dom in helping to guide this matter
through our days of hearings.
I should just like to stress, in the little
time left, that we have been genuinely
trying to achieve equity for a group that
has been left out.
Mr. President, I send to the desk an
amendment that would withdraw sec-
tion 207 from the bill, in accordance
with the dialogue we have Just had.
The PRESIDING OFFICER. The
Chair advises the Senator from Wyo-
ming that prior to the consideration of
this amendment, it will be necessary for
the Senator from Delaware to withdraw
his point of order.
Mr, WILLIAMS of Delaware. Mr.
President, I withdraw the point of order
in order that the Senator may offer his
amendment.
The PRESIDING OFFICER. Without
objection, the point of order is with-
drawn, and the clerk will state the
amendment.
The LEGISLATIVE CLERK. It is proposed,
beginning on page 13, line 8, strike out
all of section 207, and renumber suc-
ceeding sections.
(The language proposed to be stricken
is as follows:)
SEC. 207. Section 8345 of title 5, United
States Code, is amended by adding at the
end thereof the following new subsection:
"(f) An amount, not to exceed $3,000 each
year, which is received by an annuitant or
a survivor annuitant under this subchapter
and, except for this subsection, which would
be included as gross income for purposes
of the Federal income tax laws, shall not be
included as gross income under such laws."
The PRESIDING OFFICER. The
question is on agreeing to the amend-
ment of the Senator from Wyoming.
Mr. WILLIAMS of Delaware. Mr.
President, I certainly support the de-
letion of this section. I simply wish to
make one comment in answer to a point
that was raised; namely, that all sec-
tion 207 proposed to do was extend to
civil service employees the same bene-
fits that have been extended to recip-
ients of social security pensions, I call
to the attention of the Senate that that
is not quite the situation,
Social security pensions are tax ex-
empt, that is true; but there is an addi-
tional clause in the social security law
which says the man drawing social secu-
rity must pass an earnings test. He can-
not freely supplement his income on the
outside beyond, I believe it is $1,680, ex-
cept as his pension is reduced accord-
ingly, and if he. goes beyond a certain
amount he loses his social security bene-
fits entirely.
There is no such restriction in con-
nection with civil service pensions. A
member of the executive branch or a
Member of Congress can go out of here
today with a $20,000 pension if he has
served long enough, get a job in private
industry, and draw his pension at the
same time he is working.
There are advantages and disadvan-
tages under each, but let us not try to
point out that this is simply to correct
an inequiy under exising law. If any-
thing, the inequity is directed toward the
beneficiaries of social security, who are
even more handicapped than benefici-
aries of the Civil Service Retirement Act.
I shall not debate the matter furtiler.
I support the amendment.
The PRESIDING OFFICER. The
question its on agreeing to the amend-
ment of the Senator from Wyoming.
The amendment was agreed to.
The PRESIDING OFFICER. The bill
is open to further amendment.
Mr. WILLIAMS of Delaware. Mr.
President, there are one or two more
points that I think should be called to
the attention of the Senate in connection
with this bill.
Earlier this year, not as a part of this
bill, Congress raised the salaries for
Members of Congress around 40 percent.
I opposed that action, but that raising of
our salaries automatically had the indi-
rect effect of raising the pensions also.
There are provisions in title 2 of the
pending bill which increase the pension
benefits of all Government employees, in-
cluding our own, by approximately an-
other 10 percent. I question whether or
not that can be justified in the light of
the existing circumstances involving the
solvency of the civil service retirement
fund.
As far as title I of the pending bill
is concerned, I support that provision.
It provides a new method of restoring
some degree of financial responsibility.
Title II of the pending bill, however, pro-
vides for these increased pensions.
First: It provides that instead of com-
puting our pensions based upon the
highest 5 years we compute them upon
the highest 3 years. This is the mathe-
matical equivalent of an approximate 10-
percent increase in the retirement bene-
fits of many Government employees who
will be retiring in the next 2 years.
Second: another provision adds 1 per-
cent to the cost-of-living-increase for-
mula now in the law for annuitants. Un-
der the existing law as the cost of living
increases those annuitants who have
retired under existing law receive by
Executive order an automatic increase in
their pensions to offset the increase in
cost of living. For example, if the cost of
living increases 3 percentage points for
3 consecutive n3onths during the year the
pensions of Government employees is in-
creased proportionately.
As a,result we have had, I think, three
3.9 percent increases that have been ap-
proved or are about to be approved up
to this point. I think the previous in-
creases averaged about 3.9 percent.
Under the pending bill, in addition to
this escalator clause which would guar-
antee Government retirees protection
against any of the ravages of inflation,
the bill would add an additional 1 per-
cent each time this 3 percent increase
occurs. Mathematically this means that
if the cost of living from now on in-
creases 3 percent a year the pensions will
S 11851
be increased by 4 percent. If we were to
have three more consecutive increases
in the next 3 years it would mean that
instead of raising the pensions 9 percent
to offset the increase in the cost of living
over the 3 years we would be raising them
by 12 percent.
In other words, retired Government
employees would get an additional 25 per-
cent above the normal increase in the
cost of living.
Under this bill we would be guarantee-
ing to ourselves in Congress, along kith
all of the Government employees, that
from now on, not only would we, through
our own pensions be guaranteed against
the ravages of inflation but also we would
be making a 25-percent profit in our
retirement pay as the result, of future
increased cost of living.
It does not make any sense to me that
we in Government, who to a large extent
are responsible for the inflation, would
consider a bill where we actually make
.money on inflation. Other retirees
under private, State, teachers, and fire-
men pension funds are not guaranteed
that protection against inflation. Cer-
tainly in social security they have no
such guarantee. However, under this bill
it is proposed that we guarantee not only
that we will receive a perpetual escalator
clause against the ravages of inflation but
also that we will make 25 percent more
than the increase in the cost of living
itself. That means, as far as we are con-
cerned, that if we can create a little more
inflation we will collect a premium on it.
This is an outrageous proposal. I do not
think it can be justified. Certainly that
if we are going to put in an escalator
clause the first place to consider putting
it would be on social security, for the
benefit of those with lower pensions.
I think that all of the so-called in-
creases intended for the benefit only of
those of us who are fortunate enough to
have been working for the Government
should be deleted and that we should
confine the pending bill solely to the
purpose for which it was intended; and
that is, to restore some degree of finan-
cial responsibility to the retirement fund.
The fund already has an actuarial
deficit in excess of $50 billion, and title
I of the pending bill proposes to reduce
that deficit somewhat by starting out
with approximately a $275 million a,)-
propriation from general revenue, not
this fiscal year but next fiscal year, then
with graduating increases for about 10
years when, as I understand it, it will
approach an annual appropriation of $2
billion that will be restored to the fund.
We are dealing with a program here
that will cost a great deal of money any-
way, and I think that we ought at least
not make it a necessary part of the pend-
ing bill that we have to extend additional
benefits to ourselves. I think they should
be separated in their entirety and that
we should let Title I of the bill go to the
President.
I do not think Congress can justify
these increases.
Mr. President, for that reason, I move
to strike from the bill beginning on page
8 that part of title II beginning with line
5 down to and including line 14 on page
14.
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S 11852 CONGRESSIONAL RECORD - SENATE Ocfoher 3, 1969
(The language proposed to be stricken
is as follows:)
TITLE fi-CrvR. SEnvscE RRzTrimmErrr BENzI'rrs
SEC, 201. Paragraph (4) (A) of section 8331
of title 5, United States Code, is amended
to read as follows:
"(A) over any 3 consecutive years of cred-
itable service or, In the ease of an annuity
under subsection (d) or (e) (1) of section
8341 of this title based on service of less than
3 years, over the peflod of service; or".
SEC. 202. Subsection (g) of section 8334 of
title 5, United States Code, is amended-
(1) by striking out the word "or" at the
end of paragraph (3);
(2) by striking out the period at the end
of paragraph (4) and inserting in lieu thereof
a semicolon and the word "or"; and
(3) by adding the following new paragraph
immediately below paragraph (4):
"(5) days of unused sick leave credited
under section 8339(m) of this title.",
SEC. 203. Section 8339 of title 5, United
States Code, is amended---
(1) by striking out of subsection (b) the
words "so much of his service as- a Congres-
sional employee and his military service as
does not exceed a total of 15 years" and in-
serting in lieu thereof "his service as a Con-
gressional employee, his military service not
exceeding 5 years,";
(2) by amending subsection (e) (2) to
read as follows:
"(2) his Congressional employee service;";
(3) by striking out the last full sentence
of subsection (f);
(4) by striking out "(excluding any in-
crease because of retirement under section
8337 of this title) " in subsection (I); and
(5) by adding at the end thereof the fol-
lowing new subsection:
"(m) In computing any annuity under
subsections (a)--(d) of this section, the total
service of an employee who retires on an im-
mediate annuity or does leaving a survivor
or survivors entitled to annuity includes,
without regard to the limitations imposed by
subsection (e) of this section, the days of
unused sick leave to his credit under a formal
leave system, except that these days will not
be counted in determining average pay or
annuity eligibility under this subchaper.".
SEc. 204.` (a) Subsection (b) of section
8340 of title 5, United States Code, is amend-
ed by inserting "1 percent plus" immediate-
ly after the word "by."
(b) Subsection (c) (2) of such section is
amended to read as follows:
"(2) Per the purpose of computing the
annuity of a child under section 8341(e)
of this title that commences on or after the
first day of the first month that begins on
or after the date of enactment of the Civil
Service Retirement Amendments of 1969,
the items $900, $1,080, $2,700, and $3,240
appearing in section 8341(e) of this title
shall be increased by the total percent in-
creases allowed and in force under this sec-
tion on or after such day and, in case of a
deceased annuitant, the items 60 percent and
75 percent appearing in section 8341(e) of
this title shall be increased by the total per-
cent allowed and in force to the annuitant
under this section on or after such day."
SEC. 205. The provisions of subsections (b)
(1), (d) (3), and (g) of section 8341 of title
5, United States Code, also shall apply in the
case of any widow or widower-
(1) of an employee who died, retired, or
was otherwise finally separated before July
18, 1966;
(2) who shall have remarried on or after
such date; and
(3) who, immediately before such remar-
riage, was receiving annuity from the Civil
Service Retirement and Disability Fund;
except that no annuity shall be paid by
reason of this section for any period prior to
the enactment of this section. No annuity
shall be terminated solely by reason of the
enactment of this section, Notwithstanding
the prohibition contained in the first sen-
tence of this section on the payment of an-
nuity for any period prior to the enactment
of this section, in any case in which the Civil
Service Commission determines that-
(1) the remarriage of any widow or wid
ower described in such sentence was en-
tered into by the widow or widower in good
faith and in reliance on erroneous informa-
tion provided by Government authority prior
to that remarriage that the then existing
survivor annuity of the widow or widower
would not be terminated because of the re-
marriage; and
(2) such annuity was terminated by law
because of that remarriage;
then payment of annuity may be made by
reason of this section in such case, begin-
ning as of the effective date of the termina-
tion because of the remarriage.
SEc. 206. (a) The first sentence of sub-
section (d) of section 8341 of title 5, United
States Code, is amended to read as follows:
"If an employee or Member dies after com-
pleting at least 18 consecutive months of
civilian service, the widow or dependent
widower of the employee or Member is en-
titled to an annuity equal to 55 percent of
an annuity computed under section 8339 (a)--
(e) and (h) of this title as may apply with
respect to the employee or Member, except
that in the computation of the annuity under
such section, the annuity of the employee or
Member shall be at least the smaller of (1)
40 percent of his average pay, or (ii) the sum
obtained under such section after increasing
his service of the type last performed by the
period elapsing "between the date of death
and the date lie would have become 60 years
of age."
(b) Subsection (e) (1) of such section is
amended to read as follows:
e) (1) If an employee or Member dies
after completing at least 18 consecutive
months of civilian service, or an employee or
Member dies after retiring under this sub-
chapter, and is survived by a spouse, each
surviving child is entitled to an annuity equal
to the smallest of-
"(A) 60 percent of the average pay of the
employee or Member divided by the number
of children;
"(B) $900; or
(C) $2,700 divided by the number of chil-
dren; subject to section 8340 of this title.
If the employee or Member is not survived
by a spouse, each surviving child is entitled
to an annuity equal to the smallest of-
"(1) 75 percent of the average pay of the
employee or Member divided by the number
of children;
"(ii) $1,080; or
"(iii) $3,240 divided by the number of chil-
dren; subject to section 8340 of this title."
c. 207. Section 8345 of title 5, United
St-a!, es Code, is amended by adding at the
end thereof the following new subsection:
"(f) An amount, not to exceed $3,000 each
year which is,received by an annuitant or a
survivor annuitant under this subchapter
and, except for this subsection, which would
be included as gross income for purposes of
the Federal income tax laws, shall not be
included as gross income under such laws."
SEC. 208. (a) The amendments made by
sections 201, 202, 203, and 206(a) of this
Act shall not apply in the cases of persons
ret;red or otherwise separated prior to the
date of enactment of this Act, and the rights
of e.uch persons and their survivors shall con-
tinue in the same manner and to the same
extent as if such sections had not been
enacted.
(b) The amendments made by section 204
(a) of this Act to section 8340 of title 5,
United States Code, shall apply only to an-
nuity increases which become effective under
such section 8340 after the date of enact-
ment of this Act.
(c) (1) The amendment made by section
206(b) of this Act shall become effective on
the first day of this first month which be-
gins on or after the date of enactment of
this Act.
(2) The annuity of each surviving child
receiving an annuity under section 8341(e)
of title 5, United States Code, or comparable
provision of a prior law, immediately prior
to the effective date of such amendment shall
be recomputed, effective on such date, in ac-
cordance with such amendment. No increase
allowed and in force prior to such date under
section 8340 of such title shall be included
in the recomputation of any such annuity,
and this paragraph shall not operate to re-
duce any annuity..
Mr. COTTON. Mr. President, will the
Senator yield?
Mr. WILLIAMS of Delaware. I yield.
Mr. COTTON. Mr. President, if I cor-
rectly understand what the Senator from
Delaware has just said, his chief objec-
tion is to. changing the 5-year period to
3 years in the calculation of the pension.
Mr. WILLIAMS of Delaware. And I
also object to the 1 percent escalation
clause.
Mr. COTTON. Referring to the first
subject first, I might have a good deal of
sympathy with the Senator's opposition
as far as Members of the Senate and
House of Representatives are concerned.
However, there are others to be consid-
ered.
I think one of the tragedies of our
situation here is the fact that when a
Member of Congress dies, retires, or is
defeated for reelection and his service
suddenly terminates, the impact falls on
his staff and employees.
We have all seen that while many of
the staff members and employees readily
find new employment with other Mem-
bers, there have been many instances of
hardship worked through the years on
our faithful staff members who find
themselves out of employment and un-
able to make new arrangements. At least,
they are not able to make them without
a lapse of time between their periods of
employment. That seriously affects the
continuity of their service and their re-
tirement benefits.
It would seem to me that there is cer-
tainly a big distinction between the
three-year period and that is all I am
addressing myself to here-for members
as against staff and other employees
who are subject to the hazards of a sud-
den severance from their jobs by reason
of the death, retirement, or other end-
ing of the service of the Member whom
they are serving.
I cannot see my way clear to support-
ing the Senator's motion for that main
reason. If the Senator's motion affected
only Members of Congress, I might have
sympathy with it and I might be able
to support it. However, I think we owe
something to those faithful people who
have served us through the years.
Mr. WIL.LiAMS of Delaware, Mr. Pres-
ident, the Senator from New Hamp-
shire makes a point, and I appreciate
his position. He is correct. There is in-
security involved for the staff members
of Members of Congress; however, on the
the other hand, that is somewhat offset
by virtue of the fact that employees of
Congress traditionally draw higher sal-
aries for comparable jobs than is the
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case in other branches of the Govern-
ment civil service or in private industry.
That is necessary if we are to get com-
petent help. When the employees come
here they know there is no security in-
volved in their jobs.
Mr. COTTON. And they work much
longer hours than the people downtown.
I think they earn what they get.
Mr. WILLIAMS of Delaware. I am not
questioning that. I agree fully. As one
who has been very fortunate in having
as competent a staff as any other Mem-
ber of the Senate I certainly join the
Senator.in paying tribute to our staffs.
However, on the other hand, we are
dealing with a bill that not only affects
staff members and Members of Congress
but also affects the executive branch as
well. I think we should handle it all in
one related term.
I would have no objection if we could
stop on page 10, line 3, and leave in the
bill all the modifications they made on
the survivorship benefits.
But so far as the first part of it, deal-
ing with the 3-year formula, which
raises pensions by nearly 10 percent, and
the escalating clause where retirees
would actually make money on inflation,
I think that certainly should be de-
leted. I would want to make it clear to
the Senator from New Hampshire that
this change still would not correct the
point that he raised, because the point
dealing with legislative employees, which
he raised, would be in the part I would
still be deleting.
Mr. President, in order to condense
this issue to just these two major in-
creases I am going to change my motion
to strike out beginning on page 8, line 5,
down to and including line 17 on page 10.
The ACTING PRESIDENT pro tem-
pore. The clerk will state the proposed
amendment.
The ASSISTANT LEGISLATIVE CLERK. The
Senator from Delaware proposes to
strike the language beginning at page 8,
line 5, down through line 17, on page
10.
The language proposed to be stricken
is as follows :
SEC. 201. Paragrapr (4) (A) of section 8331
of title 5, United States Code, is amended to
read as follows:
(A) over any 3 consecutive years of cred-
itable service or, in the case of an annuity
under subsection (d) or (e) (1) of section
8341 of this title based on service of less than
8 years, over the period of service; or".
SEC. 202. Subsection (g) of section 8334 of
title 5, United States Code, is amended-
(1) by striking out the word "or" at the
end of paragraph (3) ;
(2) by striking out the period at the end
of paragraph (4) and inserting in lieu
thereof a semicolon and the word "or"; and
(3) by adding the following new para-
graph immediately below paragraph (4) :
"(5) days of unused sick leave credited
under section 8339(m) of this title.".
SEC. 203. Section 8339 of title 5, United
States Code, is amended-
(1) by striking out of subsection (b) the
words "so much of his service, as a Congres-
sional employee and his military service as
does not -exce2d a total of 15 years" and in-
serting in lieu thereof "his service as a Con-
gressional employee, his military service not
(2) by amending subsection (c) (2) to read
as follows:
"(2) his Congressional employee service;"; `
(3) by striking out the last full sentence
of subsection (f);
(4) by`striking out "(excluding any in-
crease because of retirement under section
8337 of this title)" in subsection (i); and
(5) by adding at the end thereof the fol-
lowing new subsection:
"(m) In computing any annuity under
subsections (a)-(d) of this section, the total
service of an employee who retires on an
immediate annuity or dies leaving a survivor
or survivors entitled to annuity includes,
without regard to the limitations imposed by
subsection (e) of this section, the days of
unused sick leave to his credit under a for-
mal leave system, except that these days will
not be counted in determining average pay
or annuity eligibility under this subchap-
ter.".
SEc. 204. (a) Subsection (b) of section 8340
of title 5, United States Code, is amended by
inserting "1 percent plus" immediately after
the word "by".
(b) Subsection (c) (2) of such section is
amended to read as follows:
" (2) For the purpose of computing the
annuity of a child under section 8341(e) of
this title that commences on or after the
first day of the first month that begins on
or after the date of enactment of the Civil
Service Reirement Amendments of 1969, the
items $900, $1,080, $2,700, and $3,240 appear-
ing in section 8341(e) of this title shall be
increased by the total percent increases al-
lowed and in force under this section on or
after such day and, in case of a deceased
annuitant, the items 60 percent and 75 per
cent appearing 'in section 8341(e) of this
title shall be increased by the total percent
allowed and in force to the annuitant under
this section on or after such day."
Mr. HOLLAND. Mr. President, will
the Senator yield?
Mr. WILLIAMS of Delaware. I yield.
Mr. HOLLAND. In looking at this
amendment, it seems to me that it cuts
two provisions which I think are quite
sound, and I want to ask the distin-
guished Senator if this is not true.
First, it cuts the provision that allows
credit for days of unused sick leave. Am
I correct?
Mr. WILLIAMS of Delaware. The
Senator is correct.
Mr. HOLLAND. What is the justifica-
tion for cutting that out?
Mr. WILLIAMS of Delaware. I just
said that the main purpose of this bill,
as I see it, was to restore some sem-
blance of fiscal responsibility to the re-
tirement fund. Title I does that. I have
eliminated those changes dealing ? with
proposed pension increases in sections
205 and 206, and of course we have al-
ready stricken 207. Perhaps each one of
these could be debated, but I think we
should not consider the liberalization
of these pensions as proposed in this
bill.
I understand that the increased
benefits under this section which we are
dealing with here involve approximate-
ly a billion-dollar difference in the ac-
tuarial deficiency of the retirement
fund. I do not think this is the time to
approve a billion-dollar increase in re-
tirement benefits. Congress this year
has already enacted salary increases for
top executives and Members of Con-
gress, ranging from 40 to 60 percent.
That was wrong; but now why increase
pensions as proposed in this bill?
That is my personal position, and I
will ask, Mr. President, at the appropri-
ate time for a record vote.
S 11853
I respect the views of the various
Members. As I pointed out to the Sen-
ator from New Hampshire, I do not want
to leave this misunderstood. The points
he raised are not taken care of in this
modification of my amendment.
Mr. COTTON. I thank the Senator.
Mr. HOLLAND. I notice that included
in the parts to be stricken is one part
that is not a liberalization. It begins on
line 1, page 9, and goes down through
line 6. It has to do with how much of
the military service an employee or a
member shall be allowed in the compu-
tation. As I understand the provision, ,it
proposes to reduce the number of years
of military service allowed-from 15 to
5 years. That certainly is not a liberal-
ization. Quite the contrary, it is an econ-
omy measure.
May I ask whether the Senator has
considered the fact that his amendment
also covers that particular feature?
Mr. WILLIAMS of Delaware. I have.
As I pointed out in answer to the ques-
tion with respect to the unused leave, I
do not think we should deal with any
of those factors so far as this bill is con-
cerned. I intentionally included the ones
which the Senator refers to, and I real-
ize that he is correct in his analysis of
that, too.
Mr. HOLLAND. I thank the Senator
for his frankness. It seems to me that
his amendment goes a good deal further
than his intention, and I could not vote
for it in the form that it is presented.
Mr. WILLIAMS of Delaware. I appre-
ciate it. It is not further than I Intended.
Perhaps it does go further than some
would think it should. But the basic 90
percent, or more than 90 percent, of
what is involved in this motion, in dollar
volume, is all in the change in the for-
mula with respect to the computation
of the annuities or the escalating
clauses as a result of inflation.
My feeling is that at a time when we.
are dealing with the problem of infla-
tion, it is not a time when we can afford
to liberalize pensions. Unless we take
prompt action the entire fund itself will
be insolvent in a matter of 'a few years.
I support the provisions of title I. On
the other hand, I do not91.think these
large increases in pensions for Members
of Congress and others can be justified.
For that reason, I hope this amendment
will be agreed to.
Mr. McGEE. Mr. President, I hope the
Senate will not accept the pending
amendment, and I woula like to suggest
why I feel that way.
The Committee on Post Office and Civil
Service was also very conscious of the
cost factor and was even hesitant about
the cost of putting the fund on a sound
financial basis. But we believe you have
to start being honest sometime with the
established fund for civil service retire-
ment and that the time to begin is now.
It was not an easy decision; it was not
a happy decision; but we would like to
think it was a little bit statesmanlike.
We likewise believe that in that proc-
ess, as we make that fund solvent, we
also ought to assist the annuitants them-
selves in remaining solvent, and that this,
too, is a good reason for that program.
Our very modest adjustments and modi-
fications and changes in policy in regard
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S 11854 CONGRESSIONAL RECORD- SENATE October f,-_1'969
to civil service retirees fall into that
category.
I would say to my friend the Senator
from Delaware that in arriving at this
decision, the committee raised the con-
tributions in each category to more than
pay for the accruing benefits. It comes
out to a 14-percent Increase In the con-
tribution and 13.9-plus percent of new
funds that are required under theebene-
fits that were added In the bill. We were
very conscious of this point.
So I think we would do well to weigh
very carefully the elements in title II
that the Senator is proposing to strike,
the high three; the sick leave allowance
toward retirement; the annuities for
children that we are proposing to raise
from $61 to $75 a month, so that they
can live it up in great affluence; and the
1 percent that we add to the 3 percent
cost-of-living adjustment-that is al-
ready the law which is only aimed at
atoning for the remaining inequity there.
That remaining Inequity is that by the
time the annuitant gets the 3 percent,
it is already 5 or 6 months later, after
the reading was taken. It was felt that it
was only fair and just to add that 1 per-
cent, so that by the time he got it, in
the direction that things are now moving,
he would almost be catching up with the
cost of living.
I say it is unusual language for the
Senate to suggest that we want to ignore
the needs of the one group that suffers
first and most from inflationary forces.
Here is the group which has no other re-
course except for the endeavors in this
body. They have no other place to turn.
They cannot receive a. salary increase or
a salary adjustment without us. We are
trying to make it possible for them to
survive these rising costs. In an extreme-
ly modest way, this is what we have tried
to do with this 1 percent.
With regard to Members of Congress,
it becomes picayunish when we single out
Members of Congress every time one of
these measures comes up. We are Federal
employees and the moment one group is
selected over another group the stage is
being set for the next group, the next,
and the next. It is far more simple in
terms of total money, it was far more
equitable, and more fundamental to quit
trying to nitpick with respect to groups.
We explored this possibility and decided
that was not wise legislation. -
I do not want the Senator from Dela-
ware to leave the impression here that
the committee did not worry about these
matters at all. In our collective judg-
ment, which was unanimous, we felt this
was the most reasonable balance we
could achieve, and it is a good balance,
and still stay within the confines of our
determination to be responsible about it
in terms of fiscal responsibility.
I hope this body will reject the pend-
ing amendment of the Senator from
Delaware.
Mr. FONG. Mr. President, will the
Senator yield?
Mr. McGEE. I yield.
Mr. FONG. Is it not true that if we
adopt the amendment of the distin-
guished Senator from Delaware we
would be forcing the employee to add
one-half percent to his retirement with-
out giving him any more benefits?
Mr. McGEE. Indeed, the Senator is
correct. That would be the net effect.
They would get. nothing for that increase.
Mr. FONG. And for congressional em-
ployees, we are raising them 1 percent,
from 6.5 to 7.5 percent, and they
would not get anything.
Mr. McGEE. The Senator is correct.
Mr. FONG. Members of Congress
would be increased to 8 percent. Is that
correct?
Mr. McGEE. This measure proposes to
raise Members .of Congress to 8 percent.
Mr. FONG. The reason for raising
these percentages is to cover a sufficient
amount of money so we can give them
the added benefits the Senator from
Delaware would' knock out. Is that
correct?
Mr. McGEE. The Senator is correct.
Mr. FONG. And even with these in-
creases we are 0.02 percent below the total
amount that will be contributed by the
employee and the employer.
Mr. McGEE. That is correct. This is
right to the point on the issue raised by
the Senator from Delaware, who has an
understandable and legitimate concern
about fiscal responsibility in our country,
and rising costs. That is why the com-
mittee did what it did.
Mr. FONG. The committee also raised
the contribution and that is why we
raised it.
Mr. McGEE. We raised the contribu-
tion to just a bit more than to cover
benefits.
Mr. HOLLAND. Mr. President, will the
Senator yield?
Mr. McGEE. I yield.
Mr. HOLLAND. Assuming that when
we raised the level of pay for employees
of the Government we did so because of
increased living costs, Is it not practical
to base the amount upon which the re-
tirement is figured upon the greatest 3
years, which would be the last 3 years,
rather than on 5 years, which takes the
period back to a time of much lower
living costs?
Mr. McGEE. That is correct.
Mr. HOLLAND. In other words, putting
it on a 3-year basis, retirement is figured
more nearly on the current living costs.
Is that correct?
Mr. McGEE. The Senator is correct.
Mr. HOLLAND. It Is more nearly up
with present living costs than on a 5-year
base?
Mr. McGEE. The Senator is correct.
Mr. HOLLAND. I congratulate the
Senator and the committee for recogniz-
ing that fact which to me seems entirely
practical and just.
Mr. McGEE. I thank the Senator for
his comments. I yield the floor.
Mr. President, I am ready to vote.
Mr. WILLIAMS of Delaware. Mr. Pres-
ident, I ask for the yeas and nays.
The yeas and nays were ordered.
Mr. WILLIAMS of Delaware. Mr. Pres-
ident, I am willing to proceed to a vote
in just a moment.
The Senator from Wyoming pointed
out that raising the one-half percent
contribution by employees finances the
increased benefits under the pending
bill. The Senator is correct to that ex-
tent. Title I of the bill does raise the cost
of the retirement system to those who
are now civil service employees by, I
would guess, approximately the amount
of the benefits.
However, the point I make is that this
increases in the deductions from the pay-
roll checks of the employees for the re-
tirement system was intended to offset
some of the benefits Congress has been
passing in years heretofore. For years
Congress has been liberalizing the retire-
ment benefits without providing methods
of financing. I ' have raised this point
many times when we were acting on such
legislation in the past. Let us not forget,
pensions have already had one increase
as the result of the salary increases
earlier this year.
Congress has enacted several increases
in the benefits in the retirement system
which were not financed over the years.
That is the reason the retirement fund
is not solvent. The deficiency is around
$50 billion to $55 billion.
Let no one he disillusioned. The de-
ficiency created in the liberalizations en-
acted by previous Congresses is at the
expense of the American taxpayers.
Under title I of this bill, beginning
next year, we start with $275 million, and
that graduates up to a couple billion dol-
lars that will be paid into the fund an-
nually. These will be appropriated funds
that will be paid by taxpayers, so we are
not dealing with increased pensions
which will be financed by employees
themselves. It will not be financed on the
formula which was recognized first where
the employees' contribution would be 6.5
percent and the Government, as the em-
ployer, would match It with 6.5 percent.
This bill goes far beyond the matching
provision, and the ultimate end is that
taxpayers will be financing the appropri-
ations-about $2 billion from general
revenue.
Financing Government pensions from
general revenue is a drastic change from
what was intended when this retirement
system was first established.
I question whether we have any right
at this time to saddle the American tax-
payers with this extra $2 billion annual
cost to finance a retirement system which
will extend to Government employees
and Government employees alone a guar-
antee that once they retire not only will
their pensions be guaranteed against any
ravages of future inflation, but also they
will actually make a 25-percent profit on
all inflation that develops after retire-
ment. I do not think such a provision can
be justified any more than we can justify
the other section of the bill which grants
a 10-percent increase in retirement bene-
fits.
For that reason I hope the section is
deleted from the bill.
Mr. SPONG. Mr. President, the find-
ings and conclusions of the Committee on
Post Office and Civil Service with respect
to the $3,000 'income tax exemption are
basically logical and fair. Neither social
security nor railroad retirement is sub-
ject to the Federal income tax, and since
many of those annuitants are among
those 65 years old and older and already
are receiving a double exemption, it seems
clearly equitable to exempt a reasonable
portion of the civil service retirement
annuities from Federal taxation.
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October 3, 1969 CONGRESSIONAL RECORD-SENATE 511855
It is my hope that such an exemption
will be brought before the Senate'in an
acceptable form as soon as possible.
Mr. President, I have shared the con-
cern of many Federal employees with
respect to the financing of the civil serv-
ice retirement fund. It has been my feel-
ing that Congress should face up to this
problem and take no further actions to
deplete the fund until some method has
been devised to stabilize it.
I commend the members of the Post
.Office and Civil Service Committee for
their efforts to provide a solution to the
problems which have resulted from in-
creased retirement benefits and other
actions in the past that have created an
unfunded liability without any method
of payment into the fund for these lia-
bilities.
The provisions of title I, which provide
for annual payments to the fund and for
.increased contributions, should be help-
ful in ou1r efforts to stabilize the fund.
The older citizens of our country have
a difficult time making ends meet. As a
group, those over 65 have a higher pov-
erty rate than any other age group. Low
income is a major concern to them, and
their savings, pensions, and similar as-
sets are eroded swiftly by inflation and
the rising cost of living. Retired employ-
ees of the Federal Government are not
exempt from these acute economic prob-
lems that affect the elderly, and I think
the Government has a responsibility to
its employees who have labored long and
faithfully in its service.
I am glad to support the bill.
Mr. COOK. Mr. President, there was
a provision of the bill which puzzled
me-one adding 1 percent to the 3 per=
cent cost-of-living increases-although I
supported the benefits and cost-of-living
increases.
I heartily support the bill and an-
nounce that I shall vote "yea."
Mr. WILLIAMS of Delaware. Mr. Pres-
ident, I am ready to vote.
The ACTING .PRESIDENT pro tem-
pore. The question is on agreeing to the
amendment offered by the Senator from
Delaware (Mr. WILLIAMS). On this ques-
tion the yeas and nays have been ordered,
and the clerk will call the roll.
The assistant legislative clerk called
the roll.
Mr. KENNEDY. I announce that the
Senator from New Mexico (Mr. ANDER-
SON), the Senator from Indiana (Mr.
BAYH), the Senator from North Dakota
(Mr. BURDICK), the Senator from Nevada
(Mr. CANNON), the Senator from Cali-
fornia (Mr. CRANSTON), the Senator
from North Carolina (Mr. ERVIN), the
Senator from Tennessee (Mr. GORE), the
Senator from Alaska (Mr. GRAVEL), the
Senator from Oklahoma (Mr. HARRIS) ,
the Senator from Hawaii (Mr. INOUYE),
the Senator from North Carolina (Mr.
JORDAN), the Senator from Minnesota
(Mr. MCCARTHY), the Senator from Ar-
kansas (Mr. MCCLELLAN), the Senator
from New Hampshire (Mr. Me , INTYRE),
the Senator from New Mexico (Mr.
MONTOYA), the Senator from TJtah (Mr.
Moss), the Senator from Maine (Mr.
MUSKIE), the Senator from West Vir-
ginia (Mr. RANDOLPH), the Senator from
Georgia (Mr. RUSSELL), the Senator from
Maryland (Mr. TYDINGS), and the Sena-
tor from Texas (Mr. YARBOROUGH) are
necessarily absent.
I also announce that the Senator from
Michigan (Mr. HART), the Senator from
Iowa (Mr. HUGHES), the Senator from
Washington (Mr. MAGNUSON), and the
Senator from Washington (Mr. JACK-
SON) are absent on official business.
I further announce that, if present and
voting, the Senator from Washington
(Mr. JACKSON), the Senator from Cali-
fornia (Mr. CRANSTON), the Senator from
Maryland (Mr. TYDINGS), the Senator
from Texas (Mr. YARBOROUGH), the Sen-
ator from Indiana (Mr. BAYH), the Sen-
ator from West Virginia (Mr. RANDOLPH),
the Senator from Nevada (Mr. CANNON),
and the Senator from Iowa (Mr.
HUGHES) would each vote "nay."
Mr. GRIFFIN. I announce that the
Senator from Oklahoma (Mr. BELLMON),
the Senator from Utah (Mr. BENNETT),
the Senator from Colorado (Mr. DoMI-
NICK), the Senator from Arizona (Mr.
FANNIN), the Senator from Oregon (Mr.
HATFIELD), the Senator from California
(Mr. MURPHY), the Senator from Illinois
(Mr. SMITH) , the Senator from Alaska
(Mr. STEVENS), the Senator from Ohio
(Mr. SAxBE), and the Senator from South
Carolina (Mr. THURMOND) are necessarily
absent.
The Senator from Texas (Mr. TOWER)
is detained on official business.
If present and voting, the Senator from
Oklahoma (Mr. BELLMON),. the Senator
from Utah (Mr. BENNETT), the Senator
from Arizona (Mr. FANNIN), the Senator
from Oregon (Mr. HATFIELD), the Senator
from California (Mr. MURPHY), the Sen-
ator from Alaska (Mr. STEVENS), the
Senator from Ohio (Mr. SAxBE), the Sen-
ator from South Carolina (Mr. THUR-
MOND), and the Senator from Texas (Mr.
TOWER) would each vote "nay."
The result was announced-yeas 8,
nays 56, as follows:
[No. 111 Leg.]
YEAS-8
Aiken
Curtis
Williams, Del.
Baker
Hansen
Young, Ohio
Cook
Packwood
Allen
Goodell
Nelson
Allott
Griffin
Pastore
Bible
Gurney
Pearson
Boggs
Hartke
13ell
Brooke
Holland
Percy
Byrd, Va.
Hollings
Prouty
Byrd, W. Va.
Hruska
Proxmire
Case
Javitls
Riblcoff
Church
Jordan, Idaho
Schweiker
Cooper
Kennedy
Scott
Cotton
Long
Smith, Maine
Dodd
Mansfield
Sparkman
Dole
Mathias
Spong
Eagleton
McGee
Stennis
Eastland
McGovern
Symington
Ellender
Metcalf
Talmadge
Fong
Miller
Williams, N.J.
Fulbright
Mondale
Young, N. Dak.
Goldwater
Mundt
Anderson
Harris
Moss
Bayh
Hart
Murphy
Bellmon
Hatfield
Muskie
Bennett
Hughes
Randolph
Burdick
Inouye
Russell
Cannon
Jackson
Saxbe
Cranston
Jordan, N.C.
Smith, Ill.
Dominick
Magnuson
Stevens
Ervin
McCarthy
Thurmond
Fannin
McClellan
Tower
Gore
McIntyre
Tydings
Gravel
Montoya
Yarborough
So the amendment of Mr.
of Delaware was rejected.
WILLIAMS ask it be supported, as it does, by the
American taxpayer to the tune of $2 bil-
The ACTING PRESIDENT pro tem.-
pore. The bill is open to further amend-
ment.
If there be no further amendment, the
question is on the engrossment and third
reading of the bill.
The bill was ordered to be engrossed
and read a third time.
The bill was read the third time.
Mr. McGEE. Mr. President, I ask
unanimous consent that the Senate pro-
ceed to the consideration of Calendar No.
334, H.R. 9825.
The ACTING PRESIDENT pro tern-
pore. The bill will be stated by title.
The ASSISTANT LEGISLATIVE CLERK. A
bill (H.R. 9825) to amend subchapter III
of chapter 83 of title 5, United States
Code, relating to civil service retirement,
and for other purposes.
The ACTING PRESIDENT pro tem-
pore. Is there objection to the present
consideration of the bill?
There being no objection, the Senate
proceeded to consider the bill.
Mr. McGEE. Mr. President, I move to
strike out all after the enacting clause
and insert in lieu thereof the text of S.
2754, as amended.
The ACTING PRESIDENT pro tem-
pore. The question is on agreeing to the
motion of the Senator from Wyoming.
The motion was agreed to.
Mr. WILLIAMS of Delaware. Mr.
President, I shall vote against the bill.
As I stated earlier, I think title I, restor-
ing some degree of solvency to the re-
tirement fund, was necessary, and I
would like to support it; however, I do
not think that we should at this time
increase retirement benefits for all Gov-
ernment employees an average of about
10 percent, as is done under the bill as
a result of the change in the formula.
The second point is that under the
bill it is guaranteed to all retired Gov.
ernment employees that, from this day
forward, not only will their pensions be
protected against the ravages of infla-
tion but also that Government employees
will actually make 25 percent on the in-
flation that develops from the day they
retire. That is, as the cost of living goes
up 3 percent, the retirement benefits
will increase 3 percent plus 1 percent,
which means the benefits will increase
4 percent for every 3-percent increase
in the cost of living. It is an escala-
tion clause, which means that from
now on Government employees-includ-
ing ourselves and those in the ex-
ecutive department who are responsible
for inflation-will actually make money.
The more inflation we have the more
retirement benefits we will get because
the bill guarantees that never again, as
we retire from this day forward, will we
have to worry about the ravages of
inflation.
Government employees, alone of all
the American people, will now be guar-
anteed that their pensions will never be
adversely affected by inflation. Not only
that, they will make 25 percent on infla-
tion because the pensions of Govern-
ment employees will increase 25 percent
faster than the cost of living.
I think it is an outrage that the Con-
gress would adopt such a provision and
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511856 CONGRESSIONAL RECORD-SENATE (-k;fober -1, 1969
lion a year from general revenue. That The Senator from Wyoming very prop-
will be the cost tq the taxpayers. erly pointed out that the increased ben-
The ACTING PRESIDENT pro tem- efits under this measure, for the first
pore. The question is on agreeing to the time under a civil service retirement bill,
amendment in the nature of a substitute. are being financed by increased deduc-
The amendment was agreed to. tions from the payroll checks of the em-
The ACTING PRESIDENT pro tem- ployees. But the point I made was that
pore. The question now Is on the engross- these new increases in deductions should
ment of the amendment and third read- be used, not to pay new benefits such as
ing of the bill. are before the Senate today, but to cover
The amendment was ordered to be the cost of benefits which have been ap-
engrossed, and the bill to be read a third proved by preceding Congresses in the
time. past 15 years and which were not prop-
The bill tH.R. 9825 i was read the third erly financed at the time.
time. Now we are starting all over again to
Mr. GOLDWATER. Mr. President, I create another deficiency in the civil
would like to ask the Senator from Dela- service retirement fund.
ware a question. If it is in the hearings, Mr. GOLDWATER. In view of that
the ,Senator can tell me, and I will look statement,. I should like to ask the Sen-
it up, but I have not found it. ator another question. If we follow the
It was my understanding a few years procedures outlined or suggested in this
ago that the civil service retirement bill, we offset the attempt to bring the
fund was not in good shape. retirement fund into actuarial sound-
Mr. WILLIAMS of Delaware. That is Hess and continue the same problem; am
correct. There is an actuarial deficiency I correct in that?
in excess of $50 billion. Mr. WILLIAMS of Delaware. That is
Mr. GOLDWATER. $50 billion? correct, except that they propose to cor-
Mr. WILLIAMS of Delaware. Yes; and rect that problem in this manner: by
that is due to the fact that over the tapping the Federal Treasury to the ex-
years since Congress established the rate tent of $2 billion a year. I just do not
of deductions from the employees, back think that we have a right at this time
about 20 years ago, Congress has to call on the American taxpayers, who
liberalized the benefits for civil service are having enough to do to pay their
retirees without increasing the deduc- taxes and to provide for their own re-
tions or the payments into the fund tirement, to pay another $2 billion per
A part of the deficiency has also re- year to support the retirement benefits
sulted from the fact that for a number of Government employees.
of years the Government itself did not I believe in a sound retirement system.
put into the fund the matching money I was on the committee the first few
against the deductions of the employees, years after I came here and had some-
and to that extent the deficiency is, in thing to do with writing the present re-
my opinion, an obligation of the U.S. tirement system. We are proud of it. I
Government. remember the then Senator from Mary-
But on a matching basis of 6.5 percent land, Mr. O'Conor, took a very active
from the employees and 6.5 percent from part at that time, and we worked out and
the Government as the employer, that finally reported a bill which was reason-
13 percent will pay only about one-half ably actuarially solvent in that the con-
of the benefits that are now provided tributions of the employees when
under the civil service retirement sys- matched by those of the Government
tem, which means that this bill, rec- would keep it on a solvent basis.
ognizing that fact, provides for direct Unfortunately over the years, year by
appropriations from general revenue in year. Congress has liberalized the bene-
addition to the deductions beginning with fits without increasing the employee con-
$278 million a year next year, and the tributions, with the result that we have
figure will escalate until it reaches an built up this tremendous deficiency in
annual total of $2 billion a year. From the retirement fund, such that if no ac-
then on It remains at approximately tion were taken at all it is estimated that
that figure of direct taxes paid into the within about 10 or 12 years the fund
fund under the provisions of this bill. It would be bankrupt.
could even grow somewhat higher so Certainly we cannot allow that. But I
that each year the taxpayers will be felt that the provisions that would pro-
called upon to pay taxes to the extent vide for increasing the contributions to
of about $2 billion a year to support make the fund solvent should have been
benefits under the civil service retire- kept and used for that purpose, rather
ment system which are not being paid than to start this same "escalation
for by the employees and the Govern- clause" of increasing our benefits all
ment on a matching basis, over aaain T An not think
e
tif
w
can jus
y
the
~---_
por the sections of title I which would tirement benefits for Government em- form. .1 want the RECORD to show that I do
not support this provision. It was for that
provide the method of financing this ployees by about 10 percent by changing reason that I tried to delete these liber-
fund by Increased deductions. I think the formula from the 5-year to the 3-year alization provisions from the bill, but
that was a long overdue recognition of formula. Nor can we justify adding an-
was overwhelmingly
the situation that exists, but I do not other section to guarantee that, in per- defeated.
agree that at the same time we should petuity, a retired Government official will .
increase the benefits further. According never again have to worry about the rav- Mr. COOPER. Mr. President. will the
to the estimate that was given to me, the ages of inflation by actually getting a 25- Senator from Delaware yield?
increased benefits that the committee percent Increase over the degree of Mr. WILLIAMS of Delaware. I yield.
would provide under this bill will add an- inflation as it goes along. In other words, Mr. COOPER. The Senator stated that
other $1 billion to the actuarial deft- we would collect a 25-percent premium in the future the liberalized benefits
ciency. on inflation. I think it is outrageous that would be paid by Increased deductions
Congress would ever propose such a
measure. It was for that reason I tried to
delete those provisions from the bill. I
was unsuccessful, and I shall vote against
the bill.
Mr. GOLDWATER. One further ques-
tion, and then the Senator will have
satisfied my lack of knowledge,
The Senator says the fund is now $50
billion in the red, and that, if we had not
provided in section I means to offset
that, it would have meant bankruptcy
of the fund, probably, in 3.0 years.
My question is, in view of the fact that
the increases in benefits offset some of
the other increases, have we absolutely
guaranteed that there will never be a
time when the fund is bankrupt?
Mr. WILLIAMS of Delaware. To a
large extent this bill does that in this
manner; the bill provides unlimited au-
thority to tap the Federal Treasury and
let the taxpayers keep it solvent.
Mr. GOLDWATER. I thank the Sena-
tor.
Mr. WILLIAMS of Delaware. The com-
mittee frankly admits in its estimate
that such contributions from the Treas-
ury will be at the rate of $2 billion a year
when it becomes fully operative.
Mr. CURTIS. Mr. President, will the
Senator yield?
Mr. WILLIAMS of Delaware. I yield.
Mr. CURTIS. I should like to state
that the junior Senator from Nebraska
is of the opinion that there are probably
many individual cases where the record
is such that they merit and deserve the
provisions of this bill. There is another
matter that disturbs me, however, and
that is the total impact of the bill, and
the total cost of it Is, at a time when our
budget, as far as general funds are con-
cerned, is at a deficit, and it appears that
it will be that way for some time.
I am also mindful of the restraints
placed upon the people who are not as-
sociated with the Federal Government.
They are asked to hold the line. I do not
believe that private pensioners, in the
main, have the liberality that we extend
to Government pensioners. I believe that
the social security program has fallen
behind the overall benefits of the civil
service.
Would the Senator agree that while
many provisions In the bill may be de-
sirous, or many provisions that certain
individuals or groups merit and deserve,
now Is a bad time to make a sizable finan-
cial commitment that will run for all
time and from which there can be no
retreat?
Mr. WILLIAMS of Delaware. I cer-
tainly would. I think that to take this
step now is poorly advised. That is why I
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October 3, 1969
CONGRESSIONAL RECORD - SENATE S 11857
from the compensation of employees. Is
that correct?
Mr. WILLIAMS of Delaware. There
are increased deductions from the em-
ployees provided for in this bill which
would about offset the liberalized fea-
tures of the bill; that is true. But I take
the position that the increased contribu-
tions should have been directed toward
correcting some of the present insolvency
of the retirement fund rather than un-
loading that burden on the taxpayers.
That is the point I make. To call upon
the taxpayers to shoulder this burden
cannot be Justified.
Mr. COOPER. The Senator spoke
about an automatic cost-of-living in-
crease. Would that be provided by in-
creased deductions from employees' pay?
Mr. WILLIAMS of Delaware. No; fu-
ture increases would be financed auto-
matically out of the Federal Treasury.
The bill provides that as the increases
become effective the obligations of the
Federal Treasury will be increased in
proportion. So to that extent it could be
said that future increases will be financed
by the taxpayers.
Mr. COOPER. The Senator said, as I
understood him, that the actuarial deficit
would reach about $50 billion in 10 years.
Mr. WILLIAMS of Delaware. That is
the deficit now.
Mr. COOPER. As I remember, in pre-
vious years the Senator from Delaware
urged that the deficit should be cor-
' retted. What would happen with respect
to the thousands of employees who have
retired and whose deductions were of the
amounts required of them during their
service? I think it is obvious that they
could not live on those amounts now. Am
I correct?
Mr, WILLIAMS of Delaware. The Sen-
ator is correct. I would support title I
of the pending bill under which that
deficiency is, corrected and a guarantee
extended to those who have retired that
the pension fund will be solvent for the
remainder of their lives.
I think the committee should be com-
mended on that point. It is a long overdue
recognition of the insolvency of this re-
tirement fund. Sooner or later Congress
will have to face up to the fact that the
fund is approaching the day of
insolvency.
I Support the committee's. action under
title I wherein it raises the contribution
rates for both employees and the Federal
Government as the employer.
Mr. COOPER.. Mr. President, will the
Senator state whether from this time
forward, if the bill should be enacted
into law, the deductions would be suf-
ficient-and no one can tell, but mean
from an estimate standpoint-to pay the
benefits that must be paid. Assuming
that there had been do deficit in the past
and looking at the matter as if we were
starting on it now, would the fund be
solvent without the help of the taxpayers
funds?
Mr. WILLIAMS of Delaware. It would
not under this pending bill. Assuming
that the 6.5 percent contributed by the
employee is matched by the employer,
for a total of 13 percent, that 13 percent
would not be sufficient to pay the bene-
fits from this time forward. it would re-
quire an additional contribution of
around $2 billion per year from general
revenue. There would be a deficiency of
about 9 percent of the Federal payroll.
In other words, the Government would
have to put in about $2 billion per year.
Mn McGEE. Mr. President, would it
not be to the point of the Senator's ques-
tion to say that the pending bill does
address itself to staying ahead, so that
the fund will be solvent when our due
date is arrived at? We have provided in
the bill for keeping the fund solvent.
Mr. WILLIAMS of Delaware. The Sen-
ator is correct. As I pointed out, it does
it in this manner.
There are automatic clauses that could
trigger an increased Government contri-
bution out of general revenue in order
to keep it solvent.
Under that escalator clause the com-
mittee estimated the cost to the taxpay-
ers would be about $2 billion a year 10
years from now. And if in the future
other benefits are approved and the new
financing is not provided for by increased
deductions then the $2 billion figure
would rise proportionately.
Mr. McGEE. The committee did pro-
vide for an increase in the deductions to
pay for these particular benefits. How-
ever, the important point is that the de-
ficiency is not due to the failure of the
employees to contribute, but to the fail-
ure of the U.S. Government to set aside
its proportionate share each year. This
is the matter that we are seeking to
correct.
Mr. WILLIAMS of Delaware. The state-
ment is partly correct. There was a period
of years when the Government did not
put in the matching contribution. Those
matching contributions of the Federal
Government plus interest would amount
to about $5 billion or $6 billion and would
take care of about one-tenth of the pres-
ent actuarial deficiency. That arises from
the fact that even though the Govern-
ment was on an equal matching basis,
if the Government had made all its pay-
ments plus interest there would still be
$40 billion deficiency remaining which
would have to be taken care of either by
increased contributions or by tapping the
Federal Treasury, as the committee de-
cided to do.
This deficiency in the funds is the re-
sult of past Congresses voting increased
retirement benefits without making pro-
visions to raise the money to pay them.
So while it is partly true to say that
some of the deficiency results from the
failure of the Government to have
matched the contributions of the em-
ployees that is only about 10 percent of
the deficiency.
Mr. COOPER. Mr. President, as I un-
derstand it, the chief portion of the ac-
tuarial deficit results from the fact that
Congress did not first require sufficient
deductions from the employees.
Mr. WILLIAMS of Delaware. At first
it did require deductions in a sufficient
amount when the Federal Government
matched them. However, Congress over
the years has been liberalizing the pen-
sion funds, but it did not at the same
time increase the deductions to provide
for a method of financing.
One of the points that the former Sen-
ator from Maryland, Senator O'Conor,
and I made 20 years ago when we dealt
with the matter was that we should in-
corporate a requirement in the law to
the effect that every time Congress raised
the benefits it would have to raise the
deductions on the part of both the em-
ployees and the Government at the same
time.
Had we been successful then we would
not be here today with a $50 billion
deficit. Over the last 15 years Congress
has been raising retirement benefits
practically every year for the employees
and at the same time making no provi-
sions at all for the financing of these
benefits. It has been the same old story.
Members of Congress scramble for a
chance to spend money, but they are very
bashful when it comes to imposing the
tax to pay for the programs.
Even here today, while the committee
authorizes that the Federal Treasury can
be tapped for an extra $2 billion annu-
ally to pay for the cost of these retire-
ments increases, they defer the date of
this new tax until after next year's elec-
tion.
The committee had to provide financ-
ing in the pending bill to pay for the
benefit increases that had been granted
for the past 15 years, but why start this
parade all over again by authorizing a
new round of increases? If the money
provided under title I were intended to
pay for the past benefits that have been
voted my contention is that we should
have kept it to that point and not started
another round of escalation.
Mr. COOPER. Does one-half of the
deficit, or a great part of the deficit, result
from the fact that in the past Congress
did not appropriate sufficient funds to
pay the Government's share, the em-
ployer's share, of the fund?
Mr. WILLIAMS of Delaware. That
would only account for about 10 percent
of the deficiency. The other 90 percent is
accounted for by the fact that Congress
in the past approved benefits that were
not matched by the increased contribu-
tions on the part of the employees and
the Government.
Mr. COOPER. Mr. President, it is not
likely that we could levy upon the em-
ployees who have already retired in-
creased deductions to make up for the
past deficit.
Mr. WILLIAMS of Delaware. No, that
could not be done. I would not support
such a move, and I do not think it could
be done.
As these employees retire it is a con-
tract they have with the Government,
and I do not think you can go back and
rescind it.
I have always taken the position that
what the retired employees of the Gov-
ernment want most, No. 1, is the assur-
ance that, no matter how long they live,
this fund will be solverlt and their pay-
ments will continue. They do not want to
figure that they have to die by a certain
date or they will not have anything on
which to live. They want assurance that
the pension will be paid as long as they
live, and that is one point we have to be
sure to protect. I think we should con-
sider that point as No. 1.
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S 11858 CONGRESSIONAL RECORD- SENATE
The second point is, to what extent can
It be liberalized? That is equally impor-
tant to them.
But the major point is that once an
employee retires and is dependent upon
the pension he wants the assurance that
he does not have to die early in life in
order to keep from going to the poor-
house. I think we in Congress have been
negligent in giving him that assurance.
Mr. COOPER. The social security trust
fund is not actuarially solvent, is it?
Mr. WILLIAMS of Delaware. Not from
the standpoint of insurance. But it is
actuarially solvent-or was- -on the
premise the workers under the law have
to come under it; therefore, the Govern-
ment is assured of continued contribu-
tors and policy holders for life.
For years it has been a policy accepted
and recognized, by the Ways and Means
Commitee and the Finance committee
that they would consider no increased
benefits in social security if there were
not in the same bill provisions for an in-
creased contribution or tax to pay for
it. That has been the policy, and we have
mentioned it on the floor of the Senate
when various Members have proposed
increased social security benefits. Mem-
bers were told there was no use in ap-
proving increased benefits unless there
were a tax in the same bill to provide the
financing.
Had that rule been in effect in the
Civil Service Retirement Act 20 years
ago we would not be in this dilemma
today, and I wish it were a part of this
bill. Then we would have the situation
that Members of Congress as they vote
for increased benefits, which is always
popular, would also vote to raise the con-
tributing rates for the employees.
The unfortunate point is that after
next year Congress will be required to
raise the taxes of the American tax-
payers to the extent of $2 billion a year
to pay for the benefits that are being
approved under this bill today.
Mr. COOPER. If the social security
trust fund should be threatened, its real
solvency rests upon the credit of the
United States and the taxes and ap-
propriations to keep it solvent.
Mr. WILLIAMS of Delaware. Morally,
yes; that is the answer. Legally the so-
cial security pension fund is not an-
chored to the Federal Treasury. The
civil service retirement fund will be an-
chored to the Federal Treasury under
this bill.
Government employees under this
bill are being placed in a special class
with benefits that are not available to
any other type of citizens and these
benefits are being financed directly out
of general revenue. I trust that those
who have voted for this bill here today
will explain this to their taxpaying
constituents.
Mr. COOPER. I am glad to have the
October :3, 1969
Acting President pro tempore appointed
Mr. McGEE, Mr. YARBOROUGH, Mr.
RANDOLPH, Mr. HARTKE, Mr. FONG, Mr.
BOGGS, and Mr. FANNIN conferees on the
part of the Senate.
Mr. McGEE. Mr. President, I ask unan-
imous consent that S. 2754 be indefinitely
postponed.
The ACTING PRESIDENT pro tern-
pore. Without objection, it is so ordered.
Mr. MANSFIELD subsequently said:
Mr. President, I ask unanimous consent
that in the engrossment of the Senate
amendment to H.R. 9825 the Secretary
of the Senate be authorized to eliminate
the last four lines of the amendment
since it refers back to section 207 of the
amendment which was stricken out and
therefore no longer has an significance.
The PRESIDING OFFICER. Without
objection, it is so ordered.
Mr. MANSFIELD. Mr. President, the
Senate's thorough, expeditious, and
overwhelming acceptance of the civil
service retirment measure is due pri-
marily to its expert handling by the
distinguished chairman of the Senate
Post Office and Civil Service Committee,
the. Senator from Wyoming (Mr. Me-
GEE). Senator McGEE, along with the
members of his committee, worked dili-
gently to report out a bill that means
so much to those who serve the Govern-
ment and one that is designed to
stabilize the retirement fund. The Senate
appreciates his knowledge of this area
and the strong advocacy with which he
presented its features.
We are also indebted to the senior
Senator from Delaware (Mr. WILLIAMS)
for his thought-provoking contributions
to the discussion and appreciate very
much the cooperation he exhibited.
The Senate as a whole is to be compli-
mented for the efficient disposition of
this measure today.
MESSAGE FROM THE HOUSE
A message from the House of Repre-
sentatives by Mr. Hackney, one of its
reading clerks, Informed the Senate that
Mr. Mailliard had been appointed as a
conferee in the conference on the bill
(S. 1075) to establish a national policy
for the environment; to authorize
studies, surveys, and research relating
to ecological systems, natural resources,
and the quality of the human environ-
ment; and to establish a Board of En-
vironmental Quality Advisers, vice Mr.
Pelly of Washington, excused.
PEACE CORPS ACT AMENDMENTS
OF 1969
Mr. MANSFIELD. Mr. President, I ask
unanimous consent that the Senate pro-
ceed to the consideration of the motion
of the Senator from New York (Mr.
JAVITS) of September 19
1969
to recon-
.
,
,
,
s so or
ere
.
ware. Ithink it a mistake to add the Mr. McGEE. Mr. President, I move Sider the passage of H.R. 11039.
1 percent to the cost of living increase, that the Senate insist on its amendment The PRESIDING OFFICER (Mr. Mc-
and am sorry that is in the bill. But, and request a conference with the House GOVERN in the chair). Without objection,
on the whole, I think this bill does move of Representatives on the disagreeing it is so ordered.
toward protecting the trust fund and votes of the two Houses thereon, and Mr. MANSFIELD. Mr. President, I ask
protecting the retirees. that the Chair be authorized to appoint unanimous consent that the action of
Mr. DOLE. Mr. President, I support the conferees on the part of the Senate. the Senate in appointing conferees on
S. 2754, Upon reading the report, I was The motion was agreed to; and the H.R. 11039 be reconsidered.
impressed by the committee's approach
taken to resolve, problems presently con-
fronting our civil service retirement and
disability system. The committee has
recommended an extension of benefits
and also a realistic concern about fi-
nancing the benefits.
I have long been sympathetic to the
needs of our retired citizens who must
live on a fixed income. During periods
of inflation, as now, senior citizens bear
an unfair share of the problems caused
by the decreasing purchasing power of
our dollar. Many who gave years of dedi-
cated service find themselves unable to
exist on the retirement pay they had
anticipated would allow them to live
comfortably in their later years.
Several provisions in S. 2754 are par-
ticularly noteworthy. Section 204(a) will
provide for an additional 1-percent ad-
justment with each cost-of-living In-
crease. Existing law provides for an ad-
justment whenever the consumer price
index shows a 3-percent increase for
each of 3 consecutive months. The 1-per-
cent increase will allow our retired civil
servants to live more realistically with
an inflation rate that has been averag-
ing 6.4 percent.
Section 201 of S. 2754 will more fully
reward the civil service employee by use
of his highest 3 years of earnings as a
base period for computing annuities
rather than the highest 5 under existing
law.
There are other provisions, including
those for financing the civil service re-
tirement and disability system, extension
of credit for military service and im-
provements in the survivor benefits for
employees who die with little Federal
service, for employees who die after re-
tiring upon a disability annuity, and for
surviving children of Federal employees.
All are needed additions to our civil
service retirement and disability system.
I urge the Senate to pass S. 2754 as a
reasonable approach to the problems of
those retired from Federal services.
The ACTING PRESIDENT pro tem-
pore. The bill having been read the third
time, the question Is, Shall it pass?
The bill (H.R. 9825) was passed.
Mr. McGEE. Mr. President, I move to
reconsider the vote by which the bill was
passed.
Mr. MANSFIELD. I move to lay that
motion on the table.
Mr. FONG. I move to lay that motion
on the table.
The motion to lay on the table was
agreed to.
Mr. McGEE. Mr. President, I ask unan-
imous consent that, in the engrossment
of the Senate amendment to H.R. 9825,
the Secretary of the Senate be authorized
to make the necessary clerical and tech-
nical adjustments in the language of the
bill.
The ACTING PRESIDENT pro tem-
pore
Without objection
it i
d
d
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August 13, 1969 CONGRESSIONAL RECORD-SENATE
corded to the District of Columbia, and for
other purposes (Rept. No. 91-386) ; and
H.R. 12677. An act to authorize the Com-
missioner of the District of Columbia to
lease to the Jewish Historical Society of
Greater Washington the former synagogue
of the Adas Israel Congregation and real
property of the District of Columbia for the
purpose of establishing a Jewish Historical
Museum (Rept. No. 91-388).
By Mr. TYDINGS (for Mr. BIBLE), from
the Committee on the District of Columbia,
with an amendment:
S. 2056. A bill to amend title 11 of the Dis-
trict;.of Columbia Code to permit unmarried
judges of the courts of the District of Co-
lumbia who have no dependent children to
terminate their payments for survivors an-
nuity and to receive a refund of amounts
paid for such annuity (Rept. No. 91-387).
EXECUTIVE REPORT OF A
COMMITTEE
As in executive session, the following
favorable report of a nomination was
submitted :
By Mr. LONG, from the Committee on
Finance: .
Rex :M. Mattingly, of New Mexico, to be a
member of the Renegotiation Board.
BILLS INTRODUCED
Bills were introduced, read the first
time and, by unanimous consent, the
second time, and referred as follows:
By Mr. HOLLINGS:
S. 2841. A bill to amend the Marine Re-
sources and Engineering Development Act of
1966 to establish a comprehensive and long-
range national program of research, develop-
ment, technical services, exploration and
utilization with respect to our marine and
atmospheric environment; to the Commit-
tee on Commerce.
By Mr. PROUTY:
S. 2842. A bill to amend title 5, United
States Code, to assist Government employees
in preparing for retirement; to the Commit-
tee on Post Office and Civil Service.
(The remarks of Mr. PROUTY when he in-
troduced the bill appear later in the RECORD
under the appropriate heading.)
By Mr. STENNIS (for himself and
Mrs. SMITH) (by request) :
S.2843. A bill to amend the Military Se-
lective Service Act of 1967 in order to pro-
vide for a more equitable system of select-
ing persons for induction into the Armed
Forces under such act; to the Committee on
Armed Services.
(The remarks of Mr. STENNIS when he
introduced the bill appear later in the
RECORD under an appropriate heading.)
By Mr. BAYH:
S. 2844. A bill for the relief of Marguerita
Ponce; to the Committee on the Judiciary.
By Mr. BAKER:
S. 2845. A bill for the relief of George W.
Hardin; to the Committee on the Judiciary.
By Mr. KENNEDY (for himself and
Mr. YARBOROUGH) :
S. 2846. A bill entitled "The Developmental
Disabilities Services and Facilities Construe-
tion Act of 1969"; to the Committee on La-
bor and Public Welfare.
(The remarks of Mr. KENNEDY when he in-
troduced the bill appear later in the RECORD
under the appropriate heading.)
By Mr. NELSON;
S. 2847. A bill to amend the Foreign As-
sistance Act, as amended, to authorize the
Secretary of State to participate in the de-
velopment of a large prototype desalting
plant in Israel, and for other purposes; to
the Committee on Foreign Relations.
S. 2848. A bill to amend the Mineral Leas-
ing Act, and for other purposes; to the Com-
mittee on Interior and Insular Affairs.
(The remarks of Mr. NELSON when he in-
troduced the bills appear later in the REC-
ORD under appropriate headings.)
By Mr. HARRIS:
S. 2849. A bill to amend the act of Au-
gust 25, 1959 with respect to the final dis-
position of the affairs of the Choctaw Tribe;
to the Committee on Interior and Insular
Affairs.
By Mr. HANSEN (for, himself, Mr.
CURTIS, Mr. ERVIN, Mr. FANNIN, Mrs.
SMITH, and Mr. THURMOND) :
S. 2850. A bill to amend the Fair Labor
Standards Act of 1938 to establish proce-
dures to relieve domestic industries and
workers injured by increased imports from
low-wage areas; to the Committee on Labor
and Public Welfare.
(The remarks of Mr. HANSEN when he in-
troduced the bill appear later in the REc-
ORD under the appropriate heading.)
By Mr. MATHIAS:
S. 2851. A bill to'authorize refunds of
duties paid on certain forms of nickel im-
ported between July 1, and December 31;
1967; to the Committee on Finance.
By Mr. INOUYE:
S. 2852. A bill to amend the Shipping Act,
1916, as amended, to require common car-
riers by water in the domestic offshore trade
to obtain a certificate of convenience and
necessity, and to require contract carriers
by water in such trade to obtain a permit;
to the Committee on Commerce.
(The remarks of Mr. INOUYE when he in-
troduced the bill appear later in the RECORD
under the appropri tee adig.)
S. 2842-INTICODUCTION OF A BILL
ON PRERETIREMENT PLANNING
FOR - FEDERAL -CIVILIAN EM-
PLOYEES
Mr. PROUTY. Mr. President, in March
of 1966 I proposed an amendment to
the Social Security Act which was
adopted by this body, slightly modified,
by the other body, and finally became
law. Some refer to that law, which
provided a monthly benefit to Americans
age 72 or over who were not already
covered under social security, as the
Prouty amendment. Well over a million
individuals have benefited from it, and
there is not a week that passes but that
letters of appreciation come to my office
concerning that amendment which pro-
vides so little for those who had little to
begin with.
During this session of Congress I in-
tend to introduce legislation which will
increase the monthly cash income for
many of those now getting benefits un-
der the so-called Prouty amendment.
But today I want to consider one piece
of evidence I used before this body on
March. 15, 1966, in my successful effort
to convince my colleagues that there
was a need for special social security
benefits for older Americans not already
receiving such benefits. Let me read
to you amemorandum that I read then:
MEMORANDUM ON FEDERAL RETIREMENT
ANNUITIES
Of the more than 200,000 surviving widows
and children of civil service retirees, 38 per
cent receive less than $50 a month; 79 per
cent receive less than $100 a month; 93
per cent receive less than $150 a month.
Ninety-nine per cent of all surviving widows
and children receive less than the so-called
S 9889
poverty level of $3,000 a year. Of the 170,000-
some widows on the civil service retire-
ment rolls as of June 30, 1965, the average
age was 65.8, the average annuity a meager
$80 per month.
The situation of surviving widows and chil-
dren is not necessarily the most desperate.
Look at the unfortunate figures relating to
employee annuitants: 49,700 receive less than
$50 a month; 126,100 receive less than $100;
214,300 receive less than $150 per month;
307,600 receive less than $200. Viewing the
so-called poverty level as $250 per month,
377,500 civil service empolyee annuitants out
of a grand total of 508,500 receive less than
poverty-scale annuities.
Alarmingly enough, nearly 74 per cent of
all civil service employee annuitants receive
less than the magical poverty level.
I was alarmed by those statistics then,
and I continue to be alarmed by similar
statistics now.
As the country's largest single em-
ployer, the Federal Government should
be providing retirement protection for
its employees second to none. Instead it
has a retirement system basically the
same as Congress intended in 1921 when
it enacted the civil service retirement
system. Certainly it has been modified
by subsequent Congresses, but basically
it continues to be a staff retirement
designed more for worker retention than
for retirement protection.
For example, when survivor benefits
under the civil service retirement sys-
tem are compared to survivor benefits
under social security the disparity is
disgraceful. Did you know, Mr. President,
that the surviving widow and one child
of a deceased civil service employee earn-
ing $500 a month and with 5 years' Fed-
eral service would receive a $78 a month
'benefit while had her husband been
under social security instead she would
get $266 a month.
Did you realize, Mr. President, that for
that widow of a civil service employee to
get that $266 a month her deceased hus-
band would have had to been employed
for 40 years in the Federal Government.
I could repeat example after example
showing the complexity and inadequacy
of the civil service retirement system,
but my purpose today is not to over-
haul or revamp that system.
Several weeks ago I was pleased to
cosponsor S. 2554 with the distinguished
junior Senator from Minnesota (Mr.
MONOALE). Both of us had independently
arrived at the conclusion that legislation
in this area was needed. However, our
conceptualization of the specific methods
to be used for achieving effective Govern-
ment-wide preretirement planning dif-
fer. Therefore, I am today introducing
a bill that I had drafted during the last
Congress.
My bill differs from S. 2554 in one im-
portant respect. S. 2554 provides in part
that-
The head of each agency shall formulate
and carry out a program to provide compre-
hensive preretirement assistance to employ-
ees of such agency who are eligible, or ap-
proaching eligibility, for retirement.
The bill I am introducing today pro-
vides that the Civil Service Commission
shall provide preretirement assistance.
Now I feel that this is an important
difference for two major reasons.
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First, I can see the possibility for many
problems in having each individual agen-
cy responsible for preretirement assist-
ance. I suspect that there would be a
great deal of employee resentment from
older employees who would suspect that
their employing agency was merely using
preretirement planning as a vehicle for
encouraging them to retire. On the other
hand, my bill which gives the authority
for preretirement planning to the Civil
Service Commission would avoid this sit-
uation whereby employing agencies
would be put in a difficult position of try-
ing to provide preretirement assistance
without unduly upsetting their em-
ployees.
Second, I am convinced that in legis-
lation of this sort it is always a good
general principle to provide the agency
with primary responsibility with as much
latitude and flexibility as possible.
I sincerely hope that prompt action is
taken on this matter during this Con-
gress.
Mr, President, in August of 1961 the
U.S. Civil Service Commission published
a little pamphlet entitled, "Retirement
Planning: A Growing Employee Rela-
tions Service." The conclusion of their
little pamphlet reads as follows:
A variety of approaches are used in re-
tirement planning programs in industry and
In government. This is to be expected consid-
ering the relative recency of employer par-
ticipation In this field, and the fact that
most organizations are still feeling their
way, testng and experimenting with various
approaches, adjusting program activities to
local needs and resources. These differences
are healthy, because without effort there will
be no results. There is a need for further
experimentation and evaluation because of
the scarcity of objective information on the
relative effectiveness of various programs and
the dearth of research evidence on the long-
range significance of retirement planning
activities.
The signs are many, however, that retire-
ment planning is a matter of increasing gen-
eral Interest; that it has begun to be rec-
ognized as a significant aspect of employee
relations; and that few modern personnel
offices can much longer ignore considering
how their organizations can best meet the
needs of employees approaching retirement.
It can reasonably be expected from this that
we will have more, not less, retirement plan-
ning activities in the future, with program
arrangements more selective and effective.
Mr. President, it is now nearly 10 years
later and the retirement planning activ-
ities of the Federal Government are
nearly as dormant and stagnant as they
were when the Civil Service Commission
pamphlet was written. Some agencies
have some progress sometimes, but no-
where is there an overall program to as-
sist any of the 21/2 million civilian em-
ployees who will all some day be faced
with retirement.
Mr. President, I believe the Federal
Government has done a very poor job of
being an employer concerned about the
individual's successful retirement. I am
hopeful that the bill I have introduced
today will provide the catalyst for the
Federal Government as an employer to
move off dead center into the role as a
pacemaker for effective preretirement
planning.
The PRESIDING OFFICER. The bill
will be received and appropriately
refered.
The bill (S. 2842) to amend title 5,
United States Code, to assist Govern-
ment employees in preparing for retire-
ment, introduced by Mr. PROUTY, was
received, read twice by its title, and re-
ferred to the Committee on Post Office
and Civil Service.
S. 2843-INTRODUCTION OF THE
SELECTIVE SERVICE AMEND-
MENTS ACT OF 1969
Mr. STENNIS. Mr. President, by re-
quest, for myself and the senior Sen-
ator from Maine (Mrs. SMITH), I intro-
duce, for appropriation reference, a bill
to amend the Military Selective Service
Act of 1967 in order to provide for a more
equitable system of selecting persons for
induction into the Armed Forces under
such act.
I ask unanamious consent that a let-
ter of transmittal requesting considera-
tion of the legislation and explaining its
purpose be printed in the RECORD im-
mediately following the listing of the
bill.
The PRESIDING OFFICER. The bill
will be received and appropriately re-
ferred; and, without objection, the
letter will be printed in the Record.
The bill (S. 2843) to amend the Mili-
tary Selective Service Act of 1967 in
order to provide for a more equitable
system of selecting persons for induction
into the Armed Forces under such act,
introduced by Mr. STENNIS, for himself
and Mrs. SMITH, by request, was received,
read twice by its title, and referred to the
Committee on Armed Services.
The letter presented by Mr. STENNIS,
is as follows:
SELECTIVE SERVICE SYSTEM,
Washington, D.C., May 13, 1969.
Hon. SPIRO T. AGNEW,
President of the Senate,
Washington, D.C.
DEAR MR. PRESIDENT: Transmitted herewith
is a draft of legislation "To amend the Mili-
tary Selective Service Act of 1967 in order
to provide for a more equitable system of
selecting persons for Induction into the
armed forces under such Act". This legisla-
tion would carry out the President's recom-
mendations in his message on selective serv-
ice which was transmitted to the Congress
today.
In that message the President indicated
that he would change from an oldest-first
to a youngest-first order of call so that
young men would become less vulnerable
rather than more vulnerable to the draft
as they grew older and that he would select
those who are actually drafted through a
random system. The draft legislation which
I am submitting today would amend exist-
ing law so as to permit the President's ob-
jectives to be accomplished.
I urge the Congress to act promptly and
favorably on this legislation.
PURPOSE OF THE LEGISLATION
Selective service law authorizes the Presi-
dent to provide for the selection or induction
of persons15y age group or groups. Under
the authority provided In section 5(a) of
the Military Selective Service Act of 1967
(50 App. U.$.C. 455(a)), the President pre-
sumably may designate any age group or
combination of age groups as the first to be
called, second to be called, and so forth.
In expectation that the President would
use this authority to provide for calling
"younger men first", the :,ongress, in 1.967,
when it enacted a college student deferment
program, provided that students would revert
to any prime age group for possible induction
when no longer deferred.
In 1967, the method of :;electing individ-
uals within such a prime selection group was
considered. The Congress, =_n amending the
selective service law, adopted a provision pro-
hibiting any change in the method of selec-
tion then in use (oldest first in order of date
of birth).
Sec. 2 of the bill, by repealing paragraph
(2) of Sec. 5(a) of the Military Selective
Service Act of 1967, would restore to the
President the broad authority he had before
1967 to determine an appropriate method
of selection.
Sec. 3(a) of the bill would provide that
all registrants deferred under section 6 of
the law would, as students under present
law. be subject to selection in a young prime
age group when their deferment ended. This
would treat all deferments and exemptions
under the law equally.
Sec. 3(b) of the bill would place in
such prime selection group when it is de-
signated by the President, all registrants
then neither deferred or exempt, under 26
but older than the age group or groups
which comprise such prime selection group.
This provision would prevent the relief from
possible selection of large numbers who are
now liable for selection so long as selections
are made from the 19-28 year old group.
A simple random selection procedure has
been developed to Implement the proposed
legislation. Under the procedure, selection
would be made each year Irom the current
19 to 20 year-olds and older men whose col-
lege or other deferments or exemptions have
expired. Prime exposure to the draft would
therefore be limited to a 12-month period.
Those not selected by the end of the year
would be placed in a progressively lower
order of priority for Induction and would
normally not be called except in emergency.
The Bureau of the Budget advises that
enactment of this legislation would be in
accord with the program of the President,
Sincerely yours,
LEWIS 13. HERSHEY,
Lt. General, USA, Director of Selec-
tive Service.
SECTIONAL ANALSLS OF BILL
SECTION 2
Section 5(a) (1) of the Military Selective
Service Act of 1987 authorizes the President
to establish rules and regulations for im-
partial selection of persons for induction, in-
cluding selection by age group or groups.
Section 5(a) (2), added in 1967, provides
that if the President establishes selection
by age group-Le., designates a prime age
group or groups as the first to be called-
selection of individuals within such prime
age group or groups would have to be made
by the method in effect on date of enactment
(June 30, 1967), i.e., oldest first in order of
date of birth.
Section 2 of the bill repeals section 6(a)
(2) of the Military Selective Service Act of
1967, thus restoring to the President the
broad authority he had before June 30,
1967 to determine an impartial method of
selection, including selection within any des-
ignated prime age group by lottery.
SECTION 3
Section 6(h) (1) of the Military Selective
Service Act of 1987 provides that when the
President designates a prime age group, any
person granted a student deferment shall
upon termination of the deferment be liable
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Pull ove or a ease .
S9453
_SEN&E
- RECD
August 8, 1969 CONGRESSIONAL
only 12 States definitely leaned toward direct election, it the latter should fail may linger, I have been convinced on one
the direct-election proposal. to pass Congress, only 43 percent of the point: among the several alternatives
The other two inquiries included in legislators would deinitely favor the dis- now available to Congress, I believe the
our questionnaire were designed to meas- trict plan, and in- six States-Alaska, direct election proposal has the best
ure support among State legislators for Nevada, Wyoming, New Mexico, Rhode chance of adoption.
two alternate reform proposals: the pro- Island, and Utah-a majority of legisla- Accordingly, I have concluded that
portional electoral vote plan and the tors responding were opposed to the plan. the wisest course for those interested in
district proposal recently reported by a The proportional plan was also less fa- electoral reform lies in the direction of
subcommittee of the Senate Judiciary vorable, with 55 percent of the legislators working toward perfection and adoption
Committee. supporting the plan, while one State, of an amendment which will assure that
- We were very much pleased by the Alaska, registered a majority against this the President is elected by a majority
response to our 'survey. Approximately proposal, vote of the people.
44 percent of the State legislators con- Despite my survey and other polls that I ask unanimous consent that the
tacted took the time and trouble to pro- may follow, I suspect that doubts will table, letter, and questionnaire be printed
vide answers, reflecting a strong interest continue to linger in the minds of many in the RECORD.
at the State level` in the 'important sub- Senators as to whether a direct election There being no objection, the material
ject of electoral reform. amendment can become part of the Con- was ordered to be printed in the RECORD,
Stitution. However, even though doubts as follows:
The results , of our poll, set out in a
table printed at the end of my statement,
demonstrate that there is also strong
support arrrohg individual State legisla-
tors for the proposal to elect the Presi-
dent by direct popular vote. In fact, our
survey indicates that only two States,
Idaho and North Dakota, would definitely
oppose the proposition.
On the other hand, it is interesting'to
note, on the basis of our survey, that a
majority of legislators responding in each Alabama___ __________ 32 60 40 49 45 62 27 11 33 31 36
of seven States-Georgia, Idaho, North Alaska_____ __ _______ 43 69 31 57 23 35 50 15 30 55 15
Carolina, North Dakota, Oklahoma, Vir- Arkansas-------------- 52 75 23 59 34 61 12 27 50 23 27
Delawa ------------ 41 63 37 5 42 66 17 17 25 12 63
eorgiafe _____________ 44 56 39 41 50 49 29 22 54 24 22
girlia and Wyoming-hold the view that G
their. respective legislatures would not Hawaii________________ 34 92 8 92 8 69 12 19 38 19 43 50 47 53 27 ratify a popilZar vote amendment. This Louisiana_____________ 25 79 15 67 22 56 30 32 62 28 30
apparent discrepancy between what leg- Maine---------------- 43 63 37 52 42 43 29 28 54 26 20
Islators would do as individuals and what Maryland------------- 48 70 30 51 35 62 24 14 36 34 30
28 30
they believe the members of their legisla- Moont Mntaannaa__--_ _ __ ___ ___ ___ ____ 53 63 6 65 5 40 34 47 57 4 32 2 55 53 35 36 11 10 38 42 2 30 32
ture would do collectively is very New Hampshire-------- 41 69 31 48 41 ? 62 20 18 37 27 36
New Mexico___________ 42 70 30 67 31 50 26 24 39 43 18
10 14 43 43
7
The recent UPI poll of legislative lead-
ers indicated that Alabama, Arkansas,
"Georgia, and Utah were among 10 States
which opposed or were inclined to oppose
the direct vote proposal. On the other
hand, my survey reveals thata majority
of the individual legislators in these four .
States _ would vote to ratify such an
My survey strongly suggests that there
t vote -
di
th
f
rec
e
or
is more support
amendment among State legislators--
even in the smaller States-than is gen-
erally believed to exist.
In the past, I have felt that the pro-
posal to apportion the electoral votes of
each State on the basis of its popular
vote would be most likely to win the
needed approval of three-fourths of the
States. Although, not an ideal solution, I
was of the opinion that it might be bet-
ter to support the proportional plan as
a significant step toward electoral re-
form rather than to advocate action in
Congress which would be only an exer-
cise in futility.
As a result of my survey, I have come
to the conclusion that I should' work for
approval by Congress of the direct popu-
lar vote amendment. Not only does it
appear that there is a good chance for
ratification by three-fourths of the
States, but I have been impressed by
the indication that it stands a better
chance than either of the o_ ther' two
major reform proposals.
The response received from State leg-
islators to my survey indicated that 64
percent of those responding to the first
question would vote in favor of a direct
popular election. As an alternative to a
RESULTS OF ELECTION REFORM QUESTIONNAIRE
[In percentl
Nevada_______________ 50 73 27 67 30 83
North Carolina--------- 36 58 42 30 60 53 27 20 65 28 7
North Dakota__________ 51 37 60 20 72 44 31 25 46 29 25
Oklahoma_____________ 29 53 47 35 47 47 24 29 50 21 29
Oregon_______________ 52 66 32 54 36 42 37 21 52 29 19
Rhode and 37 81 19 78 13 71 16 13 33 38 29
South Carolina---- -- 47 62 35 51 43 58 28 14 43 34 23
South Dakota__________ 55 66 34 50 45 42 30 28 52 20 28
Texas______ __________ 43 60 38 53 40 63 23 14 44 25 31
Utah_________ ______ 40 69 29 64 31 67 20 13 28 33 39
Vermont______________ 52 77 23 62 30 59 25 16 34 34 32
Virginia_______________ 54 55 43 39 50 61 32 7 44 35 21
Wyoming______________ 54 55 43 37 55 53 32 15 27 47 26
U.S. SENATE,
July 9, 1969.
DEAR LEGISLATOR: Recently the Judiciary
Committee of the U.S. House of Representa-
tives approved H.J. Res. 681 which proposes
a Constitutional amendment abolishing the
electoral college and the electoral vote, and
provides for election of the President by
direct popular nationwide vote.
To those of us in Congress who soon will
vote on this measure, it is important to
determine, if possible, whether such a pro-
posal stands a chance of being ratified by
the legislatures of a/4 of the states. Ob-
viously, if the direct popular vote amend-
ment cannot win ratification by a sufficient
number of states, Congress should focus its
attention on one of the other electoral re-
form proposals.
It would be very helpful to me and my
colleagues if you would take a moment to
answer the few questions on the attached
sheet and return it in the enclosed stamped,
addressed envelope. As long as we know
your state, it is not necessary for our survey
purposes to have your name.
Your cooperation in making this survey
as complete and accurate as possible is very
much appreciated.
Sincerely,
Legis- Individual legislative
lators support' approval'
respond- -
Unde- Unde-
No Yes No cided Yes No tided
SAMPLE COPY ELECTORAL REFORM
QUESTIONNAIRE
Member of Legislature, State of-:
1. Would you, as a state legislator, vote
to ratify a proposed Constitutional amend-
ment abolishing the electoral vote and pro-
viding for election of the President by direct
popular nationwide vote? ^ Yes, ^ No.
2. Do you believe your state legislature
would approve such a proposal? ^ yes, ^ No.
3. If the direct popular election proposal
should fail, would you favor an alternative
which would abolish the electoral colege but
retain the electoral vote of each state, and
which would:
(a) apportion the state's electoral vote
on the basis of the popular vote within the
state? ^Yes, ^ No. or
(b) award 1 vote for each congressional
district on the basis of the popular vote with-
in that district, with 2 additional electoral
votes awarded according to the statewide
popular vote? ^ Yes, ^ No.
IMPROVING THE CIVIL SERVICE
RETIREMENT PROGRAM
Mr. YARBOROUGH. Mr. President,
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5945 CONGRESSIONAL RECORD - SENATE
Senate'Post Office and Civil Service Com-
mittee. This is the amended Senate ver-
sion of the civil service retirement bill.
Except for the important Senate amend-
ments, S. 2754 is almost identical to the
recently House-passed H.R. 9825. First, I
congratulate the able chairman of this
committee,, Senator GALE McGEE, for his
able and diligent work that has brought
this bill to the floor with great improve-
ment over the House bill.
As with H.R. 9825, S. 2754 would 're-
vise the method of financing to put the
civil service retirement fund on sounder
footing. It would also begin use of a high-
3-year average formula to compute an-
nuities, add 1 percent to each cost-
of-living annuity increase, increase Gov-
ernment and employee contributions
from 6.5 to 7 percent, and establish the
principle of adding unused sick leave to
length of service when figuring the an-
nuity.
The financing of the civil service re-
tirement program has been an obvious
and continuing problem for a number
of years. For years the reports of the
actuary have been grim forecasts of im-
pending financial disaster, each succeed-
ing report being more pessimistic than
the preceding. For example, in 1958 the
unfunded liability of the program was
estimated to be about $18.1 billion and
over the years the estimates have risen
so that it is now about $57.7 billion. Cur-
rent forecasts are that the civil service
retirement fund will have a zero balance
in about 18 years if no changes are made
in the benefits provided or the financing.
The financial reforms these two meas-
ures, H.R. 9825 and S. 2754, would make
are urgently needed. Further delay will
only increase the system's financial prob-
lems. Last year when the House commit-
tee was considering the matter it was
estimated that without additional financ-
ing the retirement fund would be ex-
hausted by 1988. When it was considered
this year, the estimate had been revised
so that the fund would be exhausted 1
year earlier. In addition, the estimate of
the appropriations needed at the turn
of the century, in addition to employee
and agency contributions, to pay the
benefits provided has risen from about
$41/2 billion a year to about $5 billion. If
enactment of a measure such as S. 2754
Is put off for another year there will be
additional and similar increases in these
figures.
Of course, it cannot be said that the
bill is without controversial features. It
is a matter of record that the administra-
tion is in general agreement with the fi-
nancing provisions but objects to the
benefit improvements which would be
provided.
For my part, I believe that the exten-
sive study that has gone into the prepa-
rationof the bill indicates that it would
provide adequate income to pay for all
presently scheduled benefits and an or-
derly method of financing future benefits.
The bill strikes a fair balance between
the dangers of overfinancing and under-
financing. Under S. 2754, interest pay-
ments to the fund would be required-it
is the loss of interest on the unfunded
liability that is the chief cause of the
worsening of the financial position of the
program with the passage of time. If in-
terest payments are made, sound financ-
ing does not call for payment of the
principal amount. On the other hand,
unfunded liabilities created by future
benefit liberalizations would be fully
funded over a period of 30 years after
the creation of the liability.
The benefit liberalizations which would
be made by S. 2754-like the financing
improvements-are badly needed. I be-
lieve that an adequate retirement pro-
gram should` provide benefits bearing
some reasonable relationship to prere-
tirement wages and that they should be
increased from time to time as price rise.
These objectives are met under the pres-
ent law by relating annuities to the aver-
age of the high-5 year salary and by in-
creasing benefits as the cost of living
rises after retirement. S. 2754 would im-
prove these basic ideas. The period over
which salary is averaged would be re-
duced from 5 to 3 years. Because of a
person's highest salary tends to be his
final salary, this change would result in
making retirement annuities more close-
ly related to final salary than is now the
case.
In recognition of the lag that occurs
between the time the Consumer Price In-
dex goes up and the time the cost-of-
living increase reaches the retiree, the
bill would provide that future cost-of-
living increases would be 1 percent high-
er than the percentage rise in the cost of
living.
Finally, both H.R. 9825 and S. 2754
provide a formula for the addition of un-
used sick leave to actual length of serv-
ice in computing annuities. This provi-
sion is not as extensive as my own un-
used sick leave bill, S. 1276, but it is a big
step in the right direction.-I have fought
for this principle for some 6 years now
since I introduced my first bill on the
subject in 1963, and I am very pleased
that we were able to include this prin-
ciple in this legislation, Frankly, with
this incentive now provided to our Gov-
ernment's employees, I would anticipate
this provision's actually saving the Gov-
ernment money through a reduction in
lost time, hasty employee substitution,
and inefficient contracting-out.
Senator MCGEE and the full Post Office
and Civil Service Committee have added
three amendments that are the basic
difference between the House and Senate
bills. I strongly urge the retention of
these amendments in the final bill.
One of these amendments would create
a vested survivor right after 18 months'
service rather than the 5 years now re-
quired. Another would exempt up to
$3,000 of an annuity from Federal taxa-
tion. In effect, both these amendments
merely extend to Federal employees
rights now enjoyed by social security
recipients.
The third McGee amendment would
require an annual payment to the retire-
ment fund to cover the costs of extend-
ing credit for military service in figuring
the final annuity. The military service
credit was the idea of the Congress and
the cost should not be charged to the
fund as a whole. This amendment would
rectify this previous oversight.
Finally, an additional amendment was
added to the bill by Senator FONG which
would increase retirement contributions
August 8, 1969
for Members of Congress from 7.5 to 8
percent. I support this amendment, as it
would assist in maintaining the solvency
of the fund.
Mr. President, the case for the passage
of S. 2754 is a strong one. I would hope
that the U.S. Senate would give this
measure the vote of confidence its Com-
mittee on Post Office and Civil Service
gave it last week when it was reported
unanimously. I feel certain that such
support would not only assure passage,
but final approval by the administration
as well,
MINORITY ENTERPRISE IN
NEWARK, N.J.
Mr. CASE. Mr. President, the Gradu-
ate School of Business at Rutgers Uni-
versity is seeking to encourage minority
enterprise in the greater Newark, N.J.
area.
Reports of the success this program
has had should be of interest to all Mem-
bers of the Senate, Mr. President, so I
ask unanimous consent that articles ap-
pearing in the Newark News and the
Newark Star-Ledger about the program
be printed in the RECORD at this point-
There being no objection, the articles
were ordered to be printed in the RECORD,
as follows:
[From the Newark Sunday News, July 20,
1969]
BLACK-OWNED BUSINESSES No LONGER JUST
A DREAM
(By Chester L. Coleman)
To be black and own a business in the
Greater Newark area is no longer just a
dream. Such a vision has become a reality
for nine aspiring minority group entrepre-
neurs.
The potential of black capitalism is at
hand and its growth is, in some cases, due
to the foresight of the Rutgers Graduate
Business Sohool.
Rutgers hopes to establish a minimum of
25 minority group businesses each year for
the next three years, at an annual cost of
$50,000, according to Dr, Horace J. DePodwin,
dean.
Last week the school was awarded a $65,400
grant from the Ford Foundation to expand
its program of aiding black and other minor-
ity group members to go into business. E. I.
duPont deNemours and Co., recently gave
a $5,000 grant to support the same program.
The original program was developed by
De Podwin and Prof. Louis T. German two
years ago in conjunction with the Interra-
cial Council for Business Opportunity and
the Small Business Administration,
SEMINAR`: FIELD
The program is the outgrowth of work
started after the Newark riots in 1967, Ger-
man started a series of seminars for minority
groups where the rudiments of operating a
small business and accounting were dis-
cussed.
Among those who have already established
businesses, some in areas where the rioting
occurred, is Willie Pool, 40, and Wilbur Rich-
ardson, 31, partners of the Sky-View Radio
and TV Co., 708 Springfield Ave., Newark.
Pool said he was inspired to go into busi-
ness 12 years ago when he could not get a
"break" while employed at a factory in Lan-
caster, Pa. "I was limited," says Pool, "but
in my own business I can push myself and
if I fail it's my own fault."
Pool and Richardson, who is married and
the father of two children, repair television
and raido sets and electrical appliances. They
also buy, sets in need of repair, recondition
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July 24, 1,969 CONGRESSIONAL RECORD -SENATE
The bill clerk proceeded to call the roll. tably, however, some confusion has de-
Mr. PERCY. Mr. President, I ask unan- veloped as to what the debate is really
imo-us consent that the order for the all about. Unless the purposes of the
quorum call be rescinded. debate are made clear, legitimate ques-
The PRESIDING OFFICER (Mr. tions and answers will be seen as attacks
CRANSTON in the chair). Without objec- and counterattacks while decisions on
tion, it is so ordered. the merits of the issues will fall victim
to wasteful political compromises. If the
MESSAGE FROM THE HOUSE
A message from the House of Repre-
sentatives by Mr. Hackney, one of its
reading clerks, announced that the
House had passed a bill (H.R. 9825) to
amend subchapter III of chapter 83 of
title 5, United States Code, relating to
civil service retirement, and for other
purposes, in which it requested the con-
currence of the Senate.
HOUSE BILL REFERRED
The bill (H.R. 9825) to amend sub-
chapter III of chapter 83 of title 5,
United States Code, relating to civil serv-
ice retirement, and for other purposes,
was read twice by its title and referred
to the Committee on Post Office and Civil
Service.
AUTHORIZATION OF APPROPRIA-
TIONS FOR FISCAL YEAR .1970 FOR
MILITARY PROCUREMENT, RE-
SEARCH AND DEVELOPMENT, AND
FOR THE CONSTRUCTION OF MIS-
SILE TEST FACILITIES AT KWAJA-
LEIN MISSILE RANGE, AND RE-
SERVE COMPONENT STRENGTH
The Senate resumed the consideration
of the bill (S. 2546) to authorize appro-
priations during the fiscal year 1970 for
procurment of aircraft, missiles, navel
vessels, and tracked combat vehicles, and
research, development, test, and evalu-
ation for the Armed Forces, and to au-
thorize the construction of test facilities
at Kwajalein Missile Range, and to pre-
scribe the authorized personnel strength
of the Selected Reserve of each reserve
component of the Armed Forces, and for
other purposes.
THE ABM DEBATE AND NATIONAL SECURITY
Mr. PERCY. Mr. President, for 4
+ months now, there has been a nation-
wide debate in our country over three
letters: ABM. The public and public offi-
cials are engaged in a learning experi-
ence that is as complicated as it is vital
to the future of our Nation. The Senate
is learning in full view of all the people.
It is learning to ask questions, make sug-
gestions, and express its concern-not
simply' over the' Defense Department's
expenditure of $80 billion a year but also
over. the risks of war and peace that en-
velop that $80 billion budget.
The executive branch of our Govern-
ment ,is also learning. It is learning how
to answer questions in public that it
never before had to answer. It is learn-
ing how to explain complex and classi-
fied issues so that the American people
can better express their wishes. - It is
learning not to make its decisions with-
out great care, and it knows as never
before that it is going to has to justify
them.
The results of this collective learning
process are good and necessary. Inevi-
debate turns into mutual accusations
about personal motives, we shall never
get down to the facts. If we do not get
down to the facts, if we do not reach
agreement on whether it is necessary or
prudent for the United States to begin
deploying a nuclear ballistic missile de-
fense now, we could find ourselves jeop-
ardizing our national defense while
adding nothing to our security-all at
enormous cost.
Perhaps it is best to begin by making
clear what the debate should not be
about.
It should not be an attack on the so-
called military-industrial complex. It is
patently unfair to charge that our mili-
tary leaders and the aerospace industry
are conspiring to feed on fear in order
to sell billion-dollar gadgets for profit.
The problem is with those who are
still convinced that our safety lies solely
and exclusively in more and newer weap-
ons systems because "that is the only
way to deal with the Russians." If the
public has not been well served, it is not
because of these men. It is because so
many have sat silent for so long without
asking the hard questions.
Nor should this debate be a disguised
attack on President Nixon. The Presi-
dent's performance in his high office has
received, and I believe justly, widespread
popular support. The support certainly
includes the President's handling of for-
eign affairs.
Specifically, with respect to national
security policy, he deserves the highest
praise for his reformulation of U.S. stra-
tegic doctrine. The President has stated:
The only way that I have concluded that
we can save lives, which is the primary pur-
pose of our defense system, is to prevent war,
and that is why the emphasis of this system
is on protecting our deterrent.
He has rejected a heavy city defense
because it "tends to be more provocative
in terms of making credible a first-strike
capability against the Soviet Union." In
his April 18 press conference, he said that
he did not want to put any American
President "in the position where the
United States could be second rather
than first or at least equal to any poten-
tial enemy." His Secretary of State has
made it quite clear that the administra-
tion is flexible to, the extent that "if the
U.S.S.R. wants to go out ?f the ABM
business, we can, too." The Nixon doc-
trine should be admirably suited to deci-
sions which can brake the spiraling,
dangerous arms race.
The ABM debate encompasses three
objectives:
First, to determine and reorder na-
tional priorities;
Second, to sgbject the defense budget
to the same kind of scrutiny as other
appropriation requests; and
Third, to explore whether a unilateral
decision on the part of the United States
to deploy ABM's now on'the eve of nego-
S 8553
tiations with the Soviet Union on stra-
tegic arms limitations, makes any sense.
We must examine our national prior-
ities. In the light of our tragic Vietnam
experience and because of growing civil
disaffection, we are trying to seek out a
new and proper balance between our
domestic and international goals.
We cannot have a meaningful debate
on priorities, we cannot set a meaningful
national-international balance, without
giving careful attention to the $80 billion
defense budget, an expenditure which
would constitute fully 60 percent of the
Federal budget over which Congress can
exercise discretionary action.
The specific focus of the ABM debate is
whether we need to deploy it now, later,
or not at all.
The administration's position is that
we must begin deployment now.
Some critics are determined never to
deploy.
My position is that I favor not going
forward now, both because I strongly be-
lieve that it is in the national interest to
use the time to improve the design, and
because we can make a better decision
regarding deployment later, in the con-
text of arms limitation talks with the
Soviet Union.
This debate does not rest on whether
the proposed system will provide effec-
tive protection for our deterrent strike
forces, though scores of scientists be-
lieve that it does not.
This debate does not rest on whether
the Soviet Union or Communist China
has embarked on a strategy which will
enable either nation to attack the United
States with impunity by the mid-1970's.
Such a strategy is unrealistic and would
be suicidal. Rather this debate rests on
our hopes, and the hopes of all mankind,
for a genuine and lasting peace. For if we
mean to have peace then we must recog-
nize the futility and the danger of mili-
tary strategies which have no regard for
global politics.
Now is the time to take the initiative
for peace.
Now is the time when we possess the
ability to launch a devastating attack
upon any nation that would dare to strike
us first.
Now is the time, before deploying a
new generation of strategic weapons, to
try to prevent a situation whereby the
Soviet Union would be compelled to esca-
late their own weaponry.
Certainly we can accept President
Nixon's dictum that we must not be in
an inferior strategic position to any other
power. We must have the power to deter
aggression against our country. And we
do have that power. We must have the
will then to use our power should any
aggressor attack us. And we do have that
will.
Our second-strike capability is so awe-
some 'that we can safely decide not to
deploy Safeguard at this time. Those who
want to deploy now say the two Mlute-
man wings need to be protected by late
1973, and, the whole system should be
operative by the end of 1975.
These timing requirements are based
on the prediction that the Soviet Union
will develop and deploy all they are ca-
pable of, regardless of cost. Secretary
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S 8554 CONGRESSIONAL RECORD - SENATE
Laird's estimate is that, by 1975, the
Soviets could have as many as 2,500
ICBM's compared to our 1,000, while ex-
ceeding our total of 41 Polaris subma-
rines, and deploying as many as 2,000
ABM's relative, to say, the'1,000 projected
under Safeguard.
It is the opinion of almost all Soviet
watchers that the Russians are not
seriously contemplating the vast expend-
itures that this estimate would entail.
Indeed it is hard to believe the Rus-
sians would expect that they gained any-
thing after having done so. But, let us
nevertheless assume they will do so by
1975 and let us further assume that Safe-
guard will in fact provide a significant
added measure of deterrence and protec-
tion against such a threat, Does this
mean that a year or so from now it will be
too late to make the Safeguard decision?
In my judgment, it does not.
Our scientists and engineers have
given us an alternative. Simply stated,
this alternative involves continuing pre-
sent research and development, engineer-
ing and testing and evaluating an ABM
system. If we did only this now and if we
were also willing to spend a reasonable
additional sum of money to meet a
shorter deadline, we could still do all that
Safeguard advocates desire and have it
in operation by 1975 if that course ap-
peared necessary.
In addition to the fact that we have
time before we have to make these deci-
sions, there is a second and more basic
point that calls for delay. We can make
a better decision later. A postponed deci-
sion would be better on two counts:
First, it would give us a chance to take
the measure of the Soviet Union's intent
in arms talks;
Second, it would allow us the time to
make necessary improvements in Safe-
guard technology and strategy.
Most of the ABM debaters understand
quite clearly that the United States and
the Soviet Union now each has sufficient
forces-in-being as well as the technology,
additional resources, and the will to com-
pensate for or to negate new strategic
deployments by the other side. Whatever
we do, they can match, and whatever
they do, we can match. This is the basic
point governing the futility of the stra-
tegic arms race. What has not been made
clear by this debate is the conclusion to
be drawn from this mirrored capability.
The operative conclusion is that neither
Washington nor Moscow can make sensi-
ble strategic decisions unilaterally.
I am not saying that arms control
talks will solve all our problems. But I
am saying that these talks may indeed
constitute an important initiative for
moving further away from a nuclear
holocaust. And, moreover, I am saying
that what we will learn from those talks,
and what we will fail to learn, will help
us make better strategic decisions.
For example, we have announced over
the last few years that our Minuteman
force will stabilize at 1,000 missiles. Sec-
retary Laird claims that the Soviets have
the capability for a fixed land-based
force of 2,500 by 1975. We should ask the
Soviets how many they intend to build,
and we can check their answers accu-
rately over a period of time by counting
the ICBM silos they construct. We can
test their intent regarding a ballistic-
missile-defense system. Is it in the inter-
ests of both nations for both-to deploy
an ABM system? Or is it better for nei-
ther to deploy?
If Moscow is willing to talk numbers
and needs in a mutually reciprocal con-
text, if each side talks about what it be-
lieves deterrence requires, then a great
deal of the speculation and uncertainty
that make both want more and newer
weapons can be dissipated.
Mr. MURPHY. Mr. President, will the
Senator from Illinois yield for a ques-
tion?
Mr. PERCY. I yield.
Mr. MURPHY. The Senator asked the
question, would it not be better for nei-
ther side to deploy ABM's? Does not the
Senator have the knowledge that the
Russains have already deployed an
ABM?
Mr. PERCY. Yes, they have deployed
it, as I understand it, from the intelli-
gence reports I have, but they have con-
siderably slowed down or even stopped-
deployment of the system. They may
have Stopped. But the slowdown may be
for one of a number of reasons. They may
have decided to abandon the whole proj-
ect as worthless, as we abandoned the
idea of Sentinel. They may have decided
to go back into research and perfect a
better system. That is exactly what the
opponents of deployment are now sug-
gesting we do about the Safeguard sys-
tem-that we perfect the system for to
have the capability, but not to deploy it
now.
Mr. MURPHY. The Senator gave the
impression that there was a balance be-
tween what the Soviets had and what
we had, but that neither should go ahead
with the ABM. I merely rose to point out
that they started their deployment 3
years ago, and they have quite a few
already deployed around Moscow. The
reason for the slowdown is the uncer-
tainty, so far as my information goes,
and to improve it, or they may have
found out it is not successful-hope-
fully-but I do not think there has been
an exact answer as to the reason for the
slowdown. The point I want to make is
that the Russians do have an ABM al-
ready deployed and we do not, and that is
not exactly what the Senator is saying.
Mr. PERCY. The Senator is not sug-
gesting that we should adopt a policy
that whatever the Russians do, we should
do. I do not suggest that kind of policy.
If they make a bad mistake, I am real-
istic enough to believe that there is no
reason for us to go ahead and make the
same one.
Mr. MURPHY. The Senator's premise
is not very logical. I did not suggest that
whatever they do, we do.
Unfortunately, a false premise leads to
a false conclusion and it gets developed;
and sometimes the main thrust of the
discussion gets lost. My point in rising
was to emphasize the point in the Sen-
ator's remarks that the Russians have
the IBM. As a matter of fact, they have
another system which is deployed all over
the Soviet Union that we think is built
for another purpose. So that actually
they have two, and we do not have any.
That is the reason I do not believe we
should react to everything the Russians
July 24, 1969
do. Certainly, I do not think that. We
worry about how many warheads they
have as compared to how many warheads
we have.
I think the main thing is to be con-
scious of the fact that within the past 5
years we have lost a distinct military ad-
vantage. I do not think anyone will argue
against that. It is my opinion that as long
as we have a distinct military advantage,
as long as the character of America and
the policy of America is known; namely,
that we are not going to attack anyone,
or start a war, that we insure a great
degree of safety for the security of our
country.
On the other hand, we know histori-
cally from what the Russians have said,
to my knowledge, going back 30 years,
every time they have had a meeting
lately--I should not say the Russians, I
should say the Communists-the Moscow
Communists, the Peking Communists,
and the Castro Communists-that they
all seem to wind up with the main theme,
"We must destroy America. We must de-
stroy imperialistic America."
We are not imperialistic. However, we
have won the door prize. In a closed so-
ciety like a dictatorship, it is always nec-
essary to have a "heavy," a "bogeyman";
someone to scare everyone with. "You do
what I say, or else."
We do not have that in our society. It
is not in the character of the American
Nation. I believe that those charged with
the security of our Nation are making
certain that we are able to do whatever
is necessary to protect the safety of the
Nation. I do not believe we should be
negligent. Where there is a question of
making a mistake, I think we are bound
to make that mistake in favor of the
safety of our country and not in favor of,
maybe, saving a few dollars, or giving
some scientists a few more months to do
research work. All the scientists have
agreed that in the present state of the
art, this is the only system. They all
say we can find a better one. I am sure
that we can. I would hope that science
would find one so much better we would
never need to continue with another--
hopefully this would be a lot less
expensive.
I would. hope more than that. I would
hope the President of the United States
would be more successful in his meeting
with the Russians. I would hope they
would come to an absolute agreement
and say to us, "Don't you build an ABM
or don't you build any more ICBM's and
we don't build any more."
I think we would all be very pleased
if that happened. But as long as they
continue to inveigh against us, as long
as they use us as the target, as the design,
for destruction, I think we have to take
them at least partially at their word and
be prepared to think perhaps they mean
it.
I can remember some years ago I
bought a book for a dollar. It was called
"Mein Kampf." It was written by a mad-
man in Germany. I read it. I told some
people about it. They thought I had lost
my mind. When I read it. I believed that
man meant what he said. He did. Look at
the terrible trouble he caused. If we had
listened to him in the beginning, if we
had taken proper precautions in the
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