The 109th Congress will convene on January 4, 2005

The 109th Congress

From: Tom Dwyer, NARVRE

The 109th Congress will convene on January 4, 2005. The Republicans will have a 55-44-1 majority in the Senate and a 232-202-1 majority in the House of Representatives after the November 2004 elections. They will elect the Speaker of the House expected to be Dennis Hastert, R-IL and Senator Bill Frist, R-TN Majority Leader in the Senate. All other leaders as well as new Committee Chairs will be ratified as well. Not much will be done early on because of the inauguration on January 20, 2005.

There will be some controversial issues early on with the president pushing personal savings accounts for younger workers in Social Security. The financial experts have different opinions as to what may happen here. If monies are removed from the system budget deficits could balloon into the billions and even trillions of dollars over time. We in the railroad industry need to watch on whether or not Tier 1 (Social Security) and Tier 2 (Railroad Retirement) are affected by any proposed legislation. I would appreciate your views on the privatization issue.

Another potential problem may be the over haul of the tax code and the effects on railroad retirement. Conservative groups such as the Heritage Foundation, Cato Institute and American Enterprise Institute (AEI) are leading advocates for changes in tax policy such as a flat tax, national sales tax or a value added tax. What does this do to deductions on home interest, deductions for property taxes and state and local income taxes? Keep in mind as well that we need to watch any change in tax policy affecting taxes at the state level. Under current federal tax law states are prohibited from taxing railroad retirement.

Another issue is tort law reform being pushed by the White House and others. This would include medical malpractice, class action and asbestos reform under the Federal Employers Liability Act (FELA) which governs railroad claims. What happens to existing claims of retired railroad employees under any new legislation?

In addition, we expect to see a major policy debate on the future of Amtrak. The Administration once again is expected to present a privatization plan selling off long-distance routes to the states, outsourcing reservation jobs, and what is the future for the northeast corridor. Keep in mind those 18,000 employees contribute to the railroad retirement system as well as the employer (Amtrak). Amtrak again will make their appropriation budget request for FY 2006 which commences October 1, 2005.

So as you can see we will have a lot on our plate in 2005. We will need all of your help when the time comes.

Posted: 12/29/04