Back on March 13, 2001, we posted an Article explaining how the Bush Budget at that time misrepresented the solvency of the Railroad Retirement Fund by "scoring" the purchase of private securities as a budget "outlay", even though the purchase of government securities with those same dollars was not considered an outlay. Now that President Bush has blown the budget surplus with his tax refund and other pet projects, it looks like the same rhetoric is starting again. The Office of Management and Budget (OMB) recently suggested that the Railroad Retirement and Survivors' Act passed by the House will mean an outlay of $15 billion in public funds, which would require dipping into the Social Security "lock box." That portrayal of the situation is a blatant, self-serving scare tactic.

Here's the real deal. Railroad Retirement is a private pension plan funded entirely by cash contributions from Railroads and their employees and administered by the federal government via the Railroad Retirement Act. The government holds your Railroad Retirement money in government securities purchased with your contributions and those of your employer. This Bill simply asks the government to establish an investment Trust Fund that will use some of your money to buy private securities (earning higher returns) in order to improve retirement benefits and reduce future contributions. That Trust Fund would be bound by law to manage its assets "...solely in the interest of the Railroad Retirement Board and through it..." In other words, through the Railroad Retirement Board the government still oversees the distribution of the Trust Fund assets and the interest earnings on those assets just as before.

Does that sound to you like a raid on Social Security? When you contact your Senators about Railroad Retirement Reform, make sure they understand that you understand whose money you're talking about.