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HRD-79-33 1 (1979-01-11)

handle is hein.gao/gaobaaymr0001 and id is 1 raw text is: - G3SV31!J R ESTRICTED - Not to be released oU..:- ' ' s .... Accounting Office exccpt o1 jh basis o- specific approval hw., teOffice of Congressional Relations. FE [,L /EATI MTrlrOLLL GENERAL OF THE UNITED STATES WASHINGTON. D.C. 2,46 / % ;mv B-1 48 17 JANUARY 11, 1979 The Honorable Warren G. Magnuson Chairman, Committee on Appropriations 9/i /V03e United States Senate Dear Mr. Chairman: lllllUll 111IiDlj; p111 108389 A6c~t w 1 HRD-79-33 (105057) U320' As requested in your Committee's August 16, 1978, report on the appropriation bill for the Departments of Labor and Health, Education, and Welfare and related agen- cies (No. 95-1119), we reviewed the Railroad Retirementb &UY-( Board's calculations of the annual appropriation necessary to phase out dual railroad retirement and social security benefits (commonly called the windfall appropriation). We independently projected windfall costs and identified alter- nate methods of financing. We project (1) an increase of about $2.9 billion in estimated windfall costs above the $7.1 billion originally estimated by the Board's actuary and (2) an increase of about $3.5 billion in general revenue appropriations through the year 2000. Using the present funding method, 21 level annual appropriations of $415 million beginning in 1980 would be needed to pay future windfall benefits. The Board orig- inally estimated an annual general revenue appropriation of $250 million. The windfall appropriations could also be funded on a pay-as-you-go cash basis, which would stretch out payments through the year 2046. A table showing required windfall appropriations under the present and cash basis methods is enclosed. BACKGROUND The Railroad Retirement Act of 1974 created the so- called windfall benefits. The act provided that after 1974 individuals could no longer qualify for separate full bene- fits from the social security and railroad retirement pro- grams that, in total, were larger than the benefits they would have earned had all their earnings been credited to only one program. Individuals entitled to these dual bene- fits before 1975 became eligible for windfall payments (additional amounts required to make payments equal to the total amount the individuals would receive from full dual benefits based on earnings through 1974 or the last year of railroad employment).

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