RRB Budget Under House Siege

The Railroad Retirement Board June 27 reported that the House Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies has allocated $100 million for the agency’s Fiscal Year 2025 budget, a crippling $26 million, 21% decrease from FY2024, and a $2 million decrease from FY2023. RRB’s FY2025 request level was $172.331 million and the President’s budget request was $134.0 million.

“The RRB’s administrative budget is financed by payroll taxes paid by rail employees and rail employers,” the agency said. “Funding is appropriated from the RRB Trust Funds and not from the U.S. Treasury’s general fund. The proposed budget would be catastrophic for the RRB. With several years of reduced or flat budgets, the RRB has struggled to accomplish its mission. The House Appropriation Subcommittee’s proposal would result in drastically reduced staffing and even more spending cuts.” This despite the Subcommittee stating that it was “[p]rioritizing funding for early education, childcare, child welfare, and programs for seniors and the disabled.”

“The agency, already understaffed, was forced to implement a hiring freeze and make wholesale budget cuts,” in FY2023, RRB said. Further budget cuts will result in:

• “Longer phone wait times, with peak season wait times of 2-2.5 hours and over hour-long wait times becoming the norm, as well as projected answer rates of only 30-35% of incoming calls.
• “Field-office closures in railroad communities, and field offices with minimal or no on-site staff as well as reduced customer service hours.
• “Longer application processing times, with processing times of 18 months or more likely.
• “Indefinite delays for annuity corrections.
• “An inability to sustain and improve our security posture against 21st century cybersecurity threats, putting the agency’s data and benefits administration services at risk and curtailing our ability to meet federal security guidelines.
• “An inability to move forward with our multi-year IT modernization plan, which has been fully supported by Congress and the rail industry and which would not only harm customers but be wasteful and risk our ability to meet federal mandates.
• “Risk of failing to sustain basic operations of legacy information systems and applications.
• “An inability to improve our program integrity and risk management programs and to facilitate multiple, ongoing yearly audits.

“A budget cut of this proportion will directly harm the rail employees and annuitants who have paid into the system their entire careers. The agency has requested that Congress fund the agency at $172.331 million, because without a significant increase, the agency will not be able to provide the rail community with the customer services that it deserves. The current House proposal puts the agency at high risk of mission failure.”

COMMENTARY

“Deep within the enigma of the federal budget process is a paradoxical scheme to reduce—without actually reducing—red ink,” Railway Age Capitol Hill Contributing Editor Frank N. Wilner noted in his September 2023 “Watching Washington” column. While congressional fiscal hocus-pocus is not new, this financial absurdity is especially egregious as it adversely impacts rail workers.

“Under a guise of reducing federal spending, congressional budget hawks are preventing the payment of a portion of sickness and unemployment benefits owed rail workers. They further seek to hobble a federal agency’s ability to process and pay rail worker benefits claims by cutting its budget, even though the agency is funded entirely by rail employee and/or railroad payroll taxes. 

“Targeted is the RRB, which administers and disburses railroad disability, retirement, sickness, survivor and unemployment benefits. Under federal law, the RRB is a claims-agent and paymaster—an intermediary whose financial transactions appear in the federal budget, although not a penny of federal spending can be saved by the fiscal legerdemain contrived by congressional budget hawks.”