CIVIL SERVICE RETIREMENT THURSDAY, FEBRUARY 9, 1956 UNITED STATES SENATE, COMMITTEE ON POST OFFICE AND CIVIL SERVICE, CIVIL SERVICE RETIREMENT SUBCOMMITTEE, Met, pursuant to notice, at 10 a. m., in room 135, Senate Office Building, Washington, D. C., Hon. W. Kerr Scott (chairman of the subcommittee) presiding. Present: Senators Scott (presiding), Case, and Neuberger. Staff members present: H. W. Brawley, executive director and J. Don Kerlin, assistant staff director. Senator SCOTT. The meeting will come to order. The first witness is George Riley, legislative representative, AFLCIO. I am going to ask Mr. Brawley to take charge because we are trying our best to get our agricultural bill out, and there is more concern on that and more interest on that right now than anything else that is before us. Those of us who have had farm experience know that there is always a time to sow and a time to reap, and the farmers want to get started on what they are going to do, or rather they want to know what the Government is going to do and then what they have got to do; so if you will excuse me, I will ask Mr. Brawley to take charge and go right ahead with the hearing. I will say again to you that we want to give every consideration that is proper to the propositions that are worthy, so, Mr. Brawley, if you will take charge. Mr. BRAWLEY. Will you proceed, Mr. Riley? STATEMENT OF GEORGE D. RILEY, LEGISLATIVE REPRESENTATIVE, AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS Mr. RILEY. Thank you. I am George D. Riley, legislative representative, American Federation of Labor and Congress of Industrial Organizations. I am here in support of the Johnston bill both officially and personally. We have with affiliated organizations now some half-a-million-odd members whose employment is in the Federal civilian service. They operate directly through the Government Employees' Council, which council was formed some 11 or 12 years ago, and of which I had the honor of being its first operations director. I suppose I followed the plight of Government employees and their problems and their hopes and their ambitions and gains and losses over the years, perhaps as long and maybe even longer than anyone in this room. I have written about it, I have talked about it, and I have worked at it and worked in it. This bill, the Johnston bill is in our opinion the answer to some of the hopes that have accumulated in recent years to extend and improve the provisions of the Civil Service Retirement Act. We are definitely opposed to any building the bridges across from one system to another, notably the retirement system and the social security system. No. 1, we don't believe it is needed; and, No. 2, the vast majority of those in the service do not wish to have it that way. We feel that those who are operating under this act are, shall we call them, subscribers in good standing. The Members of the Congress we regard as the trustees of this system, and as members in good standing, or if you want to call them common-stock holders, we think they are entitled to quite a voice in the operation and destiny of their own system. I only need to go to the words of the principal official opponent of the Johnston bill to give you the philosophy and the purpose in furthering the civil-service retirement system, and these are his words: The civil-service retirement system is a staff retirement plan for about 90 percent of all Federal employees which provides annuity benefits in amounts related directly to length of Federal service and to salary earned. As a part of the personnel policy of the Government, it fulfills three major objectives: 1. It serves as an inducement for the best qualified people to enter and make a career of Federal service. 2. It provides a humane method of separating superannuated employees by retiring them on annuity. 3. It provides career employees with security against want in old age. Those are very good words. I am perfectly willing to adopt them as an expression of my own belief in this matter. They were said by Mr. Young of the Civil Service Commission, and I think they are factually correct. Then if you contrast those words with what the purpose of the social-security system is, then you get, of course, an entirely different philosophy. The social-security system is not designed to be an informal extension of active employment. The person under social security does not pay the same deduction, but there is something in common, the social security with the fund, the fund is way down just as it is these days in the civil-service plan. I believe they say that the civil-service plan is now about $5 billion in the red. That was not brought about because employees were derelict in putting their contributions in, those who are under the compulsion of putting it in. The Congress lost sight of the Government's obligation in this matter early in the existence of the civil service retirement plan. In 1934 one of our affiliated unions called attention to the sagging condition of what was then regarded as the solvency of the civil-service system's fund. There was considerable discussion, and the Congress in its wisdom saw the righteousness in setting up a formula which would in due course throughout the rest of the years of this country at the rate of $100 million a year amortize the Government's obligation in relation to the system. Senator CASE of New Jersey. Excuse me, because I am getting an education as I go along here. Was that particular act and that particular proposed appropriation over the period related to the then arrears or was that an amount that was calculated to keep the fund solvent? Mr. RILEY. The arrears then. It was then $5 billion. Senator CASE. There is a difference of view about that. Some people have quoted it as $9 billion or $10 billion. Mr. RILEY. We are not the ones to hold out for actuarial soundness and so forth. We think the word of the Government is good and just as good as the paper money we have in our pockets, but, nevertheless, when you throw at us that this fund is not actuarially sound, then, of course, we come to these decisions. We are willing to see whatever resources there are in the fund taken over by any system, including the social-security system, whether it be in the guise of building these fancy bridges across to get the benefits from social security and which are still lacking in the civil-service retirement plan or not. If there are any good things to be had under social security, we want to see them added to the system and within the framework of the civilservice plan. I think before you came in I mentioned the words of Mr. Young of the Civil Service Commission, and I used them as good and valid words as the philosophy underlying the civil-service plan. I think they are quite good, and I put them in this statement of mine for whatever value you may find in them. This discussion comes up as between those proposals largely because of the final report by the Kaplan Committee. To my way of thinking Mr. Elliott Kaplan is a very fine man. I have great admiration for him. I remember when he was the executive secretary of the National Civil Service Reform League, and then they took the word "reform" out of it, and they called it the Civil Service League. But for the life of me I never knew that he was a great retirement expert. It is true that he was in charge of Governor Dewey's State retirement system up there, but I did not know that he had all these attributes, but I am not going to question all the attributes. I am going to give full faith and credit to his report and say we still do not like the report no matter who produced it and who sponsored it or who signed it. With those few words, well chosen or otherwise, Mr. Chairman, I will submit those views and ask that these statements be made a part of the record. Senator CASE. I have no questions. Do you, Mr. Brawley? Mr. BRAWLEY. Yes; one, Senator Case. I think the record should show that Mr. Riley brings to the committee a long history of work and activity on Federal employee legislation. He was chief counsel to this committee in the 80th Congress, which was when the last major amendment to the Retirement Act was passed, the Langer-Chavez-Stevenson Act. Mr. RILEY. May I rest then on a brief note there? In the brief time I was here, obviously I was under the civil-service system. I did not get full equity to give me a vested right. I pocketed my loss. I have no complaint whatsoever. I feel this is a system for career persons, and I took my chances coming in for a short time and going out, I did lose something by not having the value from that system and by losing the time under social security. I feel that is a synonymous situation which should apply to those in the Government service with respect to the inners and outers. I think they should take the same hazards. If they are going to be careerists, they should be given the full benefits of this legislation improved through the years, as the Congress gets around to it, and gives it its full and conscientious attention. Senator CASE. Thank you very much. Do you have any questions, Senator Neuberger? Senator NEUBERGER. No questions. Senator CASE. Then thank you very much, Mr. Riley. Mr. BRAWLEY. The next witness is James P. McCann, president of the United States Customs Inspectors Association of the Port of New York. STATEMENT OF JAMES P. McCANN, PRESIDENT OF THE UNITED STATES CUSTOMS INSPECTORS ASSOCIATION OF THE PORT OF NEW YORK Mr. MCCANN. Mr. Chairman and members of the committee, my name is James P. McCann. I am a customs inspector and president of the United States Customs Inspectors Association, Port of New York. Our association, which represents the largest single group of customs inspectors in the Service, is indeed grateful for this opportunity to submit our views on Senate bill 2875. In our opinion this bill constitutes the greatest forward step ever made in consideration of Federal employee retirement, and we wish to endorse it most heartily. Members of the committee and the committee staff are to be commended on their progressive thinking and the excellent job that has been done in drafting S. 2875. The provisions of this legislation will correct many of the inequities existent in present law and will boost employee morale more than any other congressional act in recent years. We find the bill well-balanced and beneficial to all employees. It is vital, enlightened legislation and cannot fail to enhance any personnel recruitment program by attracting many capable, zealous, and dedicated young people to Federal service. It is our earnest hope that the Congress will share our views and will enact it into law. While we consider that this is outstanding legislation, we suggest that this honorable committee may wish to give further consideration to the inclusion of customs inspectors under section 6 (c), page 15 of the bill, in view of the fact that the duties of customs inspectors are quite different than those of Government employees generally. The primary duty of customs inspectors is the enforcement of the laws of the United States relating to the importation of merchandise, and the Customs Service has the sole responsibility in the prevention of smuggling. In the fulfillment of his duty, the customs inspector is responsible for investigating all suspected or actual violations of these laws; for searching persons and cargo entering into the United States; for seizing goods or merchandise the importation of which is forbidden, and for apprehending and detaining all persons suspected of or, in fact, violating these laws. No attempt will be made here to detail the infinite number of laws, regulations, and decisions which customs inspectors are required to enforce. In their enforcement duties, police powers as broad, and in some cases broader than those normally exercised by enforcement officers, have been granted to customs inspectors by statute and recognized by the courts. Neither a warrant nor an arrest is needed to search in most circumstances. Customs inspectors are authorized to carry firearms, and they work in close cooperation with the Federal Bureau of Investigation, the Bureau of Narcotics, and practically all other Federal, State, and local law-enforcement agencies. Prevention of the smuggling of narcotics is the responsibility of the Customs Service, and many outstanding seizures of heroin and other narcotic drugs have been made by customs inspectors. By reason of long uninterrupted hours of duty, the position of customs inspector is essentially a young man's job. Because of the arduous nature of their duties, many customs inspectors grow old before their time, and the often nerve-wracking and emotionally upsetting character of the work has resulted in physical breakdowns and many heart attacks. Of the 512 customs inspectors at the port of New York, approximately 70 men could qualify under the "30 years of service regardless of age" clause of the bill. Customs inspectors enter the service at grade GS-7, $4,525 per annum, and progress to the top of grade GS-9, $6,250 per annum. The bill could conceivably produce to the Government a saving of as much as $1,725 per man, per annum, through the filling of vacancies at the GS-7 level, as each position becomes vacant through retirement. At the port of New York alone, 70 men would be eligible for retirement with a net saving of approximately $120,750. S. 2875 would indeed have far-reaching effects in improved employee morale, while simultaneously providing a format of retirement more nearly commensurate with the duties and hazards of the position of customs inspector. The average age of customs inspectors throughout the country is approaching a high mark, and the force is in danger of becoming superannuated. We respectfully suggest that the committee review section 6 (c) of the bill, with the above thoughts in mind. If the committee should desire further information on these statements, we would be happy to supply anything that may be required for the record. S. 2875 has so many fine provisions that Senator Johnston is deserving of praise and gratitude of every Government worker for his sponsorship of it. We are happy indeed to endorse it, and feel confident that this most worthy and much-needed change in the Retirement Act will be forthcoming. Thank you, Mr. Chairman and members of the committee, for allowing me to appear here today and for your courteous attention. |