Sequestration hits home for ex-railroad worker

Brad Hicks • Mar 18, 2013 at 8:40 AM

Jonesborough resident Larry Renfro has been out of work since August, when he was laid off from his job with CSX Railroad in Erwin.

Renfro, who had worked for CSX for around seven years, said he has since drawn unemployment benefits through the U.S. Railroad Retirement Board, which administers retirement-survivor and unemployment-sickness benefits for the country’s railroad workers and their families under the Railroad Retirement and Railroad Unemployment Insurance Acts.

Although Renfro said he takes home around one-third of what he did while working for the railroad, he said is getting by. But Renfro said he and others in his situation have a new concern that will impact the amount they receive from unemployment.

Effective March 1, Railroad Unemployment Insurance Act benefits paid out by the U.S. Railroad Retirement Board have been reduced by 9.2 percent. According to the board, this reduction is necessary due to a sequestration order filed by President Barack Obama filed March 1 in accordance with automatic spending cuts that are requirements of the Budget Control Act of 2011.

A release from the board said the order sets aside a total of $6 million in funding under the railroad unemployment and sickness insurance program.

“Given the total amount of spending under the program, a cut of this size made benefit reductions necessary,” the release said.

The reduction in unemployment benefits has reduced the maximum daily benefit rate from $66 to a little less than $60, and the total maximum amount payable in a two-week period covering 10 days of unemployment has dropped from $660 to around $599, the board said.

Certain railroad sickness benefits are have also been reduced, but Social Security benefits, railroad retirement, survivor and disability benefits paid by the board are exempt from sequestration. In the 2012 fiscal year, the board paid more than $11 billion in retirement and survivor benefits to more than 570,000 beneficiaries, and net unemployment-sickness benefits of $89 million to about 26,000 claimants, the board said.

Renfro said the cut to his benefits could have a significant impact.

“It doesn’t seem like a lot, but it is to me right now,” Renfro said.

Renfro also said one of his main concerns with the cuts is that the federal government does not pay into the retirement fund for railroad workers — employees and employers do.

“This sequester thing, I think, has gotten out of hand and, in my case, is totally unfounded,” he said.

However, Bruce Rodman, public affairs specialist for the board, said the board is part of the federal government. Rodman likened the retirement program to Social Security, because funds for unemployment and a portion of retirement do come from contributions from employers and employees. The government is in charge of the funds.

“We are part of the government, those are government funds, and those funds are appropriated by the Congress,” Rodman said.

The total sequestration is spread out over nine years, and the initial reduction will remain in effect through Sept. 30, the board said.

After that, Congress will determine the amount of reductions going forward.

“We’re certainly hoping this is a short-term event, but we’ll just have to see how it plays out,” Rodman said.

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