WASHINGTON — On December 21, President Bush signed legislation permitting $15.3 billion in railroad pension funds to be invested on Wall Street.
The move, announced by the White House in a brief statement, allows the federally administered railroad pension system to take the assets out of U.S. Treasury bonds and invest the money in private securities instead.
The measure would cut the railroads’ payroll taxes while aiming to boost the benefits of retirees and their widows or widowers.
The measure was backed by rail companies and their unions. Proponents said it was important to help tens of thousands of rail retirees, who are not covered by Social Security, as well as the rail companies. But it was scorned by a small group of Republicans who charged that railroads and their workers had colluded against the taxpayer, who would be expected to foot the bill if the new private investments go sour.