Thanks to emergency legislation voted this week by the House and Senate, the 1 million retired and the 100,000 unemployed railroad workers can breathe more easily. Plans for drastic cuts in pension checks have been canceled, and the unemployed can be more confident their benefits will continue.
The legislation, adopted with only seven dissenting votes in the two chambers , is awaiting President Reagan's signature. His support is considered certain because his administration, the railroad industry, and rail unions all supported the bill to rescue the faltering railroad retirement system.
Budget Director David A. Stockman had warned that unless Congress moved quickly, ''the monthly checks of 1 million railroad retirees would be in jeopardy.'' Notices of the pension cuts, scheduled to take effect Oct. 1, were to be mailed by Sept. 1.
Rail unions called the legislation ''the only feasible solution to the threatened collapse of the railroad retirement system.'' Rail industry representatives saw the measure as ''the best compromise available at this time.''
The system's problems are similar to ones faced earlier this year by social security. The railroad retirement plan was set up in the 1930s when more than 1 million rail workers were employed and contributing to pension and unemployment funds. Now, about 338,000 are employed, and reserves have been drained by retirements and layoffs, bringing the fund to the brink of insolvency.
Generally, solutions included in the measure are similar to those of social security legislation crafted earlier this year. With railroad employment now apparently stabilized, problems are expected to be eased into the 1990s.
To avert a 40 percent reduction in pension checks this Oct. 1 and another 40 percent cut by Oct. 1, 1984:
* Employer and employee payments into the funds will be increased 50 percent as of Jan. 1. An additional, temporary employer tax is scheduled from July 1, 1986, through Sept. 30, 1990.
* Benefits will be reduced for workers who retire before age 62.
* Cost-of-living increases due next July will be delayed until Jan. 1, 1985.
* The federal government will contribute about $2 billion to the funds (a $1. 7 billion US Treasury repayment of money it owes the retirement system). The system also has been given more liberal authority to borrow from the Treasury if future needs require it.
* Some benefits that retirees are receiving will be taxed for the first time.
The House Ways and Means Committee estimates the five-year support package will cost $4 billion.
The railroad retirement system pays about $5.7 billion a year in pensions and , during the past few years, very heavy unemployment benefits. Its administrators in rail unions warned Congress that the system could go bankrupt early in the 1990s unless help was forthcoming.
Railroad employees with at least 10 years of service come under the railroad retirement system, which is independent of social security. Employees with less than 10 years of service were brought under social security several years ago in a congressional effort to relieve the railroad funds of some of their obligations.