The Washington times., 1935-01-19

ernmenL CTeQlG $&S%;
Is shown. Much ~
caution in in Lewis Haney
fringing on States rights is mani
fest.
Whether it be necessary or not,
however, we should all reflect
upon what this plunge of ours
into social insurance" means. 1t
is a cnnfession that the United
States have become like the older
countries of Europe, with our
life more a matter of rights"
and duties" and less under the
influence of opportunities p
more insurance and less profits.
There is a profoundly pessimis-
tic note in all this emphasis Of
unemployment, old age, and the
ills of life.
But Of more immediate import
ance is the question, Is this
really insurance? Insurance
against what?
1--WE cannot get rid of risk,
nor can we establish security
for the nation as a whole. The
President wisely admits this.
But he does not seem to see
that all we are doing is partly
~ to take income away from
the higher income classes and
give it to lower income classes,
and partly (2) to compel low
income classes to save a little.
This we are doing by central
Government (politicaD power.
This means increased Govern
ment control. It means less in
dividual initiative. It means, too,
I think. the danger that we may
imagine that we have taken out
insurance" and so do not need
to be so careful in the future.
It may actually discourage in
dividual thrift, and unduly de-
crease the fear of overspending
and business crises.
Fire insurance does not prevent
fires. Sometimes it encourages
themD
Despite the Presidents words,
An examination of the new bill
suggests that about 100000, 900
O year is to be paid out of "gen-
eral taxes" Even at $50 a month,
the old age pension feature could
easily amount to hundreds of mil
lions each year.
Briefly the plan is as follows:
ID Unemployment insur-
ance." The maximum is not
fixed. but SIS a week for a
period of six weeks, is sug-
gested. This would be enforced
by a 3 per cent Federal tax on
employers payrOllS. If the
States adopt unemployment in
Surance systems satisfactory to
the Government, 80 per cent of
the Federal tax will be given
back, 10 per cent being
retained for administration
charges.
The States may adopt different
gystems. but the Federal Govern
ment sets certain standards. One
big question is whether the States
would require employees to con.
tribute part of the funds.
90 Old age pensions and in.
Surance. (a) Non contributory
straight pensions for non-insured
persons over IS are provided for,
amounting to $50 a month, half
to be paid by the Federal Gov
ernment. CD Compulsory con-
tributory old age insurance, start
ing at u of l per cent on pay
rolls, and later rising to 212 per
cent. Co A voluntary annuity
system is to be set up by the
Federal Government to sell an.
nuities cheaply, presumably to
the higher-paid employees. Cd
Maternal and public health aids.
The costs to the Government
are estimated at about $780,
100000 for the first year, and
upwards of 100000 annually
thereafter.
Some of the detailed problems
are:
How force the various States
In line without violating the
Constitution? How force gen.
eral standards upon States
with widely different employ
ment and wage conditions?
How handle safely and wisely a
$15,OOO,OOO,OOO Federal insur-
anCe fund to be invested" only
I'm Government paper?
How force all States to re-
quire adequate emplOye con-
tributiOnS? IF labor does not
contribute we are likely to have
less emplOyment.) How can
wages be as high as formerly,
II labor is to be Ensured" and
pensiOned, as it has not been in
the past?
To what extent will the pro-
posed eventual 512 per cent pay
roll tax be borne by capital,
and tend further to slow up
capital investment?
How deal with existing pri-
Vate pension systems? How
protect the insurance companies
against the effects Of this $50
elAl insurance" actiVity7