The Washington times., 1935-02-05
CD i
To j. 8. PUT
AT4.B|LL|ON
Treasury Offers New Tax,
Benefit Plan in Urging
Drastic Changes
international News Service

International News Service
Warning that old-age pensions
will ultimately cost over four bill
lion dollars a year, Secretary of
the Treasury Morgenthau today
urged drastic changes In the Ad-
ministration'S economic security
program.
He submitted his proposals to
the House ways and Means Com
mittee, which is considering the
legislation embracing old-age pen
sions, unemployment insurance,
aid to dependent children and
health service expansion.
The Treasury plan would save
general taxpayers an estimated
81, ,478, 10000 annually from 1880
on by eliminating all contribu-
tions to the contributory old age
system from general Treasury
revenues. The system would be
financed entirely by the payroll
and earning taxes.
Mr.. Morgenthau proposed:
1. A new scale Of contribu-
tory taxes and benefit payments
in the compulsory contributory
old-age pension plan designed
to put it on a sound financial
basis without imposing heavy
burdens upon future genera.
tions;
Treasury Tax Plan
2. The Treasury plan calls for
a combined payroll and workers
earnings tax Of 2 per cent for
the first three years beginning
in 1887 and rising to 6 per
cent in IL years. The bill starts
the taxes at / per cent and
reaches a maximum Of S per
cent in 20 years;
3. Transfer from the Social
Insurance Board to the Treas
ury the function of issuing and
selling voluntary annuity certifi.
Gates:
4. Temporarily elm mating
casual workers, agricultural labor
and domestic servants from the
compulsory contributory sys.
TEN.
His proposals dealt wholly with
the old-age pension scheme pro-
posed by the Committee on Eco.
nomic Security. He did not touch
upon unemployment insurance in
his formal statement.
Provides Three Plans
Under the Wagner-LewiS bill,
three old-age pension plans are
provided. First is immediate con.
tribution up to SIS a month to
State pension plans. Second is q
contributory system with a tax on
payrolls, half to be paid by the
employer and half by the en-
ploye, designed to make the plan
ultimately self-supporting. Third
is a voluntary plan under which
workers can store up savings for
their old age by making regular
payments.
Secretary Morgenthau said:
"By inaugurating q national
contributOry old age annuity
system the Federal Government
is undertaking very heavy re-
spOnsibility extending from
year to year into the indefinite
future.
"Under the notifications
that we shall suggest, as well
as under the plan now incor-
pOrated in the economic Secur.
ity bill, the sums to be paid
out each year in benefit pay.
ments will rise to more than
four billion dollars.
'Tt is obvious that we must
make sure now that the pro-
visions incorporated in the bill
will enable the Federal Govern
ment continuously to meet the
heavy and recurring liabilities
that will be imposed upon it."
Scale Submitted
Mr.. Morgenthau said the scale
he proposed would provide annui.
ties ranging from $22.50 to $3.50
a month for those whose wages
have averaged $3.50 a month or
more; SIS to $55 if wages aver
age $10O; $3.50 to $27.50 if wages
have averaged $50: the monthly
annuities to vary with the num-
ber of years Of contributions.
Mccormack Objects
Representative Mccormack Cd
Of Massachusetts, vigorously OBJ
'jected to Mr.. Morgenthau'S Sug-
gestion that transient and casual
laborers, domestic servants and
agricultural workers be excluded
temporarily from the bill because
Of Administrative difficulties