Evening star., 1935-06-19
Administration Forces Meet
First Defeat on Social Sc
curity BiII-Fear Federal
System Jeopardized.
FINAL VOTE EXPECTED
ON MEASURE TODAY
Letter From A. F. of L. Head
Opposes Permitting Industries
to Have Own Systems-Sums
Must Match Government Fig
ure Under Plan.
BY J, A, O'LEARY.


BY the decisive vote of 81 to 35,
the Senate this afternoon adopted the
Clark amendment to the social Sc
curity bill to permit exemption from
old age pension pay roll taxes of in
dustries that operate their own retire
ment plans.
It was the first serious defeat the
administration forces have suffered in
connection with the security bill.
They had urged the Senate not to
adopt the amendment on the ground
that it might jeopardize the success
of the Federal contrlbutory old age
annuity system, if individual indus
tries could remain cut of the Fed
eral system by operating their own
plans.
When the bill reaches final vote,
probably late today, however, it is
expected there will We a large ma
jority in favor of its passage.
Senator Clark, Democrat, of Mis-
souri, emphasized that his amendment
requires companies to have a plan at
least equal to or better than the Gov
ernment plan in order to get the ex-
emption. and in his closing speech
he called attention to the large num-
ber of private plans that already
give more generous treatment than
the pending bill.
BarkIey Hits Amendment.
In a final attack on the amend
ment, Senator Barkley, Democrat, of
Kentucky paraphrased the words of
Abraham Lincoln by contending that
the old-age pension system cannot
endure half public and half private"
Senator La Toilette, Progressive, of
Wisconsin, another opponent of the
Clark amendment, read letter from
President Green of the American Fed
Grafton of Labor urging defeat of the
amendment.
The Clark amendment would allow
companies to apply to the Social Sc
curity Board for permission to op-
crate their own plan of old-age retire
ment. If the application was ap-
proved. the industry would be ex
empted from the tax, amounting to 3
per cent from the employees and per
cent from the employer, which is car
ried in the bill to finance the Federal
plan.
The exempted employer would be
required, however, to put into the
private plan as much as he would
have paid in the Federal system,
Clark said
The Clark amendment developed
into the main controversy after the
bill was taken up in the Senate. 1t
led to an entire day of debate yester-
day, in which supporters urged Con-
gress not to sweep aside voluntary
private plans that have been func-
tioning for a long time.
The Senate also will take up the
controversial committee amendment
which would allow the Treasury to
sell old-age annuity insurance tc in
dividual citizens in the form of bonds.
II this section stays il, the bill will
contain three distinct forms Of old
age security.
Direct Grant to State.
The first is the direct grant to the
State to match, ur to SIS, whatever
:ahe State pays as a gratuity TO those
already at retirement age. The sec
ond is the contributory pension sys-
tenn, to be built up for those new at
work, by a per cent tax on workers
and 3 per cent tax on their en-
ployers. This is the section in which
Senator Clark is seeking to preserve
private pension plans.
Another amendment to be disposed
Of this afternoon IS the proposal of
Senator Borah, Republican, Of Idaho
to increase above SIS the Federal grant
for old-age gratuities in States that
are unable to raise their half of a
$50 payment. Under the Borah amend
ment. If State raised $5 per indi-
vidual the Federal Government could
contribute $25.
The Clark private retirement
amendment was supported in tne de-
bate by Senators George, Democrat,
of Georgia; Tydings. Democrat, of
Maryland and King, Democrat. of
Utah. The opposition was led by
Chairman Harrison OF the Finance
Committee, Senator Wagner of New
York, sponsor of the security bill;
Senator La Toilette, Wisconsin Pro-
gressive, and others.