The Kennewick courier-reporter. [volume] (Kennewick, Wash.) 1914-1938, 1936-11-12
THE SECURITY BILL

THE SECURITY BILL
AS this column has pointed out
before, many of the great issues OF
1886 were basically unaffected by
the outcome of the election, and will
be among the great issues OF 1887
and succeeding years. One OF those
issues is provided by the social Sc
curity bill passed by the last con-
gress. That bill came in for a
great deal of discussion in the clos
ing week of the late campaign, with
Republican spokesman denouncing
it In almost every particular, ana
the Democrats defending it.
It is very possible that no piece
of major legislation enacted by the
congress is more widely misunder-
stood than this bill. It is certain
that proposals to amend the bill will
appear in the next Congress and
will have the support of many
members of both parties. A num-
her of unprejudiced observers. tho
they may endorse the principle OF
the bill and its general purposes,
feel that it was hastily drawn, is
unavoidable in some phases, con-
tains a number of dangerous jok-
ers.
Briefly, the social security act, as
now in effect, works as follows:
During the present year, every
employer in the land employing
eight or more people has been sub
ject to a tax equal to one percent
of his total payroll. This tax will
be due and payable on January !,
1897. Purpose of the tax is to pro-
vide money for state unemploy-
ment insurance funds. The fed
eral government will return 80 per-
cent Of all money collected under
this tax to the states providing it,
where these states have unemploy-
ment insurance funds. If they lack
such funds, the federal government
will keep the money and administer
the job itself.
This tax will be increased by one
percent next year, and another one
percent in 1888, reaching q maxi
mum of 8 percent of all payrolls, to
be paid entirely by employers.
That is one phase of the social
security act-the employment phase.
The other phases have to do with
old age insurance.
The tax for this starts on Jam
uary first, and will amount to 2
percent Of all payrolls. Half of
this will be paid by employers, and
the other half by employees. MAXI
mum taxable income Of an indi-
vidual is $50 per weekly This tax
will rise slowly, and reach q top Of
s percent in 1949, 3 percent of which
will be paid by employers and 8
percent by workers. All of this
money will be retained by the feder-
al government, and will be used to
retire workers at the age OF IS.
Thus, when the maximum is
reached, the social security tax will
total 8 percent on all payrolls, with
certain exceptions such as agricul-
tural and domestic labor.
It is obvious that the tax will
bring in vast sums Of money. Es-
Inmates say that in 1937-when the
total tax will be percent of pay
rolls will exceed $1,OO0,-
100000. Yield for the following
year will be close to 81 400. O00. 900.
And when the top figure is reached,
it is anticipated that $4,000, 000,0 900
q year will flow in.
And here is where one of the
jokers appears. Estimates say that
old age insurance reserves which
must, under the law, be retained by
the federal government and invest
ed in government bonds-will reach
81, 600 ,OOO, 900 by 1880. Today our
federal debt is at an all-time high
of $4,000, 100000. This debt, as
the u. S. News has pointed out,
must be inflated by another $13,-
600, 600 900 by 1880 just to provide
enough bonds for the investment OF
old age security money, entirely dis
missing other holdings of govern
ment bonds.
Worst joker of all, according to
some commentators, is that, under
the law, Congress could legally ap-
propriate this old age security
money for other purposes. In other
words, it is morally, but not legally
bound to use the funds for the pen
sioning of the elderly. An irres-
ponsible Congress, converting, say.
in 1860, could spend the savings pill
ed I'D and the worker who had been
contributing, in company with his
employer, part of his earnings Tor
a generation to assure a financially
independent old age, would be out
of luck.
Still another joker, say some, IS
that if the sums involved were put
into policies providing pensions on
the same scale as those provided by
the annuities sold by private lnsur-
ance companies, the individual
would get much more when he
reached IS. This has been disputed
by others, and the whole matter mas
been so befogged by argument ana ;