Evening star., 1937-01-29
C. 0.P:ASKSS SHIFT
IN SECURITY ACT
Would Change to Small Re.
serve, Hasten Aid to
MiddIe.kged.
BY G. GOULD LINCOLN

! MiddIe.Aged.
BY G. GOULD LINCOLN.
The Republican minority today
asked Congress to require the Social
Security Board to recommend amend.
ments to the social security act to
avoid the accumulation Of an "ulti.
mate and dangerous s47, 600, ,ooo, 900 re-
serve"
This reserve. sponsors Of the Msolu-
ton declared, is needless in q COM
pulsory, tax-supported system Of con-
tributory old-age pensions-"an un-
necessary burden on the workers Of
the country" They proposed instead
q direct pay-as-you-go plan with only
. small contingent reserve.
The Republican minority acted
through Senators Vandenberg of Mich
igan and Townsend Of Delaware and
Representatives Reed Of New York and
Jenkins Of Ohio. The resolution, in
troduced in Senate and House by these
members Of Congress, is the result Of
q long study Of the social security act
in connection with a group Of outside
experts In social security and insur.
ance. /
Would Hasten Benefits to Some.
Under the resolution, the board
would be required to report plans to
increase and hasten benefits to per.
sons now Of middle age or over, and to
avoid increased employer and employe
taxes for at least five years.
Both these objectives, the sponsors
Of the resolution maintain. will become
possible through the abandonment
Of the needless full reserve plan now
contained in the social security act"
Alternatively, the board would bs
asked for a plan which would permit
postponement of increased pay roll
taxes on employers and employees for
at least 10 years II all the savings
from the abandonment Of the full
reserve system be used for tax-saving
purposes exclusively and not TO in
crease benefit payments.
The board would be called on to
recommend amendments, too. which
would expand the social security sys-
tenn to include farmers, domestic
servants and others now excluded as
beneficiaries.
The board would be asked TO report
its recommendations for amendment
Of the act by May /, In the hope that
the law may be changed before the
present session Of Congress closes.
The Republicans supporting the
resolution insist that they are making
constructive suggestions and that they
are not at all inimical to social Sc
curity. BY their course. they say, the1
are demonstrating the value Of
minority in Congress. It is their pur.
pose to deal with other measures in
similar manner.
I'VE are completely sympathetic
with the objectives Of the social sc.
curity act" the sponsors of the reso-
luton said in joint statement. ANY
changes In 1t should be strengthening
changes. 1t was passed hurriedly one
year ago and all informed persons
agree that 1t needs substantial corr
rection. 80
Sweden, probably the most pro-
gressive country in the field Of social
security legislation, furnishes strong
evidence against the use of the prin.
ciple Of the reserve fund. After try.
ing it for years. Sweden dropped it and
Is now on a pay-as-you-go basis.
There Is no analogy between the
need of private assurances companies
Government system for full reserves.
The former are at the mercy Of un-
certain and huctuating revenues. The
latter is compulsory and Is guaran.
teed a continuous fiow Of revenues.
Ask Small Contingent Reserve.
1T seems desirable, therefore, to
provide for the repeal Of the full
reserve plan and the substitution Of
direct pay-as-you-go system with
only a small contingent reserve.
This will achieve several healthful
results. The progressively increasing
pay roll taxes in the present social
security act assessed on Doth EN-.
ployer and employee per cent to
1910, per cent to l943. per cent
cent thereafter-are largely necessary
only to build up the $4,000, 600, 900
of reserves. We are advised by COM
petent authorities that with this lat
ter monstrous burden curtsiled, It will
be possible for at least five years to
rest on the present 2 per cent tax
and, at the same time, to improve
social security under the act.
I'VE believe, for example, that bene-
fit payments can commence within q
year or two instead Of waiting until
1912, rs the law now provides. We
believe that increased benefit pay.
ments are possible for workers now in
middle age, who will, If existing law
be not changed, receive only pittance
at the age Of IS. Thus the average
benefit payment in 1912 will be about
$18 month, as against an average Of
s46 per month in 1880, unless tho
former Is corrected as we believe to be
possible. This would not mean in.
creased benefit payments to the
younger workers of today when they
are old. But it would mean that these
younger workers will be relieved OF .
large part of the burden which other
wise would be imposed upon their
private funds for the care Of their
elders. 80"
"The basic question is the reserve
system. If it be deemed wise to leave
benefit payments at existing levels, We
are confident that the abandonment
Of needless and often menacing re-
serves would make it possible to also
abandon increased pay roll taxes on
employer and employe for at least 10
years to come"
TOWNSEND COMING HERE