Evening star., 1937-01-30
Social Security Changes.

Ment of the social security act has been
advanced by tie Republicans in Con-
gress, acting through two Senators and
two members Of the House. It takes
the form of resolution calling upon
the Social Security Board. which is GER
tainly friendly to the act, to draft needed
amendments and to submit them to
Congress by May /.
First and foremost, it is proposed to do
away with the full reserve plan now in
the act. If carried into force, this pro-
vision would result in an ultimate tre-
mendous reserve of $47,000, ,000, 900. all
taken from the pockets Of the workers
and their employers through the So
called pay roll taxes. This huge sum
would be invested in per cent Govern
Inent bonds, paying 81 410, 900, 900 inter-
est annually. This interest would be
used to help operate the social security
system, paying benefits to the aged, etc.
This interest would come from taxes
levied upon the people generally. It
seems, therefore, a painful and unneces-
and their employers, through pay roll
taxes, to raise this great reserve fund.
A comparatively small reserve would be
all that is necessary, If a pay-as-you-go
system were adopted instead of the full
reserve system. That is what the pro-
ponents of the resolution, introduced by
Senators Vandenberg of Michigan and
Townsend of Delaware and Repre-
sentatives Reed of New York and Jen-
kins of Ohio, propose as a substitute for
the full reserve plan.
The immediate benefit Of the pay-as-
you-go plan would be to postpone an
increase in the pay roll taxes, which be-
gin this year at l per cent on worker
and employer, for five or ten years. The
postponement would be for five years, if
the benefits begin to flow soon instead
of in 1912 and If the benefits are in
creased in size. The longer postpone
ment would follow if the benefits were
not increased in size.
Under social security program, with
Its insurance provisions, operated by the
Government there is no need for build
Ing up a full reserve" such as is main
tanned by private insurance companies.
The reason for this is very simple.
Government insurance is compulsory.
Furthermore, the Government is guar
anteed a continuous flow of revenue,
which is not true in the case of private
insurance companies. The latter are at
the mercy of uncertain and fiuctuating
revenues.
Other proposed amendments would ex-
tend the social security system to in
clude farmers, domestic servants and
others not now covered by the act. It
applies now only to industrial workers.
II the system is desirable for this large
group of citizens, 1t is also desirable
for the other groups.
The advancement of these proposed
amendments to the social security act
by minority members Of Congress, Re-
publicans, shows what may be done by
minority in Congress in a constructive
way. The sponsors Of the amendments
are not opposed to social security legis-
lation. They make that very clear in
their statement regarding the resolution
they have offered. If the Republican
minority in Congress works along these
lines in connection with other legisla-
ton, they will hive shown to the coun-
try the real value of a minority party.
The sponsors of the resolution have
made careful study Of the social Sc
curity act, calling to their assistance
several of the foremost experts in the
country on insurance.