Evening star., 1939-06-10
Employer Tax
.CutFaces Fight
In Congress
Three U. S. Agencies
Disopprove JobIess
Act Amendment
BY DON s. WARREN.

A bitter battle over proposals by
District ofiicials for amendment Of
the District Unemployment Com
pensation Act-designed primarily
to permit a reduction of employer
taxes which now are piling up
unused millions in the Treasury
was in prospect today when it was
disclosed that three powerful Fed
eral agencies have overriden plans
OF the Commissioners.
The bill. offered by Representa-
tive McGehee, Democrat, Of Mis-
sissippi has been reported favorably
by the House District Committee
and is scheduled to come before
the House Monday.
Opposition to fundamental fea-
lures of the bill have been registered
by the Social Security Board, the
Treasury and Labor Departments
as we'll as by Director Harold D.
Smith OF the Budget Bureau, it was
revealed. Among other things. the
Federal agencies urged an increase
in benefit payments as against tax
reductions and opposed the boards
plan to be freed from control by
the Social Security Board
Contains New Features.
In obedience to prescriptions
placed on them by a presidential
executive order some years ago, the
Commissioners today tore up a fa-
vorable report they had planned
to make on the bill, although they,
as majority members of the D. u.
C. B.. were original sponsors of the
tax reduction plan. The executive
order forbidS any Government
agency from urging adoption of any
measure found by the Budget
Bureau not to be in accord with
the program of the President.
At the same time, it was learned
that the pending McGehee bill.
which was prepared under the direc-
ton of John A. Marshall, director
of the D. U. c. Board, contains
several features not heretofore gen.
orally known.
One of these would free the board
Cor its executive officer, Director
MarshalD of any and all respon-
sibility for the hundreds of mis-
takes made in benefit payments
since last July and up to the time
Of approval of the bill An ac-
counting of these mistakes" was
revealed Thursday in reports OF
auditors on the staff of Mai. Daniel
j. Donovan, District auditor, as a
part of their routine work.
Another section would constitute
the D. U. c. Board body corpo-
rate independent of the District
as well as the Federal Government.
The D. U. c. Board, which con-
sists of the District Commissioners,
as ex offlcio members. and repre-
sentative of labor and representa-.
tive of employers, planned amend
ments to the act when it was found
the present 3 per cent pay roll tax
was creating huge reserve in
funds.
AS of May 81 last. officials said,
the board had balance of S12,802.
065 to their credit at the Treasury.
In the previous Is months of bene-
fit payments, the record showed the
board had disbursed s2,423,835 to
the jobless found eligible
The plan was to give the board
authority to reduce the local tax
rate below the 3 per cent level. so
long as it could maintain a reserve
of some s10,000,0 900 at the Treasury.
Pleas Fall on Deaf Ears.
Pleas to this effect fell on deaf
ears at the Federal agencies. The
Commissioners on March last asked
the Budget Bureau to consider
proposed favorable report to Con-
gress. On May S, it was disclosed
today, Budget Director Smith ad-
vised the city heads the bill was not
in accord with the program of the
President
The Federal budget officer said the
bill would set precedent for the
States and Territories, now under
the Federal-State unemployment
compensation system Ito withdraw
as they see fl and impair the pres
ent standardized ard nationally CO.
ordinated system"
More detailed objections were
raised in statements from the three
Federal agencies, copies OF which
were forwarded tn the Commits
sioners.
S27 4 Month Average.
According to the auditors reports,
benefit payments have been averag-
ing around $27 month.
Chairman A. j. Altmeyer Of the
Security Board declared that many
States, having lower balances in
funds, had found it feasible to
recommend to State Legislatures a
more liberal formula than that
planned by the District Board.
He also raised question about
the stability of employment in the
District, although agreeing that
characteristics Of employment and
unemployment here were "sienifi-
cantly" different. Past experiences.
he said, showed that when the vol
ume Of Federal activities here de.
clined, other activities here reflected
such changes. To this extent, he
said, employment in the District is
not stable" and suggested that the
benefit payment reserve should be
planned to meet the future pos
sible drain"
Under the McGehee bill, It was
proposed to reduce the maximum
amount of benefit payment from 65
to so per cent of the weekly wages
which had been received by the
claimant. subject to the present SIS
a week limit on benefits. Present
law has a formula limiting single
beneficiary to 40 per cent of his
past wages, but an additional 10
per cent is allowed for spouse and
an additional per cent for each
child, up to maximum of 65 per
cent, but subject to the SIS limit.
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