Evening star., 1939-06-11

BACK CRGROUND-
The Social Security Act has not
been opened for amendment
since its passage IN 1885. In 1898
congressional campaign, mann
DtctoriOuS candidates Were pledged
TO support ToUnsend old-oqe
pension scheme. To meet threat
OF this ertrem,e proposal, od-
miniStrdtion this year drafted
amendments libernl,ztno sociuL
security, then administered crush
ing defeat to Townsend bill be-
fore bringing its o,Gn alternative
to House floor
PV the Associated Press
With only two dissenting votes.
the House approved and sent to the
Senate yesterday a set of amend
ments extending and increasing the
benefits of the Social Security Act
while keeping the old-age pension
tax at its present level for next
three years.
The vote was 361 to 2. with Rep
resentatives Smith. Republican. Of
Ohio. and Thill, Republican. of Wis
consin, casting the negative votes.
Representative Carlson. Republican,
OF Kansas, first voted no" then
changed to present because he
was paired with a member who
favored the legislation
The tax amendment has been
hailed as recovery step" because
it would avoid a so per cent in
crease next year in the old-age in
surance tax.
If the Senate approves the Houses
action, II will mean the working
man covered by old-age insurance
will continue TO contribute to his
retirement pension l per cent of
his paw, up to $4,000, until January
l, l943
Increase DELAYED Until 1943.
In 1913 the rate will go up to 11a
per cent. Under present law the rate
is due to go up to liz per cent next
January l.
The employer pays the same tax
as his emplove
A Ways and Means Committee re-
port estimated total savings" to
! taxpayers during the next three
years would be sl.710000000
At the same time. it estimated
! increased benefits would cost an
additional $1,000 900 900 during the
next five years. The committee said.
however. the tstal cost over the next
As years would be about the same
as under present law.
The committee also said 1,100 900
additional persons-seamen, bank
employees and employed persons IS
and over-would be provided old
age insurance under amendments
which extended coverage to these
( groups. and that 100000 additional
would get unemployment insurance.
Age Benefits Next Year.
Under the amendments. the Gov
ernment would begin paving old-age
insurance benefits next year instead
of waiting until 1912 as present law
provides.
Furthermore. the benefits to be
received by persons who reach 65-
/ the retirement age-in the next few
years would be greatly increased.
/ For instance. under present Law.
man making 500 month would
be entitled to sl750-a month pen
sion on January l, 1912. if he had
paid the old-age tax five years Csince
January /. 1880.
Under the amendments. if this
man reached IS on January /, 1910.
or thereafter, he could retire on a
pension of s2575 if he were single,
or 1883 if he were married
! Example of how amendments
affect person with average of
sl00 a month earnings is on
| Page A-2D
Lump Sum Payment Dropped.
The amendments also would pro-
vide pensions for elderly widows and
parents and the minor children Of
deceased old-age insurance partici-
pants. doing away with the lump sum
payment to heirs as in present law
The maximum Federal contribu-
ton to States for old-age assistance
would be increased from SIS to $40 a
month, as would the contribution
for aid to the blind.
Old-age assistance is intended for
the INDECENT aged and is distinct
from the old-age insurance benefits.
| The States must match Federal
funds for this purpose, dollar for
dollar.
Other provisions in the amend
ments:
Federal contributions to States for
aid to dependent children would be
changed from basis of one Fed
eral dollar to two State dollars
to straight dollar-for dollar match
ing. Estimated cost. $4,000 900.
Jobless Tax Cut.
The 3 per cent unemployment
compensation tax would be applied
only to the first $4,000 of an in
dlviduals compensation, instead Of
all compensation. Estimated saw
ings to taxpayers, $65 100000
Tax delinquency provisions would
be eased Estimated savings to tax
payers, SIS, 200 900.
A plan would be inaugurated
whereby States could reduce their
unemployment compensation taxes
if they had adequate reserves for
unemployment benefits. The So
cial Security Board estimated that,
If States acted promptly. they could
reduce tax burdens $4,000, 900 to
$75 900, 900 in this calendar year and
SITS, 100000 next year.
A special trust fund would be
set up for Old-ape Dension f,,nde
and the amount of the reserve would
be reduced drastically. 1t was esti-
mated that under present law, the
fund would reach SAT 1000, ,OOO, 900 by
1880. The amendments would limit