The Wilmington morning star., 1940-12-15
Bruce Cations
In Washington
star-News, Washington Correspondent

Observation-Disclosures of a snow-balling
reserve fund is likely to force a change in
the unemployment compensation sections OF
the social security set-up this winter.
Under the present law money is coming in
just about twice as fast as it is going out.
The unemployment insurance reserve fund to-
day stands at about 81, 700, 600, 900, and is
This reserve fund is invested by the secre-
tary of the treasury in government bonds,
each states own contribution being held to its
account.
Thus, instead of contributing to an increase
in the national debt, this piling-up of the
insurance fund provides a market for some
of the bonds which the increase in the national
debt puts on the market.
LABOR FAVORS
LIBERALIZATION
From labor and important New Dealers
comes a demand that benefit payments be
liberalized. From business interests comes a
demand that the e m p l o y s. burden be
lightened-either by a lowering of the 3 per
cent payroll tax, or by extension of the ex-
perience-rating system. Or perhaps both.
Whole future of the unemployment COM
pensation system may depend largely on how
this scrap comes out.
The Social Security Board is inclined to
liberaliZe benefits, both on the theory that in
many states the sums now paid are inadequate
and in the belief that anything which would
increase mass buying power would be all to
the good. Under the general heading of liberal
izing benefits would come shortening of the
waiting period, extension of the time over
which benefits can be paid, and hiking of the
amounts paid out.
In general, both the A. F. of L. and the
c. l. O. would back such a move. Interesting
point is that the final rallying point of the
iberalizers may be the Mccormick b i
(backed by Majority Leader John W. McCor-
mack, which would write minimum benefit
standards into the federal law. End result of
such a step would probably be more or less
complete liberalization of the whole system
which, as it now stands, is actually a state
affair operating under a degree of federal
supervision.
EXPERIENCE RATINGS
CENTER OF DEBATE
Real center of the argument, however, will
be the business about experience ratings.
This is a system, now in effect in a number
OF states, whereby the unemployment insur-
ance tax which an employer pays depends
on his record in regard to stabilizing his own
force. An employer who can show that over
a three-year period he has kept his force
from fluctuating very much and has dis
charged lew persons pays a lower tax than
the employer who lays off a large number
every so often.
For years the National Association of Manu-
facturers has urged extension of this system.
Argument is that it offers a powerful incentive
the employer who is most responsible for
toward the sterilization of employment, forces
Unemployment to bear the heaviest part of
the load, and tends to make the whole system
a means for helping to reduce unemployment.
Labor organizations and the Social Security
Board don't like experience ratings much.
They consider this a means of stabilizing un-
employment, assert it works out in favor of
corporations Qlke u~tilities) whose labor re-
qulrements are fairly steady, and say that it
promotes the replacement of men by ma
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