Evening star., 1942-10-09
Roosevelt Plans
ToAsk Boost in
Security Rates
Urges Expansion
Of System in Letter
To Senator George

10 Senotor George
President Roosevelt today said
he planned to submit to Con-
gress as soon as it disposed of
the pending tax bill "a compre-
hensive program for expanding
and extending the whole social
security system" that would in
volve substantial further in
creases in rates of contribution"
but at the same time would con-
tribute to non = inflationary
financing rapidly mounting war
expenditures"
In a letter to Chairman George
OF the Senate Finance Committee,
the President declared he was op-
posed to an amendment to the
pending tax bill by Senator Vanden-
berg, Republican, of Michigan,
which would freeze payroll taxes at
present levels.
Supports Treasury Plan.
The substantial further increases
IN rates of contribution advocated
by the President would be in line,
informed sources said, with the
Treasury Departments proposal for
an increase of the old age and sur.
vlvor's insurance taxes to an over
all figure Of per cent-21a per
cent by the employe and 21a by the
employer.
Pending congressional action on
the proposed social security expan-
sion program, the President sue-
gested "the desirability of permit
ting the increase in the rates of
contribution of old-age and surviv-
or's insurance to go into effect on
January l, 1943, as provided in the
existing law"
Increase Scheduled.
The present tax schedule calls for
l per cent increase for both en-
ployer and employe, bringing the
rate to per cent each. The rates
will automatically increase to 2 per
cent on employer and employe Jam
uary l.
The text of the Presidents letter
follows:
Dear Senator George:
L note that the Senate Finance
Committee has tentatively included
IN the pending tax bill an amend
ment by Senator Vandenberg freez-
ing the present rates of contributions
| for old Oo onI cI,ruiucrc,
instead of permitting them to in
crease automatically on January /,
1943, as provided by law.
This amendment is causing con-
siderable concern to many persons
insured under the old-age and sur.
vivors insurance system. The
financial obligations which will have
to be met in paying benefits amply
justify the increase in rates. A
failure to allow the scheduled in
crease in rates to take place under
present favorable circumstances
would cause a real and justifable
fear that adequate funds will not be
accumulated to meet the heavy OBJ
legations of the future and that
the claims for benefits accruing
under the present law may be jeop-
ardized
In 1889, in period of underem-
ployment, we departed temporarily
from the original schedule of con-
tributions, with the understanding
that the original schedule would be
resumed on January /, 1943. There
is certainly no sound reason for
departing again under present cir
cumstances. Both employment and
the income from which ccntribu-
tlons are made are at a very nigh
point-the highest since the inaugu-
ration OF the system. In fact, the
volume OF purchasing power is so
great that it threatens the stability
of the cost of living. The increase
to rates at the present time is not
only in accord with the necessities
OF the social security system itself,
put at the same time would con-
tribute to the -infationary
financing OF the rapidly mounting
war expenditures. The accumula-
ton OF additional contributions
would be invested in United States
Government securities and would
thereby assist In financing the war,
This is the time to strengthen.
not to weaken, the social security
system. 1t is time now to prepare
Tor the security of workers in the
postwar years. AS soon as the
Congress has disposed of the pend
Ing tax bill am planning to submit
comprehensive program for ex-
panding and extending the whole
social security system along the lines
laid down in my budget message
last January. This program would
involve substantial further increases
in rates of contribution.
This is one case in which social
and fiscal objectives, war and post
war aims are in full accord. Ex-
panded social security, together with
other fiscal measures, would set up
bulwark OF economic security for
the people now and after the war
and at the same time would provide
anti-inf1ationary sources for financ.
ing the war.
In the light of these considera-
tions, suggest the desirabilty Of
permitting the increase in the rates
OF contribution of old-age and sur
vivors' insurance to 60 into effect on
January I, 1943, as provided In
existing law"
The Senate Finance Committee
on September "a voted, Z to 4, to
write the Vandenberg amendment
into the new revenue bill. The
amendment, If adopted over the
Presidents protest, would block the
2 per cent increase.
Public response to this proposal
varied. Almost Immediately follow,
ing the committees action, Presi.,
dents William Green of the Amer;
ican Federation of Labor and Philip,
Murray Of the Congress of Indus-
trial Organizations voted the op-
position of organized labor to the
amendment and went on record,
faVOring an increase in socia1 sa.