Evening star., 1943-03-24
Red Letter Doy

1ue people OF the DlStrlct-em-
ployers and employees alike-should
feel grateful to the House for the
statesmsnlike manner in which the
amendments to the local Unemploy-
ment Compensation Act were de-
bated and passed by that body during
Mondays District day" session.
After the bill embodying the
amendments had been called up by
Chairman Randolph of the House
District Committee, its principal
provisions were explained by Repre-
sentative McGehee, who introduced
the legislation, and by Representa-
tive Dirksen, ranking minority men,
Der Of the committee. The explana-
tions were clear, concise and to the
point. Then there followed a dis
cussion of the changes, in which
Representatives Keefe, Anderson,
Russell and Sauthoff took a promi-
nent part. This discussion was in
formative and constructive, with
most of the participants stressing
the desirability of the legislation as a
matter of simple justice to the tax
payers of the District. When the
vote was taken not dissenting voice
was heard.
The McGehee bill makes three
important changes in the existing
law. The first liberalizes benefits in
such way that participants would
receive the most liberal overall
benefits in the country. The second
would protect the accumulated rights
of employees who enter the armed
services, while the third undertakes
to set up long experience
rating system for the District.
The fundamental and compelling
reason for adoption of an experience
rating system here lies in the fact
that it affords the only safe and
equitable method of curbing the fan
tastic growth of the local reserve
fund. AS of today that fund stands
in excess of $4,000, o,00o-enough to
pay benefits for more than fifteen
years at the highest annual benefit
rate ever paid, even though not an
other dollar we're to be collected in
taxes. Last year, for instance, more
than $7,500,000 was paid into the
fund in taxes, while only about
100000 went out in benefits. And
Of this total of benefits, about three
fourthS was paid indirectly by the
Federal Government in the form of
interest on the total reserve. That
is not good business for the Govern
ment, and it is very bad business for
the District.
The effect of this practice, as Mr..
Dirksen pointed out, is to collect
under the present law about seven
times as much as is normally paid
out. "And the money" he added,
"goes into the Treasury and is i'm
mobilized in this fund, at time
when it could be used to advantage
for (other) taxes and War bonds.
When you stop to consider that these
folks. like folks everywhere, have to
pay income taxes today-that there
are tremendous demands upon them
1T is only fair that we do them some
good If we can without impairing or
imperiling the solvency of the re-
serve fund"
The McGehee bill would do this by
setting up an individual experience
rating system under which an en-
ployer's tax rate would be adjusted
downward to minimum of ,01 per-
cent provided his individual reserve
in the fund does not fall below 3.5
per cent of his annual payroll. Should
the funds solvency ever become en-
dangered, the amendment provides
for an automatic increase in all
employer rates. 1t is estimated that
this would bring the reserve down to
between twenty-five and twenty
seven million dollars. maintaining it
at that level. And, as the experience
of the States has shown, 1t would also
provide powerful incentive to every
employer to stabilize his employ
ment.
Because of these and other factors
initiating in the bills favor, and as
matter of fair dealing with the
people of Washington, it is most
earnestly to be hoped that the Sen
ate, when it comes to consider the
matter, will follow the splendid ex-
ample which has been set by the
House.