The Ypsilanti daily press. (Ypsilanti, Mich.) 1928-1962, 1944-01-12
Michigan in
Washington
BY Esther Van Wagner Tufty

Yandenberg will tackle his pet pro
ject OF freezing social security
taxes at the present one per cent
with what he calls "invincible"
facts-right from Secretary Nor
genthau himself.
The Michigan senator will at
tempt TO prove the advisabllity OF
freezing the one per cent OF salary
paid by employer and the one per
cent by employe on the premise OF
whether or not the reserve, being
built up in the Treasury from
these salary deductions. Is large
enough to safeguard the payment
of benefits and expenses.
In the year ending June 80. some
40 million workers paid into the
reserve fund over a billion dollars
and the social securit. board paid
out 176 million In benefits to re-
tired workers, their dependents and
survivors OF workers and In admin
istratlye expenses. On June 80 the
reserve totalled about IA billion
dollars.
Is that a pace sufficient to estab-
llsh a sound reserve? Or should 1t
be doubled as proposed in present
social security law beginning the
first OF this year? Senator Van
denberg says ii far exceeds Secre-
tary Morgenthau's own yardstick
Of an adequate reserve. Always
one TO jot down what a witness
says at committee hearings, Van
denberg will quote from the March
"a, 1889 record. At that time, Mr..
Morgenthau said that to protect
against any decline, it will be
necessary to maintain a reserve
substantially equal to three times
the highest annual expenditures an
ticipated during the Ave fiscal
period.
Vandenberg will say on the Sen
ate floor that the present reserve
is about II times larger than the
"three.times" rule required by the
Secretary Of the Treasury. BASED
on heaviest cost year between 1913
and 194S as anticipated by social
security board as Ais million)
Even a remote S13 million cost
year would be about FIVE times larg-
er, Vandenberg will claim.
Then to heap on more testimony
right from those opposing his
freezing" amendment, he will quote
none other than the social security
chairman, Arthur ]. Altmeyer-"If
no employer or employe contri-
buttons were collected in 1914, the
assets on Dec. 81. 1914, would
amount to about 1900 million,
which is more than three times the
estimated expenditures during cal
endar year 1919"
All of which will probably bring
up the old argument of the rela-
tive merit OF full" reserve favor
ed by .ministration) in contrast
to contingent" reserve, as urged
by Vandenberg.
Vandenberg Is sympathetic with
Morgenthau's desire to retire the
national debt, but is firm that
levies should be made only for
social security purposes. Not that
he is accusing the secretary Of
mal-admini ration OF funds, as
the law requires all reserves be
put in government bonds. but in
creasing the reserve, Vandenberg
says, means in effect the same
thing as a war bond windfall In
millions for the Treasury.
But Nandenberg Is headed for
some tough debate, I'm told. Op-
posing senators will not argue the
entire problem from the premise
Of whether or not the reserve fund
is adequate for the five ensuing
years 1913 to 194s.
Some senator, perhaps the father
Of the social security law, Sena-
tor Wagner, will voice the opinion
OF the social security board.
I. That the "three-times" yard
stick will be meaningful only when
benefit load becomes stable, not
during these early years.
2. That development can't be
foreseen, such as the extent OF post.
war unemployment.
3. That entire long-range pre-
gram set-up on gradual increase
in payments.
1. That it's an aid to combat.
ing initiation.
). That it's easier TO make ad.
yances now in prosperous times
and the changes should come gradu-
ally.
Meanwhile. Vandenberg Is over
whelmed with flattering letters
from business men and white.col-
lar workers on his continuing fight
against an increase 10 two per cent
in social security taxes.