Evening star. [volume] (Washington, D.C.) 1854-1972, 1944-11-12
/ btginess Is It prepares to reconvert
from war to peace-time production,

buSlneAS aE 1t prepares to recOnvert
from swar to peace-time production,
Considers Reserve Adequate. II
Believing that the accumulated
reserve for old-age payments is ade-
quate, Senator Vandenberg has sue
ceeded for three years in hating the
automatic increase provided for in
the original social security law
When President Roosevelt vetoed
the current Revenue Act last Feb
ruary, one of the features with
which he found fault was the pro-
vision postponing the doubling OF
the social security tax rates until
January !, 1o45., At that time II
was estimated the increased rates
would have levied an additional ST.
100 900 900 on payrolls during 1874.
In his veto message the Presi-
dent said the postponement of the
increases did not seem wise" and
argued that they came "at time
when industry and labor are best
able to adjust themselves to such
increases"
Technical Problem Involved.
Congress at that time swiftly over
rode the veto, but unless the Presi-
dents views on the subject have
changed, the lawmakers may find it
more diftcult to put through the tax
freezing" proposal at this time.
In the first place, the Senate faces
. parliamentary problem in initial
Ing the Vandenberg proposal, be-
cause of the constitutional pro-
vision requiring revenue bills to
originate in the House.
The Senate may offer it as an
amendment to House bill, but II
the President is still against post
poning the increase it would have
to be attached to some bill OF major
importance In order to stand a
chance of ANAL enactment. A wear
ago those favoring the postpone
ment were aided by having q gen.
eral tax bill pending.
The basis for Senator Vanden-
bergs Tight against the increase is
the formula recognized by Con-
gress In 1899, when it abandoned
the original full reserve" system
as being unnecessary in a Govern
ment insurance plan. Under the
1899 formula the reserve is deemed
adequate when it equals three times
the highest estimated outlay for
benefits in any of the ensurine
Ave years.
Further Increases Planned.
Senator Vandenberg said the ex-
listing reserve will amount to an
proximately $4,000, 0oo, 900 by jan
uary l, which is IL times the lowest
estimate and 8 times the highest
estimate Of disbursements. The
Michigan Senator contends the law
is inconsistent in recognizing the
hve-year formula and at the same
time providing for automatic rate
increases.
In the absence of further action
by Congress, the rate would again
60 up in 1s47 to "a per cent, and
in 1949 to 3 per cent.
"As matter of fact. they are
more at per cent than
was expected to be collected at 2
per cent when the Social Security
Act was written" Senator Vanden-
berg observed.
Il think the question should be
settled once and for all, instead Of
bite at time every year. We can
not go on handling this highly
technical question on the floor OF
Congress"
Senator Vandenberg emphasized
that postponement of the increased
payroll tax bears no relation to the
question of expanding social Sc
curity coverage.
Favsrx Expanded Coverage.
u am In favor of a very general
expanded coverage," the Senator
added, and a readjustment of
benefits at points where it is OBJ
viously equitable. This pending
question relates solely to what taxes