The Waterbury Democrat., 1944-11-30


 to provide against future monthly checks for retired workers over 65 and their families.
 The requirements to meet benefit demands were computed by some of the nations best actuaries before Social Security was provided by Congress in 1885. Oranges in the law since that time have not decreased the amount that will be needed. If anything, they have added to it.
 To provide enough money to fi- narce your old age insurance some day the actuaries found that the trust fund should get 2 per cent of what each insured worker earned, up to $3000, in the years 1887 to 1889, inclusive; 3 per cent of what each earned from 1940 to 1942, inclusive: per cent of 1943 through 1945 earnings; per cent of 1946 through 1S48 earnings; and per cent of earnings thereafter.
 The cost was divided equally be- tween employe and employer, each to pay half.
 BUT IT'S STILL 2 PER CENT
 However, by one amendment Q9S9) and two special acts (1943 and 1944 the premiums have been held at the original per cent, half from you and half from your en- ployer, and benefits were changed half from you ard half from your employer, and benebits were chang ed greatly.
 The difference between what the actuarieS said should be collected up to now to pay for these benefits, and what has been collected, is the $3,- 400,000,000 shortage, on which old age insurance clients have lost also interest on the government bonds in which the money would have been invested
 Now Senator Vandenberg of Michigan proposes to freeze the pre- mium at 2 per cent (half from em- ployes) again for 1945. This would cost the fund another $1, 300 O,00O, GOO at least, plus lost interest.
 The Social Security Board and the Treasury Department both oppose the freeze. They want the premium rate to go up next Jan. 1 to the per cent (half from the employe) that the law now provides for.
 The Board says that the benefits provided by the present law will re- quire at least per cent of the cov- cred payroll, and may call for as much as per cent. And already there is deficit of more than four billion dollars.
 Senator Vandenberg doa1n't chal- lenge those figures. He says there is conflict in the law, and uncertain ty as to how much will be needed. He wants to freeze the premium (taX) for just one more year, have experts recanvass the situation, and then adopt scale of taxes and stick to it.
 CONGRESS MAY ACT
 ON THE MATTER
 That, in substance, is the issue over Social Security taxes about which Congress may or may not act in this lame duck session.
 Unless some of the nations best actuar1eS were wrong, 1t is going to take more money than the trust fund is receiving to provide the old age retirement that you, your wife, and your dependents think you are buying.
 But behind this problem in cold mathematics lies another of logic, expediency and tax theory which may be the one that will really de- eide how large an old age tax is to be deducted from your wages.
 It is this: Should the federal gov- ernment operate like private in- surance company, protected by re- serves? Or should it function on pay-as-you- have-to basis?
 Even to state the alternatives is a trifle complicated. I'll try to make them clear in another column.