The Nome nugget., 1949-03-30
THE COST OF SOCIAL SECURITY
(By Clarke Beach)

What would President Trumans social security pro- posals cost? Estimates difficult but there is in stence another government system that furnishes clues for rough comparisons It is the railroad retire ment system.
 Railroad workers retirement and unemployment in- systems provide all the benefits which the ad-
 niSraon has proposed to extend to most of the rest of the workers But the proposed social security taxes would be bargain prices compared to what the railroad . people pay.
 The administration plan is to raise social security taxes from the present per cent of payroll to one and onehaf per cent this July The tax would be raised to two percent Jan 1850 As the tax is paid both by employer and employee, this would make the total tax at each rate two three and four per cent In the railroad business, both employee and management now pay a tax of six per cent of payroll making total of 12 per cent In 1852, the tax will be boosted to 6H per cent each.
 The railroad men believe there will be plenty of money to pay the bills without additional taxes They don't expect to ask the for money The gov ernmen pays them nothing now except to keep war vet erans retirement credits equal to those who not in the armed forces.
 The social security plan, however, proposed, looks toward time in five to 10 years when it will be necessary raise the social security taxes above two per cent get subsidy One that railroad taxes high is that railroad workers with 30 years serv ice can retire with full annuity benefits although the system has been in effect only 12 years These workers get lot out of than they put into it. The system took the old railroad retirement plan, under which the railroad companies guaranteed pensions to 3Oyear 
 The Social Security system has parallel problem. It is defined by the Advisory Council Social Security, headed by Edward R. Stettinus Jr.
 'Under our recommendations, the full rate of bene- fits will be paid to those who retire during the first two three decades of operation though they pay only fraction of the cost of their benefits.
 1n social insurance system it would be negotiable to ask either employers employees to finance the tire cost of liabilities arising primarily because the act had not been passed earlier than it
 Hence it is desirable for the Federal Government sponsor of the program to at least part of these accrued liabilities based the prior service of early retirants. government contribution would be recog- milton of the interest of the nation whole in the well fare of the aged and the widows and children"
 The proposed social security taxes would not be quite low they in comparison to the railroad re- tireent tax They would be levied wages up to $400 month (compared to $25O month under the present law) The railroad retirement tax is levied wages up to $500 month Benefits would be about equal. The maximum monthly benefit railroad man and his fam fly can draw is $144 The Old Age and Survivors Social Security Insurance maximum would be $50. (The present maximum for Social Security is $85)
 A retired railroad employee, however, has very substantial advantage social security participants If he wants to get job paying any amount of money