Evening star. [volume] (Washington, D.C.) 1854-1972, 1963-06-01
OASI Now and Then

In the defense of OASI
finance In Sylvia Porter's
Social Security System Com
ing out of the Red" I am re-
minded Of the guilty Queens
comment at viewing "the play
within the play; "The lady
doth protest too much, me-
thinks"
The 1885 presentation to
Congress of the "Old Age
Benefits" system also claim
ed soundness, balance, pre-
dictability. There was as
sumed definite precision. in
the hastily prepared forecast,
running up to 1880, with in
come and disbursements pro-
ducing a residual trust fund
(then called the reserve) of
SAT billion.
1t is instructive to go back
to those days of innocence
to examine the then forecast
for the six calendar years
1957-1962. In that forecast,
the tax rates during this pc
riod were to be 3 per cent
from employers total of 6
per cent of the wage of the
covered individual up to
$4,000 annually. That 6 per
cent was to be the top rate.
Due to reaching that rate
In 1919, and with the slow
easing in of age benefit pay
mentS, these six years were
to witness a trust fund in
crease Of So billion. The pc
Rod did witness a decline in
the trust fund of 81 billion.
That was q total difference
for those 6 years of $12 bill
lion, a deficiency in growth,
a striking difference between
prediction and performance.
For the calendar year 1862
the income from taxes and
interest was four times that
predicted. With a smaller
trust fund, the expected ratio
of the interest element to the
tax element of As per cent
turned out to be one-ninth
that ratio, or 5 per cent.
For that calendar year
1862, moreover, the disburse-
ments were eight times those
predicted. They were $4,000
times the 81 million of bene-
fits paid in 1887, the first
year Of operation Of the sys-
tenn. From the beginning
there were old age and sur
vivors benefits-but the new
name for the system was
adopted in the 1889 amend
ments. which renamed the
reserve" to be the trust
fund" And from the begin
ming, there was Section 1104:
Reservation Of Power. The
right to alter, amend, or re-
peal any provision Of this
Act is hereby reserved to the
Congress" This right has
been repeatedly exercised,
seven times. In this program
of such largely deferred
benefits, the current benefit
carries at the end of 1862
presumably expect" at least
500 billion beyond the trust
fund Of $l8 billion at the
end Of the year.
II the claim Of perpetual
increase In wage dollars is
accepted, this could mean
prospective benefits of So
trillion to the l00,000.000
covered persons not yet re-
tired" It would undoubtedly
mean further increases in
tax rate beyond those al
ready determined for 1865
and 1868, applied TO earnings
beyond the $4,000 now in the
law. On the modest side, both
Senator Harry Flood Byrd
and Maurice STAINS note 81
trillion OF commitments" TO
future citizens 10 be paid for
by future taxpayers - "a
hefty mortgage against the
economy" 49, for all the long
range activities Of the Ma
tional Government.
The individual OASI tax
payer started with an aver
age personal tax OF 50 that
held for four years, but II
has since increased ten-fold.
II is scheduled 10 increase
about a third more In five
years. But the chap starting
work In 1868 with a tax
rate OF ga is the one de-
serving our sympathy. The
unmet burden OF the bal
ance over the long :
run" falls upon him. There
are nearly 10 million old
age primary beneficiarics
who for themselves and their
families are expecting 10 get
dollars Of benefits for nickels
OF personal OASI tax pay
ment. The youngsters are not
going 10 enjoy being the
fall guys" Nor do the TO-
100000 enjoy the sense OF
being dependent upon the
younger taxpayers.
w. RulOn Williamson