THE NOME NUGGET
Published Monday, Wednesday and Friday by the
NOME PUBLISHING CO.
NOME. ALASKA
Telephone: Main 125 P. O. Box 6io
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W. A. Boucher ./.Owner-Publisher
Entered as second class matter October 14, 1943. at the postoffice
•t Nome, Alaska, under the Act of March 3, 1879.
Nome, Alaska, Wednesday, March 30, 1949
THE COST OF SOCIAL SECURITY
(By Clarke Beach)
What would President Truman’s social security pro
posals cost? Estimates are difficult, but there is in ex
istence another government system that furnishes some
•clues for rough comparisons. It is the railroad retire
ment system.
Railroad workers’ retirement and unemployment in
surance systems provide all the benefits which the ad
ministration 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 one per cent of payroll to one
and one-half per cent this July. The tax would be raised
to two percent on Jan. 1, 1950. 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
lax of six per cent of payroll, making a total of 12 per
•cent. In 1952, the tax will be boosted to 6r4 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 government for money. The gov
ernment pays them nothing now except to keep war vet
erans’ retirement credits equal to those who were not in
the armed forces.
The social security plan, however, as now proposed,
looks toward a time, in five to 10 years, when if will be,
necessary to raise the social security taxes above two
per cent or get a subsidy. One reason that railroad taxes
are so 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 a lot more out of it than they put into it. The system
took over the old railroad retirement plan, under which
the railroad companies guaranteed pensions to 30-year
men.
The Social Security system has a parallel problem. It!
is defined by the Advisory Council on Social Security,
headed by Edward R. Stettinius, Jr.
<fUnder our recommendations, the full rate of bene-|
fits will be paid to those who retire during the first twoj
or three decades of operation even though they pay only |
a fraction of the cost of their benefits.
“In a social insurance system, it would be inequitable
to ask either employers or employees to finance the en
tire cost of liabilities arising primarily because the act
had not been passed earlier than it was.
“Hence, it is desirable for the Federal Government, as
sponsor of the program, to assume at least part of these
accrued liabilities based on the prior service of early
retirants. A government contribution would be a recog
nition of the interest of the nation as a whole in the wel
fare of the aged and the widows and children.”
The proposed social security taxes would not be quite
so low as they seem in comparison to the railroad re
tirement tax. They would be levied on wages up to $400
a month (compared to $250 a month under the present
law). The railroad retirement tax is levied on wages up
to $300 a month. Benefits would be about equal. The
maximum monthly benefit a railroad man and his fam
ily can draw is $144. The new Old Age and Survivors’
Social Security Insurance maximum would be $150.
(The present maximum for Social Security is $85).
A retired railroad employee, however, has one very
substantial advantage over social security participants.
If he wants to get a job paying any amount of money
outside the railroad industry to supplement his retire
ment annuity, he can do so.
| • THAT’S THE SPIRIT f
Under the proposed social security amendments, a re
tired person cannot earn more than $50 a month in em
ployment of a type covered by old age insurance and
still draw his retirement benefit. (At present he cannot
earn more than $14.99 in covered employment).
The railroad and new social security plan would also
provide disability insurance.
For the railroad folk, sickness and unemployment
compensation is separate. Management foots the entire
bill. Under the new social security law unemployment
insurance would remain a state obligation. Sickness in
surance, however, would be included under the new
bill. • i
REMOVE POSTAL SERVICE FROM POLITICS i
i
The commission on organization of the executive
branch of the government, headed by former President
Herbert Hoover, recommends that the postoffice de-‘
partment be removed from politics and put on a straight
business basis. This is a sensible recommendation which
should receive the support of the people of the United
States and it will, in time, receive the support of the
necessary number of Congressmen to put it into effect.
The commission points out that the department had a
deficit of $310,000,000 last year but points out that this
had been created “by circumstances beyond the control
of officials in the postoffice department.”
Acknowledging that certain postal rates are fixed “as:
an element of public policy in the dissemination of in
formation and in the provision of services not otherwise!
obtainable by the people,” the commission recommend- :
ed that rates for registered mail, insured mail, monev:
orders, postal notes, postal cards, special delivery and:
collect-on-delivery mail should be increased to makej
these services self-supporting.
A * . « i a a . m mm m *
An interesting recommendation of the Commission is
that subsidies be paid by direct appropriation from Con
gress rather than by the postoffice department in a “hid- j
den manner.” It noted that payments to common carri-!
ers for transporting the domestic and foreign air mail i
are fixed by the civil aeronautics board at a level to pro
vide a subsidy to aviation and that the postoffice must
meet these charges.
The magnitude of the business of the postal service is
emphasized by the commission, which reports that it
employs more than 500,000 persons, operates a fleet of
more than 10,000 trucks and manages 24.000 buildings.
pi which 3,200 are federally-owned. In 1947, the postof
fice handled 37,000,000,000 pieces of free mail and more
than 800,000,000 transactions in such special services as
money orders, collect-on-delivery and postal savings.
The commission would de-centralize the postal serv
ice into fifteen regions, have the 22,000 postmasters and
other top officials named by the president without con
firmation by the Senate and have the selection and
management of most of the personnel rest in the service,
with the Civil Service Commission setting and enforc
ing standards.
Internation’I News
At A Glance —
(Contined from Page One)
ried final work on plans for re
arming the North Atlantic allies. I
The state department reported
conversations with the budget
bureau to determine a specific fig
ure for arming the pact members
and other friendly nations.
A draft agreement on an armis
tice between Israel and Trans
jordan has been approved at
Rhodes by delegations of the two
nations, and both parties prepared
to submit the draft to their re
spective governments.
Informants said the way was
paved by a face-saving agreement
for reduction of forces in the
Aqaba area, southern borderland
of the two nations near the Red
Sea.
In London foreign affairs un
dersecretary Christopher P. May
hew said Britain will tell the
United Nations the sending of Bri
tish troops to garrison the Trans
jordan port of Aqaba was purely
a defensive action, not in conflict
with the truce. U. N. mediator Dr.
Ralph J. Bunche has contended
the British action was a truce vio
lation.
The Dutch government an
nounced at the Hague today its j
readiness to meet with Indonesian -
Republicans in an effort to lay the
groundwork for peace in Indone
sia.
The announcement specifi e d
that the talks must be in Indone
sia without prejudice to the rights
or positions of either side.
Wednesday. March 30. 1949
DAMASCUS, Syria, (/P) — Brig.
Hosney El Zaim, commander of
the Syrian army, took over the J
government of Syria today.
“We have been compelled to un
dertake this change in the regime
uecause of attacks against the
army inside as well as outside the
House of Representatives, which
gave way to misrepresentation of
the Syrian army and ill treatment
of its officers,” El Zaim said.
“Another reason for it is the )
people’s discontent with the pres
ent rule and the abuse from per
sonalities handling it.”
The commander cabled the
United Nations that the Syrian
army took its action to put an end
to internal anarchy. It confirmed
Syria’s adherence to her former
agreements and respect for de
mocracy.
The United States legation at
Damascus reported to Washington
that the Syrian army has arrested
President Quawatli and his entire
cabinet and is in complete control
of the city.
The report from American min
ister James Hugh Keeley, Jr., said
the army accomplished an early
morning coup d’etat. He said the
army described its assumption of
power as a temporary measure
toward achieving a truly demo
cratic regime.
Last December there was rioting
in Syria. It expressed popular re
sentment over the government’s
handling of the Palestine war with
Israel.
As a result of the riots, Premier
Jamil Mardam Bey and his cab
inet resigned and Mardam Bey
fled the country. A successor cab
inet was formed under Premier
Khaled Bey Azem.
A Rhodes dispatch said yester
day two emmissaries of Dr. Ralph
J. Bunche, acting United Nations
mediator, were leaving for Damas
cus to lay groundwork for armis
tice legislations between Syria