An article in yesterday's Business & Finance section listed the Social Security tax rate for 1978 as 5.85 per cent. It is 6.05 per cent.
The House Ways and Means Committee indicated yesterday that it will start work tomorrow on legislation to roll back scheduled increases in Social Security taxes for 1979 and 1980 - the first step toward possible agreement on a truncated version of President Carter's tax cut plan.
Although panel members reportedly still have not reached any consensus,Rep. Al Ullman (D-Ore.), the committee's chairman, has suggested a $5 billion reduction in payroll taxes for those years, with the money to be made up from a temporary emergency fund drawn from general revenues.
However, it was not entirely clear whether Ullman's proposal would win approval. The panel's Republicans are said to oppose the measure, and several key liberals expressed doubts about the proposal. The committee is under mandate from the House to come up with a rollback plan.
Meanwhile, committee leaders are said to be considering a plan to strip President Carter's general tax cut proposal of all of its tax "reforms" and enact a simple $16 billion tax cut measure comprising $12 billion in reductions for individuals and $4 billion for business.
Panel sources said that proposal was "only an initial feeler that is not that far along." However, serious consideration of the proposal is taken as evidence that the overall Carter tax plan still is in trouble, despite a two-week recess called to help salvage it.
Meanwhile, a top White House official implicitly cirticized the Federal Reserve Board for its recent moves to raise interest rates, but then backed away, saying he did not really intend to enter into "a public battle."
In an appearance before the Democratic National Committee, Stuart Eizenstat, the president's chief domestic adviser, said the administration had not sought the Fed's recent monetary-tigehtening steps and had "not applauded their having done it."
Eizenstat later insisted in a telephone interview, however, that he had not intended to criticize the Fed's recent policies, nor did he see any indication "that what they have done up to now" has hurt the economic recovery.
Nevertheless, his remarks appeared to reflect a growing uneasiness within the White House over the recent rise in interest rates. Other officials so far either have steered clear of the subject or hinter privately that they are not yet alarmed over the Fed's actions.
Meanwhile, the Fed split openly with the administration yesterday on the politically sensitive Humphrey-Hawkins "full employment" bill, urging Congress to include an anti-inflation goal in the legislation despite objections by the White House.
In testimony before the Senate Banking Committee, J. Charles Partee, one of the Fed's seven governors, said the board still is "deeply concerned" that the bill emphasizes reducing unemployment over slowing inflation, and recommended a specific anti-inflation goal.
The testimony was expected to heighten support for a proposal by Sen. William Proxmire (D-Wis.), chairman of the Banking Committee, to set a national goal of reducing the inflation rate to 3 percent by 1983. The administration opposes any such target as unrealistic.
Ullman's Social Security plan would reduce the payroll tax rate for 1979 and 1980 to 5.95 percent from the 6.13 percent rate scheduled under present law, but still above the 5.85 percent rate in effect this year. The higher rates were set by legislation enacted in December.
It also would reduce the amount of a person's wages subject to Social Security taxes to $21,900 in 1979 and $24,900 in 1980 - both $1,000 below what now is scheduled for those years. The wage this year is $17,700, up from $16,500 in 1977.
Ullman's porposal also would set aside $5 billion of general income tax revenues in a special emergency fund to bolster any portion of the Social Security trust fund in which reserve ratios fall below 25 percent.