House Ways and Means Committee Chairman Al Ullman (D-Ore) yesterday urged the House Social Security subcommittee to adopt a "quick fix" pay-roll-tax increase to bail the system out of its immediate problems while Congress studies long-range plans for revision.
Ullman marched into a meeting of the subcommittee and told members that the idea of saving the Social Security system from immediate deficits by bringing currently exempt federal, state, local and nonprofit organization employees under the payroll tax starting in 1980 - a proposal which could raise $55 billion from 1980 to 1984 - won't fly this year.
Only a quick increase in taxes on employers and employees from 6.05% to 6.25% coupled with some increase in the wage from next year's $17,700 to $18,200, and authority to make temporary loans from the treasury, ullman said, offer an immediate way out for the troubled Social Security system.
"Time is running," Ullman said. "If you are going to try to solve all the problems of the Social Security system - you can't do it. That's a full year's work."
Ullman said that while he supports the concept of integrating federal, state, local government and nonprofit employees into the system, "I don't think it will be part of the bill . . . until you have covered the bases, developed some support in the Post Office and Civil Service Committee," developed the proper way to mesh these workers' existing pension systems with Social Security.
"We're all worried about the political consequences of voting a rate increase," said Ullman, but he said the consequences would be worse if a quick revenue boost isn't voted and retirees begin to get the idea their checks may stop.
The Social Security system is facing immediate and long-range deficits because the proportion of aged persons in the population is rising, leaving relatively fewer workers to pay taxes for the benefits of an ever-larger number of older persons. It is also running short because high unemployment rates in recent years have meant smaller revenue from Social Security taxes than anticipated.
Unless something is done, the disability trust fund will run out of money in 1979, the old-age fund by the mid-1980s.
The Senate Finance Committee had adopted a fiancing plan that would solve all problems by imposing an added $40 billion in taxes on businesses over the five years ending in 1982 - proposal that doesn't sit well with many businesses and many Republicans, particularly in the House.
The House Ways and Means Social Security subcommittee has adopted several steps to solve broad, long-range problems, but so far the only thing it has done to help the immediate deficit is vote in principle to bring billions of additional dollars into the funds by transferring 6 million federal and local government employees to Social Security. Those employees are now covered by their own retirement plans.
This provision, with a 1980 effective date, pressed by Republicans, was tentatively approved 8 to 1 by the subcommittee yeaterday, for the second time. But Chairman James A. Burke (D-Mass) warned it can't pass the House this year because of opposition from some government employee groups and the difficulties of working out a transition to the new system.