President Carter urged House-Senate Social Security conferees yesterday to drop new benefits voted by one house or the other that could cost up to $10 billion a year.
As the conferees held a first inconclusive meeting on the bill to raise payroll taxes to keep the Social Security trust fund solvent. Carter sent up a letter saying he was "deeply concerned" by several provisions that would "unwisely add to the tax burden borned by all workers and employers in order to increase benefits for a relative few. We cannot afford them at the present time."
Carter did not list the offending sections, but administration officials said the big one is a House provision to repeal and Senate language to lift the ceiling on earned income above which a retiree loses part or all of his Social Security benefits. This would cost $3 billion to $4 billion a year, depending on what version is approved.Some increase in the ceiling seems certain because both houses voted increases.
Carter also objects to a Senate provision providing for twice-a-year rather than annual cost of livingbenefit increase in period of high inflation. This could cost $3 billion a year.
Another provision he objects to because of cost is the so-called living-in-sin-repcaler, which would cost an estimated $1.65 billion a year. Present law often requires benefits reduction for widows or widowers who remarry and thus encourages couples to live together without marrying.
The President also object to a Senate provision reducing payroll taxes by 10 per cent for non-profit organizations and state and local governments whose employees are covered by Social Security. The argument made for this is that these employers, unlike private companies, pay no income taxes and cannot deduct the Social Security tax a business expense.
The two bills are generally similar in their main thrust, which is to bring in more than $200 billion in additional taxes during the next 10 years to shorep up the dwindling balance in the trust fund that pays retirement benefits.
Both houses rejected Carter's proposal that, for the first time, incometax funds from the Treasury be used to help finance the Social Security system. Financing through the first 40 years has been from a payroll tax borned equally by workers and employer.
The House took a first step by voting standby authority for loans from the general fund when the Social Security trust fund dips to less than 25 per cent of its total payout during the previous year. Rep. Al Ullman (D-Ore,), chairman of the House Ways and Means Committee said this was only fair since the Treasury has been borrowing from the Social Security surplus for years.
But Sen. Russell B. Long (D-La.). leader of the Senate conferees, said he was strongly opposed because there is nothing in the general fund but a $60 billion deficit and it would just require printing more money.
The conferees took no action on any controversial issues yesterday. They will meet again Monday.