The Social Security tax bill was cleared for final congressional action today after Senate conferees dropped their insistence on a controversial college tuition tax credit.
After it passes the tax bill, Congress plans to adjourn until Jan. 19.
House leaders and the White House had agreed to set up a House vote on the $250-a-year tuition tax credit by stripping it from the Social Security bill, having the Senate attach it to a minor House tariff bill and then send it back to the House for a decision. If the House passed it, President Carter could then veto the credit bill if he wished without killing the Social Security bill, which he urgently wants to replenish the Social Security trust funds.
But at a final meeting of the conferees yesterday, Sen. William V. Roth Jr. (R-Del.), leading sponsor of the tuition credit, said he had decided this would be a hollow victory. He agreed simply to drop the issue for now but promised to be back with it next year and predicted the college credit would soon be enacted.
Roth rejected one proposed compromise of a study by the Department of Health, Education and Welfare. "I don't want a study by people who have been fighting tooth and nail to kill it," he said.
The proposal to attach the tax credit to a throwaway bill "might be good politics" but wouldn't get the bill passed, he continued.
Roth said he had no desire to embarrass the President or hold the Social Security bill hostage. So he said he would follow former Sen. George D. Aiken's advice on how the United States could get out of the Vietnam war: Just declare you've won and go home.
Both House and Senate plan to give final approval today to the compromise version of the Social Security bill, which will produce $227 billion in new taxes over the next decade. Then they plan to adjourn for the year. That will leave Carter's No. 1 legislative priority, the omnibus energy bill, unsettled until next year.
Ordinarily the House would need a two-thirds vote to take up the Social Security bill so soon after the conference. But officials said that, under the complicated House rules, they can do it by majority vote if they first pass the final adjournment resolution.
Rep. Al Ullman (D-Ore.), House Ways and Means Committee chairman, said the college tax credit will be considered by his committee next year as part of an overall review of the tax system.
Roth said he has pushed the credit proposal since he has been in Congress because he thinks everyone should have a chance to go to college. He denied administration assertions that it is a program for the rich. Ninety per cent of the beneficiaries would be families with annual incomes of less than $25,000, he said.
Unlike most Social Security bills in the past, this one provides no general increase in benefits, although there are some improvements in special categories. For instance, the limit on earned income for retirees without loss of some benefits will be increased from $3,000 to $6,000 in steps by 1982.
Mostly, it is a tax increase. For the highest paid workers, Social Security taxes deducted from paychecks will triple over the next decade because of increases in the tax rate and the wage base on which it is paid. Payments by the lowest-paid workers will go up 20 per cent because of the increase in the tax rate.
HEW Secretary Joseph A. Califano Jr. issued a statement calling the conference agreement "an example of responsible and courageous government." Final passage, he said, "will assure that millions of our senior citizens can rely on the financial integrity of the Social Security trust funds."
If the higher taxes had not been voted, the old age retirement fund was expected to run out of money by 1982 and the disability fund by early 1979.