Hustling Homeward

At the end of a long voyage through a long fog, there comes a time when visibility improves, when men can again take a sight on the sun and calculate their day of making port. Last week, after nearly six months in a legislative pea soup. Congress suddenly reached the fringes of the murk. The gentleman from Texas said to the gentleman from Oregon and the gentleman from Oregon said to the gentleman from Maine: "It looks like we might go home about the 15th of July." Then they all said to one another: "But if we're finishing by then, we've got to get a hustle on." So last week Congress was hustling as it had not hustled since it first sat in January.

Social Security. In five days the Senate polished up, passed and sent to conference one of the great omnibus measures of the session--the Social Security Bill. Besides appropriating a few (50) millions for poor mothers, crippled children, the blind and public health work, it combined four major schemes, meaning much to many millions of citizens:

1) To impoverished oldsters it promised pensions. Beginning July 1 a person of 65 or more who lives in one of the 33 states which gives him an old age pension, instead of sending him to the poorhouse, will receive from the Federal Government a second pension, the same size as that given by the state, but not more than $15 a month. By a special Senate amendment poor oldsters who live in the 15 states which have no old age pension laws will get a Federal pension up to $15 a month for two years. By that time the Government expects every state in the Union to have caught up with the old age pension procession.

2) Beginning Jan. 1, 1942 any worker* who retires at the age of 65 will be paid an annuity by the Government if he has earned $2,000 in wages during five or more years after 1936. If he earns $100 per month and has worked five years under the plan, he will get $17.50 a month; if he has worked 15 years, $27.50; if he has worked 25 years, $37.50; if he has worked 45 years (that cannot be before 1982), $53.75. The top figure for anyone at any time will be $85 a month. If he dies before he is due for an annuity, the Government will pay his estate an amount equal to 32% of the wages he has earned after 1936. No matter how high a man's salary may be, he will get these annuities provided he retires at 65, but only the first $3,000 of his annual earnings will be treated as wages in calculating his annuity. One exception to this annuity system was provided by the Senate: Employes of firms which have approved pension systems may continue under them instead of under the Government plan.

3) After two or three years any worker who becomes unemployed may draw "unemployment benefits." Whether he gets anything and how much he gets depends on whether his state has a going unemployment insurance system. The Federal Government beginning in 1936 will tax all employers of four or more workers unless such employers contribute to their state unemployment insurance fund. New York State's system, created last spring, provides that after Jan. 1, 1938 any man who has worked 90 days in the previous year or 130 days in the previous two years will, three weeks after becoming unemployed, draw benefits amounting to half his weekly pay (but not less than $5 nor more than $15). If his unemployment is due to discharge for misconduct or labor trouble he has to wait ten weeks. The number of weeks he gets unemployment benefits is limited to 16 in one year.

4) All the foregoing blessings are not to be conferred for nothing. The Social Security Bill is also one of the greatest tax bills ever passed in the U. S. To provide unemployment insurance the Federal Government will tax employers 1% on their payrolls in 1936, 2% in 1937, 3% thereafter. The states may claim up to 90% of this amount for their unemployment insurance systems, but it will all be deposited in the Federal Treasury to the states' credit. To pay for retirement annuities there will be twin taxes on employes' pay envelopes and on employers' payrolls. The tax on each: 1% beginning in 1937, increasing 1/2% every third year until it reaches 3% after 1948. These twin taxes apply to all wages although high-salaried employes will receive pensions only on the basis of $3,000 per year income. All these taxes are expected to bring in about $3,000,000,000 a year after 1948--almost as much cash as has ever rolled into the U. S. treasury in any one year. The U. S. Government will in effect become a great U. S. Insurance Co. and for a time at least the Administration may not have to worry about where its next billions are coming from.

Labor Bill. Same day that the Senate passed the Social Security Bill, the House passed the Labor Disputes Bill, sent it likewise to conference. This act will establish a new class of crimes of which employers only can be guilty: "Unfair labor practices." These will include coercing employes not to join a union, dominating or contributing money to a union (i. e. having a company union), "refusing to bargain collectively." Besides assuring Labor of its right to organize and bargain collectively--the substance of section 7a of the late Recovery Act--the measure gives new powers to the Labor Board, provides that any union wanning a majority of the votes in a plant election shall represent all employes in that plant.

Many a good lawyer regards this Labor bill as unconstitutional. Although the House dressed it up, it attempts to do exactly what the Supreme Court declared the Government could not do in the Schechter Case: use the interstate commerce clause of the Constitution to regulate Labor relations in intrastate business. Even if the Supreme Court eventually throws the whole legislative contrivance out the window, A. F. of L., in the meantime, hopes to use it to wreck some company unions, get more members for its own unions. Under such pressure, the House last week turned political coward, refused to take a record roll call, passed the bill with an anonymous whoop.

Other Bills on the Congressional frying pan which had to be cooked and served the country before Congress could head for home:

P: TVA Amendments, already passed by the Senate but tabled by the House Military Affairs Committee (TIME, June 3), were last week untabled and rigorously reamended to curb TVA's powers: its borrowing power was held down to $50,000,000; it was forbidden to buy private utilities for resale to cities; all its operations were to be audited by the Comptroller General; sale of its surplus power below cost was forbidden after July 1, 1937

P: Public Utilities Bill, already passed by the Senate, was, in defiance of President Roosevelt's wishes, completely revised last week by the House Interstate Commerce Committee. Out went the Senate's "death sentence" for holding companies and in went stiff Government regulation.

P: The Bankhead Bill, authorizing a $1,000,000,000 bond issue to help tenant farmers buy their own farms, was passed by the Senate and sent to the House.

*Except casual workers, farm hands, domestic servants, Federal and state employes, workers for non-profit religious, scientific, charitable, literary, educational institutions.

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