Secretary & Program

By the terms of the Social Security Bill, enacted in August 1935, most payrolls in the U. S. are taxed 2%--1% paid by the employer, 1% by the employe--to pay for pensions for workers over 65. This enormous levy was bitterly debated in Congress before it was passed, has been bitterly debated by U. S. economists, political pundits and taxpayers ever since. Last week, two incidents caused the debate to wax more bitter than ever. One was the case of a Washington secretary named Mabel Shea. The other was a proposal to use Social Security old-age reserve funds, which will this year amount to about $400,000,000, to help promote a housing boom financed principally by private capital.

Mabel Shea works for Washington Columnist Mark Sullivan (Our Times), who pays her $35 a week. Last month, Columnist Sullivan used the case of his secretary to illustrate two stanchly conservative theories: 1) that by deducting 1% of her salary for an old-age pension the Government was unjustifiably meddling in her private business of deciding whether or not to save her money, and 2) that, even more deplorably, the Government's handling of the money which it forced him to deduct from her salary was highly unbusinesslike, if not downright dishonest. The law, said Columnist Sullivan, had promised that all such collections would be saved up for use in paying the pensions. Instead, the Treasury was using the money to pay current expenses in a fashion which would cause a private citizen who followed the same procedure to "go to jail quickly and for a long time."

What actually happens is that the Treasury sells its own bonds to the Social Security old-age reserve fund. The fund pays for the bonds with Social Security taxes, which the Treasury then uses for general Government expenses. In effect, instead of selling bonds to the public to pay the deficit, the Treasury sells bonds to itself.

Three days after Mark Sullivan had introduced the subject of his secretary, Columnist Walter Lippmann, whose articles appear on the same page of the New York Herald Tribune as Columnist Sullivan's, undertook to clear up some of Columnist Sullivan's confusion by elucidating the theory of Social Security finance. He reached the conclusion that, while the Government was acting according to law, the law itself was at fault. Last week, the subject of Mark Sullivan's secretary came up again when her employer wrote a column saying that, despite Columnist Lippmann's reasoning, he was "still mystified" by what the Government was doing with its share of Mabel Shea's salary. Same day the subject of Mabel Shea jumped from the pages of the Herald Tribune into Franklin Delano Roosevelt's White House office. Grey-haired James L. Wright of the Buffalo News asked the President if he had been reading about Mr. Sullivan's secretary. While the President chuckled, Reporter Wright explained that "Walter Lippmann says that you have been taking the 35-c- a week that Mark Sullivan sends you . . . and spending it on riotous living."

Asked Mr. Roosevelt: Is Mark here?"

"Yes," drawled Columnist Sullivan.

The President then expounded briefly on Social Security without apparently enlightening Columnist Sullivan sufficiently to provide him with material for a further dispatch on the subject during the week. Meanwhile, in Washington, Mabel Shea had become a sufficiently newsworthy figure for the Herald Tribune to devote some space to her own state of affairs. A sedate, greying personage with tortoise-shell glasses and schoolteacherish appearance, Miss Shea, whose $35 a week salary is the reward of having worked for Columnist Sullivan the past 17 years,* surprised reporters by announcing that she was a confirmed New Dealer who not only had no objection to having Social Security taxes deducted from her pay but argued with her employer whenever he found fault with the Administration, which is approximately every time he writes a column.

Housing Program. A problem whose complexity is exceeded only by its grandeur, Social Security probably puzzled the nation last week no more than it teased the nation's Government. Coincidentally with Franklin Roosevelt's consideration of the subject of Mark Sullivan's secretary, it was learned that his advisers were seriously considering a proposal, first publicly broached by C. I. O.'s Philip Murray at a meeting of the Social Security Advisory Council last fortnight, to use Social Security old-age reserve fund to stimulate the long-promised but still illusory U. S. building boom. As yet only vaguely formulated, the plan was to use the Social Security Board's Government bonds, as some sort of a guarantee fund for private building loans. The mere mention of such a plan promptly produced an outraged protest from the school of political pundits who believe that the Social Security reserve fund should be used only for pensioners, and to whom the idea of using it for any other purpose sounded vaguely like robbing grandma's sock to buy young Junior a pint of whiskey.

*According to the salary lists for 1935, published by the Treasury last winter, Mr. Sullivan made $23,417.

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