Congress Nets Two Big Ones

Retirement and jobs bills pass

Thanks to some slick parliamentary maneuvering and old-fashioned political horse trading, two hotly debated pieces of social legislation came to the end of a long legislative haul last week virtually intact.

Most significant, the landmark $165 billion Social Security bailout package cleared its final hurdles with last-minute alacrity, if not grace. With only hours to go before a scheduled ten-day Easter recess, the Senate raced to endorse the Conference Committee compromise. The vote was 58 to 14; the night before, the House had nodded its approval with a 243-to-102 vote. "This is not a perfect bill," declared weary Senate Majority Leader Howard H. Baker Jr. "But we are not a perfect body. It is not the last word, but it is the best we can do at this time." Said Republican Barber Conable, ranking member of the House Ways and Means Committee: "It may not be a work of art, but it is artful work."

It almost did not get done, even though nearly everyone agreed on the urgency of the problem. Without substantial reform, the Social Security system was projected to go broke by July 1. Its estimated deficit over the next 75 years was $1.8 trillion. After a year of debate, the bipartisan National Commission on Social Security Reform weighed in with its solutions on Jan. 15. Though the commission package remained largely intact in the version approved by the House on March 9, the Senate tripped up over two snags that embroiled the chamber in nearly a week of filibustering and feuding.

The first was an effort, supported by the powerful banking lobby, to attach an amendment to the Social Security bill that would delay by six months a requirement that banks withhold taxes on dividends and interest. This proposal, advanced by Democratic Senator John Melcher of Montana, was a modified version of an effort to repeal the withholding requirement outright. The week before, Wisconsin's Republican Senator Robert W. Kasten tacked the repeal proviso on to the Senate's $5.1 billion jobs bill and got trounced.

The withholding measure ignited an acrimonious dej`a vu debate. "It is a second shot by the American Bankers Association not only to hold up the jobless and homeless but now all those who depend on Social Security," fumed Kansas Republican Robert Dole, chairman of the Senate Finance Committee. At a White House meeting of congressional leaders, President Reagan also lashed out. "I've had it up to here with the bankers," he declared, throwing his glasses on the table. "They're sitting on their keisters when they should be lowering interest rates." The outbursts had their effect. The Senate dumped Melcher's amendment with a deft procedural gambit.

A second snag developed over an amendment, introduced by Democratic Senator Russell Long of Louisiana, to postpone the inclusion of new federal employees in the Social Security system. That effort, too, was thwarted by a clever parliamentary maneuver. In the House-Senate Conference Committee, where final wrinkles were ironed out, the conferees agreed on the House version of the reform that would gradually raise the retirement age to 66 by the year 2009 and to 67 by 2027. Despite the tinkering, the Social Security bill remained largely faithful to the recommendations of the bipartisan commission. Said Reagan, clearly pleased: passage "brings us much closer to ensuring the integrity of the system. A dark cloud has been lifted."

The reform measure generates added revenue in three ways: 1) it speeds up tax increases already scheduled for 1985 and 1990; 2) it delays from July 1 to the beginning of 1984 the cost of living adjustment for beneficiaries; and 3) for the first time, it treats as taxable income half of the Social Security benefits of higher-income individuals (those with annual incomes over $25,000) and couples (those with annual incomes over $32,000). The Social Security tax on self-employed people, now 9.35%, would be increased to equal the combined employee-employer rate of 13.4%. State and local government employees currently covered by Social Security will not be allowed to opt out; the approximately 900,000 employees of nonprofit organizations who are not already members will be required to get in. The President, Vice President, federal judges and members of Congress, previously exempt, would also be brought into the system next January.

Attached to the reform bill was one of Reagan's major Medicare proposals: the "prospective payment" plan. As matters now stand, the Government reimburses hospitals for all "reasonable" charges associated with a Medicare patient. The new provision would preset fees for medical services, broken down by geography over nine regions of the country, and, after three years, establish a single national rate schedule. The Government will reimburse hospitals at these fixed rates but no more, creating an incentive to cut costs.

By week's end the President was in a position to sign a second high-profile piece of social legislation into law: the $4.6 billion jobs bill. The final roadblock was cleared when the House agreed to a compromise formula allocating about $2.1 billion of the funds to the areas of highest unemployment. The measure is expected to create 400,000 jobs. This file is automatically generated by a robot program, so viewer discretion is required.