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Strapped social security faces an uncertain future

Social security checks to be mailed in late June to 35 million Americans are expected to be at least 14 percent higher as a result of inflation over the past year -- seriously straining the reserves of an already financially troubled program.

The increase, to be announced April 22, is likely to add $67.50 to monthly benefits of retired couples 65 or over, giving them $549.50 a month or $6,594 a year. It will be the largest since the Social Security Administration began adjusting benefits to rising living costs in 1975. The last increase in July 1979 was 9.9 percent.

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The 1980 boost, if 14 percent, would swell social security's payout by an estimated $15 billion a year and is expected to have an immediate impact in a developing fight in Congress for and against changes in the system.

Under a congressional mandate voted three years ago, the social security payroll tax is scheduled to rise next Jan. 1 from the present 6.13 percent to 6. 65 percent of gross salary and the earnings base on which the tax is paid is to go up from $25,900 a year to $29,700.

While this would pay for some of the increased costs of benefits, the Carter administration and many in Congress say they feel that others steps should be taken to reinforce vulnerable social security reserves.

Basic benefits would not be affected by any of the current proposals. Cuts are being considered in rollbacks and benefits for workers who are disabled and widows and children of deceased workers. Another major peoposal would raise the age of eligibility for benefits from 65 (62 with reduced benefits) to age 70 by the year 2000.

The AFL-CIO and organized labor generally strongly oppose any cutbacks "in the name of budget-cutting" as potentially a severe hardship on millions of Americans. Bert Seidman, director of AFL's social security department conceded recently that "the budget-balancing fever is running strong and . . . social security might be affected." He foresees a hard fight ahead.

On another front, a bipartisan effort is under way to block any proposed changes and freeze the social security payroll tax at its present rate of 6.13 percent at least through 1981 and to reduce the rise in the earnings base for tax purposes to $28,200.

Many other changes are being debated, and almost all are controversial. One would tax a part of social security benefits, perhaps 50 percent of the total, along with other income. Another which has stirred a storm of protest among government employees would merge the federal Civil Service retirement program with the social security program. President Carter has promised that he will veto any legislation that would do this, and organized labor is opposing it.

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Labor and many in Congress suggest using general revenue to help finance parts of the social security program. Mr. Seidman said in Washington that this would be "a practical first step" toward ending total reliance on the payroll tax.


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