ECONOMIC

enefit increases greater than the increase in the cost of living cannot beexpected to reduce poverty markedly in the future.Accompanying the increase in social security benefits has been a rise inthe social security payroll tax. From 1937 to 1950 the tax rate paid by both theemployer and employee was 1 percent of the worker's earnings up to $3,000.In January 1974 the social security tax rate (for OASI, and disability andhospital insurance) was 5.85 percent of earnings up to $13,200. There isreason to believe that part of the employer's tax is shifted to employees.Viewed solely as a tax, the social security levy is regressive. As a percentageof all Federal Government receipts, social security taxes increased from4 percent in 1949 to 24 percent in 1973. The social security tax is uniquein that there tends to be far less public opposition to raising revenue from thissource than from other sources.Supplemental Security IncomeAs of January 1974, Federal grants-in-aid to States for public assistanceto the aged, blind, and disabled were discontinued, and a new federally administeredSupplemental Security Income program (SSI), financed out ofgeneral tax revenues, was instituted. The primary purpose of this new programis to provide a nationally established minimum income for these threespecific categories of adults who in general cannot be expected to earn anadequate income. Most of the recipients of public assistance benefits underthe old program for the aged, blind, and disabled were in poverty in 1973(Table 45). The benefits under SSI for those with no other money incomeare $140 a month for a single person and $210 a month for a couple. Theseare to be increased to $146 and $219 respectively in July 1974. SSI recipientscannot purchase food stamps. With the federalization of assistance, benefitshave increased for the aged, blind, and disabled poor in many States, andStates can provide additional income supplements to SSIrecipients.FEDERAL FOOD SUBSIDY PROGRAMSEver since the Great Depression of the 1930's, the subsidization of foodconsumption has been a major Federal Government program to aid the poor.Food StampsFood stamps are a Federal program, initiated in 1961, to supplement theincome of the poor in participating counties. The growth of the program hasbeen phenomenal. In June 1965, 425,000 persons received food stamps at acost to the Federal Government of $33 million during fiscal 1965. By July1973 there were 12.1 million recipients, and Federal costs in fiscal 1973were $2.1 billion. In June 1973 food stamps were available in 48 Statesand the District of Columbia, and the program will be mandated for theentire Nation in July 1974. An eligible family can buy food coupons for aprice that is lower than the redemption value at the grocery store. The differencebetween the redemption value and the price of the coupons to thefamily is the subsidy.174