Veto of Bill To Exclude Vendors of Newspapers and Magazines From Social Security Coverage.

To the House of Representatives:

I am returning herewith, without my approval, H.R. 5052, a bill "To exclude certain vendors of newspapers or magazines from certain provisions of the Social Security Act and the Internal Revenue Code".

This bill is identical with H.R. 3997, which I declined to approve in August, 1947.

This legislation has far greater significance than appears on the surface. It proposes to remove the protection of the social security law from persons now entitled to its benefits. Thus, it raises the fundamental question of whether or not we shall maintain the integrity of our social security system.

H.R. 5052 would remove social security protection from news vendors who make a full-time job of selling papers and who are dependent on that job for their livelihood. Many vendors of newspapers are excluded even at present from coverage under the Social Security Act because they are not employees of the publishers whose papers they sell. But some vendors work under arrangements which make them bona-fide employees of the publishers and, consequently, are entitled to the benefits of the Social Security Act.

If enacted into law, this bill would make the social security rights of these employees depend almost completely upon the form in which their employers might choose to cast their employment contracts. Employers desiring to avoid the payment of taxes which would be the basis for social security benefits for their employees could do so by the establishment of artificial legal arrangements governing their relationships with their employees. It was this sort of manipulation which the Supreme Court effectively outlawed in June of 1947 when the Court unanimously declared that employment relationships under the social security laws should be determined in the light of realities rather than on the basis of technical legal forms. I cannot believe that this sound principle announced by the Court should be disregarded, as it would be by the present bill.

The principal consideration offered in support of the bill appears to be a concern for the administrative difficulties of certain employers in keeping the necessary records and in collecting the employee contributions required by the social security system. In appraising these difficulties, it should be recognized that the employers have control over the form of the employment contracts and the methods by which their salesmen are compensated. The salesmen are dependent upon the employers and whatever remittances or reports are required for withholding and reporting purposes should be within each employer's reach. Certainly, the difficulties involved are not so formidable as to warrant the exclusion of these employees from coverage in the social security system and the consequent destruction of their benefit rights and those of their dependents.

It is said that the news vendors affected by this bill could more appropriately be covered by the social security law as independent contractors, when and if coverage is extended to the self-employed. Whether that is true or not, surely they should continue to receive the benefits to which they are now entitled until the broader coverage is provided. It would be most inequitable to extinguish their present rights pending a determination as to whether it is more appropriate for them to be covered on some other basis.

In withholding my approval from H.R. 3997 last August, I expressed my concern that such a bill would open our social security structure to piecemeal attack and to slow undermining. That concern was well rounded. The House of Representatives has recently passed a joint resolution which would destroy the social security coverage of several hundred thousand additional employees. As in the case of H.R. 5052, the joint resolution passed by the House is directed toward upsetting the doctrine established by the Supreme Court last summer that employment relationships should be determined on the basis of realities. The present bill must be appraised, therefore, as but one step in a larger process of the erosion of our social security structure.

The security and welfare of our nation demand an expression of social security to cover the groups which are now excluded from the program. Any step in the opposite direction can only serve to undermine the program and destroy the confidence of our people in the permanence of its protection against the hazards of old age, premature death, and unemployment.

For these reasons, I am compelled to return H.R. 5052 without my approval.

HARRY S. TRUMAN