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MINORITY VIEWS ON H. R. 7225

The Senate Committee on Finance had almost a full year during which the House-passed bill was before it. While the bill has been improved in several respects, the actions of the Senate Committee on Finance resulted in striking out some of the most beneficial provisions of the bill passed by the House. Specifically, we feel that the committee should never have eliminated those provisions which provided disability benefits for workers who become disabled after age 50 and those provisions which lowered the retirement age for working women, wives of retired workers and dependent mothers.

We further believe that the bill should have been amended to provide additional Federal assistance to State welfare plans for the assistance of the needy aged, blind, and totally and permanently disabled.

DISABILITY BENEFITS

The old-age and survivors insurance system now pays benefits to retired people who are 65 or over. To a considerable extent these benefits rest on a general presumption of the likelihood of serious disabilities in later life. Yet there is no magic in the selection of age 65 as the point at which workers no longer young are forced out of the labor market because of disabilities. There are around a million persons between ages 50 and 65, for example, who would be working but for serious long-term disability. At present they have little recourse but the charity of friends and relatives and the Federal-State programs of assistance to the needy.

We believe that retirement protection for the 70 million workers under old-age and survivors insurance is woefully incomplete because it does not now provide a lower retirement age for those who are demonstrably retired by reason of a permanent and total disability. We recommend the narrowing of this serious gap in the old-age and survivors insurance system by providing for the payment of retirement benefits at age 50 to those regular workers who are forced into premature retirement because of disability.

The majority report states that through the assistance programs in most of the States

provisions have already been made to meet the basic needs
of those who cannot support themselves because of extended

and serious disability. Such State welfare plans no more meet the needs of insurance to care for disability than do the welfare plans for the needy aged eliminate the need of old-age insurance.

Many States, because of inadequacy of funds, are able to provide welfare payments no greater than $35 per month. Many States have lien requirements whereby any recipient of disability assistance is subject to having his property seized and sold at his death. In addition, many States do not permit welfare assistance to any person if

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there is a relative in the family who could, if he would, provide some assistance for the needy person.

Seven States have no program whatever to provide relief in"cases of disability. Nearly a fifth of the Nation's population resides in these areas.

Under a sound social-insurance program, Americans should be protected against the fundamental hazards which would otherwise destroy their earning power and reduce them to beggary. Granted that some form of income is necessary to provide for those who are unable to provide for themselves, it is far preferable that these persons should remain proud, self-sufficient Americans rather than become hat-in-hand pleaders for public charity.

PRIOR CONSIDERATION OF DISABILITY INSURANCE For almost 20 years it has been maintained that disability benefits should be paid under our social-security program but that such benefits should be delayed for further study. Additional delay is completely unjustified.

In 1937 the Senate Special Committee on Social Security appointed a 25-member Advisory Council on Social Security composed of individuals representing employers, employees, and the public to study the social-security system. After a year of study, this nonpartisan group reported its recommendations. The council reported unanimous agreement on the social desirability of paying benefits to insured persons who became totally and permanently disabled, and disagreed only as to whether such benefits should be inaugurated immediately, or after further detailed study.

In 1947 the Senate Finance Committee appointed an Advisory Council on Social Security composed of 17 members from representative areas of American life to consider, among other questions, the advisability of initiating disability payments as a part of the socialinsurance system. In 1948 the chairman, the late Edward R. Stettinius, Jr., reported back to the committee that, after careful study of all aspects of the question, 15 of the 17 members felt that the time had come to extend social-insurance protection to the risk of loss of income from disability.

The only two dissenting members were the present Secretary of Health, Education, and Welfare and the then president of a large insurance company.

The council particularly stressed the desirability of insurance benefits related to past contributions as a matter of right rather than forcing the disabled worker to reduce himself to virtual destitution and depend upon public assistance. The council felt that the protection of the disabled worker's dignity and self-respect in this manner would play an important part in preserving his will to work and a positive attitude toward rehabilitation. Of the need for such a program, the council felt no doubt:

Income loss from permanent and total disability is a major economic hazard to which, like old age and death, all gainful workers are exposed * * * The economic hardship resulting from permanent and total disability is frequently even greater than that created by old age or death.

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In 1950, following extensive hearings, the House Ways and Means Committee favorably reported a social-security bill containing provisions for permanent and total disability insurance. The committee pointed out that the proposed public assistance program for the disabled could meet only part of the problem and that the worker who had paid social insurance contributions over a number of years had a real stake in the system which deserved to be recognized.

The Senate Finance Committee, however, disapproved the disability insurance provisions, stating in its report that

* * * further study should be made of the problem of income maintenance for permanently and totally disabled

persons. The 1950 bill, as finally passed, did not include the provisions for disability insurance, although the disability problem was recognized to a degree by the establishment of a separate public assistance program for the disabled.

In 1954 recognition was again given to the equity involved in the case of an insured worker who became disabled. The "disability freeze" allowed the disabled worker to leave out the years of disability in computing his average wages for the purpose of determining benefits payable at 65. The experience thus far under this legislation has been highly useful in demonstrating that disability can be determined administratively within the framework of our social-security system without unusual difficulty.

Over the years the experience of foreign governments in providing disability insurance has not been without value to those concerned with the problem in the United States. By 1954, 37 foreign countries had put into effect programs of disability insurance on a contributory basis, as compared to only 4 countries which had disability benefits restricted to a needs test. While the benefits in some countries are extremely low, other countries have successfully administered programs paying benefits at least as high in relation to average wages as those proposed in the United States.

In the consideration of disability insurance during the present Congress, the views expressed by those who are intimately connected with programs of public welfare have been particularly important, it seems to us, because of their close association on the local level with such problems as disability determination, adjudication, and rehabilitation.

At a meeting in Washington in March of this year, the public assistance and welfare directors of the States expressed unanimous approval of the proposed disability insurance program.

Despite the plea by the Secretary of Health, Education, and Welfare for more time, we know that the Department of Health, Education, and Welfare has made exhaustive studies over the years, and we are convinced that it is prepared to conduct a sound disability benefits program. On this point, John W. Tramburg, who served as Commissioner of Social Security under the present administration, and now is president of the American Public Welfare Association, testified before this committee:

The staff of the Social Security Administration has investigated every possible angle of this subject, such as the experi

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ence of private insurance companies and the experience of
foreign countries in the administration of disability benefits;
they have studied the disability benefits experience of the
Railroad Retirement Board and other Government agencies;
they have studied and looked into the possible ways of ad-
ministering a sound and efficient disability insurance benefit
program.

While Commissioner of Social Security I was responsible
for the early stages of planning the administration of the
disability freeze which your committee included in the 1954
social-security amendments. I know each of the officials
responsible for the administration of the disability freeze
program * * * they are as able and conscientious a group
of public officials as can be found and in their hands the basic
planning of the disability *** benefit program will be

wisely and efficiently carried out. In the light of the experience now available from so many sources, and in view of the consideration given the question of disability insurance for almost 20 years, it seems to us that the continued objections regarding the uncertainties of such a program and the continued call for further study constitute a tactical maneuver on the part of those who basically are opposed to the idea.

It is true that all of the possible administrative problems are not known, and cannot possibly be known until the program is under way. Yet as the 1937 council reported:

If the Social Security Act had not been launched until all administrative difficulties had been solved, this act would never have been put into operation.

COST OF DISABILITY BENEFITS

Much has been said about the cost aspects of the proposed disabilitybenefits program. Seldom is this cost explained in terms of additional insurance the worker is buying. American people are perfectly willing to pay a nominal increase in taxes to obtain this vital protection against expensive and unpredictable risk of a crippling illness or injury.

Under our proposal the top cost of buying this kind of protection for the employee paying on the full $4,200 would approximate $10 per year. (The approximate figure for employees is used because selfemployed individuals contribute only 172 times the employee rate and so the share for employers and employees is somewhat more than the level-premium cost.) In return he will recieve benefits of $108.50 per month if he is totally and permanently disabled after age 50, and meets the other qualifications. People with lower earnings will, of course, pay proportionately less.

These figures are based upon the intermediate cost estimates furnished to the committee which show that the level-premium cost of adding disability benefits for people 50 and over would be well under one-half percent of payroll-or 0.42 percent.

The predicated costs may indeed, be lower than the intermediatecost estimate we have used. In our judgment the Chief Actuary of the Social Security Administration has made as good an estimate of the probable cost of these proposed new benefits, and of the benefits already provided under the old-age and survivors' insurance system,

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