the action is taken prior to July 1, 1957. This provision would apply to the States of Nevada, New Mexico, Oklahoma, Pennsylvania, Texas, and Washington, and to the Territory of Hawaii.

Policemen and firemen in the States of North Carolina, South Carolina, and South Dakota.-The Social Security Amendments of 1954, which made old-age and survivors insurance coverage available to most employees under retirement systems, continued the exclusion of policemen and firemen at the request of policemen's and firemen's organizations. Your committee has been requested to remove the bar to coverage of policemen and firemen employed in the States of North Carolina, South Carolina, and South Dakota. Accordingly, your committee has added to the House bill a provision making coverage available to policemen and firemen in these States, subject to the same conditions that apply to coverage of other employees who are under State and local retirement systems, except that where the policemen and firemen are in a retirement system with other classes of employees the policemen and firemen may, at the option of the State, hold a separate referendum and be covered as a separate group. (4) Agricultural labor

Modifications in coverage test.-Under the present law, an agricultural worker is covered by old-age and survivors insurance for his work for an employer in a calendar year if he is paid $100 or more in cash wages by that employer during the course of the calendar year. The bill would, generally speaking, increase to $200 the amount of cash wages that an agricultural worker must be paid by an employer in a calendar year in order for his services to be covered. However, farmworkers who perform agricultural services for an employer on 30 or more days during a calendar year for cash pay at a rate which is based on some unit of time such as an hour, a day, or a week, would be covered regardless of the amount of their cash wages. Piece-rate workers would be covered only if they are paid at least $200 in cash wages by one employer.

The bill would, in effect, provide old-age and survivors insurance coverage only for farmworkers who work a considerable period for an employer, thus easing the social security recordkeeping and reporting responsibilities of many farm employers who employ short-term seasonal workers. While the bill would execude from coverage some workers who would be covered if the present $100-cash-wage test were retained, it would extend coverage to a group of farmworkers for whom old-age and survivors insurance coverage is especially desirable. The group not covered under present law who would not be covered is composed primarily of workers who, though not paid as much as $100 in cash wages by any one employer in a year customarily are in the labor force; many of them, especially those who receive a large part of their pay in the form of board, or board and room, work for 1 employer longer than the required 30 days and are regarded as regular employees. On the other hand, many of the workers who would be excluded from coverage by the bill are persons not normally in the labor force, such as children and housewives.

Crew leaders deemed employers of crew workers.-The bill provides that if a "crew leader," as defined in the bill, furnishes workers to perform agricultural labor for another person the workers would be the crew leader's employees, and that the "crew leader" would be

self-employed. The term "crew leader" means a person who furnishes individuals to perform agricultural labor for another person, pays such individuals for their work, and is not designated, by written agreement with the person for whom the agricultural labor is performed, as an employee of such person.

Many farmers throughout the United States, particularly growers of cotton, fruits, and vegetables, require a sizable labor force for a short period, especially during the harvest of their crops. Frequently they obtain the workers through persons known as "crew leaders" (or known by other designations such as "labor contractors" and "row bosses") who recruit crews of workers and transport them to the farms. The identity of the employer of such crews of agricultural workers (as between the crew leader and the farm operator) must be determined, under present law, by examining the employment relationship in the light of the common-law control test. It is often difficult for the crew leader and the farm operator to make this determination. Moreover, if it is determined that the farm operator is the employer, he may have difficulty in obtaining the necessary information about each individual worker in the crew for social-security purposes. Your committee believes that deeming the crew leader to be the employer of the individuals he recruits and pays would simplify the reporting of workers for social-security purposes, and would also be to the advantage of many of the farm workers who customarily work as members of a crew. Since they generally work for the same crew leader longer than for a single farm operator, they will have a better chance of having their farm work covered by old-age and survivors insurance. Also, a larger proportion of their farm wages will be covered if the crew leader is the employer.

The number of additional farm workers who could be covered under old-age and survivors insurance by the two provisions just described (the 30-day test and the provision under which certain crew leaders would be the employers of agricultural workers) would tend to offset the number of farm workers who would be excluded from coverage by the provision that substitutes a $200-cash-wage test for the present $100-cash-wage test. At the same time, the bill would ease the social security recordkeeping and reporting job of many farm employers.

Temporary foreign agricultural workers.-Your committee has previously recognized the undesirability of covering foreign agricultural workers who serve only temporarily in the United States, and the present law excludes service performed by foreign agricultural workers from Mexico hired under contracts made in accordance with title V of the Agricultural Act of 1949, as amended, and service performed by foreign workers lawfully admitted from the British West Indies on a temporary basis to do agricultural labor. Your committee bill would broaden the present exclusion so that it would apply uniformly to service performed by foreign workers admitted on a temporary basis from any foreign country to perform agricultural labor.

Turpentine workers.-The House bill would extend coverage to an estimated 20,000 workers engaged in the production of turpentine and gum naval stores. This provision was deleted by your committee. Under the committee bill, services in the production of gum naval stores would continue to be excluded from coverage.

(5) United States citizens employed outside the United States by foreign subsidiaries of American employers

Under present law United States citizens working outside the United States for foreign subsidiaries of American corporations may be covered under old-age and survivors insurance by means of voluntary agreements between the parent corporation and the United States Government. Coverage is available only to American citizens who are employed either by a foreign subsidiary in which the American corporation holds more than 50 percent of the voting stock, or by another foreign corporation in which such subsidiary holds more than 50 percent of the voting stock. Under an amendment added to the bill by your committee, the present provision would be broadened to make coverage available to American citizens employed by a foreign company in which the American corporation holds 20 percent or more of the voting stock.

Under the amendment, as under present law, if any of the American citizen employees of a foreign company are covered under an agreement all of them must be covered. This requirement is intended to prevent adverse selection. Your committee believes, however, that it may be unduly restrictive in its effect on the coverage of American citizens employed abroad. Accordingly, we have asked the Department of Health, Education, and Welfare and the Treasury Department to study the operation and effect of this requirement with a view toward recommending changes that would make coverage feasible for additional United States citizen employees of foreign subsidiaries of American employers.

(6) Ministers

The social-security amendments of 1954 made old-age and survivors insurance coverage available to ministers generally (and members of religious orders). This coverage was provided by permitting the minister to file a certificate indicating his desire to be covered as a self-employed person, regardless of whether he is self-employed or working as an employee. Special provisions were included to permit ministers who are United States citizens working abroad for American employers to pay self-employment contributions and receive credit for their wages and salaries under old-age and survivors insurance. Because of the definition of what constitutes an American employer American ministers serving as pastors of churches in foreign countries cannot, in some situations, secure coverage under these provisions even though their congregations are composed predominantly of American citizens. Your committee has added to the bill a provision that would make coverage available to these American ministers beginning with the first taxable year ending after 1954 for which coverage is elected. (7) Employees of the Tennessee Valley Authority and the Federal home loan banks

The House bill would have extended coverage to certain employees of the Tennessee Valley Authority and employees of district Federal Home Loan banks. These provisions were deleted by your committee because the employees are already covered under retirement systems and we feel that social-security coverage should not be extended to them until there is further evidence that the resulting total benefit amounts would not be excessive.

IV. LOWERING OF ELIGIBILITY AGE FOR WIDOWS INSURANCE BENEFITS

Under present law the qualifying age for receipt of monthly insurance benefits for all aged beneficiaries is 65. The bill would lower the qualifying age to 62 for widows of insured workers. As a result, about 200,000 additional widows would become eligible for benefits in September 1956. The reduction in the qualifying age for widows means the addition of about $20 billion to the $90 billion now estimated to be the face value of the protection in the form of benefits paid at age 65 and over to widows of insured workers.

Many women widowed in their fifties or early sixties have never worked or have not had recent work experience and find it difficult to secure jobs. Many are left with no financial resources and face the alternatives of being dependent on their children (who are themselves attempting to make ends meet while raising their own families), or of seeking assistance from public or private welfare agencies.

There is no such compelling reason for lowering the eligibility age for wives. An elderly couple has the husband's benefit in the interval between the time when he retires and the time when his wife becomes eligible for a wife's benefit. The couple is thus in a more advantageous position than a widow.

Studies by the Social Security Administration show that in 98 percent of the cases a man's decision on when to retire and apply for benefits is not based on whether his wife is also eligible. All in all, there is no convincing evidence that any real social need for an earlier eligibility age for wife's benefits would justify the greater cost involved. So far as women workers are concerned, there are indications that lowering the eligibility age for them might prove positively harmful to their welfare. If the eligibility age were lowered for working women, some employers would terminate the employment of their women employees at an earlier age than they do now, and some employers would lower hiring age limits and thus make it more difficult for women in their late fifties to get new employment. If women were retired earlier than at present, there would be a shorter period in which they could build up retirement assets and a longer one over which such assets would have to be spread. And not only would earlier retirement lower the living standards of women workers; it would deprive them of the feeling of pride and usefulness than for many comes only from satisfactory work. Moreover, if women workers were retired earlier, the Nation would be deprived of their contribution to production and the ratio of nonproducers would be increased. Thus it is important both to the individual and to the national economy that job opportunities for older persons be increased rather than reduced.

A reduction in the eligibility age for women workers would be contrary to current trends in lifespan, employment, population, and private pension plans. Women are living longer and working longer today than ever before. On the average, the woman who reaches 65 may now expect to live past 80. And the average length of life for women is 6 years greater than for men. In the past 15 years, the proportion of women aged 60 to 64 who are in the labor force has almost doubled. And while many private pension plans in the past provided a lower retirement age for women than for men, this trend has been reversed; most now provide the same for both men and women. Many public

and private programs are being set up for the purpose of opening up new job opportunities for older workers. Lowering the qualifying age for women workers could make it more difficult for these programs to accomplish their purpose.

The disadvantages of a reduction in the eligibility age for women workers have been recognized by various women's organizations, which have strongly opposed the idea of differential treatment of men and women workers under old-age and survivors insurance.

The cost of providing benefits at age 62 for all women, as in the House-passed bill, is estimated at about $400 million in the first year of operation and $1 billion a year by 1970. The level-premium cost of the program would be increased by 0.56 percent of taxable earnings, as compared with 0.20 percent for widows alone.

Moreover, reduction in the eligibility age for all women would raise sharply the issue of a reduction in the eligibility age for men also. A reduction in the age for men would be even more undesirable than a reduction in the age for women, and would be extremely costly. If the eligibility age were lowered for both men and women, the levelpremium increase in cost would be 1.10 percent of taxable earnings.

V. INVESTMENT OF THE TRUST FUND

The Social Security Act provides that the managing trustee (the Secretary of the Treasury) shall invest such portion of the old-age and survivors insurance trust fund as is not in his judgment needed to meet current withdrawals. These investments must be made in interest-bearing obligations of the United States or in obligations guaranteed both as to interest and principal by the United States. Your committee believes that this method of investment of the trust fund is sound and should be continued.

Much of the holdings of the trust fund are special obligations issued exclusively to the fund. These special obligations are required by law to bear a rate of interest equal to the average rate borne by all interest-bearing obligations of the United States. This average interest rate, if it is not a multiple of one-eighth of 1 percent, is reduced to the next lower multiple of one-eighth of 1 percent.

Your committee believes that the investments of the trust fund should reflect the essentially long-term nature of the investments. We also believe that public understanding of the financing provision will be enhanced, and criticism based on misunderstanding avoided, if it is made clear that bonds purchased by the trust fund are as much a part of the public debt as any other obligations of the Federal Government. We have therefore referred to the special obligations as "public-debt obligations for purchase by the trust fund." The special obligations would have maturities fixed with due regard for the needs of the fund. The interest rate on these obligations would be equal to the average rate of interest borne by all marketable interestbearing obligations of the United States not due or callable until after the expiration of 5 years from the date of original issue. The interest rate, if not already a multiple of one-eighth of 1 percent, would be rounded to the nearest multiple of one-eighth of 1 percent.

These changes have been recommended by the Board of Trustees of the trust fund. The exclusion of interest rates on short-term obligations in fixing the rate for public-debt obligations for issue to