as is humanly possible. But it is important to remember that, according to past experience, the estimates usually have been higher, rather than lower, than actual costs. They are based upon the assumption that there will be no future increase in the general level of earnings. This is, of course, contrary to the actual experience in the past, particularly since 1939, since which time average weekly wages have trebled. As the actuary pointed out in his testimony before this committee, his present estimate of the cost of benefits now being paid, based on 1954 earnings, has been reduced by 0.26 percent of payroll as compared with his estimate based upon 1951-52 earnings. He also states that a "possibly lower cost" would result if the cost estimate were made on the basis of 1955 earnings. In our opinion, there is no question that such a cost estimate would be lower because of the considerable increase in earnings in 1955 as compared with 1954 and the general trend of rising wage levels that the country has experienced and will continue to experience. These figures are estimates, and costs could vary. But even on the remote possibility that the high cost figures prevail, we believe the American people would want to buy the kind of protection they will provide. According to these high-cost estimates, an employee with wages of $4,200 per year would have to pay an additional $14 per year, approximately. Under the low-cost estimates the annual cost to the same worker would be approximately $7 per year. We doubt that the cost would approach the high-cost estimates, but even if, as some people have predicted, costs would greatly exceed the intermediate estimate used in our proposal, we believe that the families of this country would want the added protection. ADMINISTRATION OF DISABILITY BENEFITS Under our proposal the determination of disability will be made by the State agencies which make the determinations under the disability "freeze" provision enacted in 1954. The Department of Health, Education, and Welfare now has agreements with 36 States, the District of Columbia, and Puerto Rico to make such determinations. In all but 5 of these 38 jurisdictions, there are agreements with State vocational rehabilitation agencies. Eleven additional States and two Territories have designated vocational rehabilitation agencies to enter into agreements for this purpose, and it is expected that these agreements will be completed in the near future. În the few States where the State agency designated is the public welfare agency rather than the rehabilitation agency, working relationships have been developed for the proper referral of individuals for rehabilitation purposes. The use of these State agencies in making disability determinations for a program of disability benefits will avoid duplicating use of existing medical facilities and records and will utilize well-established relationships with the medical profession. The near-universality of the coverage of old-age and survivors insurance means that through its earnings reports and records the Bureau of Old Age and Survivors Insurance will have an automatic check on the earnings of the disabled. In the future it may be found preferable that the determination of disability should be made by the Federal Government under its own rules and regulations. If so, a simple amendment to the Social Security Act at a later date could provide for an orderly changeover. In the meanwhile, it will facilitate the beginning of the program to take advantage of the facilities and experience of the State agencies. Field offices established for old-age and survivors insurance and for the disability freeze could continue to function for disability benefits. People could therefore go to one field office for all questions concerning earnings records, filing, etc., where facts established for one type of benefit such as marriage or age-are on record for both programs. Employers would keep a single set of records for both programs. The majority report stresses the difficulty of determining disability in a public program providing such benefits. But we know that disability determinations are being made successfully every day, not only in connection with the "disability freeze" provision of the old-age and survivors insurance system, but also in numerous public programs which pay benefits. As a matter of fact, some 420,000 people are now receiving disability benefits under the following federally administered programs: Veterans with 70 percent or more disability: Most State and local retirement systems also include benefits for persons who have been disabled prior to retirement. Of the 3 million members of State and local retirement systems, about 2.9 million have protection against service-connected disability and about 2.5 million are in systems which include protection against all disability. Experience with a disability benefit plan in the railroad retirement system indicates that it would be equally effective in a social-security system, in the opinion of William J. Kennedy, former Chairman of the Railroad Retirement Board, who has written: Frankly, I have always been at a loss to understand these criticisms (that disability programs are difficult to administer) in the light of the existence of an obviously successful disability program under the railroad retirement system to say nothing of those under the Federal and the numerous State and municipal retirement systems for government employees or of the workmen's compensation laws in every State in the Union. * While the administration of the disability part of our program has presented problems not involved in the payment of old-age retirement benefits, we have not found these problems insuperable or even particularly difficult * * The standards, whicn have been strictly adhered to, are, in our opinion, in conformity with the statutory provisions and with the intent of Congress as reflected in the welldocumented legislative history of the act * Our disability program has been kept well in hand not only administratively but financially as well. There has been * ** no tendency for the number of disability retirements to in- We submit that the experience with these well-established programs has demonstrated that the extent of disability can be determined with sufficient precision to make such a program administratively feasible and financially sound. We also wish to point out that the rehabilitation features of the program we propose make an important contribution in this respect because they bring into play other factors such as attitude and work record-to supplement the medical diagnosis as to the extent of disability. EFFECT ON REHABILITATION The majority report takes the position that the payment of disability benefits might discourage rehabilitation. Belief that rehabilitation would be hindered or malingering encouraged seems to us to be unjustified in view of the stringent eligibility requirements, limited benefits, and positive stress on rehabilitation contained in the proposal to which we subscribe. The eligibility requirements would require a substantial and recent attachment to the labor force, determined by a work history which would have to include covered employment in 6 out of the last 13 and 20 out of the last 40 quarters prior to disability. The definition of disability contained in the proposal is a conservative one, limited to medically determinable physical or mental impairment which prevents the individual from engaging in any substantial gainful activity. Furthermore, a waiting period of 6 consecutive months of disability prior to eligibility for benefits is required. Since benefits under our proposal would not be paid to the dependents of a disabled worker, the income available to a worker's family from disability insurance would not be sufficient to encourage persons on the borderline of total disablement to seek benefits if employment alternatives were open to them. A worker who had earned average wages of $350 per month would received only 31 percent of his former income, or $108.50 monthly. If his wages had averaged $100 monthly, his benefits would be 55 percent, or $55; if $150, they would be 45 percent, or $68.50. In addition to the fact that the worker probably would have been without income for the 6-month waiting period, such benefits would make it unprofitable for a person who could work not to do so. The disability provisions which we support incorporate the rehabilitation process with the disability benefit plan. Refusal, without good cause, to accept rehabilitation would result in termination of the individual's benefits. At the same time, in order to avoid setting up barriers to vocational rehabilitation, our proposal specifically provides that a person who performs work while under a State rehabilitation program will not, solely by reason of this work lose his benefits during the first 12 months while he is testing a new earning capacity. A great deal of emphasis must rightly be placed on rehabilitation. However, the fact must be recognized that a great many older dis abled workers cannot be rehabilitated successfully. Our best information indicates that it has not been possible to rehabilitate more than 25 percent of disabled persons who are age 50 or over. Furthermore, rehabilitation cannot be a substitute for income for the disabled worker. LOWERING THE ELIGIBILITY AGE FOR WOMEN We wholeheartedly agree with the provision of the Senate bill which lowers from 65 to 62 the age at which surviving widows may first become eligible for their benefits, but we believe this provision should also apply to working women, wives, and dependent mothers. It is estimated that about 800,000 women would receive benefits immediately if our proposal is enacted into law, and another 400,000 women in this age group who are working or are wives of workingmen-would become eligible to draw benefits in case they retire. În about 25 years, when a larger proportion of people will have qualified, an additional 1,800,000 women will be receiving benefits earlier than they would under existing law. We believe that the policy adopted by the committee of excluding two groups of women-wives and women workers-from the same privilege which they extend to other women is a serious departure from a well-established principle of the old-age and survivors insurance system. Under such a provision, a widow who normally works and supports herself would be able to receive benefits if she lost her job at age 62, and was unable to find work, while a woman worker in the same circumstances would be forced to wait until her 65th birthday for benefits. This would be true even though she may have contributed throughout her working life to the old-age and survivors insurance system. Any woman who loses her job between the ages of 62 and 65 cannot easily get other employment. The fact is that the overwhelming majority of women at the ages of 60 to 65 are not gainfully employed. When this age group is compared to the age group 55 to 64, we find that women go out of the labor force about 21⁄21⁄2 times faster than men. This is not surprising, in view of the demand upon the strength of many older workingwomen resulting from the dual responsibility of job and home. They cannot be expected to be able to continue working as long as men. All evidence shows that even if older women are able to work they find it more difficult to get and hold jobs than do older men. Recent studies by the Department of Labor show that age limits are more frequently placed on job openings for women than for men and that the age limits are lower in the case of women. In many retirement systems the eligibility age for women is lower than for men and in many cases this earlier retirement age is compulsory. The waiting period for these women who are forced into early retirement is actually much longer than it is for men. It would be manifestly inequitable, in our view, to reduce the eligibility age to 62 for widows and for women workers but not for wives. The majority report justifies its exclusion of the wife's benefits at age 62 on the ground that An elderly couple has the husband's benefit in the interval This position, we believe, is contrary to a fundamental principle of the old-age and survivor insurance plan the principle that the payment of a wife's benefit is justified because the elderly family needs both benefits. To assume that the retired couple can maintain themselves without a substantial sacrifice to their standard of living on an amount designed for a single person is unreasonable. Even a worker with the highest possible earnings credit of $350 a month would receive only $108.50 per month for himself and his wife or 30 percent of his full-time earnings while his wife is under age 65. If the husband is entitled to only $50, or $60, or $70 a month the family income is pitifully inadequate. But many aged couples are striving to make ends meet on such miserable amounts. Our proposal would help to remedy this situation. The couples who will be helped by a reduction in the eligibility age to 62 for wives will, as a rule, be those most in need of their benefits. Husbands do not always have the choice of delaying retirement until their wife reaches age 65. Men almost universally retire because they become disabled, because they reach the retirement age in the industry in which they work, or because the employer terminates the employment for other reasons. Although lowering the eligibility age to 62 does not solve the problem for all elderly couples, we cannot overlook the fact that it would provide immediate benefits to over 20 percent more wives than at present and a shorter waiting period for the remainder. It is not realistic to assume that an elderly wife will be able to go out and get a job when the family income is reduced because of the retirement of the husband. They experience the same problem of obtaining employment as do other older women. Over 90 percent of all wives between the ages of 62 and 65 are not in the labor force. We feel that the omission of dependent female parents is unjustified. These older parents who have been dependent upon the wage earner for their needs are not in the labor force at the time of the wage earner's death. It will be just as hard for them to support themselves at age 62 as it is for widows and wives since they also have usually been homemakers during their married life. The level premium cost of adding benefits for working women, wives, and dependent mothers, would be only 0.36 percent of payroll. These relatively small added costs are more than justified so that all women will have the right to retire at age 62, which committee bill grants only to widows. PUBLIC ASSISTANCE Nothing has been done by Congress to improve the lot of our needy aged and disabled since 1952, when the present formula of Federal assistance to the States was adopted as a result of the successful amendment sponsored by Senator Ernest McFarland. Under the present formula the Federal Government puts up four-fifths of the first $25 of a payment, plus half up to a maximum of $55 per month. The increased Federal matching funds thus made available have made it possible for the States, particularly those with low per capita in |