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comes, to make considerable headway in meeting the tremendous problems of poverty among the aged and disabled needy.

Since 1952 not only has national income risen appreciably but benefits under old-age and survivors insurance have been increased by a significant proportion, even for those already retired. Average monthly payments under these three public-assistance titles, however, remain at low levels. For old-age assistance, aid to the blind, and aid to the permanently and totally disabled, monthly payments as of February 1956 amounted to $54, $58, and $56, respectively.

500 Fins

EFFECT OF PROPOSED REVISION We propose revising and making permanent the formula contained in the McFarland amendment of 1951. We believe that the Federal share of each monthly payment for old-age assistance, aid to the blind, and aid to the permanently and totally disabled should be increased to five-sixths of $30 plus half up to $65.

An amendment to this effect was introduced earlier this year on behalf of 4 members of the Finance Committee and 43 other Senators.

The more liberal formula, we believe, should be made available only to States which pass on the additional funds through increases in payments to recipients. Alabama $6, 057, 524 , New Hampshire

$568, 675 Arizona---1, 246, 914 New Jersey ----

2, 071, 152 Arkansas--3, 755, 189 New Mexico.--

798, 695 California. 24. 548, 405 New York.

12, 242, 794 Colorado.4, 773, 355 | North Carolina

102, 900 Connecticut--1, 685, 922 | North Dakota

737, 631 Delaware-----148, 751 Ohio.

9, 535, 873 District of Colum 456, 983 Oklahoma---

507, 302 Florida----5. 511, 196 Oregon------

909, 993 Georgia --6, 751, 900 Pennsylvania

699, 156 Idaho.-793, 496 Rhode Island.

807, 133 Illinois.. 8, 676, 809 | South Carolina

188, 860 Indiana 611, 337 South Dakota_

694, 260 3, 455, 871 | Tennessee.

186, 820 Kansas. 3, 099, 006 Texas.

827, 460 Kentucky 3, 506, 460 Utah.

959, 803 Louisiana.. 8, 668, 225 Vermont-

572, 604 Maine---1, 061, 792 Virginia -

487, 749 Maryland.. 1, 212, 425 Washington.

5, 678, 057 Massachusett 8,723, 071 / West Virginia_

2, 017, 160 Michigan -6, 435, 485 Wisconsin

613, 253 Minnesota.. 4, 351, 656 Wyoming -

385, 656 Mississippi. 4. 648, 660 | Alaska------

150, 578 Missouri.. 9, 069, 640 | Hawaii.-----

250, 653 Montana--

906, 964 Nebraska

1, 500, 124 | Total United States ---207, 894, 372 Nevada.

242, 995 Under our proposal, all States could immediately raise their individual payments by from $5 to $7.50 per month. Over 2,900,000 persons would receive sorely needed increases with which to purchase the necessities of life.

The proposal would make the following additional funds available in each State:

The cost of this proposal, at the present caseload level, would amount to $208 million annually, this estimate being based on the assumption that all States take advantage of the formula by maintaining their own expenditures for this purpose at about present levels.



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Of those who would be benefited by our proposal, 2,552,000 are recipients of old-age assistance. Many of these individuals, who never had the opportunity to participate in the old-age and survivors insurance program, are people who have contributed in large measure to the development and growth of this Nation. The original Social Security Act took the welfare of these persons every bit as much into consideration as it did those who could become covered by old-age and survivors insurance. It was never intended that the old-age assistance program be neglected, for the two programs were conceived as being complementary to each other until the eventual time when virtually all of our aged population is covered under the insurance program.

In 1954 those who had already retired under the social security program saw their insurance benefits increased by from $5 to $13.50, not as a result of any increased contributions on their part, but because of official acknowledgment of the inadequacy of previous benefits. A modest increase in the payments to our neediest citizens would be well in line with the complementary aspect of the two programs. Not only did the majority of old age assistance recipients fail to be affected by the aforementioned increases, but those who receive supplemental old age assistance in addition to small benefits under social security saw their old age assistance checks reduced by the same amount as the increase in social security payments.

Our proposal will make possible further progress among the low per capita income, low-payment States through the automatic $5 increase. At the same time our amendment will meet another problem. States with higher per capita income, particularly those States with a large percentage of their aged population already protected by old age and survivors insurance, have found themselves able to advance public assistance payments beyond the $55 at which point Federal matching ceases.

To provide an extra $5 of Federal matching for those high-income States, States which make large contributions to Federal revenues, would not permit those States to benefit in any genuine way. If those States cared to advance payments to their public assistance recipients, the additional $5 of Federal matching would be offset by the fact that the additional contribution of the State above $55 would not be subject to Federal matching.

Therefore, in justice and fairness those States having a higher per capita income and a higher percentage of the Federal tax burden, should be entitled to expect that the Federal Government will match State contributions to public assistance at least to the extent of $65 per month.

The Secretary of the Department of Health, Education, and Welfare has opposed any increase in the Federal rate of contribution beyond the formula established by the McFarland amendment in 1952. We find it somewhat significant that in 1951 the then Secretary did not favor the McFarland amendment, nor did the previous Secretary favor the last previous increase in the Federal share of contributions toward State welfare programs.

One of the reasons advanced by the Secretary for opposing the amendment was that the Federal Government already bears a disproportionately heavy share of the first $25 of welfare payments for old-age assistance, aid to the needy blind, and aid to the totally and permanently disabled. The argument completely overlooks the fact that States with low per capita income are those in which the most severe cases of need exist in the greatest number. It is those same States which have the greatest difficulty in providing the essential services of State government and raising sufficient revenues to provide adequately for the needy within their boundaries.

NEED FOR ADDITIONAL FUNDS A recent survey by the Social Security Administration further determined that 67 percent of persons beyond the age of 65 had less than $1,000 per year income; 24 percent had no income whatever. Income for the purposes of this study included welfare payments. The cold hard facts are that many of the low-income States, for lack of sufficient funds, have been unable to provide for a large number of needy cases.

Furthermore, they have been unable to make adequate payments in cases where severe need exists. The following table clearly demonstrates that there is need for additional matching funds. It shows the percent of national average per capital income in each State, the percent of aged people over 65 who are receiving old age and survivors insurance benefits, percent receiving old age assistance grants under State public welfare plans, and the percent of persons who receive no income from either program. It will be seen that more than 45 percent of aged persons over 65 are not receiving payments from either source.

It should be particularly noted that in some States with low per capital income there are very high percentages of individuals who are not protected by old age and survivors insurance. Much of this result is due to the fact that those who were employed in agricultural endeavors in the past were not insured by social security. Such individuals have no privilege of electing to retire when they are no longer economically productive. They must exist by exhausting such meager resources as they have been able to save, obtaining help from relatives, or receiving public assistance.

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1 Net total, does not duplicate concurrent recipients of both.
Source: Department of Health, Education, and Welfare, Bureau of the Census.

Old-age assistance will largely be replaced eventually by old-age
and survivors insurance when the latter program reaches full maturity.
It is expected that the program will fall off sharply after the year 1980.
In the meantime, however, it seems to us that it is an irresponsible
attitude to overlook the immediate problems of the millions who sorely
need additional income today.


The same essential problems exist with regard to assistance payments to the disabled and the blind. Most States have made considerable progress in initiating and improving programs for these groups. Encouragement is greatly needed, however, for them to continue their progress. It seems to us singularly inappropriate for those who oppose disability insurance provisions under social security to oppose further improvements in the public assistance programs for the disabled. We believe that the 244,000 disabled and 105,000 blind recipients of public assistance are in all justice entitled to the increased monthly payments which the revised formula would provide.

It is our earnest hope that the Congress will adopt our proposals in order to afford a modest measure of relief for our neediest citizens in a manner both humane and practical.


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