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PART 1-MATCHING OF ASSISTANCE EXPENDITURES FOR MEDICAL CARE

Sections 3 (a), 403 (a), 1003 (a), and 1403 (a) of the Social Security Act now provide for paying to each State with a plan approved under titles I, IV, X, and XIV a proportion, set forth in each title, of each State's expenditures for assistance to needy individuals under the plan. This includes expenditures both in the form of cash payments to individuals and medical care on their behalf. Sections 301, 302, 303, and 304 of the bill continue the Federal payments to the States on the basis of the present formula with respect to cash payments to the individuals. It adds a provision that enables them to receive separate dollar for dollar matching of their expenditures for medical or other remedial care (including expenditures for insurance premiums) up to a maximum of $8 times the number of individuals receiving assistance in the form of cash payments or medical care. (In aid to dependent children the maximum on the medical care expenditures in which the United States would share would be $8 times the number of adult recipients and $4 times the number of child recipients. The present individual maximums of $55 for the aged, blind, and disabled, and of $30 for the relatives caring for a dependent child, $30 for the first dependent child, and $21 for each additional child in the same home in aid to dependent children, would continue to apply, but only with respect to the money payments made to recipients.

The amendments made by this part would become effective July 1, 1957.

PART II-SERVICES IN PROGRAMS OF AID TO DEPENDENT CHILDREN,

AID TO THE BLIND, AND AID TO THE PERMANENTLY AND TOTALLY DISABLED

Section 311 of the bill would amend section 401 of the Social Security Act to make it clear that the purpose of title IV of the act includes not only financial assistance, but also services to maintain and strengthen family life and to help the relatives caring for dependent children attain that degree of self-support and personal independence consistent with maintaining parental care and protection. Section 311 would also amend section 402 (a) of the act so as to require the approved State plan for aid to dependent children to include a description of the services, if any, that a State offers to applicants for and recipients of aid in order to achieve the purposes of this part of the bill, including a statement of the steps taken to assure maximum utilization of existing agencies in providing the services.

This section of the bill would also amend section 403 (a) of the Social Security Act to delete some obsolete language and make it clear that Federal payments to the State with respect to the costs of administration of the State plan may include payments with respect to the services described above.

Section 312 of the bill would amend section 1001 of the Social Security Act to make it clear that the purpose of title X of the act includes not only financial assistance, but also services to help needy blind individuals to attain self-support or self-care. Section 312 would also amend section 1002 (a) of the act so as to require the approved State plan for aid to the blind to include a description of the services, if any, that a State offers to applicants for and recipients of aid in order to achieve the purposes of this part of the bill, including a statement of the steps taken to assure maximum utilization of existing agencies in providing the services.

This section of; he bill would also amend section 1003 (a) of the Social Security Act to delete some obsolete language and make it clear that Federal payments to the State with respect to the costs of administration of the State plan may include payments with respect to the services described above.

Section 313 of the bill would amend section 1401 of the Social Security Act to make it clear that the purpose of title XIV of the act includes not only financial assistance, but also services to help needy individuals over 18 who are permanently and totally disabled to attain self-support or self-care. Section 313 would also amend sections 1402 (a) of the act so as to require the approved State plan for aid to the permanently and totally disabled to include a description of the services, if any, that a State offers to applicants for and recipients of aid in order to achieve the purposes of this part of the bill, including a statement of the steps taken to assure maximum utilization of existing agencies in providing the services.

This section of the bill would also amend section 1403 (a) of the Social Security Act to delete some obsolete language and make it clear that Federal payments to the State with respect to the costs of administration of the State plan may include payments with respect to the services described above.

The amendments made by this part of title III of the bill would be effective on enactment, except that the provisions inserting the new plan requirement (on the description of the services provided and the steps taken to utilize other agencies in the provision of such services)sections 311 (b), 312 (b), and 313 (b) of the bill—would not become effective until July 1, 1957.

PART III-EXTENSION OF AID TO DEPENDENT CHILDREN

Section 321 amends section 406 (a) of the Social Security Act by adding "first cousin, nephew or niece" to the list of relatives with whom a dependent child may be living and be eligible, with Federal matching, for aid to dependent children.

Section 322 deletes from section 406 (a) of the act the requirement of school attendance for otherwise eligible children between 16 and 18 years of age.

PART IV-RESEARCH AND TRAINING

Section 331 adds to title XI of the Social Security Act authorization (in a new sec. 1110) for Federal participation in the cost of research or demonstration projects (relating to such matters as prevention or reduction of dependency or coordination of planning between private and public welfare agencies, or to help improve the administration and effectiveness of programs carried on or assisted under the Social Security Act and related programs) through grants, contracts, or jointly financed cooperative arrangements with States, public or nonprofit organizations. This section authorizes an appropriation of $5 million for the fiscal year 1957, and such sums thereafter as the Congress may determine.

The new section 1110 also provides that no contract or arrangement may be entered into, and no grant may be made, under the section without obtaining the advice and recommendations of competent specialists as to the soundness of design of the projects, the possibilities for securing productive results, adequacy of resources for conducting the projects, etc. Grants, and payments under the contracts or arrangements, could be made in advance or by way of reimbursement, and in such installments and on such conditions as the Secretary finds necessary to carry out the purposes of the section.

Section 332 adds to title VII of the Social Security Act authorization (in a new section 705) for allotting to the States sums wbich they may use for making grants to public or other nonprofit institutions of higher learning, conducting special, short courses of study or seminars, and establishing and maintaining fellowships or traineeships for training public welfare personnel for work in public assistance programs. The allotment to each State from appropriations under this section would be determined on the basis of (1) population, (2) relative need for trained public welfare personnel, particularly personnel to provide self-support and self-care services, and (3) financial need, of the respective States. This allotment would be available for paying the Federal share of the expenditures described above. The Federal share would be 100 percent for the period beginning July 1, 1957, and ending June 30, 1967, and 80 percent thereafter. An appropriation of $5 million is authorized for the fiscal year 1958, and thereafter such amounts as the Congress may determine.

Payments to the States under this new section 705 would be made in advance on the basis of estimates, with necessary adjustments to correct any errors being made in future payments. An allotment which a State certified it would not use could be reallotted by the Secretary to other States that have need for and will be able to use sums in excess of their initial allotment. The reallotments would be made on the same basis as the original allotments (i. e., population, need for trained personnel, and financial need, of the respective States).

Section 333 amends section 1101 (a) of the act so that the term “State" will include Alaska, Hawaii, the District of Columbia, Puerto Rico, and the Virgin Islands for purposes of title VII, just as it now does for purposes of titles I, IV, V, X, and XIV of the Social Security Act.

PART V-TEMPORARY EXTENSION OF 1952 MATCHING FORMULA In 1952, the Social Security Act was amended to increase the proportion of public assistance expenditures made by the States to be borne from Federal funds. Such amendments were originally made effective for the period ending September 30, 1954; they were subsequently extended (by the 1954 amendments to the Social Security Act) to September 30, 1956. Section 341 would further extend this period to June 30, 1959.

CHANGES IN EXISTING LAW: In compliance with subsection (4) of rule XXIX of the Standing Rules of the Senate, changes in existing law made by the bill, as reported, are shown as follows (existing law proposed to be omitted

is enclosed in black brackets; new matter is printed in italics; existing law in which no change is proposed is shown in roman):

SOCIAL SECURITY ACT

AN ACT To provide for the general welfare by establishing a system of Federal

old-age benefits, and by enabling the several States to make more adequate provision for aged persons, blind persons, dependent and crippled children, maternal and child welfare, public health, and the administration of their unemployment compensation laws; to establish a Social Security Board; to raise revenue; and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress Assembled,

TITLE I-GRANTS TO STATES FOR OLD-AGE

ASSISTANCE

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Sec. 3. (a) From the sums appropriated therefor, the Secretary of the Treasury shall pay to each State which has an approved plan for old-age assistance, for each quarter, beginning with the quarter commencing October 1, 1952, (1) in the case of any State other than Puerto Rico and the Virgin Islands, an amount, which shall be used exclusively as old-age assistance, equal to the sum of the following proportions of the total amounts expended during such quarter as old-age assistance in the form of money payments under the State plan, not counting so so much of such expenditure with respect to any individual for any month as exceeds $55—

(A) four-fifths of such expenditures, not counting so much of any expenditure with respect to any month as exceeds the product of $25 multiplied by the total number of such individuals who received old-age assistance in the form of money payments for such month; plus

(B) one-half of the amount by which such expenditures

exceed the maximum which may be counted under clause (A); and (2) in the case of Puerto Rico and the Virgin Islands, an amount, which shall be used exclusively as old-age assistance, equal to one-half of the total of the sums expended during such quarter as old-age assistance in the form of money payments under the State plan, not counting so much of such expenditure with respect to any individual for any month as exceeds $30, and (3) in the case of any State, an amount equal to one-half of the total of the sums expended during such quarter as found necessary by the Secretary of Health, Education, and Welfare for the proper and efficient administration of the State plan, which amount shall be used for paying the costs of administering the State plan or for old-age assistance, or both, and for no other purpose, and (4) in the case of any State, an amount equal to one-half of the total of the sums expended during such quarter as old-age assistance un der the State plan in the form of medical or any other type of remedial care (including expenditures for insurance premiums for such care or the cost thereof), not counting so much of such expenditure for any month as exceeds the product of 3 multiplied by the number of individuals who received old-age assistance under the State plan for such month.

TITLE II-FEDERAL OLD-AGE AND SURVIVORS INSUR

ANCE BENEFITS

FEDERAL OLD-AGE AND SURVIVORS INSURANCE TRUST FUND

SECTION 201. (a) * * *

(c) It shall be the duty of the Managing Trustee to invest such portion of the Trust Fund as is not, in his judgment, required to meet current withdrawals. Such investments may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States. For such purpose such obligations may be acquired (1) on original issue at par, or (2) by purchase of outstanding obligations at the market price. [The purposes for which obligations of the United States may be issued under the Second Liberty Bond Act, as amended, are hereby extended to authorize the issuance at par of special obligations exclusively to the Trust Fund. Such special obligations shall bear interest at a rate equal to the average rate of interest, computed as to the end of the calendar month next preceding the date of such issue, borne by all interest-bearing obligations of the United States then forming a part of the Public Debt; except that where such average rate is not a muitiple of one-eighth of 1 per centum, the rate of interest of such special obligations shall be the multiple of one-eighth of 1 per centum next lower than such average rate. Such special obligations shall be issued only if the Managing Trustee determines that the purchase of other interest-bearing obligations of the United States, or of obligations guaranteed as to both principal and interest by the United States on original issue or at the market price, is not in the public interest.] The purposes for which obligations of the United States may be issued under the Second Liberty Bond Act, as amended, are hereby extended to authorize the issuance at par of public-debt obligations for purchase by the Trust Fund. Such obligations issued for purchase by the Trust Fund shall have maturities fixed with due regard for the needs of the Trust Fund and bear interest at a rate equal to the average rate of interest, computed as to the end of the calendar month next preceding the date of such issue, borne by all marketable interest-bearing obligations of the United States then forming a part of the Public Debt that are not due or callable until after the expiration of five years from the date of original issue; except that where such average rate is not a multiple of one-eighth of 1 per centum, the rate of interest of such obligations shall be the multiple of one-eighth of 1 per centum nearest such average rate. Such obligations shall be issued for purchase by the Trust Fund only if the Managing Trustee determines that the purchase in the market of other interest-bearing obligations of the United States, or of obligations guaranteed as to both principal and interest by the United States on original issue or at the market price, is not in the public interest.

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