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and contributed to the cost of physician care and drugs. However, with our State's increasing population and in recognition of other heavy demands on both State and local government for services such as education, highways, water, and others, we just could not afford it. Even so, California's plan of implementation compares favorably with some other States.

It is apparent that the Kerr-Mills bill cannot be looked upon as the answer to the health needs of the majority of America's 17 million aged persons. In addition to the inability of States adequately to finance the contemplated programs of "comprehensive care" envisaged under the Kerr-Mills bills, there is a more compelling reason for not regarding it as the solution: The vast majority of aged people do not want to be dependent upon charity when major illness occurs.

I believe their wishes should be respected, particularly now that a workable, sound, and effective proposal such as H.R. 4222 has been introduced. The primary objective of any major plan should be to uphold rather than downgrade the dignity of the aged.

I believe Congress should regard the Kerr-Mills bill as a supplementary program to help persons whose health needs cannot be met through either a combination of social and private health insurance. The present responsibilities in this area at State and local levels would be lessened and their resources could be more intelligently used in meeting unusually expensive health needs of aged persons.

Enactment of H.R. 4222 by the Congress would have just an effect upon California's new medical assistance for the aged program. First, it would meet the costs of hospitalization and nursing-home care for roughly 50 percent of the anticipated caseload for the first 90 days of hospitalization and for the first 180 days of nursing-home care. Second, the cost reduction would make it possible for California to reduce the period during which costs are not covered from 30 days to 21 days, as permitted by California Senate bill 325.

Fifty percent of the aged persons who apply for old-age security in California are also social security beneficiaries. There is reason to believe that the anticipated number of persons who will apply for help under California's program will show at least this percentage receiving social security. Actually, this rate may be higher since about 75 percent of aged persons in California receive social security benefits.

6. Our senior citizens should be treated as social assets rather than social liabilities

America's older people are among her most precious assets. They represent the reservoir of accumulated skills, experience, and knowledge which we too often neglect in our busy contemporary way of life. As workers, they have contributed (many under working conditions unknown today), to the buildings of our economy. As parents and grandparents, they have guided many of us to happy and more satisfactory lives than often was their lot. As citizens, they helped develop, lead, and defend America in the past.

It is unfortunate that in the later years, our way of life too often tends to overlook and isolate many of our senior citizens. Regrettably, we have built up an image of the older person as a dependent, incapable of further contributions. It is a false image, but one which persists.

It seems to me the primary motive behind the recent White House Conference on Aging was to reverse this unfortunate trend. Nearly every recommendation made by the delegates to the Conference was based on the recognition of the need for the aged person to be treated with dignity and respect as an individual.

It is evident that this profound sociological problem underlies and colors much of the controversy which has accompanied this bill and its predecessor, the Forand bill. Congress must consider many complex factors before reaching a decision on this measure. Congress also must decide on a program which recognizes the human elements as well as those of an administrative and technical nature. The measure before you, H.R. 4222, does just that. It recognizes that our aged people are social assets rather than social liabilities. It is based on fiscal and administrative methods that are dignified, businesslike, and will accord aged people the respect they merit in times of medical crisis.

For this reason, as much as any other cited in this statement, I urge your favorable consideration and approval of H.R. 4222.

The CHAIRMAN. Our next witness is Mr. Walter P. Reuther, president of the United Auto Workers and president of the Industrial Union Department of the AFL-CIO.

Mr. Machrowicz?

Mr. MACHROWICZ. Mr. Chairman, I know it is not necessary for me to introduce the witness before us. He has been before us a number of times. But I do just want to say that we in Michigan are very proud of him, not only as a labor leader, but as one who has been interested in the progress in our social development in this country. Although I know there are some members of the medical profession that feel that no one but a doctor is an expert in this area, I think we are dealing here not with a medical problem, but with a social problem, and I think that the witness before us can made a great contribution to our understanding of that problem.

The CHAIRMAN. Thank you, Mr. Machrowicz.

Of course, Mr. Reuther is well known to the members of the committee, having appeared before the committee on other occasions, and we welcome you back to the committee today.

You are recognized.

STATEMENT OF WALTER P. REUTHER, PRESIDENT, UNITED AUTO WORKERS, AND PRESIDENT, INDUSTRIAL UNION DEPARTMENT, AFL-CIO; ACCOMPANIED BY JAMES BRINDLE, DIRECTOR, SOCIAL SECURITY DEPARTMENT, UAW, AND LEONARD LESSER, INDUSTRIAL UNION DEPARTMENT, AFL-CIO

Mr. REUTHER. Thank you.

First, I should like to express my sincere appreciation for the opportunity of once again appearing before your committee on the matter of medical care for the aged. I appear here as the president of the UAW; representing the 1,300,000 members of our union, and their families, and also as president of the industrial union department with approximately 7 million members in the industrial plants of America. I have a written statement which I should like to submit for the record and then to enlarge upon that orally, if I might. The CHAIRMAN. Without objection, your entire statement will appear in the record.

Mr. REUTHER. I would like to present, so that the committee will know the two gentlemen who are with me, Mr. James Brindle, who is the director of the UAW Social Security Department, and Mr. Leonard Lesser, who represents our organization and the IUD on social security matters in Washington.

The CHAIRMAN. We are pleased to have these gentlemen with us. Mr. REUTHER. Mr. Chairman, I appear here in support of the King bill, H.R. 4222. We support that bill because we believe it represents a sensible, a responsible, and a workable approach to a compelling human problem that America must face up to. We believe that this bill is a beginning toward meeting this pressing problem.

I agree with the Congressman from Little Rock who was the first witness before your committee this morning that perhaps we ought to talk about this on a philosophical basis. I happen to believe that no group in America has a monopoly on the loyalty to America and the basic principles for which it has stood these many years.

I happen to believe that America is the great hope for freemen everywhere. I lived under Hitler and I lived under Stalin. I worked in the underground helping the forces of freedom try to fight back

against totalitarianism. I know something about totalitarianism in a practical way, not just in an abstract academic way. I believe that America must find answers to basic problems to prove that freedom can find these answers, and I think that in our kind of society we must achieve unity in diversity.

Therefore, we have to recognize that you cannot solve problems merely by using scare words. In this situation there are a great number of scare words being used to confuse the issue. There is the talk about compulsion. There is the talk about loss of freedom. There is the talk about socialization of many aspects of American society. I happen to believe that this bill does not take America down that road. Last week, the President of the United States called upon the American people to respond to a deepening crisis in Berlin and he spelled out the broader dimensions of the threat that communism poses to freemen everywhere. I pray, and I am confident, that the American people will respond to that plea by the President of our great country. Together we can work, despite political differences, to make America stronger and adequate to meet this challenge, because it is the greatest challenge that freemen have ever faced. We need, I believe, to build our military posture more strongly so that we can meet the threat of aggression wherever it may raise its ugly head, whether in Berlin or some other place. But I think we need to understand that military power is but the negative aspect of the total struggle between the forces of freedom and the forces of tyranny.

We must be strong on the military front as a matter of necessity, but we will not win the contest between freedom and tyranny merely by being strong in terms of military power. We will win that struggle in the long pull. We will win the hearts and the minds and the loyalties of the hundreds of millions of uncommitted people in the world who are the balance of power in terms of the forces of freedom and tyranny. We will win that support and that loyalty not just by an adequate military posture, which we need; we will win by demonstrating the quality of our free society. We are not going to win it by slick slogans coined on Madison Avenue. We are not going to win it by talking about the tremendous material prosperity we have or by the brightness of the chrome on the new Cadillacs. The true measurement of the greatness of a civilization is not its economic wealth or its material power, but is the sense of moral and social responsibility by which a society relates material wealth to human needs-that translates technical progress into human progress and human dignity by dealing with the basic problems of the whole of society.

This is what we are talking about here this morning. We can all agree that freedom is perhaps the most priceless thing that men can possess. No one is proposing that we tamper with it. We are talking about how, within the framework of a free society, under a free government, with a free economic system, which we all believe in, we can work out within that society practical mechanisms for solving basic problems, without sacrificing our political or spiritual freedom. This is the area in which we must prove ourselves; because we are going to be judged not by what we have, but rather by what we do with what we have.

I have been in India. I have had to try to answer questions by people in the villages, by teachers and students in the universities, and by members of Parliament. I have been in Africa. I have been in

Europe. In these places we are judged in the area of social responsibility not by the standards of some other country, but by the standards that we establish. Considering the economic resources that we have we are measured by how well we meet basic human problems. I believe that you cannot separate what we are talking about this morning from this central question: How does a free society radiate clearly and powerfully a sense of caring about human problems so that it can demonstrate the superiority of our social system over one based upon the concepts of totalitarianism?

This is the area in which the contest will be won. No one can win a nuclear contest. And we all pray that somehow there will be that measure of common responsibility and common conscience in the world that no one who has nuclear weapons will dare to use them on his neighbor, no matter how great the provocation, because peace has become a condition of human survival, and we pray that we can get disarmament in the world.

We pray that we can minimize world tensions so there can be positive competition between our two social systems. We believe that in that contest our system, based upon the freedom of the individual, the greater creative capability of a free man, will prove its superiority.

As an American I believe that there are two areas in which our society will be tested most severely by the hundreds and hundreds of millions of people who are watching American democracy. They are not fooled by slogans; they know the substance of a society. First of all, they ask: What do we do in providing maximum opportunities for the education of our children so that every child born into our society, made in the image of God, can have the opportunity to facilitate the growth and the development of his maximum capabilities, as God gave each child these capabilities; and the second area in which we will be measured critically is on the other end of the life cycle: What do we do, as a free society, to provide that measure of economic security, that measure of human dignity, to each of our aged citizens in the autumn of their lives, so that having lived a productive life, having carried their share of the world's work, they can look forward to the autumn of their lives without the fear of economic insecurity, without the fear of catastrophic illness, without the loss of human dignity that results when they become public charges or have to live on the often limited economic resources of their children?

These are the two critical areas, and we are only playing games if we think that these are not the areas in which the people of the world are going to judge us. I have unlimited faith, Mr. Chairman, in the capacity of free men and the ability of our free system to meet this challenge in the world. I think we have lost ground, not because our system of freedom is unequal to the Communist challenge; I think we have lost ground because somehow we have not really tried hard enough to relate our great resources to basic human needs. We have made great progress in the field of social security, and yet there was a time in America when the same unfounded fears about socialization were raised that I heard here this morning. People were told that they would wear dog tags around their necks; that they would be called by number, not by name; and that they would lose their freedom and their self-respect. But the social security system has not destroyed freedom in America. It has given more Americans a sense of freedom. Freedom is not some abstract value that you can put in a test tube.

Freedom has to have meaning, and purpose, and substance in the everyday lives of people. In a real sense you cannot have freedom in the absence of basic security, because that insecurity will erode the finer aspects and the aspirations of true human freedom.

Despite the prophets of fear, despite the men of little vision who were afraid for America to travel the road of social security, finally we got around to where this great country of ours made an affirmative decision on a basic social security by congressional action, affirmed by the executive branch of the Government. We have made great progress and we have built upon that foundation, brick by brick, a greater measure of human security, but we did not say that's the whole job.

We found here the unique expression of the genius of American society. We said that the Government would take on the job of laying the foundation for the minimum basic standards of social security to provide a measure of income for people in their older years, but we didn't say the Government would do the whole job, that no one else has any responsibilities outside of the Government.

About 20 million Americans are covered by private pension plans. Do these programs conflict with the social security system? The answer is No. They supplement it. They complement it. They make it more adequate in the areas where we want private voluntary action to supplement the common action that we take through the instruments of government. I think Abraham Lincoln was not only a great President, a great American, but I think he was a very profound philosopher. He understood in a very sensitive way the essential role and responsibility of government among free men, and he said very well many years ago that the purpose of government is to provide the practical instruments through which people can do together what they cannot do separately. That was the whole concept behind social security. The individual could not do for himself what had to be done, and our Government took on that responsibility. But we didn't say that's the end of the road. We worked to carry out our individual responsibilities. We have supplemented the social security program by voluntary, privately negotiated programs.

In looking at the problem before your committee, the problem of how best can a free society create a social mechanism to meet the medical care needs of the aged, we ought to get rid of the slogans and the fear words and really talk about it as a basic human problem.

No one can deny this simple fact: that more than half of the Americans over age 65 have an income of $1,000 or less per year. No one who knows anything about trying to maintain the essential standards of human decency thinks that $1,000 per year is an adequate income. And yet more than half of our aged citizens are in that economic income group. The source of the basic problem, Mr. Chairman, as we all know, is that at the very time that our aged citizens cease to work in gainful employment, when their income is drastically reduced, their medical needs drastically go up.

This is the source of the basic problem. When the ability to pay for medical care is reduced, the amount of medical care needed is greatly increased. Almost 212 times as much hospitalization is required for people past the age of 65 as people in lower age groups. Mr. Chairman, we may argue about estimates that may vary by half a percent, or 3 percent, or 2 percent, but the simple facts are that

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