cretion. As I say, they have gotten into some isolated operations in many cases, and in too many cases, to the neglect of the people for whom the services were intended.

So we are pleading with this committee to bring in legislation in accord with our point of view. We are supporting in principle S. 2570, which would bring together in the Department of Labor all of these Federal rehabilitation facilities.

That bill provides for housekeeping purposes. We think it ought to go further than that. We think it ought to be an integral part of the Department of Labor, which has some experience in wage-andhour law administration; in the employment services; and in all of the other services which have such an important bearing on this. We have a great deal of work to do and we think that the Department of Labor can do it because of its acquired experience in those fields. We think that is the appropriate place for it. We would not want to see a separate agency set up. We want it in an agency which we feel has the interests of the workers at heart. That was the purpose of establishing the Department of Labor, and inasmuch as most of these people are workers, or members of workers' families, we would have much more confidence in the Department of Labor as the administrative group to supervise these activities.

Similarly we would like to see the State departments of labor exercising the same function. Of course, that is not within the purview of this committee. There I will concede to the State the right to set up its own system, and we will have to fight those questions out at the State level.

So I will be glad, Senator, to answer any questions you may have. Senator GOLDWATER. I have no questions. Your testimony follows pretty much the American Federation of Labor's testimony.

Mr. READ. Yes, sir.

Senator GOLDWATER. And looking over pretty quickly the statement that you submitted, the figures are substantially the same as they have submitted.

Mr. READ. Yes.

Senator GOLDWATER. So I have no questions at the present time. I think you have made a very clear statement of your position.

Mr. READ. Well, thank you very much, Senator, I appreciate the opportunity.

Senator GOLDWATER. I am sorry that there are no other Senators here who might care to question you. I have no questions at the present time. We will thank you for coming before us today and giving us your valuable time.

Mr. READ. Thank you.

Senator GOLDWATER. The next witness will be Mr. R. C. Thompson, State Director of the Maryland Division of Vocational Rehabilitation, States Vocational Rehabilitation Council. Mr. Thompson.

STATEMENT OF R. C. THOMPSON, STATE DIRECTOR, MARYLAND DIVISION OF VOCATIONAL REHABILITATION, STATES VOCATIONAL REHABILITATION COUNCIL

Mr. THOMPSON. Thank you, Mr. Chairman.

Senator GOLDWATER. It is a privilege to have you with us. Do you have a prepared statement?

Mr. THOMPSON. Yes, sir.

Senator GOLDWATER. You can either read your statement or proceed as you wish, and we will make it a portion of the record.

Mr. THOMPSON. The time is late, and may I just speak extemporaneously for 5 minutes, and we will file the statement?

Senator GOLDWATER. Yes. It will be made a part of the record. (The statement is as follows:)

STATEMENT OF R. C. THOMPSON, DIRECTOR OF THE MARYLAND DIVISION OF VOCATIONAL REHABILITATION, REPRESENTING THE STATES VOCATIONAL REHABILITATION COUNCIL

Mr. Chairman, my name is R. C. Thompson. I am Director of the Division of Vocational Rehabilitation of the Maryland State Department of Education. Today, I am representing the States Vocational Rehabilitation Council, the organization of State directors of vocational rehabilitation, which serves as an advisory body to the Office of Vocational Rehabilitation. Since we administer the State vocational rehabilitation program which the proposed legislation seeks to expand, we are, naturally, very much concerned with action that may be taken by this committee and by Congress.

Let me say in the beginning that we approve the objectives of the President as outlined in his state of the Union message and in subsequent messages to the Congress. We also believe that S. 2758 and S. 2759 can provide the framework for the expanded program which everyone seems to agree is badly needed. In this statement, I shall call attention to matters which the State directors of rehabilitation feel are most essential in the development of a sound rehabilitation program and shall make some suggestions with respect to specific provisions in S. 2759.

For many years State directors of vocational rehabilitation have been pointing out weaknesses in the present program and recommending Federal and State legislation and greater appropriations in order that these weaknesses may be corrected and more of the handicapped of the Nation rehabilitated into gainful employment. As we see it, in order to accomplish this objective we are going to have to have more facilities, more personnel, and more money, not only to provide the first two, but to provide rehabilitation services themselves for the handicapped.

We approve S. 2758, amendments to the Hospital Survey and Construction Act which makes Federal money available to assist the States in establishing rehabilitation facilities. We sincerely hope that after this bill is passed, Congress will make available the full $10 million per year as authorized in the bill for this important part of the rehabilitation program. We hope that funds to be appropriated will be specifically earmarked for rehabilitation facilities. We also hope that the provision in the House bill which allows one State to assign its allotment to another State for the purpose of establishing a regional facility will be included in the Senate bill.

Although it is not clear in the bill, we understand that special project funds to be appropriated, after 1956, will be available to encourage research and the training of additional rehabilitation personnel. We certainly hope that this is true, for both the areas of research and the training of personnel have been badly neglected.

Although we are not opposing the establishment of a fund for the improvement and extension of the rehabilitation program, we would like to understand more clearly just how the Office of Vocational Rehabilitation would use this fund. Some of us have received the impression that projects to be approvable under this section would have to be projects which would get the State agencies into entirely new areas of rehabilitation. Since the greatest need in the States is to expand their rehabilitation programs as they now exist, we think it would be very unfortunate if improvement and extension funds could not be used to expand the general programs.

Since we actually administer the rehabilitation programs, we are naturally very much interested in the administrative setup under which rehabilitation operates. We believe that the Office of Vocational Rehabilitation should be in the Department of Health, Education, and Welfare. So far as I know, every State director of rehabilitation in the country feels this way about it. If the committee can do somehing to strengthen the Office of Vocational Rehabilitation

within the Department, we think this would be desirable. For instance, in a bill that passed the Senate in 1950, the Office of Vocational Rehabilitation was given legal bureau status. We think this would be a good idea.

We notice that S. 2759 recommends some changes in the administration in the States. As you know, State boards for vocational education are now the administering agencies, except for programs for the blind. We do not object to the section of S. 2759 which allows a State to set up a State rehabilitation agency in lieu of the State board for vocational education. Some testimony before the committee has indicated that it should be mandatory upon the States to establish such independent agencies. We do not think this is desirable. The program is operating very effectively in most of the States under the present setup. We think that the States should be left to determine whether the independent agency is needed for more efficient administration of the program. We agree with the testimony of the National Rehabilitation Association that the language of this section should be revised to make it clear that it is not the purpose of Congress to break up the administration of vocational rehabilitation programs on the State level. We think this can be done without in any way interfering with the intent of the authors of S. 2759.

We are concerned, of course, with the method of financing which is developed for the program. Rehabilitation programs in the States grew very rapidly for a few years after the passage of the Barden-La Follette Amendments in 1943. This growth was caused, to a great extent, by the fact that the States knew that moneys they appropriated would be matched on a very liberal basis by the Federal Government. As you know, the Rehabilitation Act was intended to be an open-end act, and was administered that way for several years. Financial difficulties have been encountered since the Federal Government has taken the position that the act is not an open end, although attorneys in the Department of Health, Education, and Welfare have always insisted that it is. There is no doubt that the program is being retarded at the present time because of the uncertainty over the responsibilities of the Federal Government for rehabilitation. Accordingly, we hope this committee will revise the financing methods in the bill so as to clear up any doubt with respect to this responsibility.

We are very much afraid of how the variable grant method of financing the basic rehabilitation program would work out in actual practice. We understand that after the period of transition, over 20 States would have Federal allotments less than their present grants, provided the same amount of money is appropriated by Congress as is now being appropriated. We also understand that at least 20 States would receive less than 50 percent Federal funds for their programs. To allow a situation such as this to come into existence would, we feel. be extremely unfortunate at a time when everyone concerned is trying to expand rehabilitation for the handicapped, not retard it. We sincerely hope that the committee will work out a plan of financing which will keep any State from getting a reduction in the amount of Federal funds that it now receives,

Two methods of doing this have already been suggested by witnesses before this committee. One is embodied in S. 3039 by Senator Potter, of Michigan, which would maintain programs at their 1953 levels, but would provide that all additional funds appropriated for the rehabilitation services program would be matched 50-50 by the Federal Government. Another plan would incorporate the method of financing public assistance for the aid to the needy blind and aid to the totally and permanently disabled for the method of financing found in S. 2759. This would mean that rehabilitation would be financed under an openend type of law. It is undoubtedly true that this method of financing will offer the greatest encouragement to the States to expand their programs. We urge the committee to give careful consideration to both these methods of financing. for they can both be fitted into the framework of S. 2759.

Finally, Mr. Chairman, I want to urge this committee to report immediately a bill to repeal the restrictive language which was inserted in the 1954 LaborHEW appropriation bill. This appropriation language actually has the effect of entirely abrogating the method of financing vocational rehabilitation found in Public Law 113 of the 78th Congress. We do not understand how this language got into the bill. No mention of it is made in the conference committee report or in the Congressional Record. Since the passage of S. 2759 will probably take some time, we urge the committee to report a bill to repeal this language without any delay. The uncertainty in the States which has been brought about by this appropriation language is undermining the program and making it impossible for the States to plan their 1955 activities.

Mr. Chairman, I want to express my appreciation for being invited to appear at this hearing. You will find State directors of vocational rehabilitation anxious to cooperate with the committee in its efforts to pass a bill which will result in more people being rehabilitated than ever before. What we have learned as a result of 30 years in administering programs of vocational rehabilitation is at your disposal.

Since everyone who has testified at these hearings seems to have exactly the same purpose in mind, that is, to increase as rapidly as possible the number of handicapped persons being rehabilitated in this country, it should not be difficult for the committee to resolve the differences that do appear and report a bill without too much delay.

Mr. THOMPSON. I am merely representing Mr. Earl Caulfield of the State of Michigan, who is president of the States council. He could not come down today and my testimony is in his behalf and that of the council.

Mr. Chairman, there are just 1 or 2 things I would like to say. The first is that the primary interest of the States council, that is, the State director's, is to see that more services are made available to more disabled people. Whatever the Congress decides is the best way to accomplish that, of course, is the way we will try to work it out.

We heartily approve the objectives of the President's program, and generally we are in agreement with S. 2759, except in the matter of financing. We believe perhaps some other change would be more helpful to promote the program throughout the country.

First we would like to request the committee to give some consideration to removing the restrictions that exist in our present Appropriations Act, because it just is not possible to go forward as long as we have this weight hanging on our shoulders.

There is a bill before Congress, S. 2873, which I believe would remove the present restrictions.

Senator GOLDWATER. S. 2873?

Mr. THOMPSON. I think that is the number. We feel that is the most urgent thing confronting us. It is the passage of a bill which would make it possible for the Congress to appropriate the same amount of money as was appropriated last year, because we feel it would be unwise to set the programs back beyond their present level. So attention to that bill is what we feel is most urgent.

Senator GOLDWATER. I believe that bill is probaby before the Appropriations Committee. It has not come to this committee.

Mr. THOMPSON. I do not know, sir. Mr. Whitman, is it S. 2873, which is the bill that would remove the restrictive language?

Mr. WHITMAN. I believe that is right. Senator Kefauver has introduced over here, and I believe Mr. Hope in the House.

Senator GOLDWATER. Thank you very much. We will look that up. It is probably in the Appropriations Committee.

Mr. THOMPSON. Thank you very much.

I would like to say a word about the method of financing, which is so extremely important. As the chairman of the committee pointed out this morning, of course what you folks are interested in is setting up a framework that would meet the total problem, and the matter of appropriations is something that would have to be taken care of in another way. But a part of the total problem is the method to be used in financing whatever programs are set up. We think that Senator Potter has presented a very workable plan in his bill, S. 3039, and we

would like to urge serious consideration to that program as he presents it.

In the matter of extension and improvement of facilities we feel that such extension should apply first to the programs as now in effect, rather than to go all out for starting something new before we are doing the total job within the framework of what we had at the present time.

There is a great need for research in the field of rehabilitation. No one individual can keep up with all of the literature that comes out. Nor can he make himself acquainted with the methods that develop as time goes on. So we hope that attention will be given to this phase of the program, and that facilities for research will be made available not only to the Federal Office of Vocational Rehabilitation, but to the States.

The Federal Government has taken the lead in this program from the very beginning. We want your leadership. We want to pay tribute, and this is a personal tribute on my part, and I am sure it is shared by most of the State directors, or all of those in State rehabilitation-we want to pay tribute to the splendid leadership we have in the Office of Rehabilitation here in Washington. Miss Mary Switzer is a person who is conscientious and competent, and doing a wonderful job. We hope that our relationship can be continued and that the Office of Rehabilitation can be anchored legally and made a separate organization.

Thank you very much, Senator, for the courtesy of appearing here. Senator GOLDWATER. Thank you very much, Mr. Thompson. This concludes the hearings devoted primarily to the subject of vocational rehabilitation.

The subcommittee will stand in recess until Tuesday next, April 13, when we will convene at 10 o'clock, to begin the hearing of testimony on the President's recommendation for encouraging the extensions and improvement of voluntary health insurance plans.

The committee will stand in recess.

(The following was later received for the record :)

STATEMENT OF CORBETT REEDY, STATE SUPERVISOR OF NATIONAL REHABILITATION IN VIRGINIA, AND PAST PRESIDENT, NATIONAL REHABILITATION ASSOCIATION The President's statements regarding vocational rehabilitation, with elaboration by Secretary Hobby, contain the most realistic and far-reaching proposals yet advanced for raising the level of rehabilitation services provided disabled individuals to correspond reasonably with the need. The statement of need is not exaggerated and the goals of expanded service, when realized, mean that each year additional tens of thousands of our handicapped now dependent on family, community, or government for support will achieve a status of dignity and productivity through self-supporting employment.

I have worked in the field of vocational rehabilitation for 12 years. The most distressing situation faced in this work is the thousands of applications that have accumulated from persons unemployed because of disability who must be denied service because of the limited resources available. No one disputes the human or economic values derived from successful rehabilitation. There is no logic to our present status that allows us to provide service to one individual but not to others similarly affected by disability. Hence I must register most hearty approval of the President's desire to stimulate the improvement and expansion of rehabilitation services to the point that productivity in the State-Federal program will be increased from 60,000 to 200,000rehabilitated persons per year.