Act has been amended to add the dependent allowances to the training allowance. That would help a little. It wouldn't help enough.

The bills presently before us, both S. 1991 and H.R. 15119, do provide for getting rid of this horrible situation in some States where you lose your eligibility for unemployment insurance, if you turn down an offer of the kind that you are talking about: that is, if you refuse a job while you are taking training approved by the agency. That is corrected here. That still stops short of the real answer to your question. And the truth of the matter is that the training allowances would still, in the case we are talking about, fall about $35 short of his need, and the answer really to your question is no, there is nothing which adequately meets that problem. However, if the worker was entitled to unemployment compensation, the benefit standards we propose could give him more adequate benefits. Even if he were not, the MDTA training allowance, since it is based on the average unemployment compensation payment in the State, would similarly be more adequate.

Senator HARTKE. If you come up with any ideas on that, I would like to know; I will be interested in trying to help develop them, because I think this is a very, very difficult problem. I think that it what we are dealing with here.

Secretary WIRTZ. I do want to make clear, Senator, that since your case, the amendments to the MDTA do add $5 per dependent. Senator HARTKE. That helps some.

Secretary WIRTZ. Yes.

Senator HARTKE. But, I don't know if that helps enough either. I don't know that it does.

Let me ask a question here that was raised. I think there constantly seems to be this conflict in basic approaches. That is whether you are going to adopt a federalized program overall or whether you are going to permit the States to continue to operate these programs. Can you just briefly tell me what the benefits were under the program in 1958 for supplemental payments, and in the 1961 recession period. I don't want you to go into great detail. Just benefit amounts and

Mr. GOODWIN. They were based upon the individual receiving, in terms of duration, 50 percent of what he had received from the State, and he would receive in benefit amount the same amount that he was entitled to under the regular State program.

Secretary WIRTZ. Fifty percent in terms of length of benefit.
Mr. GOODWIN. Length of benefits, yes.

Senator HARTKE. Those programs in 1958 instituted for the recession then and in 1961 were identical for all intents and purposes. Mr. GOODWIN. On this particular point?

Senator HARTKE. Yes.

Mr. GOODWIN. They were.

Senator HARTKE. Who paid the bill?

Mr. GOODWIN. Well, in one case the Federal Government paid the bill.

What is the one case?

Senator HARTKE. Which is the one case you mean?
Mr. GOODWIN. Pardon? That is TEVČ.
Senator HARTKE. Let's identify one case.
Mr. GOODWIN. The 1961 program.
Senator HARTKE. In 1961 what happened?

Mr. GOODWIN. It was financed by the Federal Government.
Senator HARTKE. Without any payments from the State?
Mr. GOODWIN. That is correct.

Senator HARTKE. Without any payments from employers?
Mr. GOODWIN. No. There was a Federal tax.

Senator HARTKE. A Federal tax was imposed on the employers, right?

Mr. GOODWIN. Right.

Senator HARTKE. It did not come from the General Treasury. So, to all intents and purposes and in theory at least, the 1961 experience is not any different from that which is recommended by the bill which Senator McCarthy introduced; is that correct?

Mr. GOODWIN. That is correct.

Senator HARTKE. Now, what States complained about that operation?

Secretary WIRTZ. Before you go on, Mr. Chairman, that answer is not quite correct on that, because S. 1991 includes a provision for extended benefits to be financed both from an employer tax and from general funds.

Senator HARTKE. And from general funds, all right.

Secretary WIRTZ. That is right, so it is new in that respect.
Senator HARTKE. It is new to that extent.

Secretary WIRTZ. Yes.

Senator HARTKE. But, what States, if any, complain about the imposition of Federal controls for supplemental unemployment benefits? Did you have any complaints of anybody not participating, not wanting to participate?

Mr. NORWOOD. All States participated in 1961, 17 in the 1958 pro

gram.

Senator HARTKE. All of them participated in the recession of 1961; is that right?

Mr. NORWOOD. Yes, sir.

Senator HARTKE. The truth of it is, if we have a recession, and 1 think possibly that we have some signs which are not too good, especially if we keep to this tight money policy-which I wish you could convince other members of your administration to change and this high interest rate program which I wish you could get them to change. I am hoping that you don't trigger a recession on the other side instead of triggering unemployment benefits. The truth of it is that the Congress is pretty responsive, and that even without a triggering device on a permanent level, even if we do have a recession, don't you think that probably Congress will respond anyway?

Secretary WIRTZ. Yes.

Senator HARTKE. Let me make that a rhetorical question.

Secretary WIRTZ. The record would support only an affirmative answer to that.

Senator HARTKE. This Nation does not intend to stand by and see its people suffer like they did during the great depression of the 1930's; isn't that true?

Secretary WIRTZ. Yes, sir. There is a time question as to whether the timing of the action coines

Senator DOUGLAS. That was the point I was going to make. Congress will act after there has been prolonged unemployment and suf

fering, not in anticipation. I think that this act, which comes at a time of high employment and low unemployment, is done to see if we can't mend the roof when the sun is shining.

Senator HARTKE. Just so the Senator from Illinois does not misunderstand me, what I am pointing out to you is that the long-range benefits of providing for a system which would take care of employees rather than groups of employees under certain circumstances is preferable to a triggering device. This is what I was basically coming to. If you have to have a triggering device, it is much better than waiting for public opinion to trigger the Congress. You say that this is more effective. But to me the point of it still is, what are you trying to do? Are you trying to take care of the economy, or take care of workers?

If you are trying to take care of workers, then you don't trigger them as to what happens generally in a State. What happened there in South Bend I'll tell you was a horrible fact for those people. If you have done as I have, and gone in and seen a man who has worked years, and thinks he is taken care of, but doesn't even have his pension reinsured, which I hope that you will push for, too

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Secretary WIRTZ. I certainly will.

Senator HARTKE. This bill which I have on that, he doesn't even have his pension reinsured, and he doesn't even have the capacity to read and write. I hope you will encourage the adoption of my adult education bill, which is going to be passed out today. But the point I am driving at is very simply this. Either you are going to take care of people, or you are going to look out for the so-called economy. I would rather place the emphasis on the human rather than on the material economics. I would think that is why the administration's proposal basically is more sound than that of the House, and I just wanted to

Secretary WIRTZ. You will know how completely our thinking parallels your own on that. As you have just suggested, S. 1991 is on exactly the theory to which you have referred.

Now, we have in the testimony here tried to respond constructively to the fact that the House took a different view, and we have tried to suggest to the committee something which will preserve the value to which you refer and at the same time pick up the pragmatics of the House action.

Senator HARTKE. Mr. Secretary, let me ask you another question. In comparison to when we first went into this unemployment compenstation scheme, in relation to average weekly wages, are the benefits more now or less now, percentagewise?

Secretary WIRTZ. Much less.

Senator HARTKE. Much less?

Secretary WIRTZ. Yes.

Senator HARTKE. In other words, we have had a Nation which has had a successful climb out of recession into a period of high prosperity, and yet for that individual who is unfortunate enough to be the one who is caught in these gyrations and these changes, his situation, relatively speaking, is worse today than it was during the depression.

Secretary WIRTZ. That is correct.

Senator HARTKE. Not alone is it worse percentagewise, but it is really worse in his living conditions; isn't that true?

Secretary WIRTZ. Well, in absolute terms I don't suppose. In relative terms, yes.

Senator DOUGLAS. The relationship to the cost of living.
Secretary WIRTZ. That is correct.

Senator HARTKE. That is what I am speaking about. In other words, in relation to the cost of living, of how he has to live and his general standard of living, he suffers greater now than he did during the time when we first experimented with this program.

Secretary WIRTZ. Yes, I think so.

Senator DOUGLAS. Assuming no more reserves.

Senator HARTKE. That is right.

Secretary WIRTZ. Yes.

Senator HARTKE. If he had reserves that is good, that is fine.
Senator DOUGLAS. Yes.

Senator HARTKE. But, that is not due to the law.

Senator DOUGLAS. That is right.

Senator HARTKE. The law has just failed to keep pace. This is what I am trying to bring out. I would like to point out that Mr. Martin Gronvold-I don't know who he is, I have never met the gentleman-Unemployment Compensation Division of North Dakota, points out that although something is done along the line, and that their State has taken steps, they are not lagging behind in benefits, and unless there is some type of overall approach to making some uniformity throughout the Nation, that they will have to cut back.

Secretary WIRTZ. That is right.

Senator HARTKE. In other words, unless something is done along the lines which are being suggested here today, of a material benefit to raise the actual percentage of benefits which are received, the amount of the benefits received, then those States which have been progressive enough to try to meet this problem on a local level will find that in order to be competitive with other States they are going to have to turn the clock back.

Secretary WIRTZ. That is still right, and this is why, Senator, we are just so hopeful that there won't be just some easy settling on H.R. 15119, because if there is, it will leave out all that you are talking about here.

Senator HARTKE. Then I would like to come back to the difference in the duration proposal, and I was hoping that the Senator from Delaware would have stayed, because I wanted to take that quotation which is made by Mr. Rosbrow of the Delaware Employment Commission, and he testified that:

We in Delaware have had our share of casualties due to technological change. Garment plants, paper equipment manufacturing, a steel fabricating plant, iron works, in our generally prosperous State. The toll, not men in between jobs, but men in new occupations and new opportunities to utilize skills required and sharpened over decades of conscientious effort. Neither the State of Delaware nor its employers—

And I think this is an important factor—

Neither the State of Delaware nor its employers are responsible for the changes of this nature.

This is a factor which we must take into consideration.

We believe it appropriate that unemployment of this type extend beyond 26 weeks. The Government of the United States should step in to meet some of the cost of a national phenomenon.

I wanted to get that statement in this testimony early before we go off into those other tangents.

Is there at the present time a tendency on the part of the States to be fearful that their funds may become insolvent, and, therefore, that they hesitate, and frequently say that "We do not want to increase the benefits too much because of the danger of insolvency"? Have you run into this at all?

Secretary WIRTZ. Is there a hesitancy on the part of the States to improve their provisions?

Senator HARTKE. Improve their provisions for the benefits.

Secretary WIRTZ. Well, there is that, but there is another very strong factor involved, too, and that is the pressures in that direction that come from employers because of the experience rating system. Now, we don't mean to go into that here.

Senator HARTKE. I understand that.

Secretary WIRTZ. But, it is certainly a realistic part of the answer to your question, and if the broad question, Mr. Chairman, is whether there is timidity, a tendency to draw back, a tendency not to keep pace with a developing economy as far as the State administration of these systems is concerned, you will know that my feeling is that there is.

Senator DOUGLAS. Will the Chair permit me to break in again. This was one of the grievances which some of us saw in the Labor Department bill back in 1935. By providing for merit rating you gave a financial incentive to the employers to try to keep the benefits down, not merely on individual cases, but on the scale of benefits. As I say, I congratulate the Department of Labor for being able to learn over the span of 30 years. You have learned much more quickly, Mr. Secretary.

As I say, a lot of this trouble could have been avoided if the experts of the Department of Labor had thought this problem out in 1935 instead of adopting the idea that unemployment was the fault of the employer. That if you just penalize him for it, he would eliminate unemployment as it was said he would reduce accidents.

Accidents are only partially under the control of the employer. They are under the control of the employer only to a very limited degree.

You will forgive me if I raise these points. I don't want to be put in the position of point scoring, but I have waited 31 years to say this. Secretary WIRTZ. I want to be clear in my answer, Mr. Chairman, that I don't mean to reopen the question of going into experience rating further.

Senator HARTKE. I understand.

Secretary WIRTZ. We subscribe to the House approach to that entirely, but your question is whether there are forces committed, or whatever you want to call them, as far as the State administration is concerned that is part of the answer.

Senator DOUGLAS. I would agree that this is part of life.

Secretary WIRTZ. Yes.

Senator DOUGLAS. That the experience rating is embedded and you can't change it.

Secretary WIRTZ. Sure.

Senator DOUGLAS. But it results in powerful pressures being exerted to keep the scale of benefits down. I commend the Senator from Indiana for bringing this point out.