Senator CRANSTON. Our next witness is John C. Harmon, general counsel of the Goodwill Industries of America.

Mr. Harmon, thank you very much for coming.

STATEMENT OF JOHN C. HARMON, JR., GENERAL COUNSEL AND DIRECTOR OF SPECIAL SERVICES, GOODWILL INDUSTRIES

Mr. HARMON. Thank you, Mr. Chairman, for this opportunity to speak on behalf of the 168 local member Goodwill Industries all across the country. Frank Taylor, of the National Board of Goodwill Industries, was very anxious to be here, but could not rearrange his schedule to meet the time change for his appearance and asked me to express his regrets. He is one of the many outstanding volunteers who give of their time and substance to make possible Goodwill's service to the handicapped.

I would like in the interest of time to have my written statement placed in the record as though I in fact read it.

Senator CRANSTON. That will in fact go in the record as read, and I appreciate very much your doing that.

Mr. HARMON. Mr. Chairman, thank you for the privilege of testifying today on H.R. 8395 and the several other bills proposing to extend and revise the Vocational Rehabilitation Act.

I am John C. Harmon, Jr., general counsel and director of special services for Goodwill Industries. I hope and believe that you are generally familiar with our organization, which consists of 146 member Goodwill Industries serving handicapped people and their communities all across the country.

We have been engaged in this work for most of this century. In recent years, most of the local Goodwill members have increasingly developed rehabilitation concepts and programs. As a result, while Goodwill continues to be a major means of providing employment for large numbers of handicapped people, it also is a rehabilitation organization. Most local Goodwill Industries have direct daily working relationships with the State vocational rehabilitation agencies, for whom they provide services to State agency clients. This, plus a variety of other community relationships, makes the network of Goodwill Industries locals one of this country's principal resources for restoring the handicapped to useful work and a place in community life.

Despite the excellent gains made in recent years, all of us who serve the disabled are constantly faced with a sea of unmet needs. We can take pride in the growth of voluntary organizations, such as Goodwill, and in the Federal-State program of vocational rehabilitation, which now is rehabilitating nearly 300,000 handicapped people yearly. But with conservative estimates indicating from 7 million to 8 million. handicapped people needing help, we have a long and difficult road ahead of us.

Mr. Chairman, we find many important and valuable features in H.R. 8395 and we find some deficiencies which we think are so glaring that they should be corrected before your committee reports a bill. Specifically, we endorse the proposal for advance funding of the programs under this proposed new act, which we believe would help. every agency which cooperates in this set of programs, without adding any cost whatever for the Federal Government.

We support the proposed new title I providing for the FederalState program of Vocational Rehabilitation Services, including the new program of grants under section 104 to permit the States to initiate or expand service programs for the handicapped.

We endorse title II of the bill to authorize grants to States to pay 9 percent of the costs of programs to evaluate the rehabilitation potental of handicapped and other disadvantaged individuals.

We further concur in section 410, to establish a National Information and Resource Center for the Handicapped, section 411, the National Center for Deaf-Blind Youths and Adults; section 412, to auauthorize comprehensive rehabilitation centers for deaf youths and aduits; and section 413, to create a National Commission on Transportation and Housing for the Handicapped. Rehabilitation without adequate transportation is a poor answer. Rehabilitation of the whole person includes housing. We also support section 414, or any similar arrangement which will help focus attention and funds on the complex problems of those disabled by spinal cord injury.

After much study of the House bill, we are convinced that it fails. to meet future needs for the necessary improvement and expansion of rehabilitation facilities generally and workshops in particular. The House bill continues most of the present provisions of the act, but at a reduced funding level. The 1965 Vocational Rehabilitation Amendments provided for a major expansion of work-oriented rehabilitation. effort. Later in our testimony we describe the improvement and expansion of services by Goodwill Industries as a tremendous and exciting demonstration of this advance.

We are well aware of the critical opinions expressed by some that workshops are often only a dead end for the handicapped. We are even more aware of the criticism about low wages in workshops. Organizations serving the handicapped have for years been working to find adequate solutions to these important problems. Yet we must be candid and say there seems to be a lack of sufficient concern to really do something about helping workshops provide an adequate remedy.

It's real easy to say, why don't you get these people in workshops cut into the regular labor market-why don't workshops pay at least the minimum wage to every handicapped individual regardless of work performance?

The House bill provides for a study of these workshop problems. This is good, as far as it goes. It might lead to later action.

We think it would be much better and more in keeping with the general spirit of the Vocational Rehabilitation Act for Congress to authorize positive action now. We hope this committee will recommend such a program of action by specific language in the 1972 Vocational Rehabilitation Amendments.

These problems-which in terms of meeting the needs of handicapped people are opportunities in disguise-are:

1. Income of handicapped workshop employees;

2. Instruction and financial needs of trainees in workshops; and 3. Construction and expansion of rehabilitation centers, workshops and other rehabilitation facilities.

We propose, therefore, that a new title be established in the act, as title IV: Rehabilitation Facilities, Workshops and Related Programs, to include sections dealing with the above three needs, plus sec

tions incorporating certain related programs already authorized by law. Specifically, we recommend:

Incomes of handicapped workshop employees. There are several thousand handicapped people in this country who work regularly in workshops, who cannot secure employment in competitive industry, who do the best work they can in workshops which are efficiently operated and yet the workers cannot earn enough to make a living. Despite their conscientious efforts, they still are dependent on welfare, or charity, or relatives, or a combination of these.

We believe that, as a matter of social justice, these workers should have their incomes supplemented regularly to a point which permits them to live decently-not as a matter of charity but as a standard reward for making the best effort they can to earn a living.

We propose, therefore, that a section be included in such a new title IV to establish a system of Federal financial augmentation of wages earned by handicapped persons employed in workshops. The workshops to be eligible for participation would be those which (1) meet the definition in the present section 11(c) of the act and the regulations; (2) meet the requirements of the Wage and Hour Division of the Department of Labor with respect to such workshops; (3) are certified by the appropriate State vocational rehabilitation agency as furnishing a necessary service to the handicapped individuals of the community; (4) are public or other nonprofit workshops as defined in the present section 11(d) of the act; and (5) are workshops which compete fairly in obtaining work or in the sale of their products.

Such a program should be designated as a work supplement program in workshops for the handicapped. The new program should provide that the Federal Government will pay the costs of supplementing the income of those handicapped people employed in workshops who (1) are in an employee status (rather than a trainee or recipient of other services); (2) are employed on a fulltime basis (i.e., not less than 30 hours weekly); (3) are certified not less than annually as being employed at their highest current level of skill and earning power; and (4) who are reviewed and evaluated not less. than semiannually to determine the individual's potential for being placed in employment outside the workshop.

For such handicapped employees in eligible workshops, we propose that payments be made from Federal funds in amounts which will bring the combined income from wages and Federal Work Supplement funds to an amount for each such handicapped employee which equals (1) the amount of the "poverty level" income applicable for a person in such personal circumstances, as determined by the income. levels promulgated by the U.S. Office of Economic Opportunity; or (2) the amount the individual would have earned if the standard Federal minimum wage were applicable, whichever of the two amounts is less.

In recent years workshops, including Goodwill Industries, have greatly improved staff services to accurately assess the productive effort of handicapped workers. This is required under the wage and hour regulations covering handicapped workers.

The Department of Labor made certain recommendations in this area in connection with a study of workshop wages authorized by Congress in 1966. There has been no action on the wage supplement recommendation.

Many workshops have, in recent years, added placement staff to help those ready to find suitable employment, with considerable

success.

Yet, with it all, there will remain a high percentage unable to be absorbed into regular competitive employment.

SPECIAL TRAINING SERVICES PROJECTS

Since 1965 the act has provided for special training services to encourage workshops to provide for (1) organized well-administered skill training programs to handicapped persons, including work evaluation, work adjustment, occupational tools and equipment; and (2) a training allowance to the handicapped trainee.

This program should not be confused with the regular program of services which the State vocational rehabilitation agency obtains from workshops with funds provided by the State and Federal Government under section 2 of the present act.

This special program for which the workshops put up the matching money was created to extend services to handicapped persons not presently being served in the regular State program. The results are self-evident of this fact. It has also led many State agencies to expand their use of workshops in the regular program.

We believe it is necessary, not only to continue this valuable channel for training services, but we believe it ought to be expanded.

The demonstrated record of success in attracting and encouraging the trainee by an adequate training allowance during the period of training is phenomenal. It provides substantial evidence for our proposal to extend such assistance to other individuals receiving workshop services, including extended employment.

We recognize that the State vocational rehaiblitation agency may now provide for the "maintenance" of individuals receiving rehabili tation services under section 2 of the act. Because of limited funds, this never amounts to much more than bus fare for the person that receives the service in a workshop. We see no prospect of improvement in the near future.

Therefore, we urge, Mr. Chairman, that you devote a section of the proposed new title IV to this training services in workshops program and that you authorize appropriations in a much greater amount for the next 3 fiscal years. I can assure you that you will make no better investment in practical training and employment of handicapped people.

Construction and expansion of facilities. H.R. 8395 would (1) continue the present authority for grants for construction and expansion of rehabilitation facilities, as a part of the proposed title IV, and (2) add new provisions for a mortgage insurance plan for such construction, along with annual interest grants.

We believe this largely ignores the realities of present and future needs for facilities. As the committee is aware, there have been practically no funds for grants for construction for the past 4 years and the backlog of need is piling up. Nonprofit groups in communities scross the country can and will raise locally a substantial share of the cost of new workshops and centers but they cannot assume the entire burden by themselves-particularly when they know that the compieted facility means that they must continue to raise funds to pay for

a major portion of the services to many of the people they will serve. We urge, therefore, that the new title IV contain a section authorizing grants to States and other voluntary nonprofit groups for the construction, expansion, alteration, equipment, and initial staffing of workshops, centers, and other rehabilitation facilities, using the same project approach and the same matching provisions that are in the present law.

We feel it is questionable whether the mortgage insurance and interest subsidy plan in H.R. 8395 would be helpful. To the extent that it might be used as an excuse not to budget for construction grant funds, it could be harmful. As a device to help encourage the construction and expansion of rehabilitation facilities, we do not see it being used widely. For one thing, the bill would limit the amount of any mortgage to $250,000 which is far short of the cost of building most rehabilitation facilities today. Thus, we are not enuthusiastic about the possibilities in this proposal.

Mr. Chairman, in addition to the above, the proposed new title IV should include provisions for the following programs which already are functioning under the present act:

1. Rehabilitation facility improvement grants. It can be seen from the subsequent review of past improvement of Goodwill Industries which follow in our testimony, that this source of aid has been most successful. We urge that it be continued in the same form with an adequate authorization to cover increased needs in the future. The amendment to the Wagner-O'Day Act, adding the "severely disabled" to the blind for government products and services, will provide much needed work for both transitional and extended services in workshops. Expansion funds are required to tool up for this program. The House committee stated, in approving the Wagner-O'Day amendment:

The Committee on Government Operations expects that the Department of Health, Education, and Welfare will utilize its resources to a greater degree, especially the Department's Rehabilitation Services Administration, to assist the Committee.

This will require an adequate authorization under the vocational rehabilitation amendments of 1972.

2. Technical assistance to rehabilitation facilities. In this connection, we hope the committee will specifically authorize an annual appropriation for this small but highly valuable service to workshops and other facilities, so that it will not be subject to the vagaries of the salaries and expense appropriation for the Federal agency.

3. Continued authorization for, and use of, the national policy and performance council. With respect to the latter council, we suggest that language be included in the bill to require that the council meet not less than once annually with the Secretary of Labor, or his representatives, for consideration of problems and solutions in operation of the wage and hour law as it pertains to the functioning of workshops for the handicapped. We hope this council can be used to an even greater extent to advise the Secretary of the Department of Health, Education, and Welfare on all matters which relate to rehabilitation facilities and, more specifically, workshops.

4. For the purposes of this new title IV, we propose an annual authorization of appropriations of not less than $60 million for fiscal 1973, $70 million for fiscal 1974, and $80 million for fiscal 1975. We suggest an additional authorization be set for the new work supple