The CHAIRMAN. We did want to go into that now, but we have several people here waiting to get on a panel. We do want to get them on before we break and we are very grateful and appreciate very much your being with us, Commissioner Ball, with your able assistants.

Will our panel please come forward, Mr. Hutton, Mr. Schuchat is next, Charles Fichtner, Edwin Shelley, William Greenough, and Othie Burk.

STATEMENT OF WILLIAM R. HUTTON, EXECUTIVE DIRECTOR, NATIONAL COUNCIL OF SENIOR CITIZENS; THEODOR SCHUCHAT, RETIREMENT EDITOR, NORTH AMERICAN NEWSPAPER ALLIANCE; CHARLES C. FICHTNER, MEMBER OF LEGISLATIVE COUNCIL, AMERICAN ASSOCIATION OF RETIRED PERSONS AND NATIONAL RETIRED TEACHERS ASSOCIATION; EDWIN S. SHELLEY, PRESIDENT, NATIONAL COUNCIL ON THE AGING; WILLIAM GREENOUGH, CHAIRMAN, TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, COLLEGE RETIREMENT EQUITIES FUND; AND OTHIE G. BURK, VICE PRESIDENT, NATIONAL ASSOCIATION OF RETIRED CIVIL EMPLOYEES

The CHAIRMAN. Who is the chairman of this delegation, gentlemen? Mr. HUTTON. I am elected, Mr. Senator, I am Bill Hutton and I am the executive director of the National Council of Senior Citizens. I want to submit for your record three brief statements; two of them from distinguished Americans who were former presidents of the National Council of Senior Citizens and one from our new acting president of the National Council. These statements are from our founder and first president, the Honorable Aimé J. Forand; our immediate past president who is now president emeritus, John W. Edelman; and from the current acting president—and I hope he will be our new president after our convention in June-Nelson H. Cruikshank. The CHAIRMAN. We will include them in the record.

STATEMENT OF MR. HUTTON

Mr. HUTTON. The National Council seeks a meaningful increase in social security benefits. Our membership also seeks Medicare improvements including abolition of the deductible and coinsurance payments that deprive more and more eligibles from benefits of this great health program.

We do insist on inclusion of the cost of outpatient drugs under Medicare and the extension of Medicare to eyeglasses, false teeth, hearing aids, and other essential health items which are not now covered.

In addition, the National Council asks action by Congress to insure the needy elderly housing, housing at prices and rents they can afford. In short, the National Council of Senior Citizens asks for social growth to match the Nation's tremendous economic growth.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you very much, Mr. Hutton. We are glad to have the statements for the record from the past and present presidents.

(The statements referred to follow :)

STATEMENT OF AIME J. FORAND

My name is Aime J. Forand. I served 18 years as Congressman from Rhode Island, retiring in 1960 for health reasons. For three years, I was president of the National Council of Senior Citizens. I have been President Emeritus of that organization since 1964.

I have always been interested in health care for the elderly and I take satisfaction from the fact that those 65 or over now have Medicare health insurance. In the years since the Medicare program was the subject of nation-wide controversy, I have had the chance to evaluate forecasts and predictions of the groups that opposed this very worthwhile social program.

I recall the claims of many economists and social scientists that an expanding economy would lift all or nearly all the poor out of poverty and Social Security, Medicare and other measures to make a better life for them would not be necessary.

One part of this optimistic forecast has come true. The United States has become the wealthiest nation in the history of the world. However, instead of being better off, poor children are no better off and some are probably worse off with one in four U.S. children living in poverty.

The plight of the elderly poor is surely worsening year by year with one in every three elderly persons sunk in poverty.

This descent into the maelstrom for the helpless, infirm and elderly is taking place in a period of unprecedented prosperity for the majority of Americans. The report of the task force set up by your Committee to go into this situation is, in my opinion, historic. It points up graphically the trend in our country to steadily rising living standards for the majority and more and more depressed living standards for the helpless poor, infirm and elderly.

It is especially revealing in its data on the growing gap between what a worker earns on the job and the much smaller income he is likely to have upon retirement.

I am very much impressed with this report entitled: "Economics of Aging: Toward a Full Share of Abundance." I salute Dorothy McCamman, consultant to your Committee, and the experts who joined in its preparation.

I am hopeful the report will generate real impetus toward a solution of this crucial national problem of persistent poverty in the midst of plenty.

STATEMENT OF JOHN W. EDELMAN

I am John W. Edelman, retired President of the National Council of Senior Citizens and retired Washington, D.C., representative of the Textile Workers Union of America.

I am 76 years old and, during most of my lifetime, I have heard well meaning people professing interest in the problems of the poor, infirm and elderly justify inaction by saying our nation's resources were limited-too limited in fact to admit any real improvement for those at the base of the economic pyramid.

If there ever was justification for a do-nothing social policy, there is no longer any such justification in America.

With our gross national product approaching a trillion dollars a year, with the great majority of Americans better off than at any time in history, with our country far and away the world's richest, this idea that we cannot afford to lift the helpless poor, including the elderly who are the poorest of the nation's poor, out of their poverty becomes ludicrous.

The United States uses less of its national wealth for the social benefits than any other advanced industrial nation.

According to a report by the International Labor Organization, a United Nations affiliate, America ranks below 21 other nations in the percentage of national income devoted to social benefits.

Austria and West Germany set aside more than twice as much for social benefits out of their national income than does our country, this report reveals. Even Ireland and Malta set aside more of their national incomes for social benefits than does the United States, according to the ILO report.

Of course, those who have shared the rise in U.S. living standards may have to make a few sacrifices to help our poor, infirm and needy elderly achieve a decent minimum of comfort and security.

I think the U.S. Senate Special Committee on Aging's task force report on the economics of aging may provide the incentive for needed action.

STATEMENT OF NELSON H. CRUIKSHANK

My name is Nelson H. Cruikshank. I am Acting President of the National Council of Senior Citizens and, for the Spring term, I am Visiting Professor of Social Science at Pennsylvania State University. I retired in 1965 after 12 years as Director of the AFL-CIO Social Security Department.

The National Council of Senior Citizens sees an urgent need for a substantial increase in Social Security benefits-an increase on the order of 50 per cent across the board with even greater improvement at the minimum benefit levels.

Our organization considers the 7 per cent so-called cost-of-living increase in Social Security budgeted by President Nixon a pitiful token that comes nowhere near meeting the desperate money problems of the elderly poor.

The inadequacy of the Social Security increase Mr. Nixon has proposed is shown by the report of your Committee's task force on the economics of aging. It reveals an awesome gap between a worker's income from wages and the income the same worker is likely to have after retirement.

As this report states, the retirement income gap is worsening every year and vast numbers of today's wage earners face a grim prospect indeed when the time comes for them to retire.

The Social Security increase proposed by President Nixon means the retirement income gap will continue. Millions of elderly poor-an estimated 8,000,000 at or below the poverty line and millions more who are perilously close to itwill be a little better off but they will continue to be deprived.

Mr. Nixon has called the 7 per cent Social Security increase he has proposed a cost-of-living increase but the sad fact is an increase of that amount in February, 1970, the time the President sees the proposed increase becoming effective, would make it fall considerably short of being a genuine cost-of-living increase if the present escalation of the Consumer Price Index continues.

I need not remind you that the March rise in this index was the largest in 18 years.

In fact, a 50 per cent across-the-board increase in Social Security would provide a very modest level of living for Social Security recipients. With a 50 per cent increase, an individual would average no more than $1,764 a year, and couples would average no more than $2,970 a year.

The National Council of Senior Citizens has been flooded with letters expressing disappointment with President Nixon's proposed 7 per cent Social Security increase.

Here are typical comments in these letters:

"I deplore the proposal (7 per cent Social Security increase). It is outrageous in view of the fact that Senators and Congressmen voted themselves a 41 per cent pay increase, effective immediately."

"I am a widow getting $74 a month on Social Security. If President Nixon could see how people like us live, I think he would want us to have a great deal more than a 7 per cent increase."

"After working all my life, my Social Security is not enough. I am on relief." "With all the billions of dollars the Government has to spend, why can't they do better than a 7 per cent increase. Why do old people get the short end?" These men and women live in poverty as do millions of their contemporaries. Mr. Chairman and members of this distinguished Committee, I submit our society has failed these millions of unfortunate citizens.

A prosperous and vastly productive America can help them if we make up our minds to. Up to now, we have sought to cure poverty by studying the poor. I suggest we now consult our own consciences. The benefits asked by the National Council of Senior Citizens are reasonable and attainable if the American people are determined to include the poor, infirm and needy elderly in their vision of progress.

Mr. HUTTON. If I may, I would like to just give three brief highlights, one from each of those three statements. Aimé Forand says that in the years since the Medicare program was the subject of nationwide controversy, he has had a chance to evaluate the forecasts

and the predictions of the groups that opposed this very worthwhile social program.

The CHAIRMAN. In my book he is the father of Medicare.

Mr. HUTTON. Thank you, sir; I believe most of us in the National Council also believe that. Forand says, "I recall the claims of many economists and social scientists that an expanding economy would lift all or nearly all the poor out of poverty and Social Security and Medicare and other measures to make a better life for them would not be necessary."

Forand says only one part of that optimistic forecast has come true that is that the United States has become the wealthiest Nation in the history of the world. But the plight of the elderly poor is worsening year by year, with one of every three elderly persons sunk in poverty.

John Edelman, our immediate past president, says that with America's gross national product approaching a trillion dollars a year, with the great majority of Americans better off than at any time in history, with our country far and away the world's richest, the notion that we cannot afford to lift the helpless poor, including the elderly who are the poorest of the poor, out of their poverty, becomes ludicrous.

Edelman says the United States uses less of its national wealth for social benefits than any other advanced industrial nation in the world. He says according to a report by the International Labor Organization, the United Nations affiliate, America ranks below 21 other nations in the percentage of national income devoted to social benefits.

Austria and West Germany set aside more than twice as much for social benefits out of their national income than those of our great country. Even Ireland and little Malta set aside more of their national income for social benefits than does the United States.

Nelson Cruikshank, our new acting president, says the National Council of Senior Citizens sees an urgent need for a substantial increase in social security benefits, an increase on the order of 50 percent across the board with an even greater improvement at minimum levels.

Our organization, sir, considers the 7 percent so-called cost of living increase in social security, budgeted by President Nixon, a pitiful token that comes nowhere near meeting the desperate money problems of the elderly poor.

Finally, sir, on my own behalf, I would only like to say that poverty in any form is a national disgrace, and in the case of millions of the elderly poor, it is a terrible injustice to the men and women who have contributed so much to the prosperity of the great majority. The CHAIRMAN. Mr. Schuchat?

STATEMENT OF MR. SCHUCHAT

Mr. SCHUCHAT. The subject of these hearings is the growing gap between the social security benefit and a moderate standard of living for retired people and the growing gap between the income of older people and the income of younger people.

Secretary Finch, however, has perceived another gap. In a statement issued on April 9, he said:

32-346-69-pt. 1

With regard to the need for greater emphasis on child development, we know that there are four times as many young people as aged in the U.S., yet:

Federal benefits and services of all kinds in 1970, including the social insurance programs, will average about $1,750 per aged person, and only about $190 per young person; and

The relative imbalance has been expanding, with the increase over the last 10 years for the aged standing at nearly $22 billion, compared to $11.5 billion for the young.

In my opinion, Secretary Finch is as wrong as he can be in this statement, and I recommend that he stop and think before maintaining this erroneous and divisive policy position, if this is indeed what his statement represents.

In the first place, he seems to be using the wrong figures. In 1969, the Federal expenditure per older person was $1,690, and in 1970 it will be an estimated $1,785, according to the Administration on Aging, a unit of the Department he heads. I don't know where he got the figure of $1,750 for 1970.

Second, these figures lie as they stand in Secretary Finch's statement, without explanation or clarification of any kind. He does not explain, for instance, that 85 percent of the Federal expenditures for older people currently come from trust funds to which the elderly themselves contributed heavily during their working years. In contrast, only 25 percent of the Federal expenditures for children come from trust funds.

EXPENDITURES FOR YOUNG AND OLD

He has tried to tell the American people that the Federal Government is spending $10 for each old person and only $1 for each child. The ratio of 10-to-1 that he apparently decries falls to a ratio of only 2-to-1, however, if we exclude the trust fund expenditures and stick to expenditures from general revenues.

Now, let us examine the nature of these expenditures. Of the Federal expenditures for older people, 98 percent are represented by income maintenance payments (76 percent) and health care (22 percent). So it turns out that the Federal expenditures per older American for everything except income and health care is less than $36.

In contrast, only 41 percent of the Federal expenditures for young people are represented by income maintenance (31 percent) and health care (10 percent). For children, the Federal expenditure for everything except income and health care is more than $99.

Next, let us consider why these data come out the way they do, with the Federal Government apparently expending much more for older people than for youngsters. The reason is obvious. The needs of most children for income and health care are met by their parents, and their needs for education are met to a very large extent by local and State governments.

However, the needs of old people for income and health care-to the extent that they cannot be met from their earnings or their savings or those of their relatives-are met to a very large extent by Federal programs, and remember that the recipients of this aid themselves contributed to the trust funds that provide 85 percent of it, as well as to the trust funds that provide a large part of the aid to children.

Just what message was Secretary Finch trying to convey when he issued this misleading fiscal comparison on April 9? Does he mean