Project Moneywise-Senior is to be presented for the purpose of training older Americans to help their friends and neighbors, specifically the aged, develop economic self-security. Frequently the victims of unscrupulous merchants, the older citizens will be taught practical consumer skills and family financial counseling. They will learn to prepare a family budget; to compare values, prices, and credit in shopping; and to use group effort to combat financial ills. With the knowledge gained from the classes, the trainees will return to their local communities and help other older citizens to help themselves. The trainees will also be taught credit union operations and management. This job skill may be employed to supplement income and enable older people to become participating members of their communities. William D. Bechill, Commissioner on Aging, has stated: "We are convinced that ranking high among the many services which must be made available to our older citizens are imaginative and effective consumer education programs." Consumer education, family financial counseling and places to borrow at low rates of interest are the objectives of this new program-Project Moneywise-Senior. EXHIBIT B-SAMPLE PRESS RELEASE-GOVERNOR PRESENTS CERTIFICATES CONSUMER EDUCATION TRAINEES Twenty-five senior citizens who completed a Federal-State sponsored program in consumer education will receive certificates signed by the Governor in ceremonies at the State Office Building. Receipt of the certificates marks their completion of the Consumer Education Training Program, a four-week course sponsored by and taught by officials of the Bureau of Federal Credit Unions of the U.S. Department of Health, Education, and Welfare. Project Moneywise Senior consists of workshops that seek to teach people how to make their dollars stretch further. The training program taught these older Americans how to help their friends and neighbors, particularly the aged, develop economic self-security. Frequently the victims of unscrupulous merchants, the older citizens were taught practical consumer skills and family financial counseling. They learned how to prepare a family budget, to compare values, prices and credit shopping; and how to use group efforts to combat financial ills. With the knowledge gained from their classes and field trips, the trainees now will return to their local communities to help other older citizens to help themselves. Attending the ceremony in the State Office Building, in addition to will be Trainees receiving certificates include The EXHIBIT C-SAMPLE RELEASE, PROMOTIONAL COPY CONSUMER EDUCATION TRAINING PROGRAM (Sponsor) is contacting key people working with the elderly in and around the State for names of persons likely to be benefited by a four-week consumer education course. This course will deal with problems in consumer education, credit union operations and management, and family financial counseling. The (Sponsor) is conducting this course, and aiming it at the financial problems of the elderly. The course will last 6 hours a day for 20 days. A portion of this time will be spent in field trips, which will serve as laboratories for the classroom work, and in small discussion groups to share the students' experiences. Ideally, the participants in this program will return to their community and conduct consumer education programs for other older people. These people will be expected to serve as resource persons within their area for consumer problems. Out-of-pocket expenses for travel and lunch will be absorbed by the program. SOCIAL AND REHABILITATION SERVICE REGIONAL COMMISSIONERS Region I: Neil P. Fallon, John F. Kennedy Federal Building, Government Center, Boston, Massachusetts 02203. Region II: James C. Gallison, Room 1200, 42 Broadway, New York, New York 10004. Region III: Corbett Reedy, 220 Seventh Street, N.E., Charlottesville, Virginia 22901. Region IV: Virginia Smyth, Room 404, 50 Seventh Street, N.E., Atlanta, Georgia 30323. Region V : Dr. Effie O. Ellis, Room 712, New Post Office Building, 433 West Van Buren Street, Chicago, Illinois 60607. Region VI: H. Lyle Knight, 601 East 12th Street, Kansas City, Missouri 64106. Region VII: Doyle Best, 1114 Commerce Street, Dallas, Texas 75202. Region VIII: James R. Burress, 9017 Federal Office Building, 19th and Stout Street, Denver, Colorado 80202. Region IX: Philip Schafer, Federal Office Building, 50 Fulton Street, San Francisco, California 94102. ASSOCIATE REGIONAL COMMISSIONERS Region I (Conn., Maine, Mass., N.H., R.I., Vt.): Mr. James C. Hunt, John Fitzgerald Kennedy Federal Building, Boston, Massachusetts 02203. Region II (Dela., N.J., N.Y., Pa.) : Miss Eleonar Morris, Room 1420, 42 Broadway, New York, New York 10004. Region III (D.C., Ky., Md., N.C., Va., W. Va., Puerto Rico, Virgin Islands): Mr. H. Burton Aycock, 220 Seventh Street, N.E., Charlottesville, Virginia 22901. Region IV (Ala., Fla., Miss., S.C., Ga., Tenn.): Mr. C. Franklin Nicholson, Room 404, 50 Seventh Street, N.E., Atlanta, Georgia 30323. Region V (Ill., Ind., Mich., Ohio, Wisc.): Miss Verna Due, Room 712, New Post Office Building, 433 West Van Buren, Chicago, Illinois 60607. Region VI (Iowa, Kans., Mo., Minn., N.D., Nebr., S.D.): Miss Ameila Wahl, 601 East 12th Street, Kansas City, Missouri 64106. Region VII (Ark., La., N. Mex., Okla., Texas): Mr. Harold S. Geldon, 1114 Commerce Street, Dallas, Texas 75202. Region VIII (Colo., Iadho, Mont., Utah, Wyo.): Mr. Clinton W. Hess, Room 9017, Federal Office Building, Denver, Colorado 80202. Region IX (Calif., Nev., Are., Ariz., Wash., Alaska, Hawaii, Guam, Samoa): Mr. Charles P. Weikel, 406 Federal Office Building, 50 Fulton Street, San Francisco, California 94102. BIBLIOGRAPHY THE POOR PAY MORE, Consumer Practices of Low Income Families: By David Caplovitz. The Free Press, A division of the Macmillan Company, 866 Third Avenue, New York, New York 10022. A DOLLAR DOWN: Some Facts About Credit: Agricultural Extension Service, Purdue University, Lafayette, Indiana. A Guide to Federal Consumer Services: The President's Committee on Consumer Interests-1967. A GUIDE TO BUDGETING FOR THE FAMILY: Home and Garden Bulletin 108, U.S. Department of Agriculture. BE A GOOD SHOPPER: Division of Home Economics, Federal Extension Service, June 1965. BE WISE: CONSUMER QUICK CREDIT GUIDE: The President's Committee on Consumer Interest. Executive Office of the President. Washington, D.C. BORROWERS HANDBOOK OF SIMPLE ANNUAL INTEREST RATES FOR INSTALLMENT LOANS: Consumers League of New Jersey, 20 Church Street, Montclair, N.Y. BORROWERS HANDBOOK OF TRUE ANNUAL INTEREST RATES FOR INSTALLMENT LOANS: Consumers League of New Jersey, 20 Church Street. Montclair, N.Y. CONSUMER BEWARE: A GUIDE TO INSTALLMENT BUYING: AFL-CIO, Washington, D.C. Consumer Issues 66-A Report to the President from the Consumer Advisory Council. District of Columbia Home Economics Association Committee on Aging List of Selected Consumer Publications for Older Persons. American Home Economics Association, 1600 Twentieth Street, N.W., Washington, D.C. 20009. FACTS YOU SHOULD KNOW ABOUT BORROWING: Educational Division, Better Business Bureau, New York. FACTS YOU SHOULD KNOW ABOUT YOUR CREDIT: Educational Division, Better Business Bureau, New York. FACTS YOU SHOULD KNOW ABOUT SAVINGS: Educational Division, Better Business Bureau, New York. Gillum, Helen L.: "What should oldsters ent?" Today's Health 36: 53-55, July 1958. Guitat, Mary Ann: The Retirement Council. 101 Ways to Enjoy Your Leisure. Stamford, Conn. 1964. Harrington, Michael. The Other America. New York: The Macmillan Company, 1963. pp. 101–118. HI! I'M MR. MONEYWISE. I'D LIKE TO TELL YOU WHY I'M A CREDIT UNION MEMBER: Bureau of Federal Unions, Social Security Administration, HEW, Wash., D.C. Kaplan, Jerome. A Social Program for Older People. Minneapolis, University of Minnesota Press, c1953. MANAGING YOUR MONEY: Division of Home Economics, Federal Extension Service, March 1964. Maxwell, Jean M. Centers for Older People: Guide for Programs and Facilities. The report of a National Council on the Aging Project under a grant from the Frederick and Amelia Schimper Foundation. New York, The National Council on the Aging, 1962. A Definitive work on standards, philosophy, program, and building of centers. MONEY WORRIES? A CREDIT UNION CAN HELP: Bureau of Federal Credit Unions, Social Security Administration, Department of Health, Education, and Welfare, Washington, D.C. National Urban League. Double Jeopardy-The Older Negro in America Today. New York: National Urban League, Inc. 1964. SAFEGUARDS TO COMBAT EXPLOITATION OF OLDER CONSUMERS, THE HIGH COST OF GULLIBILITY, National Business Bureau-February, UNDERSTANDING AND USING ECONOMICS: Better Homes and Garden CONSUMER'S QUICK CREDIT GUIDE, Superintendent of Documents, U.S. Government Printing Office, Wash., D.C. 20402 (5¢ each.). ITEM 3: MRS. HELEN H. LAMALE,* CHIEF, DIVISION OF LIVING CONDITION STUDIES, BUREAU OF LABOR STATISTICS, U.S. DEPARTMENT OF LABOR (Subsequent to the hearing, the chairman asked several questions in a letter to Mrs. Lamale. The questions and responses, with attachments, follow :) Question. Senator Church. May we have additional discussion of your statement: "The Medicare program shaped part of the standard for medical care." Answer. Mrs. Lamale. The medical allowance in the Retired Couple's Budget includes hospital and medical insurance as provided by the Federal Medicare program, initiated in July 1966. Under the hospital insurance, for each spell of hospitalization there is an initial $40 deductible amount paid by the enrollee, and the insurance fully covers the remaining hospital costs for the first 60 days. Hospital insurance also includes 20 posthospital days in an extended care facility and 100 posthospital home health visits, at no cost to the enrollee. Finally, the hospital coverage includes outpatient hospital diagnostic benefits, for which the enrollee pays the first $20 and 20 percent of the balance of the costs for each diagnostic study. Under the medical insurance program each enrollee pays a monthly premium amounting to $3 in 1966-67. In addition, the enrollee pays the initial $50 of costs plus 20 percent of all remaining costs for services and supplies (medical and surgical services of a physician, diagnostic tests, selected medical supplies, and home health benefits). *See testimony, p. 371. Since the budget is designed for a couple in reasonably good health and able to take care of themselves, it was assumed that no charges were incurred by the couple for the longer term provisions of Medicare. For the autumn 1966 budget, the estimated annual average out-of-pocket cost ($148) for all Medicare enrollees was provided for budget use by the Office of Research and Statistics of the Social Security Administration, based on survey data for the first 12 months of the program. That portion of the estimated cost which covered the nonpremium charges under medical insurance ($58) was adjusted by BLS to reflect intercity differences in costs primarily the differences in fees for physician visits-using data from a special BLS analysis. Since Medicare does not cover the cost of routine dental care, eye examinations or eyeglasses for refractive error and correction, or most out-of-hospital prescription and nonprescription drugs, allowances for these items were added. Also added was a checkup visit to a physician for Medicare enrollees not using any Medicare services within 1 calendar year. Dental care quantities were derived from 1963-64 utilization data in the National Health Survey. Allowances for eye care and prescriptions and drugs were developed from the BLS 1960-61 Consumer Expenditure Survey data. Question. Senator Church. You also refer to "the increased ownership and use of automobiles by retired couples." May we have additional discussion of this point? Answer. Mrs. Lamale. The original Elderly Couple's Budget for a modest but adequate standard, developed by the Social Security Administration in 194647, provided only public transportation and made no provision for automobile ownership or use. When the Bureau of Labor Statistics prepared the revised Interim Budget for a Retired Couple in 1959, an allowance was included for automobile ownership by 14 percent of the couples in New York, Philadelphia, and Boston, and by 22 percent of the couples in the other 17 large metropolitan areas for which the interim budget costs were computed. These percentages reflected the practices of retired couples in these large cities at that time. In the autumn 1966 revision of the moderate Retired Couple's Budget, the costing of the budget was extended to include smaller metropolitan areas and nonmetropolitan areas. The percentage of auto ownership was increased to 25 percent for the New York area; 40 percent for Boston, Chicago, and Philadelphia; 60 percent for all other metropolitan areas; and 68 percent in nonmetropolitan areas, reflecting the increased ownership and use of automobiles by retired couples in the 1960's, as compared with the 1940's and 1950's. These data were obtained from the Bureau's surveys of consumer expenditures and indicate a substantial increase in the transportation standard over the two decades. Question. Senator Church. Your prepared statement referred to the requests by public assistance agencies to suggest ways in which the moderate standard budgets could be scaled down. How will your so-called "down" budget help such agencies? How will BLS assure that such a budget will not be used as a rationale for even less adequate assistance to the elderly? And once again, may I ask, what items can possibly be removed from your "moderate" budget? Answer. Mrs. Lamale. As indicated in my prepared statement the development of lower and higher standard budgets for a 4-person family and a retired couple was the recommendation of the Bureau's Advisory Committee on Standard Budget Research. (See enclosed report.) This Committee was made up of nonFederal Government users of standard budgets and included representatives from labor and business organizations, academic research, and private welfare agencies, as well as public assistance agencies. In recommending the development of a lower standard, the Committee, in effect, concurred with the judgment of public assistance program administrators that the norms represented by the moderate standard are too high to be consistent with the objectives of public assistance programs, or with the funds available to administer such programs. Similar problems with the use of the moderate standard had been encountered by legislative planners and by administrators in forming eligibility criteria and benefit levels for such programs as public housing, unemployment insurance, workmen's compensation, etc. In agreeing to develop the lower standard budgets, the BLS made quite clear that the lower budgets are not designed "to identify the cutoff point which sepa rates families with enough from those with insufficient income, in the context of these and numerous other programs." This standard does provide the basis for additional estimates of living costs which may constitute a more realistic benchmark than the moderate standard and hence be more useful to those concerned with problems of inadequate income. Since all BLS standard budgets are general purpose benchmark measures and are not tailor-made for any specific program, the Bureau cannot accept responsibility for their use in relation to specific program issues. The responsibility for such use (or misuse) rests with the user. It is the Bureau's responsibility in publishing these budgets to provide the technical data and to describe in detail the contents of the budgets and the basic assumptions and procedures used in their derivation. The BLS has fulfilled this responsibility with respect to the current budget program with the publication of the technical bulletin series numbered 1570-1 through 6, and with numerous articles in the Monthly Labor Review and other professional journals. Question. Senator Church. May we have additional information on how the BLS budgets arc used, as you said in your testimony, "to measure the adequacy of various types of pensions in existence now." Answer. Mrs. Lamale. The major purpose in the construction of the original "Budget for an Elderly Couple." issued by the Social Security Administration in 1948 was to evaluate the level of payments to beneficiaries. Chart A, pp. XII and XIII of your Committee's Task Force Working Paper is an excellent example of this type of use. Other examples of such use in Federal programs are cited under item 12. White House Conference on Aging (p. 20) and item 4, Medical Care Program (p. 24) of the enclosed "Report of the Advisory Committee on Standard Budget Research." The Retired Couple's Budget has been used extensively by the University of Colorado and the Colorado Department of Public Welfare in evaluation of the State old-age pension; see item 2(c), p. 25, of the enclosed report. The budget has also been used by both labor and management in planning and administering private pensions, frequently with the help of private consulting firms; see item 7 (b), p. 19 for an example. The enclosed paper which I prepared for the Church Pensions Conference at their invitation illustrates the interest in and use of the Retired Couple's budget in appraising the adequacy of the pension plans of the some 60 member denominations. The Retired Couple's Budget was used to appraise the adequacy of current and future pension income in the Social Security Administration Research Report No. 24, The Economic Status of the Retired Aged in 1980: Simulation Projections (see Measures of Income Adequacy, pp. 45-47 and Chapter V, Summary and Conclusions). Question. Senator Church. You did not have adequate time to respond to my question about a cost-of-living index for the elderly, similar to that established in Great Britain. I would like additional discussion of this method. Answer. Mrs. Lamale. The question of whether a "cost-of-living index," or consumer price index, specially designed for the elderly should be prepared is primarily a question of whether the expected differences in the trends of such an index from those of the existing Consumer Price Index are sufficiently large to warrant the substantial additional costs required to prepare the special index for the elderly. Although the expenditure weights for goods and services which would be used to combine the prices in an index for the elderly would be quite different from those used in the Consumer Price Index for employed wage-earner and clerical-worker families, the price trends might not differ significantly. In the past, there has been some misunderstanding about the relationship between price changes as indicated by the Consumer Price Index and changes in prices of goods and services which retired persons buy. There has been a tendency to think that the increase in price for the older families will always be greater than that measured by the Consumer Price Index for younger families. This is not necessarily true. It is true that in the period from 1950 to 1960, when many of the price changes were associated with medical service and other items which weighed heavily in the spending of the elderly, that the CPI probably understated the rise in prices for the elderly. During this decade prices for all urban U.S. consumers increased an average of 23.5 percent, and prices for families with |