COMMITTEE ON WAYS AND MEANS WILBUR D. MILLS, Arkansas, Chairman

JOHN M. MARTIN, Jr., Chief Counsel
J. P. BAKER, Assistant Chief Counsel
RICHARD C. WILBUR, Minority Counsel

MESSAGE ON SOCIAL SECURITY

THE WHITE HOUSE

To the Congress of the United States:

This Nation must not break faith with those Americans who have a right to expect that Social Security payments will protect them and their families.

The impact of an inflation now in its fourth year has undermined the value of every Social Security check and requires that we once again increase the benefits to help those among the most severely victimized by the rising cost of living.

I request that the Congress remedy the real losses to those who now receive Social Security benefits by increasing payments by 10 percent. Beyond that step to set right today's inequity, I propose that the Congress make certain once and for all that the retired, the disabled and the dependent never again bear the brunt of inflation. The way to prevent future unfairness is to attach the benefit schedule to the cost of living.

This will instill new security in Social Security. This will provide peace of mind to those concerned with their retirement years, and to their dependents.

By acting to raise benefits now to meet the rise in the cost of living, we keep faith with today's recipients. By acting to make future benefit raises automatic with rises in the cost of living, we remove questions about future years; we do much to remove this system from biennial politics; and we make fair treatment of beneficiaries a matter of certainty rather than a matter of hope.

In the 34 years since the Social Security program was first established, it has become a central part of life for a growing number of Americans. Today approximately 25 million people are receiving cash payments from this source. Three-quarters of these are older Americans; the Social Security check generally represents the greater part of total income. Millions of younger people receive benefits under the disability or survivor provisions of Social Security.

Almost all Americans have a stake in the soundness of the Social Security system. Some 92 million workers are contributing to Social Security this year. About 80 percent of Americans of working age are protected by disability insurance and 95 percent of children and mothers have survivorship insurance protection. Because the Social Security program is an essential part of life for so many Americans, we must continually reexamine the program and be prepared to make improvements.

Aiding in this administration's review and evaluation is the Advisory Council on Social Security which the Secretary of Health, Education, and Welfare appointed in May. For example, I will look to this Council for recommendations in regard to working women; changing work patterns and the increased contributions of working

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women to the system may make present law unfair to them. The recommendations of this Council and of other advisers, both within the Government and outside of it, will be important to our planning. As I indicated in my message to the Congress on April 14, improvement in the Social Security program is a major objective of this administration.

There are certain changes in the Social Security program, however, for which the need is so clear that they should be made without awaiting the findings of the Advisory Council. The purpose of this message is to recommend such changes.

I propose an across-the-board increase of 10 percent in social security benefits, effective with checks mailed in April 1970, to make up for increases in the cost of living.

I propose that future benefits in the social security system be automatically adjusted to account for increases in the cost of living.

I propose an increase from $1.680 to $1,800 in the amount beneficiaries can earn annually without reduction of their benefits, effective January 1, 1971.

I propose to eliminate the $1-for-$1 reduction in benefits for income earned in excess of $2.880 a year and replace by a $1 reduction in benefits for every $2 earned, which now applies at earnings levels between $1.680 and $2.880, also effective January 1, 1971.

I propose to increase the contribution and benefit base from $7.800 to $9.000, beginning in 1972, to strengthen the system, to help keep future benefits to the individual related to the growth of his wages, and to meet part of the cost of the improved program. From then on, the base will automatically be adjusted to reflect wage increases.

I propose a series of additional reforms to insure more equitable treatment for widows, recipients above age 72, veterans, for persons disabled in childhood and for the dependent parents of disabled and retired workers.

I emphasize that the suggested changes are only first steps, and that further recommendations will come from our review process.

The social security system needs adjustment now so it will better serve people receiving benefits today, and those corrections are recommended in this message. The system is also in need of long-range reform, to make it better serve those who contribute now for benefits in future years, and that will be the subject of later recommendations.

THE BENEFIT INCREASE

With the increase of 10 percent, the average family benefit for an aged couple, both receiving benefits, would rise from $170 to $188 a month. Further indication of the impact of a 10 percent increase on monthly benefits can be seen in the following table:

The proposed benefit increases will raise the income of more than 25 million persons who will be on the Social Security rolls in April 1970.