The Social Security Act of 1935 placed full responsibility and discretion with the States to determine eligibility conditions, weekly benefit amounts, and the duration of weekly benefits. Congress set up this program in keeping with the tradition of leaving to the States those things which they can do most effectively. Thus, Congress recognized the widely varying living and working conditions in different areas of the country, that the States were in the best position to make the necessary adaptation of these programs to their respective conditions and situations. Therefore, I implore you to let the States run this program. I request that this letter be made a part of record of the hearings. Sincerely, R. A. HERRLY. CROWN TOOL, INC., Wabash, Ind., April 2, 1959. Re Kennedy-Karsten H.R. 3547. HOUSE WAYS AND MEANS COMMITTEE, Washington, D.C. (Attention of Hon. Wilbur D. Mills, Chairman). GENTLEMEN: Supplemental unemployment laws should definitely be left up to each individual State. We (in Indiana) have already increased unemployment compensation from $33 for 20 weeks to $36 for 26 weeks, or a total of $936. The above bill would require potential maximum benefits of at least $2,340 in a year's period. The application of the controls to the Indiana benefit formula would permit $1,500 in wages to qualify a person for $2,340 in unemployment benefits. IS THIS THE AMERICAN WAY? Surely we can see unfairness to the employee himself, for what incentive to work are we creating? As for inflation, we would burden the Indiana employer by a conservative estimate of $58 million increase over his present cost of $82,800,000. We know he will have to provide means to recover this amount. Let's get off this merry-go-round, and spend the taxpayers' money in improving our country, rather than downgrading our people by softening them up. Let's think big, and spend your efforts toward curbing inflation, and educating our people. This will do them a lot more good than trying to hurt others to pay them subsidies for what they don't earn. We hope you will use your influence in rejecting the above measure, and all of the 125 like measures which have been introduced. Thanking you for your sincerity and cooperation, we remain Very truly yours, LEO R. KASTNER, Vice President. P.S.-We are sending copies of this letter in triplicate to the House Ways and Means Committee and request they be made a part of record of the hearings. Hon. WILBUR D. MILLS, Chairman, House Ways and Means Committee, PERFECT CIRCLE CORP., Hagerstown, Ind., April 8, 1959. DEAR MR. MILLS: We should like to express opposition to H.R. 3547, known as the Kennedy-Karsten measure, now under consideration by your committee and give you some reasons for our opposition to this bill. Passage of this measure would give the Federal Government virtually complete control over the standards in unemployment compensation. We believe, in particular, that the determination of eligibility conditions and amount and duration of benefits is a proper function of the individual States and that such determination should remain there. A social program such as unemployment insurance is terrifically complicated in its implications and effects. Functioning on a reasonable basis, it represents a constructive force in the economy. But, published statements of the AFL-CIO to the contrary, larger benefits mean higher taxation which must be borne by someone, regardless of whether it be borne directly by the employer or eventually by the consuming public. A runaway unemployment compensation program can create, by its cost impact, the very ills of unemployment it seeks to abate. The theory that unemployment benefits sustain purchasing power is sound within limits. But if always-larger benefits for nonproduction created an alwayshealthier economy, then there would be no need for anyone to do anything other than to wait for a Government agency to ladle out cash. Obviously there is a limit to the extent by which the economy can lift itself by its own bootstraps through the feeding back of income for which no productive services are performed. A Federal rule that maximum benefits in each State must equal at least twothirds of the average weekly wage of persons covered by unemployment compensation is exorbitant and inconsistent with the original concept of the program. If unemployment compensation is to be converted from a system of limited insurance against the hazards of unemployment to a program which attempts to meet fully all normal living needs, then a needs test should be injected into it. This would not be desirable, but it would permit the program, without involving prohibitive costs, to be more generous to persons in need while withholding the benefits from people not in need. The provision in the bill for a uniform duration of benefits is wholly inconsistent with any insurance principles in unemployment compensation, which historically relate both amount and duration of benefits to earnings, and is therefore undesirable. It would result in discrimination against the steady worker and favor the person in the labor market only occasionally. The serious question in the matter of both proposals of maximum benefits of at least two-thirds of average weekly wage and uniform duration of 39 weeks, is whether the incentive for a person to seek work rather than to remain on the benefit rolls would be destroyed. We think it would, particularly with respect to second and third wage earners in a family and to single persons with themselves only to support. The more comfortable we make it for people in handouts the more we destroy saving incentive and individual initiative. In our opinion this is not good for the individuals nor for America. Indiana has certain disqualification provisions in its law, as we presume is the case with most States. These disqualification provisions are necessary to prevent abuses in the program. Any proposal, by Federal law, to eliminate such provisions would weaken the program and reward the undeserving. We feel H.R. 3547 would be a move in the wrong direction and are therefore strongly opposed to it. We think your committee would perform a real service by killing this measure in committee. This letter is being mailed to you in triplicate and we kindly ask that it be made a part of the record of your hearings. Cordially yours, DON H. TEETOR, Chairman of the Board. KNIGHTSTOWN TELEPHONE CO. INC., Hon. WILBUR D. MILLS, Chairman, Ways and Means Committee, DEAR CONGRESSMAN MILLS: We understand that hearings will start April 7 before your committee on H.R. 3547, commonly known as the Kennedy-Karsten measure. This bill, as we understand its proposals would require Indiana to amend its unemployment compensation program, (1) to pay maximum unemployment benefits of $60 weekly, or more, to meet the Federal rule that the maximum benefit in each State be equal to at least two-thirds of the average weekly wage of persons covered by unemployment compensation. (2) Guarantee 39 weeks of duration insuring each person eligible for benefits to a full 39 weeks of benefits in any 1-year benefit period. (3) Eliminate any disqualifications, including fraud, which would reduce benefit rights below the full 39 weeks of benefits. Indiana now offers maximum unemployment benefits of $33 weekly for up to 20 weeks for a potential total of $660. And after July 4, 1959, the benefits will be $36 for 26 weeks for a total of $936. The 1959 Indiana Legislature also made 39678-59-73 payments under supplemental unemployment benefit plans nondeductible from State unemployment benefits otherwise payable, effective March 13, 1959. Legislation was also enacted whereby municipally owned utilities and their employees (except executives) were covered under unemployment compensation, effective April 1, 1959. Under the present Indiana law, unemployment benefits may not equal more than $1 of benefits for each $4 of wages. Were the proposed Kennedy controls applied to the Indiana benefit formula, $1,500 in wages would qualify a person for $2,340 in unemployment benefits. Thus, $1 in wages could qualify a person for about $1.56 in benefits. And we understand this would be true in cases of self-employment. The Kennedy bill would, according to conservative estimates, increase unemployment compensation costs in Indiana around 70 to 75 percent. Application of a 70 percent increase to the $82.8 million paid in Indiana in benefits in 1958 would have meant an increase in the cost of doing business that year of $58 million. This bill would specify ceilings of benefit-eligibility requirements above which the States might not go. It would invite elimination of experience rating by authorizing flat-rate tax reduction for all employers in place of individualemployer experience rating. Thus, an employer having a stable record of employment would be penalized by employers having less favorable records of stable employment. The bill would also curtail rather than increase employment by encouraging more overtime work by present employees. It would encourage idleness on the part of more people than it is intended to help. It would increase the cost and selling price of all consumer goods and services thereby adding fuel to inflation. Those who are unemployed through no part of their own and who are willing, eager and able to work should be helped. But voluntary idleness must not be encouraged or subsidized. American taxpayers, already overburdened, must not be saddled with further schemes which reflect the image of European "welfarestate" patterns, if our American free-enterprise system is to survive. This letter is being written and mailed in triplicate with the request it be made a part of the records of the hearings. Yours very truly, E. C. MULL, Manager. ALEXANDRIA, IND., April 17, 1959. Hon. WILBER D. MILLS, Chairman House Ways and Means Committee, House Office Building, Washington, D.C. DEAR MR. MILLS: May I express to you and your committee my opposition to the Kennedy-Karsten measure dealing with unemployment compensation laws and upon which your committee has been holding hearings. As I see this measure, it is nothing more than an attempt by the Federal Government to dictate to the States and additionally atempts to establish some of the European "welfare-state" patterns in his country. As I see it, it will do nothing except invite bureaucratic controls and even foster a "drone" type of individual who is perfectly willing to let someone else be his support. I should like for my opposition to this measure to be put on the record of these hearings, and I might add that I have written my Senators and Representative and asked them to oppose this measure if it appears in the Congress for vote. Very truly yours, J. P. MCMAHAN. APRIL 9, 1959. Hon. WILBUR D. MILLS, Chairman, House Ways & Means Committee, MY DEAR MR. MILLS: The Kennedy-Karsten measure, H.R. 3547, is under committee consideration in the House, and its basic philosophy is most disturbing to those who can see States rights going right down the drain. Indiana has been accused of having horse-and-buggy legislation on unemployment compensation. We make no apology for using horse sense in paying $36 a week for 26 weeks to our people who are out of work due to reasons beyond their own control and who are able, available, and making an effort to secure work. The law is administered as an unemployment insurance program and is not considered as relief or a paid vacation. I feel that Indiana is a good example of how a sound program can be efficiently and effectively operated at the State level. I can understand labor's desires for Federal controls and minimum standards that are far beyond existing State programs, but it is a serious question whether such a degree of wage replacement is in the best interests of the public as a whole. The increased taxload on business and industry is not a minor factor, but all competitors would be in the same boat, and so the added cost would be passed on to the consumer who ultimately pays the bill anyway. At a level of 10 percent of unemployment on the national scale, the remaining 90 percent of the work force who are employed would have to pay higher prices and that would reduce buying and production. The principle of unemployment compensation is economically sound in caring for the jobless on an insurance basis paid by industry. It is one thing to provide for day-to-day living expenses, but we must rely on our legislative representatives to avoid any "pie-in-the-sky" programs or popularity contests to see who can give away the most money. I have worked in the employment office of a manufacturing plant for 18 years and have had experience with both State and Federal administration of the program. I have studied and worked with the law and the changes during the years and would like to make a few observations relative to the problem: 1. The wage earnings qualifications for eligibility should be of sufficient amount and duration to screen out the intermittent short-time employee who really is not in the labor market. 2. Duration of benefits should not be a flat number of weeks for all eligible people, but should vary with length of employment in the base period. 3. A maximum weekly benefit of $60 or two-thirds of the average weekly wage is definitely in excess of the insurance principle of unemployment compensation. The best health and accident insurance plans pay maximum benefits of 50 percent of the average weekly wage, and there is no sound reason to pay more to the healthy person who is out of work. Two-thirds of the average wages before taxes can be as much as 80 percent of "take home" pay, and this is far beyond a short term "tighten-the-belt" level of expense that unemployment insurance is set up to cover. 4. Unscrupulous individuals try to take advantage of every law and there should be penalties to apply to such people. The original qualifications for unemployment insurance are basic and sound, i.e., the person should be out of work because of reasons beyond his control and he must be able and willing to work. The argument for simplification of administration has no value if you have to abandon the basic principles to accomplish the advantage. 5. The reported provisions of Federal grants to finance three-fourths of the cost of benefits in excess of 2 percent of the States taxable payroll just revives the illusion of "free money." Why bring the Federal Government into the act at tihs point? Let each State pay its own share of benefits, and they will have some incentive to do an effective job. Now we are right back where we started from. 1. Why should the Federal Government dictate to the States on the unemployment insurance problem? 2. Why should we make it more attractive to draw unemployment compensation than to work? 3. Is this just another and bigger step toward the welfare state? John Q. Public wants law and programs that are in the balanced best interests of all the people, and we must rely on our elected representatives to provide such judgment and statesmanship. I am enclosing two extra copies of this letter so that it may be made a part of the record of the hearings on the Kennedy-Karsten measure. Very truly yours, WALLACE E. BEER, Fort Wayne, Ind. J. E. WALZ, INC., April 7, 1959. Hon. WILBUR MILLS, Chairman, House Ways and Means Committee, Washington, D.C. DEAR SIR: We are defintely opposed to any increase in unemployment taxation. We consider unemployment compensation a fringe benefit. Here is an example: In an employee earns $5,200 per year, we pay $2.50 per week into social security, which is good. We pay 3 percent unemployment compensation which is $3. We pay his full group insurance which averages $3 per week. This totals $8.50 per employee per week. When the above is multiplied by the 35 people we employ, it is a burden of $297.50 per 5 working days. When you also consider two 15-minute coffee breaks per day for each employee, multiplied by his hourly rate, there is an aditional burden of $217.75 per week. The grand total is $515.25. We believe in unemployment compensation but, if rates are to be increased, feel that they should be deducted from the employees' wages, thereby creating a participating program of employee and employer. We, therefore, wish to go on record as opposing any additional expense to our company. Sincerely, LOUIS E. WALZ, Secretary. P.S.-I would like this letter entered as part of the record of the hearings. Re H.R. bill 3547 and Senate bill 791 Hon. WILBUR D. MILLS, Chairman, House Ways and Means Committee, BRAMBLETT & SLOAN, Lebanon, Ind., April 6, 1959. SIR: We definitely are opposed to H.R. 3547 sponsored by Representative Karsten and also the companion measure to Senate bill 791, introduced by Senator Kennedy. We, as taxpayers prevail upon you to use your utmost influence to defeat both of these as we feel that our taxload is getting almost unbearable without any additional weight. You, as a representative of the taxpayer can help to bring about the changes that are going to have to be made. Yours very truly, WILLIAM SLOAN. TINGLE BUSINESS FORMS Co., Hon. WILBUR D. MILLS, Chairman, House Ways and Means Committee, House of Representatives, Washington, D.C. DEAR MR. MILS: The Kennedy-Karsten measure, which I believe is known as H.R. 3547, has been called to my attention, and I understand hearings are to start in the near future. I would like this letter to be made a part of record of the hearings. I am very definitely and strongly opposed to this bill. I believe that it is a bad thing for the country in general, the people as a whole, and that it should be defeated-and I certainly hope it is defeated. I will not go into the details on why each point is not good for the country, but summarizing the bill as a whole, it is more totalitarian government of a socialistic nature and is even very bad socialism. The bill is not set up to help those unfortunately unemployed people who are unemployed through no fault of their own but is designed more as a general dole to give something for nothing and kill individual initiative by encouraging self-created unemployment whereby people can receive income practically equal to that received by being gainfully and earnestly employed. So, we certainly hope that this bill is defeated in its entirety. Very truly yours, CHARLES C. TINGLE. |