(a) The following loans have been made from the Federal unemployment account:

1 Oregon attorney general ruled Governor did not have authority to request an advance and therefore advance was returned.

* Pennsylvania requested $112,000,000 but balance in account only $95,043,303.

(b) The following excess Federal tax receipts have been distributed to States: TABLE 22.-Excess of Federal unemployment tax collections over employment security administrative costs credited to State unemployment trust fund accounts under the Reed Act

371, 989. 91 6,860, 286.95 538,035.84 1,395, 810. 35 272, 445. 98 383, 070. 63

1, 231, 825. 25

1, 134, 062. 90
168, 969. 78
186, 417. 19
5,075, 821.98
2,077, 087. 16
734, 101. 40

173, 730.69
3,284, 316. 32

262, 318. 81
654, 942. 63
117,992. 60
176, 890. 38
640, 119.90
534, 237.31

82, 714.55
86, 837.89
2,359, 421.57

952, 285.23
340, 180. 09

289,064. 37

369,689. 77

426, 159. 44 152, 664. 44 555, 412.60 1,256, 930. 65 1,847, 064. 47 532, 977.94 153, 861. 19 768, 936.87 99, 893. 57

162, 275. 28

75, 686.76 118, 140. 80 1,380, 440. 15

109, 565.85 4, 244, 089. 48

595, 802. 33 43, 740. 87 2,340, 669. 22 291, 234. 71 321, 589.94 2,675, 381.81

193, 763. 19 285,873. 33 47, 633. 91 466, 434.87 1, 295, 317.76 132, 358.82 54, 600. 20 477, 481.60 545, 202. 10

300, 254. 71

722, 623. 22

51, 307.67

924, 624.83 335,984. 50 1, 173, 767.00 2,598, 142. 41 3,757, 600.36 1, 140, 546. 46 358, 283. 10 1,656, 772. 09 210, 684. 17 355, 356. 02 144, 531. 48 240, 974. 69 2,860, 839.58 237, 532. 61 8,933, 098. 68 1, 332, 344. 72

104, 901. 02 4,794, 870. 34 643,050.89 771, 219. 51 5,489, 496. 77 446, 436. 89 601, 349.74 109, 748. 27 1,031,220. 54 2, 945, 240. 12 280, 701. 42 124, 104. 55 1,073, 517.81 1, 110, 595. 11 668, 583.87 1,529,533. 68 106, 130. 71

458, 902. 82 153, 400.33 551, 066. 13 1, 203, 537. 37 1,702, 450. 18 538, 699.47 171, 758.95 775, 403. 45

93, 696.36 163, 062. 33 69,767.49 112, 437.32 1,337, 607.03 120, 006. 51 4, 253, 234. 46 617, 333. 45 51, 053. 47 2,208,984. 35 296, 767.44 342, 904.00 2,543, 761. 15 201, 454. 35 291, 845.83 51, 204. 09 479, 538.65 1, 412, 652. 33 134, 347. 77 56, 952. 67 515, 956. 27 531, 694. 55 321,000. 85 704, 670. 84 49, 507.02

722, 072.23

13, 351, 082. 44 1,030, 456. 03

2,708, 467.43 510, 000. 23 746, 053. 49 2,362, 938. 65 2, 172, 228.76 333, 609. 69 360, 888.89 9, 821, 692. 84 4,003, 593. 86 1,406, 442. 43 1,206, 404. 21 1,499, 885. 85 1,809, 687.09

642, 049. 27 2,280, 245.73 5,058, 610.43 7,307, 115.01 2, 212, 223.87

683, 903. 24 3, 201, 112. 41 404, 274. 10 680, 693. 63 289,985.73 471, 552. 81 5, 578, 886. 76 467, 104.97 17, 430, 422. 60 2, 545, 480.50 199, 695. 36 9, 344, 523.91 1, 231, 053. 04 1, 435, 713. 45 10,708, 639.73 841, 654. 43 1, 179, 068. 90 208, 586. 27 1, 977, 194. 06 5,653, 210. 21 547, 408. 01 235, 657.42 2,066, 955. 68 2, 187, 491.76 1, 289, 839. 43 2,956, 827.74 206, 945. 40

1 The total available amount is distributed among the States in the proportion of payrolls taxed under State law during the preceding year to total payrolls subject to tax under all State laws: Source: U.S. Department of Labor, Bureau of Employment Security.

The CHAIRMAN. Mr. Machrowicz will inquire.

Mr. MACHROWICZ. Mr. Chairman, before inquiring I think I should make a few observations.

One, that I find myself, being one of the coauthors of the Federal standards bill, in the very unusual position of having to agree with the opponents of the Federal standards bill on the committee and criticizing the logic of the Department of Labor in expressing its views on that bill.

Secondly, I think I must share the concern not only of the members of the committee but I think of the public at large that the Secretary of Labor because, and I quote your words—

of personal commitments

was unable to be here today to explain his position particularly since in the opening paragraph of your statement you say:

We are discussing measures to alleviate human suffering.

I would think that measures of that kind should require the Secretary's presence, particularly since so many of his statements on this issue have been so contradictory.

Now, may I ask you a few questions?

I might state also that I am afraid to say that the confusion that exists in this matter has been contributed to somewhat by your testimony.

You stated in the first part of your testimony in answer to questions I believe by the chairman, that you feel that the States are showing an increased awareness of responsibility. I am quoting your words

now:

And that the States have met and promise to meet the situation in a reasonably satisfactory manner.

That is fine. But in answer to questions by Mr. Karsten, you seemed to indicate that not a single State has yet met the standards which have been set by the President.

Mr. O'CONNELL. I think we indicated that you could probably say that one or two have completely met them.

Mr. MACHROWICZ. You mentioned New Hampshire. I haven't heard you mention any others. I have here figures based on the data from the U.S. Bureau of Employment Security which show that the average weekly benefit paid for total unemployment in New Hampshire in 24 weeks. Would you say that meets the standards set by the President?

Mr. O'CONNELL. No. It is now 26 weeks uniform, I understand. Mr. MACHROWICZ. What is that?

Mr. O'CONNELL. I understand it is 26 weeks.

Mr. MACHROWICZ. The U.S. Bureau of Employment Security doesn't seem to agree with you.

Mr. O'CONNELL. Mr. Murray says that that is the average paid in weekly benefit amount.

Mr. MACHROWICZ. Then even giving you the benefit of that doubt, you have the grand total of one comparatively small State in the Union having met the standards set by the President many years ago. Is that satisfactory progress in your opinion?

Mr. O'CONNELL. They are still working on it. We would not say it is a satisfactory result at the present time. We would think that

is satisfactory progress.

Mr. MACHROWICZ. What did you mean when you saidMr. O'CONNELL. We still have 28 States in session. Out of 18 States that have gone home 10 took some and some considerable action during this period. An additional four States that are still in session also have taken action. This is in essence what we believe that the States have a full appreciation of their responsibilities and are working toward reaching this reasonable level.

Mr. MACHROWICZ. Do you feel that the fact

Mr. O'CONNELL. I would point out if I may that the wage loss which is made up under the system today, or was in 1958-59, was 27 percent of the wages lost, 1954-55, 25 percent 1949-50, 22 percent. We are moving pretty consistently forward, upward in this regard.

Mr. MACHROWICZ. Even though at the most one State, a comparatively small State, so far has met the standards set by the President? Mr. O'CONNELL. Right.

Mr. MACHROWICZ. You wish to have your testimony stand that you are satisfied with that progress?

Mr. O'CONNELL. I said we were not satisfied with the result; we were satisfied with the way in which progress was being made. Mr. MACHROWICZ. Where is this progress? I haven't seen any note of it.

Mr. O'CONNELL. Since 1954 almost all the States have increased their benefit amounts; 28 have increased their duration.

Mr. MACHROWICZ. How many have reached the maximum weekly benefit set by the President, the 50 percent?

Mr. O'CONNELL. You mean the average wage?

Mr. MACHROWICZ. Average of 50 percent.

Mr. O'CONNELL. We already indicated probably only one or two. Mr. MACHROWICZ. One or two. You are satisfied with that progress?

Mr. O'CONNELL. We are satisfied that they are making progress; yes.

Mr. MACHROWICZ. Coming back to the statement made by Secretary of Labor Mitchell, which may or may not be the reason he is not here today, it seemed to me that you interpret that statement differently than has been generally interpreted and in that statement Mr. Mitchell said:

It is my hope that the Congress next year when it convenes will look at this whole problem of unemployment compensation and adequacy of unemployment compensation

and please note these words

both in terms of duration and in terms of benefits so that we can set at the Federal level a standard which the States could properly follow.

Is there in your opinion any other way to interpret that statement than as an endorsement of Federal standards for determination of duration and terms of benefits?

Mr. O'CONNELL. I believe I have been requested by the committee to have the Secretary explain his statement. I would prefer not to explain his statement.

Mr. MACHROWICZ. I understood you to answer sometime before that you were speaking for the Secretary and I am sure that the Secretary must have known that this question would be asked because it has been generally attributed to him.

Mr. O'CONNELL. We have been asked to have a written explanation from the Secretary and I think that should cover the situation. Mr. MACHROWICZ. Now, you refer to the Federal Advisory Council on Economic Security, inferring that their report was not a report of the full committee. Is that correct?

Mr. O'CONNELL. I was trying to in a sense indicate that the portions that were being read seemed to my recollection to be statements from a subcommittee report. I indicated that there might be a difference in the full committee report and I asked to submit the full report for the record.

Mr. MACHROWICZ. May I refresh your memory by reading to you from the full committee report signed by the public members and the employee members and it says as follows:

This legislation

speaking now of the temporary extension

points up the need for permanent legislation to assure that the States will provide adequate duration of benefits so that the need for Federal legislation and Federal appropriation of funds will not recur in future recession.

The Federal Government has long accepted a responsibility for adequate protection of the unemployed. Heavy unemployment has its origins in the national economy rather than in that of individual States, and even localized pockets of unemployment are often attributable to technical or market changes beyond the control of individual States. Federal concern with the adequacy of protection is merely an extension of Federal concern with the existence of unemployment already expressed by Congress through the enactment of the original unemployment insurance provisions of the Social Security Act.

Then I read further:

Federal action is necessary to stimulate the States to provide levels of protection that meet at least minimum objectives. Claimants with identical earnings and employment experience are today entitled to widely different amounts in different States. Variations in eligibility conditions and disqualifications add to the disparity in benefits payable under identical circumstances. Most of these interstate differences do not reflect differences in wage levels or living costs.

One major objective of the Federal unemployment tax was to eliminate interstate tax competition as a deterrent to the establishment of an unemployment insurance program. Federal action of the sort proposed is needed to help remove the competitive disadvantage of States with more adequate benefits.

Doesn't that appear to you as being a full support of Federal standards in the unemployment compensation bill?

Mr. O'CONNELL. By that part of the Advisory Council, yes.

Mr. MACHROWICZ. Now, isn't it true also that Dr. Arthur Burns, the former Chairman of the Council of Economic Advisers to President Eisenhower, has also urged publicly the need for at least the Federal standards which are sought in the bill?

Mr. O'CONNELL. I don't recall the exact time, but I am sure that he has.

Mr. MACHROWICZ. Isn't it true also that the Rockefeller Bros. Fund report of April 1958 also stated the need of the Federal minimum benefits standards?

Mr. O'CONNELL. I am not familiar.

Mr. MACHROWICZ. And the President has directly urged that these standards be obtained but they thought it should be done by State action, is that correct?

Mr. O'CONNELL. That is correct.

Mr. MACHROWICZ. Let me ask you this question, since we are talking quite frequently recently about the Federal budget and unbalancing the budget. Would you say that the Federal standards bill as proposed by several members of this committee would tend to unbalance the Federal budget?

Mr. O'CONNELL. I don't think it enters into the budget.

Mr. MACHROWICZ. I agree with you. Would you say that the extension of the unemployment compensation bill as proposed by the administration several months ago did tend to unbalance the budget? Mr. O'CONNELL. It enters into the immediate budget, yes.

Mr. MACHROWICZ. So wouldn't it be better, then, more advisable from the budgetary viewpoint to propose something like Federal standards rather than temporary measures?

Mr. O'CONNELL. Actually, the temporary one gives you an expenditure this year, but since it is on a reimbursable advance basis, eventually it will find its way back into the Treasury. It would have an effect on an annual budget.

Mr. MACHROWICZ. Now, there has been some talk of States rights here. You have undoubtedly read the bill proposed by members of this committee, have you not?

Mr. O'CONNELL. Yes, sir.

Mr. MACHROWICZ. Actually in that bill latitude is given to the States to present a choice between experience rating and flat tax rate deductions. That is a standard which we are taking off, are we not?

Mr. O'CONNELL. I would say yes.

Mr. MACHROWICZ. We are giving the States more latitude?

Mr. O'CONNELL, I would say you are giving the States latitude. Mr. MACHROWICZ. They would have more latitude than they have now?

Mr. O'CONNELL. On this particular phase.

Mr. MACHROWICZ. Do I understand, Mr. O'Connell, that the Secretary will be available after he talks to the unemployed tomorrow? Mr. O'CONNELL. I understand that the Secretary gave to the chairman some alternate dates.

Mr. MACHROWICZ. I would suggest, Mr. Chairman, in view of the fact that there is quite obviously greater uncertainty about the position of the Department of Labor now than there was before, that the Secretary should be asked to be here either Friday or Monday. I understand those were the dates he has open.

The CHAIRMAN. The Secretary did suggest that he would be available on the 10th or the 13th. But on the 10th, Mr. Meany will appear before the committee, and on the 13th Mr. Reuther will appear before the committee. And at the time the Chair received the request from the Secretary that the date be changed from the 7th to either the 10th or the 13th, the Chair had agreed to hear Mr. Meany and Mr. Reuther, and did not feel that the committee could hear the Secretary and these gentlemen at the same time as well as the others that were being scheduled for those days.