had earlier scaled down their operations below what they had originally started with. Mr. QUIE. With that explanation, my suggestion that we go to $650 million appropriations means $60 million-the difference from $590 million-would not be accurate; rather we should talk about you going to $650 million, that would be $40 million above what has been anticipated by the States, therefore, being available for only half of the fiscal year would be at an annualized basis of $80 million additional. Would that be accurate? Mr. REEDY. I rather doubt if it would work out exactly that way. In the first place, there is a cost-of-living increase in the operation of a State agency, and to fit their operations this year back to last year's level means that they have restrained expenditures for case service and so forth in order to maintain staff. The second half of the year has always been the heavier part of the expenditure of most State agencies, and spreading that over the whole year does not mean that they would have to pick it all up just in new operations in the last half of the year, in my opinion. Mr. QUIE. So, in other words, there is justification for having an appropriation figure higher than the $610 or even $615 million? Mr. REEDY. As reported earlier in the last 2 years, many States have spent substantially more than the amount for which they received Federal matching. If we pick up this margin alone, then, there would be a good portion of the extra $40 million consumed. Mr. QUIE. How much of the $40 million additional would be consumed to fund the programs that they now have in operation adequately because of the squeeze, as you indicated, staying at last year's anticipated level? How much of the $40 million would be used for that and how much of the $40 million additional if Congress appropriated it would then have to go for new programs? Mr. REEDY. I Would be unable to give an exact figure, but on the basis of the expenditure reports of last year in which States could have claimed higher Federal matching, we could reach an estimate on that and supply it. Mr. QUIE. If you could do that. Then, the other question I have is what kind of capability is there in the States now to fully utilize that amount of money which would be the difference between the estimate that they could easily use over the $610 million because of the inflation you talked about and the full $40 million. There is a chunk of money in there that is more than was just picked up because of inflation. How quickly can you start a new project and how adequately could they utilize that money? Mr. DWIGHT. One of the things that occurs to me, Congressman Quie, is that if we generalize, we would probably reach an erroneous conclusion. In other words, you would have to look at each State on the basis of information we do not presently have, I don't believe. In other words, what the States are doing, what their legislatures have appropriated, what kind of flexibility they have, these factors would have to be examined on an individual State basis. We do not presently have that information. That is not to say we could not get it, but it would probably take a while to get it if our past experience in garnering information from the States is any indication. Mr. QUIE. How long a time are you talking about? Mr. DWIGHT. A couple of weeks. Mr. BRADEMAS. Mr. Reedy, don't you have the information on what the States estimate they can put up? The committee has it and I therefore ask unanimous consent to place it in the record at this point. [Material referred to follows:] ESTIMATED GRANTS SECTION 110, REHABILITATION ACT OF 1973 BASED ON MATCHING STATE FUNDS AVAILABLE WITHIN ALLOTMENT Louisiana. Maine. 15,326, 300 16, 261, 755 16, 261, 755 2,719, 494 2,543, 314 14, 208, 628 7, 924, 812 4, 218, 237 9,927,846 13,742, 698 22, 902, 421 12,011,927 11,930, 650 15, 515, 902 2,693, 551 4,753, 179 2,000,000 2,638, 283 15, 223, 335 4,570, 745 34,039, 210 21, 364, 858 2,596, 361 30, 567, 658 10, 325, 153 7,037, 538 34, 988, 268 2,854, 341 12, 268, 618 2,797, 832 17,409, 300 41, 203, 702 4, 607, 945 2,000,000 16, 133, 701 9,659, 625 7,918, 909 14,783, 717 Virginia. West Virginia.. 12, 628, 762 Wyoming 1, 107, 302 2,000,000 17,847, 420 4, 218, 237 9,927,846 13,742,698 22,902, 421 12, 011, 927 11,930, 650 15, 514,000 2,693, 551 12, 268, 618 17,847, 420 664, 672 5,904 16, 261, 755 4, 218, 237 9,927,846 13, 742,698 22,902,421 12,011,927 11,930, 650 15, 514,000 2,693, 551 4,753, 179 2,000,000 2,638, 283 15, 223, 335 4,570, 745 34,039, 210 21, 364, 858 2,596, 361 30, 567,658 10, 325, 153 7,037, 538 34, 988, 268 2,854, 341 12, 268, 618 2,797, 832 14,409, 300 41, 203, 702 4,607, 945 2, 000, 000 16, 133, 701 9,659, 625 * 7, 924, 812 13,578, 668 2,000,000 177, 684 559,377 17,847, 420 664,672 408, 016 1 Excludes $1,000,000 for the evaluation of the vocational rehabilitation program. 2 Distribution based on State funds reported in the program and financial plan, May 1972, as available for the basic support program, sec. 110, for fiscal year 1974, with a minimum grant of $2,000,000. 3 Adjustment required by sec. 110(d) to bring State's grant to fiscal year 1973 amount. Authorized under sec. 111(a). Mr. REEDY. We have an estimate as of April on the amount of State funds available for matching fiscal 1974. Mr. BRADEMAS. Would that amount in your judgment, from your experience, be increased or decreased since April? Here we are in December. Mr. REEDY. I would be unable to say, whether it has changed significantly. Most States, by April, had their firm appropriations. Mr. BRADEMAS. If most States by April had their firm appropriations, then a reasonable corollary of that response is there is little likelihood they would have changed several months later. Isn't that true? Mr. REEDY. Among all the State agencies, some of them every year change somewhat. Generally, the changes are toward increases rather than toward decreases in their estimates. So it would be slightly higher. Mr. BRADEMAS. It would be slightly higher? Mr. REEDY. Slightly. Mr. BRADEMAS. Therefore the members of the House-Senate Conference Committee on this matter ought to be able to have a reasonable judgment already as to the amount of moneys the States have available to match Federal funds. Is that not true? Mr. REEDY. Yes. Mr. BRADEMAS. That is true? Mr. REEDY. Yes, sir. Mr. QUIE. Let me also ask you, Mr. Dwight, in section 407 there is going to be a State allocation study. You are supposed to report back by June 30, 1974. I am looking forward to that study because I have a feeling that if the facts of the case on this formula were presented to the Members of the House of Representatives they would want to change it. It just happens that the majority of Senators fare better than a majority of House Members on this formula, the way a formula is written. There was a Senator from the Southern part of the Nation who had a little influence on the way this thing was written. I noted this last time. Our Northern colleagues are becoming more and more aware of that and I don't think we are going to extend this formula just the way it is next time. In fact, I am not going to be in accord with extending it just the way it is next time either. Now, we need the results of that study. How are you progressing on that study? What kind of action have you taken and when can we expect to get the report on it? Mr. DWIGHT. You can expect to get the report as the law requires. That was one of the efforts we have presently underway in the implementation of the new law. In other words, we got our marching orders on September 20 when the law was signed by the President, and we are proceeding toward a design of this effort along with several others which will provide us with information and options so that Congress can consider them. This is, as I understand it, a problem that has been with us for some period of time and has been the source of some agitation on the part of the States that do not think they are getting as fair a shake as they would like to see on the allocation formula. Mr. QUIE. Are you going to contract that study out? Mr. DWIGHT. At this point in time we don't know. I would assume we would have to go at least in part, to the outside in order to get all the information we would need in order to make a reasonable presentation to Congress. Mr. QUIE. When do you expect you will have that contract out then? It takes a while. You cannot do it on May 30, you know. Mr. DWIGHT. It is one of many things we are doing. We are trying to do them all at the same time. If this was all we had to do in the implementation of the new law, then we would be further down the road now. But we have three major efforts; the establishment of a new office in the Secretary's Office, the question of where the work is actually going to be done, the methodology to be used, and the development of regulations governing the new program which we talked about earlier. We have all these issues that we are concerning ourselves with currently. Mr. QUIE. I can only assume then by your answer that you do not have any idea of when you are going to get going on it? Mr. DWIGHT. We are in the early planning stages right now. Mr. QUIE. I would like to know when this is going to be in operation because it takes a while to do that study and do it adequately and again here it is the end of December and if they are not ready to go full blown in January, I think we are going to have serious trouble getting the kind of answers we want. I think it takes 6 months to do that study. If you get going in January that is going to be less than 6 months. Surely you have to have it going so they have at least 5 months to operate. Mr. DWIGHT. One of the problems we have is we do not have the funds to do the work currently, and that is part of the request that we have pending in the supplemental for the program. Mr. QUIE. I recognize you are not going to get the money before December is up so you could not have done it before now, but it seems to me the planning should have gone on so we would know the contract would be let and decisions could be made. Mr. REEDY. Mr. Quie, anticipating the short deadline on this study and the importance it has, our staff has been pulling together extensive tables and other references to the manner in which the formula has been working in recent years. We would be able immediately to supply to the study team or the contractor this kind of background information that would give some head start on understanding the problem. Mr. QUIE. The next question I have is, Who is going to decide who is the most severely handicapped? We give the preference in new legislation to the most severely handicapped. Are you going to leave this entirely to the State? Are they sending in their State plan to you and how is this in operation now? How are you going to put that new program into effect? The new law goes into effect the 24th, I guess it is, of December? What has transpired so far between you and the States in implementing that aspect of the new law? 27-081-74-pt. 2-11 Mr. DWIGHT. Let me give you a general answer, and I am sure Corbett would want to amplify that. Both the interim regulations and the final regulations will have to address the issue of the definition of severely handicapped or severely disabled. Those are the issues that we are talking about and we will be talking about this afternoon in our discussion with the congressional staff. I am sure that there have been some discussions as there was some concern, if you recall, as that legislation came out of conference, as to the definition. I believe the record supporting the legislation has some specific statements supporting exactly what the Congress did mean in establishing that emphasis on services to the severely disabled. It also is going to this continuing concern about whether there is an inordinate amount of creaming going on in the program itself which is one of the things we have to address as we move forward. But in terms of the actual discussions with the State, Corbett has been handling that, and he might want to answer that. Mr. REEDY. We take with extreme seriousness the mandate in the act that the persons with most severe disabilities be given priority in the program. A preliminary look at 1973 rehabilitations reveals that there is a steadily growing impact on the severely disabled in the program now. Our recent efforts in regard to the spinal cord injured and such has been taking us in this direction. We realize there is a major task ahead of us in redesigning the intake system and the service system itself so that substantially larger numbers of persons, the more severely disabled, will be located and activated in the service stream. The regulations will specify the act's requirements of the States in this respect, in the development of the State plan guide which will also set forth the requirements on the States for specifying how they shall go about effectuating this priority. These will be very specific. In fact the preliminary State plan drafts, which are going out in anticipation of this December 24 date in order to have them in a position to continue operations, is stressing this very point, so that as of this time the priority is operative. Then we have a group of State and Federal staff members working on the development of a white paper and program operation guidelines that will deal with this subject in depth and that is expected to be released very soon. We have spent a good deal of time on an attempt to further define for operational purposes who is to be considered a severely handicapped person. The definition in the act is somewhat vague when it gets down to operational application. We understand its meaning and we mean to observe it meaningfully. But we are trying to amplify this in terms that every counselor, every State administrator can clearly understand in terms not only of what he is committing himself to do but also in terms of how well he will put this into operation and achieve the goal that we all seek. Mr. QUIE. This has been studied in some States and they have come to some conclusions on how to implement it. In your discussion with them will you be taking into consideration their views of how they can implement? Mr. REEDY. Definitely. |