In Section 101 (a) (1) (B) the law requires that the state plan provide that the sole state agency shall include a vocational rehabilitation bureau, division, or other organizational unit which (i) is primarily concerned with vocational rehabilitation or vocational and other rehabilitation of handicapped individuals and is responsible for the vocational rehabilitation program of such state; (ii) has a full time director; and (iii) has a staff employed on such rehabilitation work of such organizational unit all or substantially all of whom are employed full time on such work; and that such unit shall be located at an organizational level and shall have an organizational status within such state agency comparable to that of other major organizational units of such agency.

It has been our experience, Mr. Chairman, that these provisions represent the wisdom of the Congress in assuring that there be specific program responsibility for the vocational rehabilitation of the handicapped, including the blind. It also represents the determination by the Congress that these programs be administered in the states in such a way that handicapped people not get lost in any broad program of delivery of services to all people. These provisions have prevented the fragmentation of rehabilitation services and have assured the integrity of rehabilitation programs for the handicapped. They have limited the use of Federal rehabilitation funds to specific rehabilitation programs for eligible handicapped people. During its 53-year history, the program has been remarkably free from misuse of rehabilitation funds or diverting of rehabilitation resources to any other purposes in the states. Handicapped people have benefited from this protection.

While these fairly strict requirements have protected against abuses, they have permitted flexibility in the administration of the state programs. As stated earlier in this testimony, the state rehabilitation programs have been characterized by the greatest variety of joint program efforts.

For example, most states have developed cooperative programs with other agencies and "third party" programs in which other governmental agencies provide the state matching funds to earn Federal rehabilitation funds, but always for rehabilitation purposes and for handicapped people only. These may include cooperative programs between state rehabilitation agencies and local school districts to provide work-oriented rehabilitation programs for handicapped students of employment age. These include the mentally retarded as well as the physically handicapped.

Such cooperative programs are extended to schools for the deaf, schools for the blind, state hospitals for the mentally ill, institutions for the mentally retarded and for a variety of other handicapped groups who require innovative programs. These programs have extended the outreach of rehabilitation and have demonstrated the flexibility of administration which is possible within the legal bounds of the Rehabilitation Act.

Many state rehabilitation agencies are now located administratively within larger umbrella or human service agencies. Many have always been located within state departments of education. They still have been able to conform completely to the requirements of the Rehabilitation Act and to assure that rehabilitation funds were not diverted to other services of clients of the parent agency. Information coming from several states would indicate the possibility that Social and Rehabilitation Service staff or other HEW staff members in regional or central offices may be condoning or encouraging the development of state organizational arrangements or state plans which may not comply with the requirements of the law and which might result in the diminution of services to the handicapped.

If HEW should approve any state plan which violates the organizational requirements of the law or makes it possible for a state to use Federal rehabilitation funds for any purpose except those provided for in the Act, such action would be an open invitation to other states to follow such a course. This could only result in a disservice to handicapped people.

Mr. Chairman, we urge the Committee in these oversight hearings to call upon the Administration for a clear statement of purpose in terms of legal review and approval of state plans in keeping with requirements of the law.

5. Our fifth concern, Mr. Chairman, is with the financial and budget recommendations made by the Administration following the passage of Public Law 93-112. After supporting the fiscal compromises in the Act it does not appear that the Administration is willing to request funding at the authorized levels for each part of the program.

After two vetoes described as necessary in part because of the monetary levels authorized in the vetoed bills, the Administration and the conferees of both Houses of the Congress worked out a compromise which was considered fully acceptable. This resulted in the final passage of Public Law 93-112 with the full endorsement of the Secretary of HEW and approval by the President.

Upon signing the bill the President stated: "The process of hammering out a compromise on this matter was long and difficult. It is heartening, however, that neither the Congress nor the Administration allowed the smoke of legislative skirmishes to obscure the good we have shared from the first-that of continuing and improving a program which has long been one of the most humanitarian and effective of all Federal grant activities." The statement also included the following: "At the same time the new law wisely avoids certain pitfalls which led me to reject earlier versions. Its funding levels, while adequate, do not abrogate the fiscal discipline essential for a non-inflationary balanced budget." When the Congressional Conference Committee reported its version of H.R. 8070, the Rehabilitation Act of 1973, Secretary Weinberger of the Department of Health, Education, and Welfare, released a message which included the following statements: "Earlier bills were vetoed because they set unrealistically high spending levels. * * * H.R. 8070 has remedied these defects. It authorizes a generous level of funding and a solid program. It deserves the support of every Member of Congress."

Mr. Chairman, in the light of these statements and the experiences associated with the development of this legislation, it appeared to those of us in the rehabilitation movement that the Administration found the authorized amounts in the Act to be acceptable and that we could move forward together in the implementation of the Act. We had reason to believe that the Administration would support budget requests at the authorized levels. It is therefore with considerable dismay that we note the Administration's budget requests for the current fiscal year, 1974, are appreciably below the compromise levels agreed upon. This is especially true with regard to the basic program of funds for services and is true for training and research, for facilities, for new authorities, and special Federal responsibilities.

Further attention will be devoted to specific concerns for training and for facilities, but particular mention should be made here of the lack of any recommendation by the Administration for implementation of the new legislative provision for advanced funding. This important provision was never in question. It was included in all versions of the legislation during the two-year history of the development of the Act. It was supported by both Houses of the Congress and by the Administration as a way of providing the states with advanced fiscal information so that states could plan legislative budget requests. This was widely supported in the field and especially by state agencies as an important new development in state-Federal coordination and fiscal management. It is therefore quite disappointing to find that the Administration included no recommendation on this issue in its budget request.

Mr. Chairman, we urge the Committee in its oversight hearings to call upon the Administration for an explanation of its position with regard to fiscal support of the authorizations in the Act, and specifically for its position with regard to the important provision for advanced funding.

6. Our sixth concern is with support for facilities. The new Act includes strong provisions for grants for construction and initial staffing of rehabilitation facilities (Sec. 301). This continuing basic provision of the prior Act which has been so important in the development of the growing network of rehabilitation facilities which provides the essential services for handicapped people. With the new emphasis in the legislation on services for severely handicapped people, it is imperative that adequate resources be made available for construction and initial staffing of rehabilitation facilities. Without such facilities there simply will be no mechanisms for providing the highly specialized services needed by severely handicapped and multiply handicapped persons.

The entire rehabilitation movement was shocked to learn that the Administration requested only one half million dollars for facilities for this year. The National Rehabilitation Association, the International Association of Rehabilitation Facilities, and the Council of State Administrators of Vocational Rehabilitation have all recommended that at least fifty million dollars be requested as the appropriation for facilities this year.

Mr. Chairman, this is a most serious omission in the budget request by the Administration. We feel that it is important for the Committee in its oversight hearings to explore this issue with the Administration.

7. Our seventh concern is with support for training and research. During the testimony before both Houses of Congress in support of rehabilitation legislation, many witnesses expressed concern over the withdrawal of the Administration's support of training. The support of highly specialized training for skilled manpower needed in the delivery of rehabilitation services has been one of the most important and most successful aspects of the rehabilitation program. The training authorities under the Act have made possible the development of counselor training programs, special programs in counseling the deaf, the blind, the mentally ill and mentally retarded. It made possible the development of entirely new programs in work evaluation and personal adjustment training and the development of new skilled manpower in facility administration. These, along with the development of training programs in rehabilitation medicine, opened up new frontiers in services for severely handicapped people who could never have been served without this specialized manpower. Colleges and universities would not have developed such programs without grant support and most of them will not be able to continue such highly specialized programs without grant support. The proposed phase-out of such training grants will result in an acute shortage of such specialized personnel at a time when the rehabilitation movement needs them most to expand and improve services to severely handicapped people.

In the development of the new Act, the Congress wisely retained all the statutory provisions for training.

The Administration has made a budget request for only $8.13 million for training for fiscal year 1974 and has indicated its intention to proceed with its planned phase-out of all training despite the continued authorizations for training in Public Law 93-112.

Mr. Chairman, the entire rehabilitation movement speaks with one voice in expressing its grave concern over the reduction and phase-out of training. Inservice training in our state agencies as well as the specialized training cited above has been the life blood of our manpower and recruitment programs. We cannot maintain the level of service or the quality of service needed for handicapped people without this essential resource. We urge the Committee in its oversight hearings to give careful attention to this matter and to take all appropriate steps with the Administration to see that this provision of the law is carried out.

There is a similar concern with the reduced Administration support for research to support the development of new knowledge and new techniques and methods for serving severely handicapped people. The administration has made a budget request for twenty million dollars for research. If the scientific development of rehabilitation is to continue, there is a need for substantially more support for research: for research in spinal cord injuries; end-stage renal disease; and for research centers devoted to programs that will assist state agencies and rehabilitation facilities in extending and improving services to severely handicapped people.

We urge the Committee to review this aspect of the program and the law with the Administration.

8. Our eighth concern is for the process of development of new regulations pursuant to Public Law 93-112. As cited earlier in this testimony, this has historically been a partnership effort by state and Federal staff members. While the Secretary of HEW has the legal responsibility to develop regulations, the staff of the Rehabilitation Service Administration has always been assigned the specific task and has utilized the technical assistance of many state rehabilitation personnel in developing the issues and in preparing the language of the regulations. This has been important to both state and Federal partners because state agencies bear most of the responsibility in applying the regulations that pertain to the delivery of rehabilitation services.

With the likelihood of passage of the Rehabilitation Act, task forces began the development of the issues to be resolved. Skilled and experienced state personnel were involved and volunteered their time to assist the small staff of the Rehabilitation Services Administration in developing and reviewing draft language for the regulations. A carefully constructed timetable was drawn up by the Acting Commissioner of the Rehabilitation Services Administration to ensure re

view, revision, and approval of drafts in order to meet the early deadline of having the regulations ready ninety days after the signing of the Act into law. After initial involvement of several state volunteers in the process, the Administration notified the state partners through the Acting Commissioner of the Rehabilitation Services Administration that the draft language of the regulations could not be shared with "outsiders" until the regulations had been approved by the Administration. Thus, an important aspect of the state-Federal partnership in rehabilitation has been eliminated by the Administration.

Mr. Chairman, this item may not be covered in the law, and we do not dispute the right nor the responsibility of the Secretary to develop the regulations pursuant to the law. But we submit that an important aspect of state-Federal teamwork is lost when the state partners are excluded from the process. It is suggested that the Committee may want to explore this issue with the Secretary of HEW to the end that a more open and democratic involvement of representatives of public and volunteer rehabilitation agencies as well as representatives of the Congressional committees may be of benefit to handicapped people and the programs that serve them.

9. Mr. Chairman, our final concern to be included in this testimony refers to the previous oversight hearings by your Select Subcommittee on August 3, 1973. At that time your Subcommittee made public the HEW planning document which called for plans to dismantle the proven vocational rehabilitation program in favor of a cash benefits program.

It seems a paradox that the successful vocational rehabilitation program would be held up as a model for the delivery of services in other human service programs, while at the same time plans would be developed to dismantle the program. Perhaps no single action in the history of rehabilitation programs in this country has so alarmed every segment of public and private programs and the organized groups of handicapped people.

Our concern on the previous eight items must be viewed in the context of our continuing concern over this HEW planning document because it would appear to establish a pattern of reduced support for statutory provisions, reduced budgetary recommendations, and reduced participation by the Administration in program aspects considered essential for a vigorous state-Federal program and a vigorous team effort between the public and private sectors in rehabilitation.

Such a reduction could mean a diminished effort to meet the growing needs of handicapped people, and a willingness to let handicapped people compete with all others for the specialized services they need.

We feel this would be a tragic step backward when our developing skills and increased technology should make it possible for this nation to take giant strides forward in expending and improving our services to our handicapped citizens. On behalf of Council members, I want to express our appreciation to you for holding these oversight hearings and for giving us the opportunity to present this testimony.

Mr. BRADEMAS. Mr. Mills, let me thank you at the outset for the great care with which, obviously, you have developed this very comprehensive statement.

Let me also ask you at the outset if you would say just a word about your own background and experience in the field of vocational rehabilitation.

Mr. MILLS. Mr. Chairman, I have been in rehabilitation since 1946. I served first as a counselor in a district office and as supervisor. I was coordinator of the disability insurance program in our State office at the time it began in 1954. I have served as a State staff member, supervisor of services, and assistant director of rehabilitation, and since 1966 I have been director of the program of vocational rehabilitation. Mr. BRADEMAS. Thank you very much.

Mr. Mills, what I want to do is put a series of comments to you in light of your statement and then invite your response to my understanding of what you are saying.

I am going to try to get to the heart of what seems to me to be the matter before us, at least as represented by your testimony.

On page 5 you observe that the Social Rehabilitation Service will continue to have authority over rehabilitation programs and you go on to note that the Rehabilitation Services Administration will, according to some indications which you have received, be submerged beneath a management layer.

Again on page 6 you note that a similar arrangement with respect to proposals for the regional offices is apparently underway; namely, that the Associates Regional Commissioner for Vocational Rehabilitation is being relegated to the status of a "program specialist under a program management officer for SRS who is responsible to the SRS Regional Commissioner." I interrupt myself to note that the SRS Regional Commissioner will be responsible, obviously to the Administrator of SRS and not to the Commissioner of RSA.

Then on page 6 you begin a discussion of the role of the State rehabilitation agencies which concludes on page 9, that SRS may be, to quote you, "condoning or encouraging the development of State organizational arrangements or State plans which may not comply with the requirements of the law."

Does not your own discussion, then, suggest to you, Mr. Mills: First a submergence at the national, regional, and State levels of the rehabilitation program; second, a separation or fracturing of the line authority for rehabilitation from the Commissioner of RSA to individual State rehabilitation programs; third, a diffusion of responsibility for rehabilitation at every level; and fourth, an accompanying increase in management as distinguished from program personnel at every level?

Now, have I fairly stated the substance of your concerns? I realize I have not addressed myself to other matters included in your statement that have to do with training, research, facilities, and budget matters, but have I fairly stated the substance of your concern or not? Would you comment?

Mr. MILLS. Yes, Mr. Chairman, you have. I would have to answer yes, to all of the questions or positions that you have taken there. We have, as a basis for comparison, the experience between the passage of the amendments in 1954 and since 1967 when SRS was created. Prior to that time the head of Rehabilition Administration in the Washington Office worked directly with regional representatives of vocational rehabilitation in the various regions who, in turn, worked directly with the States. The lines of communication were short and tight. It was easy to get clearance on policy interpretation matters. It was easy to communicate and develop new materials, training programs, and technical assistance.

We find now a series of delays in the lines between SRS both at the Federal level and at the regional level and, as stated in my testimony, it would be my feeling, if there is serious consideration being given to the proposals that I cited, that those lines of communications would be even longer and that communication and policy interpretation matters would be even more difficult.

Mr. BRADEMAS. Following that, Mr. Mills, you have said a couple of times in your statement that regional professionals have not been involved as they have in the past in the development of rehabilitation legislation, and that you have been regarded as outsiders.