period ending when his disability occurred, and (b) 20 quarters of coverage out of the 40-quarter period ending when his disability occurred. H. R. 6000 will put the Federal Government into the disability-insurance business. The experience of life-insurance companies on disability has been very disastrous. Many life-insurance companies, as is generally known, suffered very serious losses during the depression. Life-insurance companies, as you know, where they furnish disability insurance, make this available only to select groups at a high rate; but, under the proposed bill, all types of risks will be brought in and will constitute a much greater hazard than insurance companies have under their policies. The trouble with disability in a tax-supported system is that people will claim benefits as a matter of right because they have paid their taxes to cover the receipts of disability. In the first place, it would be impossible to police such a large-scale program because it is a known fact that disability is very hard to disprove. Rheumatism, low back pains, and other obscure things such as nervous disorders, feigned heart diseases, which keep people from working, are most difficult to handle. Another danger in this program is that one receiving benefits for disability will certainly want to remain on the rolls if jobs become scarce or the wage scale falls. You must remember that this is not benefits for 26 weeks or 1 year; it can mean benefits for life. The situation which we would probably face is that in the event of a depression, in a system of this kind, when the claimants have exhausted their unemployment-compensation benefits, they would then try to prove their inability to work and show that they are disabled and be put on the permanent benefit rolls. We would like to bring out one of the dangers, particularly in the textile industry, where many women are employed. Say we have a woman who has been working in our industry for 10 years. She is married and wants to go home. She does so, and after 6 months she claims that she is not able to work because she is disabled. You probably could not prove that she was not disabled, and she claims benefits, say, for rheumatism, nervous break-down, or some other obscure cause. You could see exactly what would be the outcome in a case of this kind. We believe that policing this would be impossible. Just remember that when you become 65 years of age that is a fact, but total disability would be mighty hard to disprove at any age. H. R. 6000, taxable wage base.-Under the proposed bill, the total annual earnings on which benefits would be computed and contributions paid is raised from $3,000 to $3,600. We strongly urge the $3,000 taxable wage base be maintained, inasmuch as the entire tax plan already established in OASI and State unemployment insurance is at $3,000. I quote from the minority report of the House Ways and Means Committee, which we believe is an excellent reason why the present wage base should be retained: "We definitely are of the opinion that the proposed increase in the wage-base limit from $3,000, as proposed in H. R. 6000, results in higher benefits to those better able to provide their own protection and does nothing to increase the benefits for those with average wages below $3,000 for whom the system should be primarily concerned. It increases the dollar cost of the system substantially, provides a windfall to persons near retirement who earn $3,600 or more, and unnecessarily complicates the keeping of wage records by employers who must continue to report unemployment taxes on a $3,000 wage base." We believe benefits should be increased by increasing the formula and not the taxable wage base. We feel that benefits as provided in H. R. 6000 go entirely too far. The CHAIRMAN. The committee will recess until Monday morning at 10 a. m. (Whereupon, at 12:35 p. m., the committee recessed to reconvene Monday, February 27, 1950, at 10 a. m.) SOCIAL SECURITY REVISION MONDAY, FEBRUARY 27, 1950 UNITED STATES SENATE, The committee met at 10 a. m., pursuant to recess, in room 312, Senate Office Building, Senator Walter F. George, chairman, presiding. Present: Senators George, Johnson of Colorado, Kerr, Millikin, Taft, Butler, and Brewster. Also present: Mrs. Elizabeth B. Springer, chief clerk, and F. F. Fauri, Legislative Reference Service, Library of Congress. The CHAIRMAN. The committee will come to order. Mr. Rieve? STATEMENT OF EMIL RIEVE, CHAIRMAN, CIO SOCIAL SECURITY COMMITTEE, AND GENERAL PRESIDENT, TEXTILE WORKERS UNION OF AMERICA, CIO Mr. RIEVE. Good morning, Senator. The CHAIRMAN. You are on first this morning. We hope other members of the committee may come in during your appearance, but it is rather difficult to secure full attendance at any time, especially this session. You are the chairman of the CIO Social Security Committee? The CHAIRMAN. And the general president of the Textile Workers Union of America? Mr. RIEVE. That is right, Senator. I am also vice president of the CIO. The CHAIRMAN. You were on the Senate Advisory Council last year. Mr. RIEVE. Yes; I was one of the two labor representatives on that committee. The CHAIRMAN. We will be very glad to hear you, sir, on H. R. 6000. Mr. RIEVE. I appreciate this opportunity to discuss with your committee the CIO position on improving our Federal social-security program. I am appearing here today as chairman of the CIO committee on social security, which has a number of proposals for strengthening the bill H. R. 6000 that you are now considering. This Congress is certainly going to pass some kind of social-security legislation. I am optimistic, you see. The need has existed for many years, and the demand has become too widespread to be ignored. Now that you have undertaken the job, it is our hope that you will do it thoroughly. We urge you to adopt a program which will be adequate for some time to come rather than to settle for the smallest possible degree of progress. With this in mind, our proposals go somewhat beyond both. the terms of H. R. 6000 and the recommendations of the Advisory Council on Social Security, which reported to your committee in the Eightieth Congress. I had the honor to be one of the two labor representatives on that Council, and I joined in its recommendations for improving old-age and survivors insurance, and for setting up benefits covering permanent and total disability. The Council's program would be far better than the present law; but there have been several new developments which we think should impel you to move further. First is the fact that pensions have become a primary issue in collective bargaining. The steel strike and the Ford agreement dramatized the question. Today, the country as a whole accepts the_principle that one way or another industrial workers have a right to decent retirement incomes. I do not think any of you will deny that the steel strike, in particular, was a leading factor in the overwhelming approval of H. R. 6000 in the House of Representatives last year. We now have a situation in which higher social-security benefits will reduce the actual or potential burden on employers, as well as providing benefits for workers. Our CIO unions entered into such agreements deliberately. It is no part of our philosophy to win pensions for our members only, leaving the rest of the population to look out for itself. We want adequate pensions for all; and we are convinced that our efforts are helping to get them. As President Philip Murray told the House Ways and Means Committee last April, in supporting the administration's social-security bill: We do not regard collective-bargaining plans as a substitute for the basic legislation we are asking. Rather they are supplementary, to provide more adequate total benefits and to meet problems not covered by legislation. The poorer the laws, the greater emphasis we will have to put on collective-bargaining supplements We are not afraid that Congress will do too much, but rather we fear it will do too little. * The steel industry fact-finding board developed a similar point in its report on the eve of last year's strike. I assume you are familiar with this report, but I can supply your committee with a copy if you so desire. The CHAIRMAN. If you will submit it, Mr. Rieve, it will be valuable for our reference. Mr. RIEVE. We will supply it, sir. (The report has been placed in the committee files.) Mr. RIEVE. In short, there may have been a time, many years ago, when certain labor unions resisted social legislation for fear it would weaken their appeal to workers. We in the CIO have no such idea. The second reason why we ask you to go beyond the Advisory Council's report is not really new. Rather, it is an old reason strengthened by recent experience. We in the labor movement have argued for a long time that we must. have in this country an economy of high production and full em ployment. The events since the end of the war-while they have not been uniformly pleasant-have shown that this is not only desirable but possible. Whole new avenues of progress, including the peaceful application of atomic energy, have opened up. The conservative economist, Sumner Slichter; the President's Council of Economic Advisers; and the President himself have all spoken in glowing terms of our prospects. Barring another war, there is no ceiling on our future if only we conduct our affairs with ordinary good sense. Therefore there is no doubt that we can afford an adequate social-security program, for the cost will be relatively slight in an expanding economy. The third reason for doing better than the Advisory Council's recommendations may seem indirect to some of you. In recent months, communism has won great new victories in Asia. I think it is fair to say that the Communists were able to take over China so easily because the former Chinese Government, after many years in power, failed completely to meet the needs of the people. I am aware that this is not the place to discuss foreign affairs. But I think most of us realize that everything we do, as the major antiCommunist power in the world, has an effect on the thinking of people everywhere. If we fail to provide a fair measure of security for the average worker, we strengthen the strongest argument for communism. If the rich can retire in luxury while workers are left to charity, we weaken the cause of democracy at home and abroad. Now I would like to discuss briefly the specific recommendations of the CIO. To begin with, I ask your permission to insert in the record four resolutions adopted by the CIO convention last November, together with a resolution adopted by the CIO executive board on February 15, 1950. In my oral testimony, I will devote most of my attention to the CIO proposals which go beyond H. R. 6000 and the Advisory Council's recommendations. I do not want to burden your committee by repeating a mass of statistics already in the record. With your permission I will deal in order with the three basic sections of H. R. 6000-old-age and survivors insurance, permanent and total disability insurance, and public-assistance and child-welfare programs. I shall also discuss our strong conviction that the program of temporary disability insurance, rejected by the House, should be restored to the bill. Old-age and survivors insurance: First. Coverage-the CIO believes that all Americans, including the self-employed, should be protected by our social-security system. Your committee has already been reminded that the restrictions on coverage enacted in 1935 are responsible for many of today's problems. This Congress should not perpetuate the mistake. Although H. R. 6000 extends coverage to 11,000,000 more persons, we favor the broader provisions of H. R. 2893. Specifically, a number of CIO members are included in the group removed from coverage by the Gearhart resolution, after a Supreme Court decision had indicated they were employees and therefore protected. Our agent laundry drivers, who belong to the Amalgamated Clothing Workers of America, are among them. They have proposed changes in the wording of the law which will meet their problems, together with a brief, which I ask permission to introduce in the record as an appendix to our statement. The CHAIRMAN. You may do so. Senator MILLIKIN. Mr. Řieve, what is the basis of employment of the laundry drivers? Do they work on commission, or how do they work? Mr. RIEVE. They work on a commission fixed by the contract. The Supreme Court indicated that they were employees. Then the Gearhart resolution took them out of the provision of the law, on the argument that they were not employees really but that they were independent salesmen, so to speak. Senator MILLIKIN. Well, there is a lot of debate on that. I did not want to get into that. All I wanted to find out was what is the employment contract, or whatever the contract is, of the laundry workers. Do they work when they please and quite when they please, or do they have a basic wage? Mr. RIEVE. No, they don't work when they please. They get a commission fixed by the contract. And, Senator, it is described in the appendix as to just what they are doing and what their status is. The CHAIRMAN. Have you a copy of a contract? Mr. RIEVE. No, but we can supply that, Senator. The CHAIRMAN. We would be glad to have it. Mr. RIEVE. Fine. We will supply it. (The material referred to appears following statement prepared by Amalgamated Clothing Workers on p. 1268.) Mr. RIEVE. Second. Insured status: Eligibility provisions should be liberalized in order to protect as many workers as possible. We favor the plan suggested by the Advisory Council in its report. Also, we strongly urge a provision to exclude, in determining insured status, any quarters during which a worker was disabled or involuntarily unemployed. H. R. 6000 excludes only the first of these. The CHAIRMAN. Would it interrupt you, there, to ask you how you would enforce that; particularly, now, with reference to the involuntarily unemployed? Mr. RIEVE. Well, if the worker is not paying any social security, he is unemployed. That quarter ought to be taken out in computing his status. The CHAIRMAN. How would you check that? You see, in many States the unemployed worker, if he has been working in a group of less than eight workers, is not under unemployment compensation. Mr. RIEVE. Well, all right. The unemployment-compensation law may have to be amended to jibe with that. The CHAIRMAN. I just wondered how you would enforce it. How would you check it? How would you know it? Mr. RIEVE. The worker has to apply to the unemployment compensation office to see if he is covered by unemployment compensation, and that office would know whether he is unemployed or not. The CHAIRMAN. You may proceed. I was wondering, though, how we could check the involuntarily unemployed. You would obviously have to do it, if you were going to give them full credit. And you refer to "a provision to exclude, in determining insured status, any quarters during which a worker was disabled or involuntarily unemployed." |