Mr. RIEVE. H. R. 6000 already covers the first, the disabled.
The CHAIRMAN. Yes, sir. That is right.

Mr. RIEVE. Now, we propose that it will be extended to the involuntarily unemployed. I think that there is a problem of proper enforcement, but I believe that ways can be found to bring it about; that is, if we would broaden our unemployment-insurance scheme, so that a worker has to report when he is unemployed in order to be entitled to unemployment compensation, so that a record could be kept of whether he continues unemployed for that quarter or not. Now, there might be difficulties in the mechanical set-up. I don't know just how to work it out, but it seems to me it can be worked out, Senator. There is no reason why an economic disaster which is bad enough at the time should be permitted to strike again after a worker has retired.

You see, the way it is now, the worker is unemployed, not of his own choice, and then that is counted against him; and when he retires it is counted against him again, because he had no earnings during that period of time. So he actually suffers twice.

Third. Benefit categories: We favor reducing the age of permissive retirement for women from 65 to 60, with a similar cut in the age requirement for the wife, widow, or dependent mother of a covered worker. What is happening in this, Senator, is that the average wife is somewhat younger than the husband is. The result of it is that on the average the wives are about 3 or 4 years younger than the husbands are; so that when the husband reaches 65 really he cannot retire, because his wife is not entitled to her share of his retirement, because she is not 65 years of age yet. So he has to almost be 70 years of age before he retires, if he has to depend on the supplementary income that his wife gets from the old-age pension. By reducing that age for women, they could probably retire when the men reach the age of 65. Fourth. Benefit amounts: Here is a point I should like to discuss at greater length. Not only do we in the CIO propose a generally higher level of benefits than H. R. 6000, but in addition, we would like to make clear the principles we follow in considering this part of the social-security program.

We do not accept the idea that social security should be only a minimum, and a low one at that. We are not impressed by the arguments of the insurance companies that every worker should buy enough private protection to supplement his Federal benefits.

Judged by the standards of workers, private insurance is expensive. Also, the benefits are fixed by the original contract; they cannot be adjusted to the cost of living. When living costs go up, the worker is unable to buy additional protection at the same rate; his age has also increased.

Our union plans also have obvious limitations. They usually demand continued employment by one company, or at best in one industry. If the company fails, or the worker goes elsewhere, the protection is lost. To be sure, the benefits paid under union plans can be raised through collective bargaining; but this does not give the worker freedom of movement.

Private insurance gives a worker flexibility in employment; unionnegotiated insurance is flexible in amount. But only Federal social

insurance can provide both at a cost within the average worker's reach.

Furthermore, CIO supports the principle that benefits should have a relation to past earnings. Those who earn higher wages contribute more toward the program; as a general rule they have a higher standard of living; and they should get larger pensions.

At the same time, we recognize that the lowest-paid workers will reach old age with the least personal resources. We accept the idea that their pensions should represent a somewhat greater proportion of their past earnings than do those of the higher-paid group.

H. R. 6000 maintains both these ideas, but it doesn't go far enough in either direction. Before getting into the figure, however, I would like to make one other point.

There are a good many people today who deliver eloquent speeches in favor of equal pensions for everybody, regardless of the socialsecurity system. Now this idea has a certain amount of appeal; we do not want to see anyone suffering hardship because of old age.

The CIO is also in favor of adequate pensions for all. But we are firmly convinced that the only realistic path to this goal is expanding and improving the present social-security system. We recognize that millions of our citizens have reached retirement age without being entitled to Federal pensions. We realize that millions of others will be under the same handicap in the future-either because their occupations were not covered by the act, or because they were not covered for a long enough time to draw full benefits.

These are a part of the growing pains of social security. They are the reason why we are urging more general grants for old-age assistance. But they are not an excuse for abandoning the social-security program itself.

Senator MILLIKIN. When you say, Mr. Rieve, "but they are not an excuse for abandoning the social-security program itself," you are referring to the insurance program?

Mr. RIEVE. Yes; I am referring to abandoning our present social security in favor of a flat amount for everybody.

Senator MILLIKIN. A contributory insurance system is what you are talking about?

Mr. RIEVE. Yes, for everybody.

I have read about testimony before your committee favoring a flat benefit of $25 or $30 a month. That's not a pension; it's a parody. Yet even paying this amount to the 11,000,000 Americans over the age of 65 would cost more than $3,000,000,000 a y ear. A flat benefit of $50 a month would cost more than $6,000,000,000 a year.

The conservatives who have spoken favorably of flat-rate pensions are not among those who are willing to pump additional billions into the Federal system. We suspect their real aim is to break down the whole social security program.

We in CIO, on the other hand, have no objection to expenditures of this size for old-age pensions, provided the money is raised and disbursed in a fair and sound way. We believe these conditions can be met by following the existing social security pattern, with the improvements we suggest.

I would like to remark, in passing, that we deplore the opposition of private insurance companies to higher Federal benefits. In the first

place, we do not believe these companies have an inherent right to make money from the insecurity of our people. In the second place, we are convinced-and the record bears us out-that the Federal plan encourages the purchase of supplementary insurance, because the Federal pension helps bring an adequate retirement income within reach. Here is what the CIO proposes as a program for liberalizing benefit amounts: The calculation of the average monthly wage should be revised. This calculation is of primary importance in determining what the worker gets in the way of a pension.

As you know, hourly paid workers cannot, as a rule, work full time throughout the year. Seasonal unemployment is typical of many industries. Others close down at intervals because of material shortages, weather conditions, or other factors.

Under the present law, these periods of involuntary unemployment also reduce the workers' pension rights. H. R. 6000 applies a remedy only in the event of permanent and total disability. This is not enough. We suggest that the average monthly wage should be based on earnings in the highest quarters of five consecutive years-the 5 years which produced the highest total earnings.

The benefit formula I am about to propose is based on the assumption that you will adopt this suggestion. We are primarily interested in a certain level of benefits. If the average monthly wage is brought down by a different method of calculation, we naturally want to increase the percentage of the average monthly wage which is paid as a pension.

Actually our recommendations on the benefit formula are at a minimum level from our point of view. As I have indicated, we believe social insurance payments should be enough to maintain an American standard of living. At the same time, we want to be practical; so we have scaled down our proposals to a substantial degree.

We favor the provision of H. R. 6000 regarding the first part of the benefit formula; that is, a primary benefit of 50 percent of the first $100 of the average monthly wage. But we believe that the percentage for wages in excess of $100 should be doubled, permitting 20 percent to be added to the primary benefit.

The CHAIRMAN. Mr. Rieve, at that point: Mr. Murray did, did he not, advocate the administration bill, that is, the bill first introduced in the House, H. R. 2893? And that bill had this formula: Fifty percent of the first $75 of average wage, plus 15 percent of the next $325. You are suggesting a change there?

Mr. RIEVE. We are. That is right.

The CHAIRMAN. You want 50 percent of the first $100, and then a doubling of the percentage for wages in excess of $100, to permit 20 percent to be added to the primary benefit?

Mr. RIEVE. That is right, yes.

We also favor the present 1 percent annual increment, rather than the one-half of 1 percent allowed in H. R. 6000. And we urge that the wage base be raised to $4,800 instead of $3,600.

We have prepared a table comparing the benefits under this formula with the present figures, and with those contemplated by H. R. 6090.

Comparison of benefits after 20 years of coverage provided by various plans (single person)

1 After 1955, benefits are reduced by periods in which the worker was not covered.

I will not take the time to read the figures, but you will note that we propose, for a single person after 20 years of coverage, a minimum of $60 and a maximum of $132, compared to a minimum of $55 and a maximum of $77 under H. R. 6000.

The greatest differences occur in wages of more than $200 a month. This is in line with our belief, as I mentioned earlier, that benefits should be related to past earnings. We are willing to modify this relationship for the sake of the lowest paid; but we must accept the unhappy fact that many wage earners are paid too little to build up adequate pension reserves. We cannot correct the inequities in our economy by means of the social security system.

This is why we urge a primary benefit of 20 percent, instead of 10 percent, of wages above $100 a month. A similar approach is involved in our view on the annual increment. While we hope you will extend coverage to all workers, we do not think you should penalize those who have been making contributions for many years.

At the same time, we do not believe there should be too drastic a reduction imposed on those whose periods of covered employment are interrupted. We feel the continuation factor in H. R. 6000 cuts benefits too far.

We advocate a wage base of $4,800 because this figure, in terms of wage and price levels, is equivalent to the $3,000 base of the prewar years. Anything less than $4,800 is a step backward, and puts an adequate program that much further out of reach.

Also, the $25 minimum in H. R. 6000 is entirely too low, even though it is much better than the present $10. We propose a minimum of $50 a month for all covered workers.

After all, the aim of social security is not to provide a little spending money for aged workers who must find other means of support. We want to do better than that; and to do it, $50 a month is as low as we can go.

Along the same line, we vigorously approve the provision in H. H. 6000 permitting outside earnings up to $50 a month. Together with our proposed benefit minimum, this opens the way to a $100 monthly income for a retired worker in the lowest pension bracket who retains some earning power. Certainly this is more realistic than the $14.99 limit for the same worker today.

The maximum for family benefits, in our opinion, should be 80 percent of the average monthly wage, without a dollar ceiling. To chop off benefits at $150, as H. R. 6000 contemplates, would defeat the purposes of social insurance where there are a number of dependents. Simple justice calls for higher dependents' and survivors benefits. The surviving dependents are just as important as the surviving workers, though the latter have held the spotlight.

A widow should receive 100 percent of the primary benefits; her living costs are just as high as a retired single worker's. We also favor increasing the allowance for the first child or dependent parent of a deceased worker to 75 percent of the primary benefit, as set forth in H. R. 6000. We are sure you agree that protection for the children of widowed mothers has an importance which transcends any statistical analysis. It is a form of investment in the Nation's future.

In all these cases, limiting the maximum family benefit to 80 percent, of the deceased workers' average monthly wage eliminates the risk of excessive allowances.

Finally, we urge liberal wage credits for veterans covering their period of service, the cost to be met from the general revenues.

You will note that I have not brought out an array of figures on the cost of living, family budgets and so on as part of our case in behalf of these higher pension payments. It seems to me it is unnecessary to do so. Our proposed schedule of benefits is clearly not

extravagant.

Therefore I will simply point out that a budget developed jointly by the Social Security Administration and the Bureau of Labor Statistics calls for an income of more than $140 a month for an aged couple in a representative city. These agencies describe the budget as "modest but adequate. I think it can be said that the first adjective is more descriptive than the second. Actually, of course, we believe these figures are not nearly adequate to provide a decent American standard of living.

In any event, the CIO proposals would produce such an income only in a relatively few cases.

I would like to turn now to the second basic section of H. R. 6000. I would like now to turn to the question of permanent and total disability.

PERMANENT AND TOTAL DISABILITY

H. R. 6000 provides payments for total and permanent disability closely in line with those recommended by the Advisory Council. In the opinion of CIO, no part of the bill is more important than this

one.

A worker who becomes permanently and totally disabled loses in three ways. First, his income is cut off, often at the very peak of his family obligations. Second, he often is saddled with medical costs which consume whatever savings he may have. And third, he is very likely to lose his insured status under the social-security laws, and therefore be deprived of pension benefits when he reaches the age of 65. There is presently no way for the average worker to insure himself against this triple disaster. In my own union, the Textile Workers Union of America, 90 percent of the membership is protected by group insurance covering disability; but the payments terminate after 13 or 26 weeks.