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SOCIAL-SECURITY REVISION

THURSDAY, MARCH 23, 1950

UNITED STATES SENATE,
COMMITTEE ON FINANCE
Washington, D. C.

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, Byrd, Johnson (Colorado), Kerr, Myers, Millikin, 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.

Senator Long?

STATEMENT OF HON. RUSSELL B. LONG, A UNITED STATES SENATOR FROM THE STATE OF LOUISIANA

Senator LONG. I did not bring a prepared statement, Mr. Chairman. I would just like to discuss one or two points in the present socialsecurity bill, H. R. 6000, which I expect to support.

I think this bill goes a long way toward correcting the inadequate provisions that we have at the present time for the needs of retirement and the other phases of social security. The only objection that I would have to benefits at the present time is that I believe they will still be too meager even after we work this program out. I note that the average benefits will be about $46 for retirement, and in my own State, the average public-welfare check is about $47.50 for people

over 65.

The CHAIRMAN. Old-age assistance?

Senator LONG. People who are on old-age assistance; and who are, you might say, in that respect wards of the State and the Federal Government. It seems to me we should try to work out a retirement program wherein the retirement benefits, the social insurance for retirement, would take up where the public-welfare program leaves off, so that at least a person who has paid for his own retirement could expect to live in a little bit better circumstances than a person who, for one reason or another, either was unable or failed to contribute to his own retirement. I feel that a minimum benefit, for example, of $25 for a person who has paid over a period of years for his own retirement is ridiculous, when a person on public welfare who could simply qualify as being needy could get twice that maximum. I know in your State, Senator Millikin, it even goes higher than $50

a month.

Senator MILLIKIN. It is $75.

Senator LONG. It seems, therefore, since our Government has adopted the position that it would match up to $50 a month for the retirement of individuals-that is, under public assistance-we should take up at $50 for the retirement of people under social security, so that we could feel that at least those who have paid for their own retirement would live a little bit better, or at least as well as those who were depending entirely on public assistance.

I do hope that someday we will see the public-assistance program and the social-security insurance features merged into one consistent program, and I hope that if that day is ever reached we will provide a basic $50 per month retirement for everyone at age 65.

I do not believe that is likely under the present bill, so I will not go into great detail on it.

I also believe that someday we will see fit to go to a cash-in and cashout basis, rather than attempting to build up enormous surpluses on which a person could retire. I do not know exactly how much the Social Security Administration estimates would have to be in the fund for people to retire, but I would estimate that if we are going to build up a fund large enough for 60 million workers to ultimately retire on, and take those same dollars back out over a period of time, the fund would probably have to be somewhere between 300 billion and 400 billion dollars. I do not believe you could find that many securities to purchase, and there is not that much cash in America. It appears to me it would be necessary either for the Government to issue additional securities or to run the printing presses to create additional currencies to build up such an enormous fund. I feel that we are making a basic error when we look entirely toward the dollar value of retirement and not in terms of it as a case of taking a certain portion of the gross national product and providing for those whom we wish to retire from productive labor. I believe, if we look at it in that sense, we will find that all during the time we have had social security we could have paid greater benefits if we had been paying out the receipts that we were at that time taking in.

It is my feeling that the workers who are presently working should pay the expense of retiring those who are presently retired, and should in turn expect the succeeding workers to pay the expense of retiring them as time goes by, and that our social-security policy should le based on estimating how much of our gross national product the national economy could afford for us to set aside for the retirement of our aged people.

Senator MILLIKIN. I think what you are saying is that you believe in a pay-as-you-go system.

Senator LONG. That is right. I believe in pay as you go. I do think it is a very fine thing to have a substantial reserve. We have at present, I believe, about 12 billion dollars, or possibly substantially more than that, in reserves; and, where you do have a substantial reserve, anyone dependent on that retirement system knows that there is no prospect of the fund going broke at any time in the near future,

I think everyone who is retired likes to feel there is a large amount in the fund and no immediate prospect of the fund coming to an abrupt end. Therefore, for the peace of mind of all those who rely on our social-security system, I believe it is good to have a substantial fund there and to put a little bit more into the system each year than we

take out. But, as far as building these tremendous reserves, I believe that someday we will find that fallacious.

I think, also, we will find that we are making a mistake when we try to plan the retirement of a person 50 years in advance. I believe if we are able to provide a reasonably satisfactory retirement program for our people today, or during the next 5 or 10 years, future Congresses will find a way to better plan for their people than we can plan for them generations in advance.

Of course, those items I do not believe will have much effect on the present bill, because I believe that the committee and the Congress are pretty well committed at the present time to going along under the usual insurance programs to build up these large reserves; but I do hope over a period of time we can work toward a pay-as-you-go system. One need that is extremely deserving of help, Mr. Chairman, is the situation of the disabled people in this country. That is the blind spot of our present public-assistance program, and I feel that it is probably one of the blind spots of our insurance program as well. In my State, we provide for about 125,000 aged people over the age of 65. In addition, we provide for about 24,000 disabled people, about one-sixth as many people as we have under old old-age program. But it is this one-sixth who must be aided by the State, with no aid from the Federal Government whatsoever.

If my memory serves me correctly, we are spending about a million dollars a month in my State, with no Federal aid, in the effort to provide for these disabled people. If economies must be effected in our program, there are many who would urge that we reduce the aid for this category, because there is no Federal matching, and the money would go further in the old-age program with Federal matching. But that would be a very unfair thing to do in most respects, because those are the cases of the most crying need. In many cases those people have heart disease or have been subjected to a heart attack, where any strenuous labor would kill them almost immediately. Many of those people have cancer, and many of them have other incurable diseases, which would make it completely impossible that they ever work again. It seems very unfair that the Federal Government would match us and make it possible for us to adequately provide for a person 67 years old, let us say, who is yet able to perform some useful labor, and at the same time give us no aid at all in providing for a man, let us say, 61 or 62 years old, who is bedridden and may never be able to do any work of a remunerative character again. And I certainly hope that this committee will come forth with a provision to enable us to care for the disabled.

The definition that is presently in the bill as it passed the House provides for aid for the totally and permanently disabled, and I do not believe anyone will be able to tell us exactly what that language means if that test is applied. I know in my own State our workmen's compensation law used the term "totally and permanently disabled." The term was so strict that the court saw fit to liberalize it, and our definition in Louisiana is that a man who was a carpenter, if he suffered an injury which would prevent him from climbing a scaffold, although he could do many other types of useful work, was totally and permanently disabled to be a carpenter and is entitled to compensation as a totally disabled worker although he might then go to work as a

watchman and make more money than he made as a carpenter, because he had been totally and permanently disabled for that particular job that he had been doing. We will find ourselves splitting hairs and fighting over definitions as long as we have the definition of "permanently and totally disabled," unless we intend to go further and define those terms in this act. To me the only proper definition of "aid to disabled" would be that the person be, first, needy, and that in addition to being a needy person, he has disability that is such as to prevent him from earning sufficient money to provide for his own needs. That is what we are ultimately going to arrive at in our definition of "totally and permanently disabled," in my opinion, if we ever put it in the act. And I feel that we might as well be realistic in the beginning and realize that the State program would have to attempt to set up a definition that would be more administrative and would rely on the fact that a person because of his disability was unable to earn sufficient income to provide for himself. Otherwise, I believe we will find ourselves in a situation where possibly a great number of people who would be entitled to some consideration may not receive it.

There are a lot of people who are temporarily disabled, although the temporary disability may last for as long as 6 or 8 months, and if they have no other visible source of income it would seem to me that they should be entitled to some consideration for public assistance. I do not feel that it would be proper for the National Government to say that it would not match or assist with any of those kinds of cases. Therefore, I hope that this committee will consider the amendment that I offered pertaining to the definition of "disabled.”

In addition to that, Mr. Chairman, I have received complaints from some of our States and municipal employees, who feel that they will be compelled to come under the Social Security Act and receive less benefits than they would receive under the present retirement system within their States. As an example, our school teachers have a very excellent retirement system in the State of Louisiana that they have worked on over a period of many years. Now, the law provides that those people could vote whether or not they wanted to come under the social-security program; and on its face it would seem that they would be well protected. However, they feel that, in the event we pass the present social-security bill and include such a provision, many of the members of the State legislature would simply refuse to appropriate money for the State's matching portion to the retirement system, in the effort to compel the teachers to go under the socialsecurity program, which would be less expensive to the State. They feel that to avoid any type of compulsion, or being forced by the legislature, or by a balking legislature, to go under the Federal retirement system, they would just prefere to be exempted. Therefore, an amendment has been presented, which I believe was proposed by Senator Lehman, in this connection, and I will not attempt to suggest to the committee what its decision should be on that matter, but I do believe that should be considered in studying this bill.

Further than that, I have heard from many of the timber people, logging mills, and paper mills in my State, who are concerned about the definition of "employee" where, as they feel, the individual is a private contractor. I have not had a chance to make sufficient study of that matter to know just what my own opinion would be, but I

would call it to the committee's attention so that they may give study to the position of an independent employee, or an independent con tractor, who may or may not be covered by the act. I certainly hope that, however the committee works it out, we do clearly spell it out one way or the other, rather than leave it for administrative decision as to whether a person working as a private contractor for a logging mill or a pulp mill or something of that sort is an independent contractor. I feel it is only fair to both the employer and the employee that both sides know where they stand when Congress acts on this

measure.

The CHAIRMAN. Thank you very much, Senator Long, for your appearance.

Senator LONG. I thank you very much for the time, Mr. Chairman, and your consideration.

The CHAIRMAN. Mr. Lowell Whittet?

Mr. Whittet, before you proceed, we shall offer for the record a statement prepared by Ernest W. Greene, vice president of the Hawaiian Sugar Planters' Association, in which he advocates the coverage of farm labor under social security.

(The statement referred to follows:)

STATEMENT OF ERNEST W. GREENE, VICE PRESIDENT, HAWAIIAN SUGAR PLANTERS' ASSOCIATION

I am Ernest W. Greene, vice president of the Hawaiian Sugar Planters' Association, of which all of the producers of sugar in Hawaii are members.

The executive committee of the association, on March 13, 1950, unanimously adopted a resolution as follows:

"Whereas the Committee on Finance of the United States Senate is presently conducting hearings on proposed amendments of the Social Security Act, and consideration is being given by said committee to proposals for the extension of the coverage of said act to include persons not now receiving benefits provided by the act: Now, therefore, be it

"Resolved, That this committee express to the Committee on Finance of the United States Senate the position of the sugar-plantation companies of Hawaii in favor of the extension of the coverage provisions of the Social Security Act in order to entitle agricultural labor to the same old-age and retirement benefits now received by other persons covered by the act."

The production of sugarcane and the processing of raw sugar therefrom is necessarily a large-scale operation under the conditions which exist in Hawaii. Persons employed by sugar producers are engaged in year-round employment in every phase of the farming and harvesting of sugarcane, transporting such sugarcane to the sugar mill on the plantation farm, and processing it into raw sugar.

About one-half of the employees of sugar producers are employed in employment which is covered by the present Social Security Act. The other half are employed in employment which is defined by the act as agricultural and, therefore, they are exempt from such coverage. Exemption in this instance means that many thousands of the persons employed in producing sugar do not participate in the benefits of social-security legislation.

The sugar producers of Hawaii urge that the Committee on Finance amend the Social Security Act to extend to employees employed in agriculture the oldage and retirement benefits which are now received by persons who are covered by the act.

We believe that coverage of agricultural workers will accomplish simple justice by affording to such workers the security which is now enjoyed by other workers who are employed in employment which is so classified as to be covered.

The CHAIRMAN. Also a request by the Honorable Guy M. Gillette, junior Senator from Iowa, on behalf of the National Brotherhood of Packinghouse Workers; and that will be entered into the record also, Mr. Reporter.

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