This committee has before it a choice between true socialized medicine and the utilization of the proven social insurance system offered by prepayment within the social security system. And I will point out to this committee that failure to utilize the social security system. in a manner not dissimilar to that proposed in H.R. 4222, or H.R. 4309, will result in a continuing expansion of the Kerr-Mills system. The unmet medical care needs of the aged, covered and uncovered by the Kerr-Mills proposal, will be answered by continuing expansion of that program, until it becomes a permanent part of our system of medical care for all of our aged population.

I would point out to the membership of this committee that there is no prepayment under the Kerr-Mills bill. It is supported by taxes and from the general funds and revenues of the State and Federal Governments in the manner of the British plan so hated by the AMA and by other opponents of the principle of H.R. 4222 and H.R. 4309.

I would also point out that the taxes supporting this program are in no wise voluntary; so the question of voluntary participation is not before us.

Enactment of this legislation will provide the soundest method of meeting the most serious needs of the aged. It will help children and relatives who so often must help meet the medical care deficit of the aged. The bill will help hospitals. It will alleviate the loads of private charities, public welfare, and overburdened local and State budgets, the last having been heavily strained in meeting the State's share under the Kerr-Mills bill.

Enactment of this proposal will help eliminate "skimming" by private insurance plans of the good risks of the nonprofit plans as pointed out by a recent University of Michigan study, and allow both to concentrate in improving coverage and protection of their assured both with reduced premiums and by increasing the amount of benefits available by elimination of a significant portion of their high cost medically indigent and near-indigent assured risk. And I will point out that the commensurate financial and service benefit to the assured under such a situation will be tremendous.

Benefits under H.R. 4222 and H.R. 4309 would be financed by a payroll tax of a quarter of a percent for employers and employees and three-eighths percent increase for self-employed, with earnings base increased from the present $4,800 yearly to $5,000 a year.

I will point out in conclusion that the proposal is reasonable, meets a desperate need, and is in the public interest. I hope that this committee will report it speedily. If this legislation is not enacted in this Congress, it will be soon, gentlemen, by a later Congress.

And I will again stress to you gentlemen the choice which this committee puts today is a very simple one. It is whether or not we are going to utilize now a program of medical care for the aged based on payroll taxes, based on payment by the persons concerned, on the basis of a sound social insurance program, or whether we are going to go down the road we have started and have a program which will be based on direct taxes by Federal Government and by State government, which will then become the full program for care of our aged, we have gone almost too far now to return.

I will point out, gentlemen, that the dangers inherent in a situation like this are vastly greater than they are in a program which is based

on the insurance principle; that the dangers inherent in a program of this sort, of a political nature, are vastly greater. The inducement and the incentives to irresponsibility of various kinds, both by legislative and by citizen action, are vastly greater than they are in the instance where we have a program where there is a tax levy to finance the program.

Now, I have heard this morning a number of questions dealing with, "Well, now, do you favor taxes not on the basis of means?" My record is very clear on this, and I have consistently supported a graduated Federal income tax to accomplish the general functions of Government. However, I recognize that in a large number of instances, this Government must face the fact that specialized types of programs, as provided for example under the social security system, can only be accomplished by a tax which will be based on payroll, which is subject to reasonably easy administration; and that this principle has been engrafted in our laws on many, many occasions. It is not novel. It is not an unfairness to the aged or anything else.

I think that if we reflect, the cost of this program is very minimal. It will not be an additional burden to States or to the Federal Government. It will be found, gentlemen, the equivalent of about 3 cents per day during the working life of the individual. And on conclusion of his working life, he will achieve what will be the equivalent of a paid up program of health insurance, which will offer the general benefit level which we witness embodied in the bills before us.

It is not socialized medicine. It is by no means a step toward socialized medicine. It is a very concrete and a very real way of meeting perhaps one of our greatest programs and our greatest needs in the country today.

I will point out to you further that the traditional opponents of this legislation have been heard playing the same exact cracked record on this subject which they played before us today. The American Medical Association for example has opposed the original social security program. They opposed Blue Cross. They opposed Blue Shield. In fact, their opposition to Blue Cross and Blue Shield is so great that the AMA found itself in difficulties with the Department of Justice for violation of the antitrust laws. They have opposed, for example, eliminations of the means test and the crippled children's program. And they opposed Federal grants to States for maternal and child welfare programs.

And I say that when the medical profession works, as they have done so well, to provide better medical care, to improve the standards of the practice of medicine, to improve in a general way the manner in which the actual practice of medicine is carried out in this country, there is none finer. But when they get their nose into matters of social and legislative concern, very generally they manifest a reaction which is frightening to behold.

And so, with that, Mr. Chairman, I thank the committee.

I want to pay particular tribute to the committee and also to my distinguished friend from California, the sponsor of the legislation before this committee, for the courage, for the vigor, and for the public interest, which he has displayed in this matter.

Thank you very much.

Mr. KING (presiding). The acting chairman appreciates your comments, Mr. Dingell. The committee likewise appreciates your bringing to it your views.

Are there any questions?

Mr. Machrowicz?

Mr. MACHROWICZ. May I just briefly commend my colleague from Michigan for a very fine statement, and for the deep interest he has always shown in this subject matter and the help he has given to all of us on the committee in preparing proper legislation in this area. Mr. DINGELL. I certainly appreciate the gentleman's very gracious

remarks.

As our time in Congress has shown, we have been good friends, and I have had an opportunity to learn a great deal and to benefit greatly by the wise counsel and assistance of the distinguished gentleman from Michigan.

Mr. KING. Mr. Curtis will inquire.

Mr. CURTIS. The gentleman has a bill which extends health care to all aged, does he not?

Mr. DINGELL. That is absolutely correct. I certainly do.

I would point out to my distinguished friend from Missouri that the fact that I have legislation in dealing with much broader aspects of the medical needs of the people of this country should not in any way influence the gentleman with regard to the legislation before the committee at this time.

Mr. CURTIS. Only to point out what many have, and I myself, that the proponents of this, by and large, are in favor of the full coverage. So that when we discuss the possibility of what this first step would lead to, it is appropriate to refer to bills such as you have introduced, which is a complete coverage, like your father's

bill.

Mr. DINGELL. I would point out that that is appropriate. But I would still point out to my very good friend that the question is not whether or not we are going to cover everybody. The question is whether or not we are going to meet the needs of a group in our society which has perhaps the most pressing and desperate medical need of any group.

And then the question is: Is there any other way in which this can be met? And I would point out to the gentleman that statistics show that in the past we have not met this. I would point out that only 40 percent, or a shade better than 40 percent have achieved coverage under any prepayment programs, either nonprofit or insurance-type, of any sort.

I would point out, lastly, that by and large these programs, which are available for the care of the aged, in this very low income group in our society, are by no means adequate. They are subject to cancellation. For example, I would point out to the gentleman one of my relatives by marriage was the head of Dentists for Taft in the State of Colorado. And he got the shock of his life when he got his first serious illness after he passed 65. In fact, one of the worst jolts he had gotten in his life was when I married his niece.

Mr. KING. That was the second shock?

Mr. DINGELL. Yes.

Mr. CURTIS. I would assert that much of the items that he quotes as facts are in conflict with considerable of the testimony before us,

and let it go at that, including, I might say, such things as that the AMA was opposed to Blue Cross and Blue Shield.

Mr. DINGELL. I can give the gentleman a quote on that.

Mr. CURTIS. I think the record is already pretty well established, but by all means put it in the record.

Mr. DINGELL. I would point out that Dr. Fishbein called it a crackbrained program.

Mr. CURTIS. Well, you are talking about individuals. I was talking about the organization.

Mr. DINGELL. Well, as I pointed out to my good friend, the AMA got itself in antitrust difficulties because of its opposition to Blue Cross and Blue Shield programs here in the District of Columbia. I would further quote, for example, the statement of Dr. Fishbein, then head of the AMA with regard to this point. There are many other quotes I could give the gentleman.

Mr. CURTIS. Put them in the record. I am talking about the organization; not individuals. I think the record is pretty clear on that. You were referring to the organization, and not individuals?

Mr. DINGELL. Well, he was the head of the AMA, I will say to the gentleman.

Mr. KING. Any further questions?

Mr. Knox will inquire.

Mr. KNOX. My distinguished friend from Michigan is, I know, a dedicated individual and believes in this philosophy. I commend him for having a philosophy, regardless of whether I agree with his philosophy.

I have been greatly concerned about the financial obligations of those that would be forced, under the provisions of this bill, to make contributions to the program. I do not know whether you have gone into it or not. My concern is that the average workingman today would be in the category of the $5,200 a year. Therefore his entire salary would be taxed. Then we have the other segment of our country, that has much greater income, but if they are covered under social security they would only pay on the first $5,200, and the rest would be tax free. That is my concern. I want to emphasize to my good friend that that is my chief concern about the financing of a program of such magnitude as this one.

Mr. DINGELL. I believe the gentleman will recall with me that not too long back a release either from the Department of Labor or from the Department of Commerce pointed out that the average wage in this country has now approximated about $7,100 a year.

Mr. KNOX. Yes. I believe that would be true. However, we are looking to separate the wage brackets in the working force today; and the greater numbers are in this group of $5,200. If you take the ones that are in the $40,000, $50,000, $100,000, and higher, of course that brings the average, then, up to the so-called $7,100. There is no tax imposed on this higher group above the $5,200, so it is my opinion that we would be forcing a tax upon a segment of our country that are least able to pay, rather than at the top, which are more able to pay.

Mr. DINGELL. I think there is some truth in what the gentleman points out. This carries out what we have established some 32 years ago, under the social security law. I would point out to the gentleman something else that I think is still more important, and that is this: This group, about which the gentleman expresses very proper

concern, favors this proposal. I think if a poll were made of all the persons in this group, we would find that they favor by an overwhelming majority the provisions of the bill now before the committee which we are discussing.

They favor paying this tax so that they can have some protection against medical indigency during their later years. Indeed, I would point out to the gentleman that this is perhaps one of the greatest fears that the workingman of this country has. I would point out still a further fact, that the workingman of this country not only faces the problem of medical indigency in his own right, but he faces it in medical indigency on the part of friends, relatives, and parents, who very frequently are either dependent on him or semidependent on him. The statistics of the study submitted to this committee revealed the very striking fact that not only do people during their working lifetime have parents and so forth living with them and either dependent or semidependent upon them, but indeed recipients of social security benefits, in other words, persons 65 or over, not infrequently, and in the future with increasing frequency, have and will have parents, relatives, living with them, and either dependent on them or semidependent on them.

Mr. KNOX. I do not know that we have before the committee at the present time figures which will show the number of people in this category that are in favor of this program. It is my opinion that the people of the Nation do not know all of the contents and provisions of this particular legislation.

Now, I think the reason why the committee is holding hearings is in order to get more information prior to making any decision. I have an open mind on it. I certainly have not come to any conclusions, and if I had come to conclusions, I should not be sitting on the committee, because I am here for a purpose, and that is to get information, and then determine how far we should go with this program, if we go with it at all.

Mr. DINGELL. I am very happy to hear the gentleman say that, and I am sure that he is a very fairminded legislator.

I would point out, by the way, that the special conference, the White House Conference, on this point, called by the previous administration, made it very clear that the Conference as a whole and the particular part of the Conference which considered this precise question of whether or not this should be financed through social security, whether this type of program was in the public interest, made its statement very clear on this point: that they favored, by 170 to 90, in this specific group, 170 to 99, or something like that, this type of program as being the best way to meet the need which we have in this country.

Mr. CURTIS. Will the gentleman yield?

The gentleman, I think, is in error. The Conference as a whole did not make such a finding. One of the groups did.

Mr. DINGELL. The group charged with financing.

Mr. CURTIS. One group did, and another group took the other position.

Mr. DINGELL. I would point out to the gentleman first of all that the group that was charged with starting the financing came out strongly in favor of this, and I would point out that that particular group had perhaps the heaviest membership of the whole of the Conference, or