I am singularly unimpressed with the great bulk of the testimony of opponents to this proposal. This is the one area wherein this committee has witnesses representing a vested point of view who more often than not come here with a weak case on the merits of this proposal and who apparently, it seems to me, in desperation can only interlace their testimony with disproved slogans and an expression of concern about the other fellow's welfare. It gives me cause for interest, if not concern, when an opponent to a piece of legislation comes before us and as a part of his case presents the side presumably of the proponent, who apparently according to this type of witness, really does not know “whereof he speaks."

RE TAX BURDEN ON LOW-INCOME FAMILIES

There has been considerable comment on the tax burden of social security on a low-income family. It has been pointed out that in some cases a family not otherwise subject to income tax has nevertheless to pay social security taxes. I have some observations on this. It has been of considerable interest to me that, in the first place, this point, without exception is raised by the people who not only oppose my bill but who opposed social security initially and who have opposed every improvement in the act over the years. On the other hand, just as recently as last week we received testimony from the labor group, which represents millions of the so-called low-income families, to the effect that it is the opponents who worry about this tax burden and not the low-income family, who benefits from the proposal and who pay their share toward it.

As a matter of fact, spokesmen for the laboring group over the years have never asked for increased protection and benefits without also recommending increased taxes to pay for the liberalizations.

Mr. KING. The committee will now recess until 2 p.m.

(Whereupon, at 12:15 p.m., the committee was recessed, to reconvene at 2 p.m. the same day.)

AFTER RECESS

(The committee reconvened at 2 p.m., Hon. Wilbur D. Mills (chairman of the committee) presiding.)

The CHAIRMAN. The committee will please be in order.

Our first witness this afternoon is the Honorable David L. Lawrence. Governor Lawrence, we are pleased to have you with us today. Mr. Green?

Mr. GREEN. Mr. Chairman, I would like to have the opportunity of welcoming our distinguished Governor of Pennsylvania to the Ways and Means Committee. He has done a remarkable job in Pennsylvania. He has had an outstanding administration, thank goodness, with very little trouble, and we have a great deal of admiration and respect for the Governor and we hope that he continues in good health. We are happy to have him today before the committee.

STATEMENT OF HON. DAVID L. LAWRENCE, GOVERNOR OF THE STATE OF PENNSYLVANIA; ACCOMPANIED BY NORMAN V. LOURIE, DEPUTY SECRETARY OF WELFARE

Governor LAWRENCE. Thank you, Congressman.

Mr. SCHNEEBELI. Governor Lawrence, as a fellow Pennsylvanian, I, too, welcome you to these hearings. I am sure that what you have say will be a matter of great interest to us.

to

Governor LAWRENCE. Thank you, Congressman.

Mr. SCHNEEBELI. Thank you.

The CHAIRMAN. Governor, you are with friends today, and we are pleased to have you here, sir, and you are recognized.

Governor LAWRENCE. Thank you, Congressman, very, very much. First, I want to thank your committee and its chairman for the opportunity to present this testimony this afternoon. The bill now under consideration by this committee is one of the most important pieces of social legislation since the passage of the original Social Security Act.

It is a far-reaching proposal which takes into consideration the great needs of a large part of our population. Pennsylvania is particularly concerned with this legislation. We have more than 1 million men and women who are 65 or over. Of this total, around 800,000 receive social security benefits.

Many-far too many-of these senior citizens are men and women of extremely limited means. Forced to cut corners, to skimp and count pennies, to mortgage both their independence and their dignity in these declining years of their lives, they are met with rising medical and hospitalization costs which cannot be curtailed. Far too much of the time they are left with no alternative-they simply do not get the treatment they need until their illness has become serious or beyond cure.

Pennsylvania is not unique in its percentage of senior citizens. Every other State in our Nation is confronted with this rising total of older men and women.

During recent years, our State has set out to improve the plight of those over 65. It is a slow and painful process, for a State government is severely limited in the measures it can feasibly take in such fields. Short of increasing public assistance caseloads, the contributions of State governments in this particular area of public welfare have been negligible.

Pennsylvania has taken the first important steps toward giving her older citizens a life of dignity and respect in retirement. We have, at least, established a "Bill of Rights for the Aging" which itemizes our own goals for the elder citizen.

We believe that human life in a free democracy is freedom's greatest natural resource, for it is from the minds and hearts of its people that a Free Nation secures its strength and determination. We believe, further, that the life of a man or woman cannot be "written off" at the age of retirement. We do not intend-and we do not intend to let others close the books on valuable human beings. They must not do it through design-and we cannot allow it to be done through neglect.

To give ourselves goals, to set up signposts along the road, we have enumerated a few ideals which we believe are essential.

First of all, we believe that every American citizen has the right to an equitable income after retirement. It should be provided through social security insurance, personal savings and private pensions. It should not be a charity handout; it should not bear the stigma of the dole. Either of these is repugnant to an American who believes in democracy.

Our older citizens have the right to decent food, clothing, and housing. They have the right to hold jobs for which they are qualified and we reject the idea that a man's usefulness ends at an arbitrary age limit.

I personally want to express my resentment of that because if they had an age limit I probably would not be Governor of Pennsylvania. America's senior citizens have the right to live in the communities they have helped to build-the towns, the cities and the rural areas which have been founded on their toil and have grown great from their energy and talent. They have a right to remain in the mainstream of community life if they choose to do so, for their contributions to mankind are by no means ended.

Men and women over 65 have a right to reasonably good health and good health care, for these are the two greatest possessions of a respectable free society.

Finally, we believe that our senior citizens have the right to dignity and respect, to independence and self-reliance, for without these things freedom is meaningless.

Let me hasten to assure you that these are conclusions based upon sound and logical research. They are not a social worker's dream world or the utopian fantasies of impractical men. To arrive at this statement of human need and basic human rights, we asked the men and women who know most about the subject. We asked our own older citizens to tell us what they think needs to be done.

In Pennsylvania, the issue of good medical care financed through social security was first articulated in 1957 when my predecessor, Gov. George Leader, called for hearings throughout our State to let the senior citizen speak for himself. They did speak, in community after community. This is part of what they said:

Health service benefits ought to be a part of old-age and survivors insurance. Also this:

We pay into insurance policies all through our working years, only to have the policy canceled when we need it most. If it is not canceled, it is far too expensive for us to afford and continue the policy after retirement.

Time after time, Pennsylvania's older citizens came back to this one central question:

What can we do about medical care insurance, in old age? We pay into a program for years. Then, when we retire, we either can't keep up the payments or we can't participate in the group plan-and this is when we need it most. If it is not canceled, it is far too expensive for us to afford and continue the policy after retirement.

It's like the man who was insured and jumped out of a 20-story building. He was insured to the 10th floor-but from there on down he was in his own.

During 1960, Pennsylvania prepared vigorously for the White House Conference held in Washington this January. Committees were organized in almost all our counties and 63 out of 67 of those counties prepared lengthy reports, complete with detailed recommendations. More than 800 people came to a 2-day conference on the aging. They prepared a final report which included this recommendation at the very heart of its matter:

A broad program of medical care should be financed through additional contributions to social security during the working years of each covered individual, and services should be made available as a right upon the cessation of employment.

Just 1 week ago, Secretary Ribicoff testified before this committee. and pointed out that more than 75 percent of our elderly men and women have incomes of less than $2,000 a year.

There it is, gentlemen-clearly and unmistakably enunciated for us-and for the world to see. We are asking our elder citizens, the men and women who put their lives into making this the greatest, most productive nation on the face of the earth-we are asking these men. and these women to live out their days on incomes which are lower than the average price the average American pays for a new automobile.

On an income of less than $2,000 a year we are asking our senior citizens to pay for decent food, clothing, and housing. On top of this we are demanding that they meet the spiraling expenses of good health care, at a time of life when they are most prone to illness.

Last Wednesday, I reluctantly signed legislation to implement the Kerr-Mills Act in Pennsylvania. I signed the bill only because there is a great need for some kind of aid to our elderly persons. Their problems are immediate for most of them cannot bear the financial strain of prolonged illness and neither can their families. I signed the law, too, because it provides assistance to many Pennsylvania hospitals whose finances are badly strained.

But the basic approach of the bill, the crude philosophy behind it are repugnant. It is nothing more than an extension of the relief system and all that system entails. It sets up a publicly financed charity that does severe violence to the essential right of dignity in old

age.

It is true that the law makes medical care available-but it does so on the basis of a means test. There are thousands upon thousands of our citizens who will not take advantage of its provisions because they are loathe to take the oath of a pauper and to accept public assistance.

We estimate that services will be provided to between 60,000 and 65,000 persons. It will give Pennsylvania about $19 million a year in Federal funds. It will cost us $5.3 million, to be secured from other State tax revenues.

Our plan is limited to hospital care and use of certain hospital services. If a substantially larger number of persons should ask for these services, we will be hard put to find money to finance the program.

Like most other States today, Pennsylvania is having trouble finding revenue. Our funds are already insufficient to pay adequate grants to indigent children, to the disabled, the blind or the unemployed who require public assistance.

It is, therefore, entirely realistic and rational to suggest that medical care for the aged must be financed on a social insurance basis, that it must be prepaid and that the best mechanism for it is the social security system. There are four major and perfectly sound, practical reasons for this approach:

(1) It is a system of insurance-not a public handout.

(2) Social insurance is a sound approach to financing broad-based services. Although I do not pretend to be an insurance expert, the best minds in that field available to me tell me that our social security system is actuarially sound. The long-range estimates support this. Medical care for the aged can be financed over a person's working lifetime with the broadest possible population base. Payments, therefore, would be made during the period when a person can most afford them.

(3) Private insurance simply has not met the need. There are no indications, to my knowledge, that it intends to do so. Private insurance is extremely limited and it seldom covers serious, long-term stays in the hospital.

Moreover, private insurance has not yet developed a prepayment plan and the rates of payment are appallingly high at a time when the subscriber's income is generally low.

(4) Finally, it seems to me that the greatest single argument in favor of prepaid health and medical care insurance is an intangible one. We cannot say, with any precision, what effect the worry about potential illness has upon older men and women. Yet there is no doubt in my mind-and I am sure there is none in yours-that the threat of crippling sickness and long hospitalization, the specter of of mounting doctor bills and ever larger drug purchases can take a frightful psychological and emotional toll from our elder citizens. How many older men and women are there today who have suffered permanent damage to their emotional and mental makeup through worry and strain about meeting the financial obligations of advanced age? I cannot answer that questional exactly, for I do not believe the statistics have ever been prepared. But I do know that there are thousands of older men and women who have become wards of the public, in the county homes, even in the mental hospitals, who should not be there, and who would not be there if a sensible society had helped them help themselves.

It is the drain upon their minds, the constant and unavoidable worry which provides the most persuasive argument in favor of medical care through social security. It is time we looked at the core of our problem. It is time we admitted that we are senselessly and callously torturing millions of American men and women with the uncertain threat of illness and indigence.

I cannot believe that this is the face of America we want to see in the mirror. I know it is not the image we want the world to see of a free and courageous country.

We all know that a massive campaign has been launched against the theory of medical care through social security. It is a campaign rife with innuendo and insinuation, half-truths and utter falsehoods. It is an expensive campaign and, if I may say so, the money being spent by pressure groups might better be spent in research grants for medical scientists. Or if they want to make it genuinely and tangibly useful, perhaps it could be diverted into the construction of clinics for the aging.

We have arrived at a significant crossroad in our national life. We are being asked now to decide whether we believe in helping American citizens to prepare for retirement as dignified human beings or if we are going to consign them to an old age of pity and handouts on the dole. It is an absolute denial of all we hold sacred in American freedom to make men suffer and send them to their graves with a beggar's tin cup clutched in their hands.

For my own part, and for the more than 1 million senior citizens of Pennsylvania, I urge you gentlemen to give favorable consideration to H.R. 4222.

More than this, I ask that you give this consideration, for the sake of all our citizens, no matter what their age, for it is their future as much as yours or mine that is being decided in this room.