DEPARTMENTS OF LABOR AND HEALTH, EDUCATION, AND WELFARE APPROPRIATIONS FOR FISCAL YEAR 1977 MONDAY, MARCH 15, 1976. SOCIAL AND REHABILITATION SERVICE PUBLIC ASSISTANCE WITNESSES DON I. WORTMAN, ACTING ADMINISTRATOR, SOCIAL AND REHABILITATION SERVICE NICHOLAS NORTON, ACTING COMMISSIONER, ASSISTANCE PAYMENTS ADMINISTRATION M. KEITH WEIKEL, COMMISSIONER, MEDICAL SERVICES ADMINISTRATION MICHIO SUZUKI, ACTING COMMISSIONER, PUBLIC SERVICES ADMINISTRATION DAVID B. SMITH, ASSOCIATE ADMINISTRATOR FOR PLANNING, RESEARCH, AND EVALUATION LOUIS B. HAYS, DEPUTY DIRECTOR, OFFICE OF CHILD SUPPORT ENFORCEMENT SAMUEL E. MARTZ, ASSISTANT ADMINISTRATOR FOR FINANCIAL MANAGEMENT, SOCIAL AND REHABILITATION SERVICE MISS ANNA L. PERKINS, DIRECTOR, DIVISION OF BUDGET, SOCIAL AND REHABILITATION SERVICE WILORD FORBUSH, DEPUTY ASSISTANT SECRETARY, BUDGET INTRODUCTION Mr. FLOOD. We will now take up the Social and Rehabilitation Service. The presentation will be made by Don Wortman, the Acting Administrator for the Social and Rehabilitation Service. You have some people with you you would like us to know, Mr. Wortman? Mr. WORTMAN. Yes, sir, I appreciate that opportunity. On my left is Michio Suzuki, Acting Commissioner, Public Services Administration. Next to him is Nicholas Norton, Acting Commissioner of the Assistance Payments Administration. And beyond him is David Smith, our Acting Associate Administrator for Planning, Research, and Evaluation. On my immediate right is Dr. M. Keith Weikel, Commissioner, Medical Services Administration; Louis B. Hays, Deputy Director of the Office of Child Support Enforcement; and an associate of mine whom you know and who has appeared at this table many times, Wilford Forbush, Deputy Assistant Secretary for Budget, and a gentleman who will be testifying with us tomorrow probably more (1) than today, Merwin Hans, our joint HEW and Department of Labor Executive Director of the WIN program. To my rear I would like to identify Sam Martz, our Assistant Administrator for Financial Management, and over here, Dr. Victor Kugajevsky, who runs the quality control program. OPENING STATEMENT Mr. FLOOD. I see you have a prepared statement. How do you want to handle this? Mr. WORTMAN. Sir, I would request the chairman's permission to put an overview which we provided to the committee staff, plus an 8to 10-page public assistance statement in the record. I would like the opportunity to read a 4-page summary of the public assistance statement. Mr. FLOOD. Without objection, that will be done. We will also include the biographical sketches of yourself and your colleagues. BIOGRAPHICAL SKETCH OF DON I. WORTMAN Position: Acting Administrator, Social and Rehabilitation Service. Education: Macalester College, St. Paul, Minn., B.A., Economics, 1951. University of Minnesota, M.A., Public Administration, 1952. Industrial College of the Armed Forces, Fort McNair, 1961-1962. Military service: Army Specialist Training Program, July 1945–January 1946. Army Air Force, January 1946-November 1947. Experience: January 1976: Acting Administrator, Social and Rehabilitation Service. 1973 to present: Deputy Assistant Secretary for Program Systems, Department of Health, Education, and Welfare-Development and operation of the Department's policy planning and policy coordination activities; design of activities to strengthening capacity of state and local government to plan and manage human resource programs; provision of and planning for data processing and statistical services for Office of the Assistant Secretary for Planning and Evaluation. Served in a variety of special assignments for the Secretary: Conference on Inflation, Energy Coordinator and Director, HEW Refugee Task Force. 1971-73: Economic Stabilization Program-Administrator, Office of Price Monitoring, Cost of Living Council; Director, Office of Operations, Price Commission-Review and action on requests for price increases, interpretations of the regulations and for monitoring profit margin performance of companies with annual sales over $50 million. Personnally created and directed staff of 250 auditors, accountants, economists, and lawyers to do this regulatory job. 1965-71: Office of Economic Opportunity-Controller; Director, Office of Community Actions Support; Associate Director for Program Operations, Community Action Program; Deputy Assistant Director for Research, Plans, Programs and Evaluation; Chief, Programs and Evaluation Division-for first two years at OEO, performed planning, program analysis, policy development and budget responsibilities. For next four years, served as an operating official in the Community Action Program in administering programs through ten Regional Offices. Concluded OEO phase as Controllers. 1953-65: Atomic Energy Commission-Director, Requirements and Facilities Division Albuquerque Operations Office; Director, Budget Division, ALO; Deputy Assistant Manager for Program Analysis and Budget, Division of Military Application; Management Intern through Senior Program Analyst-Develop professional skills in budget in a variety of assignments in the atomic weapons program both in Washington and in Albuquerque. Last assignment in AEC was directing staff of engineers in assessing production capacities and capabilities in meeting future workloads and new weapon designs. Civic and church activities: Member, Rockville Citizens for Good Government, 1958, 1962, and 1965. Leader in various capacities in Rockville United Church, 1969 to present. Member, Rockville Human Relations Committee, April 1970-November 1971. Creator of major fellowship program in honor of Dr. Dupre, former Dean of Macalester College. Honors and awards: 1970-Distinguished Citizen Award from Macalester College. 1972-Distinguished Service Award-Price Commission. 1973-Meritorius Service Award, Federal Government Accountants Association. 1975-HEW Secretary's Special Citation. Other: Married, father of three sons. BIOGRAPHICAL SKETCH OF M. KEITH WEIKEL Position: Commissioner, Medical Services Administration, SRS, DHEW. Education: B.S. (Pharmacy) Philadelphia College of Pharmacy and Science, Philadelphia, Pa., 1960. M.S. (Pharmacy Administration), University of Wisconsin, Madison, Wis., 1962. Ph. D. (Economics and Business Administration) University of Wisconsin, Madison, Wis., 1966. Experience: Aug. 1974 to Present: Commissioner, Medical Services Administration, SRS/ DHEW. 1973-July 1974: Associate Administrator for Planning, Evaluation and Legislation, Health Services Administration, DHEW. 1970-73: Director of Health Evaluation, OS/DHEW. 1968-70: Manager of Health Economics Research, Roche Laboratories, Nutley, N.J. 1965-68: Marketing Research Analyst and Product Marketing Manager, Roche Laboratories, Nutley, N.J. 1964-65: Assistant Professor of Marketing and Economics, Philadelphia College of Pharmacy and Science, Philadelphia, Pa. BIOGRAPHICAL SKETCH OF MICHIO SUZUKI Position: Acting Commissioner, Public Services Administration. Education: University of California, Berkeley, B.A.-Psychology 1949. University of California, Berkeley, M.S.W.-1952. Experience: January 1976: Acting Commissioner, Public Services Administration, SRS, HEW. January 1974–January 1976: Acting Deputy Commissioner, Community Services Administration, SRS, HEW. June 19-December 1973: Assistant Commissioner for Program Management, Community Services Administration, SRS, HEW. May 1972-November 1973: Director, Division of Child and Family Services, Community Services Administration, SRS, HEW 1963-72: California State Department of Social Welfare. 1961-63: Director, Japanese American Community Services, Los Angeles, Calif. 1955-61: Director, Japanese Children's Home, Los Angeles, Calif. 1952-55: Caseworker, Jewish Family Service, New York, N.Y. BIOGRAPHICAL SKETCH OF NICHOLAS NORTON Position: Acting Commissioner, Assistance Payments Administration, Social and Rehabilitation Service. Birthplace and date: North Westchester, Conn., January 7, 1931. Education: Haverford College, Haverford, Pa. B.A., English, 1952. Loomis School, Windsor, Conn., 1948. Bacon Academy, Colchester, Conn., 1947. Military service: 1952-56 U.S. Navy, Lt., USNR. Experience: January 1976: Acting Commissioner, Assistance Payments Administration, Social and Rehabilitation Service. August 1975: Deputy Commissioner, Assistance Payments Administration, Social and Rehabilitation Service. January 1973-January 1975: Welfare Commissioner, State of Connecticut. June 1971-January 1973: Deputy Welfare Commissioner, State of Connecticut. 1967-71 Executive Assistant to Chairman of the Board, Security Insurance Group, Hartford, Conn. 1958-66: President, The C. H. Norton Company, North Westchester, Conn. Other activities: 1972-74 Member, Northeastern Regional Committee on Human Resources, Council of State Governments. 1962-66: Member, National Defense Executive Reserve, U.S. Department of Commerce. 1963-66: Member, Board of Governors, American Paper Institute. 1963-71: Chairman, Board of Finance, Town of Colchester (Conn.). 1965-69: Representative, Southeastern Connecticut Regional Planning Agency. 1969-70: Chairman, Fund Raising Advisory Committee, Connecticut Heart Association. 1959-69: Board of Directors, Hartford County YMCA. Married: Father of 4 children. BIOGRAPHICAL SKETCH OF LOUIS B. HAYS Position: Deputy Director, Office of Child Support Enforcement. Education: University of Redlands; Redlands, Calif., B.A. in English 1966. School of Law of the University of California, Los Angeles, J.D.-1969. Experience: August 1975 to present: Deputy Director, Office of Child Support Enforcement. July 1973-August 1975: Senior Legal Adviser, Social and Rehabilitation Service. September 1969-July 1973: Deputy County Counsel, County of Los Angeles, Calif. Biographical Sketch of David B. Smith Position: Acting Associate Administrator for Planning, Research, and Evalua tion. Birthplace and date: Rhinebeck, N. Y., May 10, 1938. Education: Columbia College, New York, N.Y., BA in Anthropology, 1959. University of Pennsylvania, Philadelphia, Pa., MA in Anthropology, 1962. Columbia University, New York, N.Y. Ph. D. in Anthropology, 1965. Military service: None. Experience: May 1975 to present: Acting Associate Administrator for Planning, Research, and Evaluation, SRS. April 1975-August 1975: Acting Assistant Administrator for Program Analysis and Evaluation, OPRE/SRS. January 1973-April 1975: Director, Income Maintenance and Social Services Program Analysis, OPAE/OPRE/SRS. March 1972-January 1973: Intermittent Consultant, Office of Child Development, DHEW. August 1968-March 1972: Vice President, Education, Training and Research Sciences Corp., Washington, D.C. May 1968-August 1968: Free lance consultant, New York, N.Y. January 1968-May 1968: Research Associate, University Research Corporation, Washington, D.C. May 1967-January 1968: Director of Research, Data Systems Research, Inc., New York, N.Y. April 1966-May 1967: Director of Research, Educational Design, Inc., New York, N.Y. August 1965-April 1966: Senior Research Associate, University of Notre Dame, South Bend, Ind. September 1964-June 1965: Preparing Ph.D. dissertation. June 1964-September 1964: Assistant Professor, University of Florida, Gainesville, Fla. September 1963-June 1964: Instructor, Columbia University, New York, N.Y. STATEMENT BY THE ACTING ADMINISTRATOR ON PROGRAMS OF THE SOCIAL AND REHABILITATION SERVICE Mr. Chairman and members of the committee, thank you for the opportunity to appear here today to present our budget request for fiscal year 1977. The total budget request for the Social and Rehabilitation Service in the Labor-HEW appropriation bill is $18.4 billion. We will discuss with you, first, the $18 billion request for public assistance. As you know, this appropriation is determined primarily by the extent to which the States expend funds under the public assistance titles of the Social Security Act as implemented by Federal regulations. Also to be discussed are our budget requests of $315 million for work incentives and $63 million for the Federal administration of the Social and Rehabilitation Service programs. HIGHLIGHTS OF SRS ACTIVITY The following items are covered in a separate statement, but I would like to highlight at this point the broad trends and basic assumptions which underlie the 1977 Social and Rehabilitation Service budget request; they are: (1) The AFDC caseload reflects the improving state of the economy. The fiscal year 1977 budget projects a modest decrease in caseload with increases amounting to about 10 percent, in average payments. (2) AFDC cost will be partially held in check by the continuing Federal-State quality control programs giving increased emphasis to the adherence of State programs and plan material to Federal law and policy. (3) The new child suport enforcement provisions are currently being implemented by the States, which are required by law to have in place fully operational programs by January 1, 1977, and the fiscal impact is reflected in the budget estimates. (4) The cost of medical services, operating under wage/price controls through May 1, 1974, accelerated rapidly since that date when controls were removed. Cost increases account for almost all the medicaid increase from 1975 through 1977. (5) The Department's medicaid quality control and utilization control systems will continue to be emphasized in 1977 as part of the overall efforts to improve medicaid management. Particular attention is directed to fraud, abuse, and State administrative practices in the medicaid program. (6) Title XX legislation, effective October 1, 1975, continues the social services program, with a significant departure from previous legislation in that States have wider latitude and flexibility in determining the types of services that will be provided and to whom they will be provided. The budget request provides a small increase in fiscal year 1977 as more States move toward full utilization of their allocation within the $2.5 billion ceiling. (7) The work incentive program continues to emphasize direct placement of AFDC recipients resulting in less resources being required for training activities. In summary, Mr. Chairman, we are requesting $18,400,295,000: $18,022,200,000 for public assistance programs, $315 million for the work incentive program, and $63,095,000 for program administration. Mr. Chairman, this concludes my statement. I will be glad to answer any questions you or the committee may have. STATEMENT BY THE ACTING ADMINISTRATOR, SOCIAL AND REHABILITATION SERVICE, ON "PUBLIC ASSISTANCE" Mr. Chairman and members of the committee, the consolidated budget for public assistance includes funds for maintenance assistance, medical assistance, social services, State and local training, child welfare services, and public assistance research activities. The total amount requested in the 1977 budget is $18,022, 200,000, which is $1,029,283,000 over our revised 1976 estimate of $16,992,917,000. The above amount is based primarily on an analysis of the States' August 1975 estimates. The estimated program costs included in this request, Mr. Chairman, recognize the continuing oversight and management control efforts of SRS staff to insure effective, prudent use by the States of public assistance funds. These efforts include technical assistance to the States in interpretation and implementation of Federal regulations, financial reviews of States' claims, and specific initiatives such as AFDC quality control, medicaid quality control, utilization review, medi |