Senator RANDOLPH. We could continue if we had no children. But that would be a tragic situation. Mr. ODELL. We need a positive policy toward the aging and I think this committee is making a promising start in moving in the direction of establishing a climate in which people can decide whether they want to work or retire, and if they retire they can retire with some assurance of an adequate income, decent housing, and an opportunity to continue to be good citizens, if they want to. Thank you. Senator MCNAMARA. Thank you. Mr. KUPLAN. One of the reasons why we should be so concerned with a need for activity in the late years is because there is a very good correlation between good mental and physical health and activities. Because we retire people arbitrarily, we are jamming up our local hospitals, our State mental institutions are filled with older people who are there mainly for the reason that they have given up all hope of living. There is no motivation for them or place in society for them and they come into our public hospitals. This is actually costing us almost more than some of our State pension programs are costing us. Research has been done and shows that most of these people do not belong here but if the governments, at various levels, had developed porgrams to provide meaningful activity for these people they would not need to be in these hospitals at the expense of the taxpayer. If we don't do this thing then we are heading for a nation which is going to be a hospital-bed-oriented nation. How many hospital beds can you provide for these people? I was taken aback by one of our California county hospitals that it had a woman 114 years of age who had spent 40 years in that county hospital as a vegetable at the expense of the taxpayers. Senator CLARK. Dr. Kuplan, let me ask you and the other members of the panel if you have given some thought-we want to hear Dr. Sargent and not interrupt now-but if you have given some thought as to why it is that there is not a keener interest in this problem and more effective action, first at the local level, and second at the State level, why do all these problems in the end come down to the Federal Government with the request that "Uncle Sugar" pick up the ball and appropriate a good deal of money and work up a program which appears to have substantial support among what is called the "eggheads" of the community, and very little grassroots support, with the result that the eggheads have to come running down here to Washington to get anything done? Mr. KUPLAN. I would say this: that while we talk about what we do in California Senator CLARK. Do not forget to give lots of credit to Dr. Townsend. Mr. KUPLAN. We are developing in California a program which does not necessarily look to the Federal Government, but to the resources of the community and of the State in helping the local community take a look at the senior citizens and how it can use the resources it has at hand. We are being fairly successful, but the reason we have so much difficulty in getting things going is the fear of the individual himself of the aging process because of the misunderstanding. Each one of us subconsciously, and perhaps con sciously, reacts to this problem and says: "Oh, no, this isn't good, the later years are pretty bad, not to be desired; let's postpone the evil day and not think about it." I have found among community leaders, businessmen, labor leaders, and others, a reluctance to face the problem of retirement before they are there. To give you an extreme example, about a year ago I met with the vice president of one of our largest steel concerns, he called me in to discuss his retirement planning program, and then he said, "Isn't this a lot of nonsense?" He was a man of 45. He said, "In all sincerity, when I get to be 65 I am going to be senile." How can you expect any planning out of community leaders when they have that attitude themselves? This is very widespread. Our individual fears prevent us from moving into this thing with fists flying. Mr. ODELL. I would like to comment on this because it goes back to something Dr. Ginzberg said at the outset which I think is very important, and I think that Senator Randolph was picking me up on the children for this same reason. Most of the communities are confronted in the programs we are talking about where older people need greater attention, where a conflicting demand of increasing dimensions and importance for these same services exists on the part of children. And in education, for example, how can we legitimately expect the local school administrator to take on with any sincerity an expanded program of adult education and retirement preparation for older people in the face of his inability to finance existing programs adequate to meet the needs of a rising school population of children? Senator CLARK. I think you have put your finger on it, which is that local tax resources and State tax resources tend to be inadequate to meet the needs, but more than that you have this problem which you referred to earlier that, acting under the democratic process, people are unwilling to tax themselves at the local level to the extent which is necessary to have a first-class community. We had a shocking example in Pennsylvania which was brought up at a hearing, where the richest county in the Commonwealth, Montgomery County, in a referendum which was fully debated, refused by a vote of 6 to 4 to establish a county health farm. Senator MCNAMARA. I think this whole colloquy is extremely interesting but we have not yet heard from one of our panel members, Dr. Sargent. I do not want to cut this colloquy off, I do not want to discourage it, this is probably the best part of the hearing, but we want to hear from our last panel member and then have this discussion. He has sat there very patiently all this time. Let me add that I am torn between two loves, this hearing and a meeting of the Subcommittee on Education, where we hope to get out a Federal aid to education bill. I would certainly like to stay here, but now I have to make a choice. They need me for a quorum and I will ask one of the Senators-will you take over, please, Senator Clark, in my stead? Senator CLARK. Certainly. Senator MCNAMARA. Thank you very much. I will try to get back soon. STATEMENT OF DWIGHT S. SARGENT, PERSONNEL DIRECTOR, CONSOLIDATED EDISON CO. OF NEW YORK Mr. SARGENT. May my entire statement be inserted in the record at this point? Senator CLARK (presiding pro tempore). Without objection, it will be incorporated in the record. (Mr. Sargent's prepared statement follows:) I am recommending a basic change in the "limitation on earnings" requirement of social security after social security benefit payments start. This change is not designed to increase the total amount of social security benefit payments; my hope is that the total cost of the proposed plan will break even with the present cost, and may possibly be less. I am proposing this change because I believe that men between the age of 65 and 71 should be encouraged to work, either part or full time, instead of being penalized as they are now if they work and earn over $1,200 a year. Put very simply I believe that no one should get less for doing more. This is what happens under the existing social security rules. There is no question but that men in the 65-71 age group watch the $1,200 earnings limit very carefully and do not make the mistake of working enough to earn a little over that amount, thus losing one or more benefit checks. Of course, if the man's wife is also receiving payments on her husband's qualification, the individual is doubly careful, because she loses her check for each one her husband loses. I think it is also well understood that the present social security rules invite collusion between individuals and employers and concealment of earnings by employees. To carry out such action is, of course, a violation of the law, but persons rationalize this on the grounds that the rules are unfair and so they are forced to get around them. Table A attached shows the number of social security payments that are withheld under certain marital conditions when income from employment is within certain limits. This is simply the present law. Table B attached is a proposed revision of table A. The change from table A is in the first two columns, which allow higher annual earnings, over the $1,200 base, before losing any or all social security checks. Table B is based on the following generalizations: 1. A man age 65, with a wife and two or more dependents, eligible to receive the maximum social security benefits, should lose not more than $1 social security benefits for each $1 he earns over the base $1,200. This man would not improve his financial position by earning over $1,200 up to $4,248 a year. Neither would he be penalized-no incentive is provided but the existing penalty is eliminated. 2. A man age 65, eligible for only primary benefits, should lose not more than $1 of social security benefits for each $2 he earns over the base $1,200. This individual is given the maximum incentive to work. 3. A man and wife, both age 65, with no dependents, both eligible for maximum social security benefits, should lose not more than $2 of social security benefits for each $3 the man earns over the base $1,200. This provides less incentive than for the man receiving primary benefits only, but still is an incentive to work. (If the wife is younger than 65 the incentive is proportionately improved.) The present law and the effect of the proposed changes on these three groups are shown graphically on charts C, E, and G and examples of cases under the three groupings on tables D, F, and H. Other plans or some modifications of this plan might be developed which would further improve the final plan. The main objective is to establish a plan which offers the maximum inducement to work without increasing the total cost of social security. In order that a plan can be formulated to meet this objective, I recommend that 1. A study or survey be conducted to determine how many individuals receiving social security payments would be encouraged to go back to work or to work more if a plan establishing a real inducement was adopted. Such a study would be the basis of estimating the total reduction in social security payments. 2. An estimate should be made to determine the total amount of social security payments which would be required to be made to the individuals between age 65 and 71, who have never applied for social security benefits because they were working and earning over $1,200 a year, who under the terms of the proposed plan would qualify for some social security payments if their earnings were below $4,248 a year. Such a study would be the basis of estimating the increase in social security payments. With these two estimates the net effect in the total social security costs could be determined. |