PROGRAM OPERATIONS

OASDI Benefits

More than 306,000 monthly cash-benefit awards were made in August under the old-age, survivors, disability, and health insurance program (OASDHI) an increase of nearly 23,000 over the total number in the previous month but still considerably below the year's high of 352,000 awards in March. Approximately three-fourths of the rise represented awards to retired workers and their dependents and about one-fourth went to survivors. Awards to disabled workers and their dependents were at the July level.

The average benefit amount awarded to retired workers in August was $90.61, about $1.50 higher than the July average and the highest since June 1966. The rise in the average amount awarded in August can be attributed in part to the relative increase in the number of conditional and deferred awards. Higher benefit amounts are generally associated with conditional and deferred awards. The rise in the benefit amount was also reflected in higher averages for both the actuarially reduced and the nonreduced benefit awards for both men and women beneficiaries.

Monthly benefits were payable in August to approximately 23.4 million persons-about 70,000 more than the total number receiving benefits for July. About 44,000 of the added number were retired-worker beneficiaries; there were close to 17,000 more widow and widower beneficiaries and about 7,000 more disabled-worker beneficiaries. Monthly cash benefit payments in August totaled $1,789 million-slightly below the total paid out for July. For retired workers and their dependents, payments declined by nearly $7 million.

HI Benefits

In August, more than 457,800 hospital admission notices were received by the Social Security Administration for aged individuals covered under the health insurance program. For the fiscal year beginning July 1967, more than 918,000 hospital admission notices have been received. About 21,700 "start of care" notices for home. health services were received during August, bringing to 43,200 the total number of notices in the first 2 months of the fiscal year. Since January 1, 1967, when extended-care benefits under the hospital insurance program became effective, more than 270,500 admission notices to extended-care facilities have been received-about 37,000 in August.

An estimated 4 million of the 19 million persons enrolled in the hospital insurance program received hospital care during the first year of opera

tions. Included in the 4 million are persons admitted to short-stay general and special hospitals and a relatively small proportion admitted to long-term hospitals. These aged persons used an estimated 66.5 million days of inpatient hospital care. In other words, they spent 17 days in the hospital, on the average. At $46 a day (the average amount of charges reported in Social Security Administration records), total charges for the hospitalized aged person averaged an estimated $750 during the year.

PUBLIC INCOME MAINTENANCE
PAYMENTS HIGHER

Monthly payments under public income-maintenance programs rose 3 percent in August to reach $4.3 billion. Substantial increases under OASDHI ($19 million), public assistance ($50 million), and unemployment insurance ($29 million) accounted for most of the increase.

rise in vendor medical payments occurred in medical assistance under title XIX of the Social Security Act.

SOCIAL AND REHABILITATION SERVICE

On August 15, 1967, Secretary John W. Gardner realigned the welfare, rehabilitation, and service programs of the Department of Health, Education, and Welfare. The reorganization merges three existing agencies of the Department (the Welfare Administration, the Vocational Rehabilitation Administration, and the Administration on Aging) into a new agency, the Social and Rehabilitation Service.

The functions of the older agencies and of the Public Health Service's Mental Retardation Division are to be carried out by the new organization under the direction of Mary E. Switzer as Administrator, through five major divisions: (1) the Assistance Payments Administration, responsible for the money payment aspects of the public assistance programs and for the work (Continued on page 38)

AUGUST UPTURN IN AFDC CASELOADS

In August the number of recipients of aid to families with dependent children turned upward abruptly. The increase of 80,000, or 1.6 percent, from the July figure was the largest increase in the program's history for a summer month. More than four-fifths of the States reported larger August caseloads, with New York reporting 30,000 more recipients. The increase since July 1966 in the number of recipients was 578,000, or 12.9 percent, for the Nation as a whole; substantial rises occurred in several States, with California and New York accounting for almost half the national increase.

Recipients of money payments were also more numerous in the other programs in August. The July-August rise was relatively slight, however, except in general assistance where it was 7 per

cent.

Expenditures for assistance, including vendor payments for medical care totaled $679.3 million in August $49.5 million higher than the July total. Larger amounts reported for money payments in all programs accounted for $8.6 million of the total increase in expenditures. Most of the

by IDA C. MERRIAM*

THE LONG-TIME UPWARD trend in social welfare expenditures, both in absolute amounts and as a percent of the gross national product, continued in the fiscal year 1967. So did the increasing importance of the Federal sector. Total social welfare expenditures for the first time passed the $100 billion mark and amounted to 13 percent of the gross national product ($763 billion). Federal funds accounted for 54 percent of all social welfare expenditures. The largest. single increase was the $3.3 billion for health insurance for the aged under the Social Security Act (Medicare).

Just before the turn of the century, total social welfare expenditures amounted to about 2.4 percent of the gross national product with expenditures for education-almost entirely from State and local funds-making up almost half the total. Veterans' benefits, more than one third of the total, were the only significant Federal social welfare expenditures. The great depression of the 1930's brought the Federal Government into the area of social welfare activities in a major way. Significant growth in the population and in the number of risks covered by social insurance, as well as an accelerating Federal involvement in health and education programs, has been largely responsible for the rising trends in social welfare expenditures since the late 1950's. The increasing number of children and older persons in the population, accompanied by the prolonging of school years and a trend toward early retirement have had their effect on both transfer payments and service programs.

As recently as the fiscal year 1965, State and local funds had provided more than half of all social welfare expenditures. In fiscal year 1966 the State and local share dropped to 48 percent, and it declined to 46 percent the following year (chart 1). If account is taken of Federal grants to the States and localities, the proportion of funds going to programs administered by State or local agencies was 56 percent in 1966-67.

Assistant Commissioner, Office of Research and Sta

tistics.

THE REVISED SERIES

For the past several years, the Office of Research and Statistics has been reviewing the estimates used in this social welfare expenditure series. The concepts and classifications have been reexamined in the light of new program developments and of questions raised by users. The sources of data and methods of estimating have been extended and refined. The series has been carried back to 1929, and revisions, which earlier had been made only for the 5-year interval data presented in the BULLETIN, have now been made in the year-to-year figures, along with other changes dictated by this review.

A monograph-Social Welfare Expenditures Under Public Programs in the United States, 1929-1966-presenting the revised estimates in great detail, together with an explanation of the sources of data and methods of estimates, will be issued in 1968. A summary table with figures for the major categories of expenditures for each year from 1929 through 1967 is included here (table la.)

There has been increasing interest in the past few years in a system of accounts related to the Nation's investment in human resources and its expenditures on social programs. The Subcommittee on Economic Progress of the Joint Economic Committee last year initiated a major inquiry in this area. Summary data from the social welfare expenditure series were published by the Committee along with detailed data from departments and agencies of the Federal Government.1 This report highlighted both the problems of classification and the need for more analytic studies.

A growing recognition of the importance of public expenditures in major areas of consumption has stimulated increasing interest in their distributional effects and their relation to economic stability and growth and related issues. The Office of Research and Statistics has under way

1 Federal Programs for the Development of Human Resources (Joint Committee Print), 89th Congress, 20 session, December 1966.

a number of analytical studies designed to explore some of these questions. The prerequisite for any major study in depth is a set of aggregate measures that are constructed around meaningful components and with sufficient explanation of the procedures to enable the user to interpret the data properly for his purposes. It is this latter obligation to the user that the Office of Research and Statistics has tried to meet more effectively than ever before in the forthcoming monograph.

The conceptual basis of the social welfare expenditures series has been described in previous articles in the BULLETIN. There are few changes in the conceptual framework of the revised series. The basic grouping of data on a program basis has been retained. The summary historical table presented here also shows a functional total for health expenditures. This is the functional area with the greatest demand for a combined total and also the area in which such categorization presents fewest difficulties. A broad definition of health expenditures one that in

cluded good housing, adequate nutrition, and the like would have great fuzziness and present great difficulties. By focusing on medical care-an organized and recognized body of services-and the institutional arangements surrounding these services, a basis for classification is created.

In the field of education, the more analytic tables presented in the BULLETIN continue to show an educational expenditure total that includes veterans' educational benefits. Whether specialized training-in the Job Corps or Neighborhood Youth Centers, for example-should be functionally grouped with education is an open question. In general, no attempt has been made to identify the "education" component in all other programs.

The proliferation of social programs, particularly in the antipoverty area, is posing new questions for the social welfare expenditure series. Many of these programs combine elements of several different types of established programs and involve crossovers of purpose and technique

that make categorization difficult. Where the purpose is reasonably clear-as in Head Start, for example the subprogram is grouped under the relevant major heading (in this case, education). A category now labeled "special OEO (Office of Economic Opportunity) programs" and shown under the major heading "other social welfare" may at some later time come to have a more descriptive title or may be further sub

divided, depending on the way these programs actually develop.

Ten years from today programs now omitted from the social welfare series may appear to be obviously an aspect of social welfare policy that should be included. For the present, the general boundary line of programs designed specifically to deal with individual welfare has been retained, and the series continues to exclude such com