mediate budget assumes 65 percent of homeownership and the higher budget assumes that 75 percent of the couples own their homes.

Consumption items such as housing, food, transportation, clothing, and medical care totalled $2,556 in the lower budget, $3,626 in the intermediate budget, and $5,335 in the higher budget. While representing a comfortable standard of living the higher budget definitely is not an affluent budget. Obviously, an income of $5,000 would require a tight budget.

I would also point out that the elderly pay taxes that may seem small compared to that paid by an employed person, but to the elderly man trying to support his wife, this tax added to his other expenses may create an economic crisis. The retiree is also faced with rising taxes at the State and local level. For those who own their homes, property taxes have been rising steadily. In addition, sales taxes are often imposed on food and nonprescription drugs.

The elderly should not have to be satisfied with a hand-to-mouth existence. These people have worked hard all their lives and deserve to look forward in their final years to a time of dignity and reward not to one of foreboding and degradation.

Mr. BURKE. Does that complete your statement? Are there any questions? If not, we appreciate your coming to us today.

Mr. HALPERN. Thank you.

Mr. BURKE. Congressman Robert W. Kastenmeier. We are pleased to have you with us today and you may come forward and proceed as you wish.

STATEMENT OF HON. ROBERT W. KASTENMEIER, A REPRESENTA

TIVE IN CONGRESS FROM THE STATE OF WISCONSIN

Mr. KASTENMEIER. Mr. Chairman, I appreciate your giving me an opportunity to present your committee with a statement on the proposed amendments to the Social Security Act, including my bill, Ĥ.R. 14152.

These hearings come at a time when an increasing number of our senior citizens live in real poverty. The large proportion of these older citizens were active and productive workers in their younger years and they invested part of their earnings in the social security system, with the promise of an income when they retired. Yet, with the rising cost of living, the elderly, many of whom have no income in addition to their social security payments, simply cannot meet the cost of basic goods and services and taxes.

The mail I have received reflects their plight and I am certain each member of this committee and most, if not all, of our colleagues have heard from social security beneficiaries like the couple who told me the monthly social security check they receive is $75.60. To economize on real estate taxes and other expenses, they sold their home and moved to an old schoolhouse in a small community. Now their property taxes have risen 450 percent at the same time they must try to pay for such basic necessities as food and drugs. Or the widow with a monthly benefit of $51 who has budgeted as closely as possible to stretch her small income and resorts to such economies as using only a Christmas tree bulb for light when she is alone.

These examples may seem extreme, but I am convinced they are not, for the Social Security Administration tells us that the average cash

benefit for a retired worker is $100 monthly, with elderly couples receiving $168 and aged widows $87 on the average.

I doubt that any of us would seriously contemplate trying to exist on such a small basic monthly income and yet many of our retired citizens must do so. It is a sad and bitter irony that our modern society, which has witnessed the benefits of medical breakthroughs that substantially prolong human life, has not made adequate provision for our elderly citizens so they can live in dignity and enjoy their retire

ment.

I believe we now must acknowledge the fact that social security payments are relied upon by many of our elderly as their prime income and that the present level of benefits simply is not enough.

My conviction that we must meet our obligation to our elderly citizens led me to propose a 25-percent across-the-board increase in benefits. While I realize this may seem quite high at first glance, the steadily rising cost of living and our failure to provide adequate benefit raises in the past make a substantial hike necessary now.

In addition, my bill, H.R. 14152, would double the minimum primary benefit by raising the present minimum of $55 a month for an individual to a much more realistic $110. The minimum amount for a retired couple also would increase from $82.50 to $165 monthly.

My proposal also would raise the earnings limitation, add prescription drugs to the medicare program, extend medicare coverage to those receiving social security disability benefits, and provide for automatic cost-of-living benefit increases in the future.

The present $1,680 limitation on earnings is much too low with the result that it penalizes senior citizens who wish to work to supplement their incomes and it denies our Nation's economy the benefit of the experience and productivity of these older workers.

I feel the present earnings limitation should be raised to at least $2,400 so that a worker can keep the first $200 he earns each month as well as $1 of every $2 from $2,400 to $3,600.

Since drug costs now are a major expense for elderly citizens, I propose that the cost of prescription drugs be added to the medicare program. Although persons 65 and over constitute only 10 percent of our population, they account for 20 percent of our $3.5 billion consumption of prescription drugs-an expenditure many can ill afford, especially in view of the escalating cost of this and other medical care items.

Under my bill, a committee would be established to compile a list of necessary drugs which would be disseminated annually to physicians and druggists. The list would include each drug or biological by generic and brand names, with prices, in an effort to make available information on the various names and prices for each drug. Reimbursement under medicare would be based on the lowest priced generic or brand name drug on the market, consistent with Federal Food and Drug Administration standards.

I also support extending medicare coverage to those receiving Social Security disability benefits. Those severely disabled citizens, like the elderly, have greatly reduced incomes and high health costs and they frequently cannot obtain adequate private health insurance at a reasonable price. The need for this expansion of the medicare program has been widely recognized and was recommended by the outgoing Secretary of Health, Education, and Welfare, Wilbur Cohen, last January.

Proposals to authorize automatic cost-of-living increases in the future have received substantial support, including the backing of the President. I firmly agree that we need to assure our social security beneficiaries that their benefits will raise as prices increase, rather than lagging behind as they have while the cost of living has soared by 8.7 percent since the last benefit raise in February 1968. Several years ago we authorized an automatic cost-of-living increase for civil service annuitants. My bill establishes the same system for those receiving social security benefits so that their payments would be increased by the amount the cost-of-living index has risen whenever this is more than 3 percent. Unlike the administration's proposal and several others I have seen, this increase mechanism would be triggered each time the cost of living has risen at least 3 percent.

The President's recommendation of a 10-percent increase, effective in March 1970, is not totally responsive to the needs of our elderly citizens and would not constitute a real increase at all. Due to inflation and rising taxes, it would represent a loss in actual purchasing power by next March. In addition, a raise in the earnings limitation from $1,680 to $1,800 annually is too small and token an increase to be of any real benefit to senior citizens who wish to work or find it necessary to do so to supplement their incomes.

However, he has proposed several improvements in our social security system which I feel have considerable merit. Among these is his recommendation for higher benefits for widows and widowers who do not begin receiving payments until age 65. Many widows and widowers find they cannot maintain their standard of living when their spouse dies, particularly since many of their costs, such as rent, property taxes, and utilities, remain virtually constant while their benefit is reduced to 8212 percent of the spouse's former paymenta cutback of close to 50 percent of the full benefit and a half they had been receiving. I feel a good case can be made for providing a higher benefit for these widows and widowers, perhaps through the device the President has suggested which would increase the benefit entitlement of those who wait past 62 to begin receiving payments. Other administration suggestions I favor are the proposals for:

Full benefits for the entire calendar year in which a person reaches age 62-regardless of his earnings in the months before he becomes 72.

Benefits for children who become totally disabled before age 22 rather than the present age limit of 18.

Benefits for the aged dependent parents of retired and disabled workers in addition to the present coverage for the dependent parents of workers who have died.

Equalization of the treatment of men and women in the computation of average monthly earnings the average on which monthly benefits are based. (This change would lower, to the year in which a man becomes 62 instead of 65, the ending point of the period of years used in calculating a man's average monthly earnings, thus making the ending point for men and women the same and, in many cases, raising the earnings average and benefit entitlement of men and their families.)

Some may challenge the 25-percent increase I have recommended on the basis of its cost. I believe, however, that we must put the

welfare of our social security beneficiaries ahead of the fixed concept that the social security system must be self-supporting. At the same time, we must recognize the burden social security taxes place on many workers and avoid an undue burden on them.

As a result, I have proposed financing my bill by an increase in the amount of taxable earnings, from $7,800 to $9,000 with no raise in the present contribution rate. These additional contributions would be supplemented by general tax revenues. The closing of tax loopholes, together with the administration's announcement it contemplates a budget surplus this fiscal year and the prospect of reduced military spending as we terminate our involvement in Vietnam should provide the Treasury with more than enough general tax funds to cover the cost of higher benefits.

The crisis our older citizens are facing makes a substantial benefit hike imperative now. Consequently, I hope this committee will, after careful consideration of the needs of our social security beneficiaries, act promptly to provide the level of benefit increases and other amendments which are necessary to enable our elderly to meet their basic expenses and live in dignity.

Mr. BURKE. Thank you for your statement to us here today. We appreciate your coming to the committee.

Mr. KASTENMEIER. Thank you, sir.

Mr. BURKE. Our next witness is the Honorable Henry B. Gonzalez from the State of Texas. Mr. Gonzalez, please step forward and we will be glad to hear your testimony.

STATEMENT OF HON. HENRY B. GONZALEZ, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS

Mr. GONZALEZ. Mr. Chairman, I am pleased to have this opportunity to address my remarks to you and the committee members on the 6month waiting period a person disabled and unemployed must endure after his application for social security disability benefits has been approved.

I would call the situation painfully inequitable. While a waiting period is a hardship for anyone in need, clearly, the hardship is greatly multiplied for one who is physically incapable of caring for himself. The 6-month period, I strongly believe, should be completely eliminated.

Thousands of people are enduring hardships because they believe that in the event of sudden disability they will be able to rely on their only source of assistance their social security benefits; but, the rude truth is that or 6 months they will not be able to work, nor will they have a source from which to pay their rent, their debts, their medicines, or even money with which to buy food stamps or the special diet food which they must have in order to control their particular disease.

I believe you will find that both the local social security offices and congressional offices encounter persons almost daily who very definitely meet the requirements of having a disabling condition and who unquestionably suffer hardships as a direct result of the 6-month waiting period. Once their application has been approved, a letter is sent to the individual-the young man with a young family, the widow, the old retiree-telling him yes, your disability is severe enough to

prevent you from engaging in substantial work and yes, your illness is expected to last more than a year or may even result in death, but there is a law in the books that says we have to wait 6 months to see if you are really ill. What more proof is needed to point to when the obvious fact is that the man is physically incapacitated as the result of a stroke, or has been diagnosed as having a terminal case of cancer or an uncontrollable case of diabetes. These cases necessitate us to look again at that law in light of the specific instances of hardships incurred.

If the social security disability benefits law is to be strict in determining a disability condition and the necessity of a long duration of the illness, then I should think whoever qualifies ought to be allowed to receive benefits due them at the onset of their illness.

One of the points made in opposition to removing the waiting period is that some cases, as those which are not terminal, cannot be definitely defined as lasting more than a year. However, I think the physicians' discretion in determining the severity of disabilities could also be extended to suggest that according to previous cases of this type in their numerous medical experiences, the illness is "likely" to last for more than 1 year. And even if the impairment would not last the year, but only 8 or 9 months, this would not necessarily be a disaster. The benefits would be immediately cut off, the aid could not be considered a waste, and thousands of others which remained disabled would not be penalized during those first 6 months.

Equity, gentlemen, is singularly the crux of my rhetoric-and I hope that you will see the necessity of passing out legislation which will remove this limitation. And I urge you not to merely reduce the waiting period but to eliminate it completely; because after a traumatic recognition that one is no longer able to earn a living because of a disabling condition, 1 month or 6 months will be an added burden. Your favorable consideration of this proposal would be greatly appreciated. Thank you.

Mr. BURKE. Thank you, sir. Would any one like to question Mr. Gonzalez? If not, thank you for coming to the committee.

Our next witness this morning is Dr. Russell B. Roth, and Mr. Bernard P. Harrison, of the American Medical Association.

Is Dr. Roth here?

We welcome you to the committee, Dr. Roth, and you may proceed. STATEMENT OF DR. RUSSELL B. ROTH, ON BEHALF OF THE AMERICAN MEDICAL ASSOCIATION; ACCOMPANIED BY BERNARD P. HARRISON, DIRECTOR, DEPARTMENT OF LEGISLATION

Dr. ROTH. Mr. Chairman, and members of the committee, I am pleased to be here today to present the comments of the American Medical Association with respect to proposals to amend the various titles of the Social Security Act. As the committee knows, our interest lies in many of the topics before you. However, I plan to speak about only one of the subjects which concerns the committee during the course of these hearings-to ask for the careful consideration of the AMA's proposal to provide a health care program for the Nation.

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