SOCIAL SECURITY AND WELFARE PROPOSALS WEDNESDAY, NOVEMBER 5, 1969 HOUSE OF REPRESENTATIVES, Washington, D.C. The committee met at 10 a.m., pursuant to notice, in the committee room, Longworth House Office Building, Hon. Wilbur D. Mills (chairman of the committee) presiding. The CHAIRMAN. The committee will please be in order. Our first witness this morning is our colleague from Hawaii, Hon. Spark M. Matsunaga. Mr. Matsunaga, we are glad to have you back before the committee again, and you may proceed. STATEMENT OF HON. SPARK MATSUNAGA, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF HAWAII Mr. MATSUNAGA. Mr. Chairman and members of the committee, I thank you for this opportunity of presenting my views on pending legislation which would increase social security payments and generally improve the social security program. I have introduced and cointroduced several bills which come within the scope of these hearings, and I shall identify them during the course of my testimony. It is clear, from the most cursory examination of the social security and welfare proposals introduced in the present session, including the administration's welfare plan, that the need for improvements in the social security program is widely recognized. There appears to be some difference of opinion, however, as to the nature and extent of the needed improvements and as to the time when they ought to be instituted. Social security payments are the major source of income today for some 25 million Americans. The number of recipients seems to be growing yearly as the average life span of humans is lengthened and more of our workers join the ranks of the retired. The elderly who depend solely on their social security check to defray current living expenses have found the benefits to be totally inadequate to meet even the minimum needs of life. The Department of Labor has pegged "moderate" living standard at $4,200 a year for a retired couple. An estimated 10 million retirees are reportedly kept above the poverty line by their social security benefits. However, it takes very little imagination to picture the plight of the millions of other elderly Americans, who, even with their social security payments, are forced to live in want and despair after completing their working years. Surely, our senior citizens deserve better in their declining years. (1659) 36-662-70-pt. 5-18 To meet this clearly demonstrated need, Congress must provide dramatic and significant increases in benefits under the old-age, survivors, and disability insurance program of the Social Security Act. Anything less would fall far short of our goal of elevating our elderly Americans to the desired level of self-respect and dignity. Of the several pending bills, I believe that H.R. 14430, H.R. 14431, and H.R. 14432, the comprehensive bills introduced by the distinguished member of this committee, Mr. Jacob Gilbert, and a number of cosponsors, including myself, would do the job most effectively. THE "SOCIAL SECURITY AMENDMENTS OF 1969" The main thrust of the Gilbert bill, also cited as the "Social Security Amendments of 1969," is found in its provisions which would provide two increases of 20 percent across the board, the first beginning January 1, 1970, and the second beginning January 1, 1972. The first 20-percent increase would also raise the minimum benefit payment from $55 to $90; and the second 20-percent increase would also raise the minimum to $120. After both increases are effectuated, the benefit amount based on average monthly earnings of $510 would be raised from the present $179.70 to $258.90. ANCILLARY BENEFITS Other benefits provided by this legislation would: A. Raise the special age-72 payments from the present $40 a month to $48 in January 1970, and to $57.60 in January 1972; B. Increase the maximum lump-sum death payment from the current $255 ceiling, which has been in effect for the past 17 years, to $500 beginning in January 1970; and C. Raise the widow's benefit, effective January 1970, from the present 8212 to 100 percent of the worker's benefit where the widow's benefit begins at age 65 (there would be a reduction to 8212 percent if her benefit should begin at age 62). RETIREMENT EARNINGS The Gilbert bill would also update the amount that a person may earn in a month and still receive full social security benefits. The present exempt amount of $140 would be raised by $10 to $150, which means that the annual exempt income would be $1,800, effective January 1970. Rather than being a liberalization of the earnings test, this provision reflects an adjustment based on recent increases in wages and prices. For the first $1,200 of earnings above the annual exempt amount, the present withholding of $1 of benefits for each $2 of earnings would be unchanged. However, earnings exceeding the initial $1,200 subject to withholding would call for the withholding of $3 in benefits for each $4 of earnings. At no point would $1 in benefits be withheld for each $1 of earnings. COST-OF-LIVING ADJUSTMENT An automatic adjustment of benefits, including regular social security and the special age-72 payments, would be provided whenever there are annual cost-of-living increases of at least 3 percent. This provision would become effective in January 1973, and is expected to contribute greatly to the sense of security of our senior citizens. This provision for a cost-of-living adjustment is found in the Federal Civil Service Retirement Act and in many retirement plans in private industry, and should be made a part of the Social Security program. DISABILITY BENEFITS The provisions under which present social security disability benefits are paid can hardly be called humanitarian or realistic. Such benefits are now payable only if the disability is expected to last at least 12 months and only after the worker has been totally disabled throughout 7 consecutive calendar months. The Gilbert bill would make it possible for the worker to begin receiving disability benefits in the fourth month of disability by substituting a 3-month waiting period in lieu of the present 6-month period, effective in July 1970. The current harsh requirement that the worker's disability must be expected to last at least 12 months or end in death, would be elimnated. To help bridge the gap between workers who are totally disabled and older handicapped workers who presently do not qualify for disability benefits, this legislation would provide, effective in July 1970, monthly disability benefits to handicapped workers age 55 and over, who can no longer perform their regular work or other work they have performed in recent years. The 3-month waiting period would also apply to these older handicapped workers. Recognizing the need of totally disabled widows below age 50 for benefit protection, this legislation would also eliminate, effective January 1970, the age 50 and over requirement in existing law. The further extension of disability benefits for the blind is found in my bill, H.R. 10465, and I shall comment on that proposal later in my testimony. MEDICARE Medicare would be expanded and strengthened by a plan, to become effective in July 1970, which would finance the hospital insurance and the medical insurance parts of the program with contributions paid by employees, employers, and the self-employed, with a matching contribution by the Federal Government from general revenues. Everyone who qualifies for hospital insurance would also qualify for supplementary medical insurance. Another significant improvement to the medicare program is the extension of health insurance protection to the disabled which this bill would provide. Commencing in January 1972, hospital insurance and supplementary medical insurance protection would be extended to social security disability beneficiaries. This extended protection would be financed in the same manner proposed for health insurance for the aged: Payroll contributions by employees, employers, and the self-employed, along with a Federal matching contribution from general revenues. As protection against today's high cost of drugs, the Gilbert bill would also provide coverage of prescription drugs. H.R. 287: HEALTH INSURANCE BENEFITS FOR THE DISABLED If our national health insurance program is to be meaningful, and if it is to be made available to those whose need for such protection is greatest, then it is necessary that title XVIII of the Social Security Act be amended to extend health insurance benefits to all disabled persons. Both the Gilbert bill and H.R. 287, a bill that I introduced on the opening day of this Congress, provided for health insurance benefits for the disabled. For the young who are disabled, the Gilbert bill would extend medicare benefits to those who have attained age 18 and are entitled to child's insurance benefits under existing law. H.R. 287 would extend the health insurance benefits to individual over 21 who are disabled, regardless of entitlement to monthly cash benefits. The minimum age of 21 years required in H.R. 287 was intended to extend the health benefits to disabled workers who have reached the age of majority, which is 21 years in most States, but who may not be eligible for social security benefits under existing law. If it is clearly the intent of the proposed legislation to provide health insurance for all disabled persons who need but are not presently covered by insurance, then there ought to be no restriction as to age. In recognition of the increasing difficulty among young and old alike to meet ever rising medical expenses I would recommend that the Gilbert bill relating to health insurance for the disabled be extended to cover beneficiaries irrespective of their age or entitlement to social security monthly benefits. FINANCING The cash benefits part of the social security program appears to be on a sound fiscal basis. Recent evaluation of the program by the actuaries of the Social Security Administration reportedly shows a surplus of 1.16 percent of taxable payroll. The added cost of the improvements in the Gilbert bill would be met out of an increased $15,000 contribution and benefit base, with an automatic adjustment provision, and a gradually increasing Government contribution, which eventually would be equal to about one-third of the total cost of the cash benefits program. Since the proposed second 20 percent benefit increase would not be effective until 1972, it is expected that rising wage levels would enable the program to continue on an actuarially sound basis. H.R. 10465: TO LIBERALIZE ELIGIBILITY OF BLIND PERSONS TO RECEIVE SOCIAL SECURITY DISABILITY INSURANCE BENEFITS The blind person occupies a peculiar place in our working world. While his handicap does not carry a social stigma, he nevertheless experiences considerable difficulty in finding steady employment. If he is fortunate enough to be hired, his work generally is on a project basis and comes to an end after a few weeks or a few months, with long gaps between periods of employment. Recognizing the need to accelerate a blind worker's eligibility to receive benefits under the Social Security Act, every Congress since the 88th Congress has considered, but failed to enact, legislation which |