anomalous to say they are voluntary when they are really being paid for by the U.S. taxpayer.

On four different occasions this committee has dealt with the question of compulsion. Many of you gentlemen here have had to face up to this before. You decided in 1935 that compulsion was a desirable thing in connection with old age. There were people who came before your committee in 1935 and said that if you did this you were going to drive all private insurance out of business if you applied this principle of compulsion and I am reading from the committee report of

1935.

They said that if you applied this principle of compulsion you would destroy private pension plans. They said that you would put such a crushing burden upon industry and labor as to be undesirable. In addition, they said it was unconstitutional.

It seems to me you had to face up to this same issue in 1939 when you added survivor's insurance and you had to face up to it in 1955 and 1956 when you added disability insurance.

Now, why did you gentlemen use the principle of compulsion? I know most of you pretty well and I know you do not believe in compulsion for compulsion's sake. None of you were interested in applying this principle of compulsion because of its own sake. You came to the conclusion, that if you did not apply the principle of compulsion, many people were not going to protect themselves and contribute over their lifetime, and in the last result the taxpayer of the United States was going to be left holding the bag through public assistance. You decided that that was not a desirable alternative. You decided that it was more in the interest of society to require everyone to pay over their entire lifetimes a small premium that would protect themselves and their families and society from this threat which you have which will ultimately cost billions of dollars of general revenue to the general taxpayer if you do not find some solution to that group of people of the aged who do not have voluntary insurance.

I say that the principle of compulsion, while it must be considered very carefully, is nothing new. It is a principle that you have embodied in countless laws and in the social security program not because you believe in the principle of compulsion but because ultimately you believe that society is better protected. I see nothing wrong in that principle, and I would like to say this:

If you will study the public opinion polls on this very issue, you will find that there are more than 50 percent of the American people who say that they want you to apply compulsion to them in this regard. They think that is a democratic method by which it can be applied.

I think, for myself, the principle of compulsion here is one that we should not shy away from. It is one we have adopted and we should use when we find that society is being disadvantaged.

Mr. FORAND. Thank you very much, Mr. Cohen; you have contributed a great deal to our discussion.

Mr. MASON. I do not have any questions but I have an observation to make.

Mr. Cohen, you have furnished us valuable, professional, yes, and I would say scientific testimony in connection with this problem that

is facing us and I think you have made a valuable contribution to our thinking on this matter.

The CHAIRMAN. Are there any further comments or questions?

Mr. ALGER. You mentioned this matter of rising costs earlier. I missed a lot of the things you said because you were talking so fast. You made the statement if I recall correctly, that it does not make any difference whether it is voluntary health program, whether the Government pays for it, the costs will be the same. Is that what you said?

Mr. COHEN. That, substantially, is my position; yes.

Mr. ALGER. I do not want to belabor it but I must take issue with you. I, coming from small business, have found there is an incentive factor. Government costs go up and up and up because of lack of incentive and you have deprecated administration costs which you say would be very small and covered by the payroll taxes.

I have the uneasy feeling that the administration costs might be staggering. No one has been able to give us a prospectus of how many human bodies would be involved in administering this program. Could you comment on that?

We are limiting all the witnesses and I realize it is a big question. I suppose we should take a lot of time with this.

Mr. COHEN. On this matter of administration, it is not the Government that is administering these plans; it is the doctors and the hospitals. The Government in the plan that Mr. Forand has presented has very little to do with it. It is not the Government who puts the man in the hospital; it is his doctor.

Mr. ALGER. I have gone with you up to this point but who is going to certify what doctors, nursing homes, and so on and who is going to carry it out?

Mr. COHEN. You cannot get into a hospital unless a doctor admits you. That is point No. 1.

Mr. ALGER. Who is going to lay down the law?

Mr. COHEN. Congress would lay down the law.

Mr. ALGER. Who is going to enforce it?

Mr. COHEN. The administrative agency would enforce the law but the administrative agency does not put the man in the hospital. Mr. ALGER. It has to start with the administration.

Mr. COHEN. No, sir; it starts with the doctor.

Mr. ALGER. Does it make any difference where it starts? who is going to administer the program? The Federal Government will administer it since it is a Federal program.

Mr. COHEN. I beg to differ with you because I think since the man cannot get into the hospital unless the doctor puts him in there it is the doctor's initial and professional responsibility.

Mr. ALGER. A doctor will not even have a right to participate unless he has been certified by the Federal Government and the administrative personnel to do that.

Mr. COHEN. That is correct.

Mr. ALGER. Then, do not tell me that the administration is not involved and that the starting point is with the doctor. It is with this group of Congressmen right here that will write the law that will be administered by the Government and only later then, all the human beings like doctors will become involved.

Mr. COHEN. The law and the regulations will not pay a single person's hospital bill until the doctor puts him in the hospital.

Mr. ALGER. Have you any idea what the personnel group will be in the Federal Government to administer this since there is where the program will be conceived, originated, and administered?

Mr. COHEN. I think with 2,500 additional people you could administer this whole additional program.

Mr. ALGER. Thank you; I appreciate your giving me the figure. I realize how difficult it is to give any figure and I would be the first to admit that none of us really are certain about the figures.

Mr. MASON. Will the gentleman yield there for just an observation? Mr. ALGER. Certainly.

Mr. MASON. If anyone should know the number of additional Federal employees this would require, the witness should know because he has been in this field for 20-odd years and administering it himself and knows at first hand approximately how many would be involved. Mr. ALGER. I appreciate that. I might say to the gentleman from Illinois, I do not subscribe to it because I am a newcomer and I do not know of his past experience.

On page 8 you bring up this subject which keeps recurring about the contribution that will be collected from nearly all people who work for a living.

If the tax is levied on the employer or the employee, or the selfemployed, obviously the consumer will ultimately pay for it in the price of the product.

Do you think this a fairer way to levy the tax or as you have touched on, although not in this record, would it be fair for it to be taken out of the Federal Treasury and not have a business tax as such?

Mr. COHEN. That is a very, very big question and I would say in balancing all the ramifications-and I thought about this question for 25 years-I would prefer to have it paid by employers and employees rather than out of the general revenues because I think it is good to have the employers and employees take a sense of responsibility for these matters and not pay it out of the general revenue.

Consistently, for 25 years, I have supported the idea that it is much better to have employers fully participating and employees fully participating in the fundamental policy decisions that come before this committee rather than pay it out of general revenues and sort of everybody's business is nobody's business.

Mr. ALGER. I appreciate that. Let me ask you further in the same vein now, do you feel the Forand bill embodies a good bill?

Mr. COHEN. Yes, sir. I have made some suggestions for changes. Mr. ALGER. You would find fault that only some over age 65 who need help are covered?

Mr. COHEN. There are people who are not covered and I would hope as this committee has done on other occasions it would see fit to continue to broaden the coverage so that everybody would be covered. Mr. ALGER. And you would rather see everybody over 65 covered as a matter of equity?

Mr. COHEN. As a matter of equity I see the greatest advantage in having everybody 65 and over covered.

Mr. ALGER. This is a matter of logic consistency.

Mr. COHEN. Absolutely.

Mr. ALGER. You recognize that this bill does not do that?
Mr. COHEN. That is correct.

Mr. ALGER. You have mentioned several times and I think very thoroughly, as thoroughly as anybody has, this matter of compulsion. I would like to pose to you the same question that I asked of several, including Mr. Flemming. All of us know what we can count on from the doctors as a group. They are good people and they are as dedicated as any group of people like our ministers and other people in public

service.

There is no question about their dedication, but let us say there are features in this program which doctors feel are self-defeating. This is my own thinking and there may be a flaw in it. If doctors do not want to participate in it or there are too many forms to fill out or some qualification that the administration lays down, like a questionnaire to make out, whatever the reason, is it not true then if enough doctors did not voluntarily desire to participate that there would have to be some compulsion there?

We would have to see to it that we have doctors participating once we have the program in force.

Mr. COHEN. I would not put surgical benefits in the bill initially as Mr. Forand has in his bill.

Mr. ALGER. You would not?

Mr. COHEN. I would not. I appreciate that Dr. Larson and Dr. Schwartz representing the views of the vast majority of the medical doctors of this country are not in favor of the surgical benefits and at the initial stage of the bill I would not cover surgical benefits.

I would cover hospitalization and related benefits which do not get into the question of the relationship between the Government and the doctor. In other words, recognizing the point that you said, I would work out the matter with the hospitals because this is a relatively simple device.

There are about 7,000 hospitals in the United States compared to 185,000 doctors. It can be handled much more simply administratively and the hospitals have been doing this with Blue Cross all the time.

Therefore, if what you say has merit, I would initially not cover the surgical care and I would say to the doctors, you object to it, so we will leave the surgical out, but I do not see why the doctors of this country have any objection to this committee covering hospital care because that is a relationship between the individual and the hospital and not the doctor.

Mr. ALGER. Again, I think there is a consistency in our free society. Businesses are free to come and go. Doctors do have a certain calling. There is a certain relationship between them and their calling that builds up a duty that is more compelling than just making the dollar as most in business do.

What strikes me is this: If we pass this bill, there has to be a compulsion factor because there have got to be doctors.

Mr. COHEN. When you say we are a free people, we are not so free as you think.

Mr. ALGER. I agree with you but you know what I mean.

Mr. COHEN. Whenever society thinks that its interests are superior to the individual, you pass a law to coerce the individual to do what

society thinks best. That is what you have done with the income tax law and that is what you have done with social security, unemployment insurance, and workmen's compensation.

I cannot go out and say I am a doctor. I will be thrown in jail if I practice medicine here.

Mr. ALGER. We had witnesses who testified yesterday, three that I recall, that there is a right that we take care of the old people. One man said that there has always been in this country à community responsibility for taking care of the aged.

Do you feel that that right or that responsibility or whatever that is, is a function of the Federal Government?

Mr. COHEN. I do not think the responsibility of taking care of the aged persons in all respects is a function of the Federal Government, but I think when the Federal Government decided in 1935 to apply the principle of compulsion both on John D. Rockefeller and the person making the lowest income in the United States, it accepted the principle that old-age security had certain Federal responsibilities and that does not mean that you have to take over the whole load. But I would say this, Mr. Alger, and I come back to my point: The Federal Government is taking care of the aged. You have a lot of Federal responsibility through all of these various other ways I have mentioned.

You cannot escape fiscal responsibility. That does not mean you have to enact the Forand bill, but I say this: 25 years from now if we came back in this room, you will find that the Federal Government will have taken much greater responsibility for the aged because there is no other effective means in our society of providing this lifetime protection.

Mr. ALGER. That brings up another subject. Do you feel pretty definitely there is a need? That is the whole gist of your statement, that there is a need for the Federal Government to enter into this field with this type of legislation at this time.

Mr. COHEN. There is not only a need

Mr. ALGER. I did not say government; I say Federal Government, recognizing we have local community responsibility and we have State and Federal Government, and at the base of this we have residual rights of individuals, so when I said government, I meant the Federal Government, that the Federal Government enters this as an entity at this time.

Do you think the need is great?

Mr. COHEN. Yes; I do. I think in this great and growing country of ours where people are mobile and move around the country, you cannot accept the arbitraries of State political lines as a sole basis of providing for the health and security and safety of the American people. I am sorry to say it because it would be much nicer to come here and say, "Mr. Alger, this can all be handled by the localities in the States," but it can't be because these people move around and they move to different States and the result is that only a national power can handle this problem satisfactorily.

Mr. ALGER. I appreciate your viewpoint there. I frankly cannot accept it on the testimony thus far that it cannot be handled locally. I do not believe from the witnesses we have heard thus far that there is need for the Federal Government to be involved.