Many of the issues of misunderstanding which arise are differences of opinion, not differences of law. Three things would ease the burden this situation imposes:

First, provision for court review of proposed deductions or penalties where construction of law is involved, as recommended by the New York Temporary State Commission to Study Federally Aided Welfare Programs (1951-52-53), and more recently by the Temporary State Commission on Coordination of State Activities (1961).

Second, since most issues are technical differences of opinion and should be cleared up rapidly in advance, some administrative appeal or review mechanism would appear appropriate a board of appeal or review. The former Social Security Board provided a collective judgment on critical issues in the formative days of the program. It provided an important element of security to Federal and State personnel in the sense that technical differences could ultimately be examined in the broad interests of all, and be resolved by group judgment. Section 121 of the bill gives wide duties of general review to the Advisory Council. It would appear appropriate to provide it, or an analogous group, with appellate and review functions on Federal-State matters of current administration.

Third, since we are dealing with matters of less than exact dimension, some indication in the law that substantial compliance by the States is expected would be welcome. As the law now stands there is an implication that the critical matters dealt with are absolutes. And yet, in human affairs, and especially the intangible factors dealt with in public welfare administration, essentially we deal with relative values. Some expressed latitude as to the intended rigor of application of the principles laid down would probably be welcome by all administrative officials engaged in this intergovernmental enterprise. The New York Temporary State Commission to Study Federally Aided Welfare Programs of a few years ago was, in part, called into being as a result of many audit questions arising over the status of local employees; technicalities as to duration of provisional status when sufficient personnel of adequate qualifications were in short supply. In the intervening years our localities have made substantial increases in salaries, have dropped local limitations on residence, have joined in statewide recruitment and examination. These have been evolutionary changes and all the more stable and accepted as a result. The latest audit, however, notes exceptions as to provisional status for some 77 local employees out of the 11,500 engaged in local public welfare administration Is not this substantial compliance? Efforts to keep on top of any such situations should be evidenced (and they have), but for it to be necessary to schedule fiscal adjustments under such circumstances seems questionable. In summary, our request is that after a quarter century of development, there be some stocktaking of the administrative involvements which have grown up in our Federal-State system; that, to the greatest extent feasible, administrative personnel, State and Federal, be relieved from concern with details, with form and procedure of conformity and their attention be directed to the constructive, the imaginative, and the productive; and that the inherent value judgments involved in treating human affairs be safeguarded by appropriate review and resolution of differences of opinion when they arise.

Finally, if there be insufficient time available to give earnest consideration to these matters on this occasion, we request they do not be dismissed, but be reserved for future study and consideration.

ADDENDUM TO STATEMENT OF MYLES B. AMEND ON BEHALF OF NEW YORK STATE BOARD OF SOCIAL WELFARE RE H.R. 10606

MEMORANDUM OF PROPOSED AMENDMENTS TO H.R. 10606

On February 20, 1962, the New York State Board of Social Welfare adopted a resolution with respect to Federal-State relations in the administration of public assistance. A copy of that resolution is attached. There follows a description of specific amendments to H.R. 10606 which would accomplish the intent of the resolution.

The board's resolution could be accomplished in one of several ways:

(a) Substitute "a State's law" for "a State plan" and "law" for “plan” in sections 1, 2, 3, 4, 5, and 6 of title I, entitled "Grants to States for Old-Age Assistance and Medical Assistance for the Aged", of the Social Security Act and make similar changes in the corresponding sections of titles IV, X, XIV, and proposed XVI.

or

(b) Define a State plan in the definition section of each of the public as sistance titles (I, IV, X, XIV, and proposed XVI) (sections 6, 406, 1006, 1405, 1605) for the purpose of that title. The definition could be: A State plan shall mean the laws of a State making provision for old-age assistance (or other appropriate reference to the category of assistance); and at the option of the State, such rules and regulations as such laws may require or authorize, but the Secretary shall not require the State to promulgate any rules or regulations.

or

(c) The above definition or some similar definition could be made applicable to all the titles, I, IV, X, XIV and proposed XVI, by including the definition in a general provision such as title XI, section 1101. (a); this could be added to (a) as subparagraph (9).

(In the material that follows I am assuming that (b) or (c) would be followed, i.e., that State plan would remain in the various parts where it now appears, but a definition as indicated in (b) or (c) would be included indicating that the term referred to the State's law.)

Because "approved" does not seem an appropriate term to use to describe the determination of a Federal official relative to the conformance of State law with Federal requirements, it would seem appropriate to take this term out of the various sections in which it occurs with respect to State plans, in each of the existing titles and of the proposed new title. In lieu of "approved" I suggest there be substituted "determined (‘or found', if that is preferred) to conform to the requirements of this title."

Sections 1, 2, and 3 of title II of the board resolution could be translated as follows: Amend the last sentence of section 1 of the Social Security Act (and make similar changes in the corresponding sections of titles IV, X, XIV and proposed XVI) as follows: "The sums made available under this section shall be used for making payments to States which have in operation State plans for old-age assistance, or for medical assistance for the aged, or for old-age assistance and medical assistance for the aged, which plans have been submitted to the Secretary of Health, Education, and Welfare (hereinafter referred to as the Secretary) and have been determined to conform to the requirements of this title.

Amend subsection (b) of section 2 of the Social Security Act to read as follows (and make similar changes in corresponding sections of titles IV, X, XIV and proposed XVI):

"(b) A plan shall be determined to be in conformity with the provisions of this title if it fulfills the conditions specified in subsection (a) and does not impose, as a condition of eligibility for assistance under the plan (1) an age requirement (2) any residence requirement * * *; (3) any citizenship requirement

Reletter subsection (c) of that section to be subsection (d) and add the following new subsection (c) (make corresponding changes in the other titles): "(c) If within sixty days from the date a plan, or an amendment to a plan, is submitted to the Secretary he shall fail to act with respect to it or shall determine that such plan or amendment is not in conformity with the requirements of this title, the State affected may institute an appropriate proceeding before the United States Court of Appeals requiring him to act or to determine and accept the plan, or amendment, as being in conformity with the requirements of this title, when such is the case; the Secretary shall not require a State to amend a plan or any amendment thereof which has been approved or found to be in conformity with the requirements of this title, except amendments required by amendments of this title or by other provisions of law".

Amend section 3 (and make similar changes in corresponding sections of titles IV. X. XIV and proposed XVI) of the Social Security Act in the following respects:

Amend subsection (a) to read :

a) From the sums appropriated therefor the Secretary of the Treasury shall 27 to each State which has a plan determined to conform with the requirements **** title, for each quarter the State administers the plan in good faith and

substantially in compliance with such requirements, beginning with the quarter commencing October 1, 1960 * * *”.

Add a new subsection (c) to read:

(c) The Secretary shall not reduce the amount to be certified for any State, as provided in (2) (A) of subsection (b), on the grounds that portions of amounts previously paid to such State pursuant to this section have been expended for purposes not authorized by this title, if the State expended the funds in good faith for the purposes and objects of this title and substantially in accordance with its State plan, without the approval of the States' plan review board granted after reasonable notice and opportunity for hearing to the State agency administering or supervising the administration of the State plan for such State. If the Secretary proposes to find that certain amounts have been expended for purposes not authorized by this title and were not expended in good faith for the purposes and objectives of this title and substantially in accord with the State's plan, he shall notify such State agency and the review board that he proposes to reduce the amount to be certified to the Secretary of the Treasury for payment to such State for the next succeeding or any subsequent quarter to the extent of the unauthorized expenditure, if the review board approves after reasonable notice and opportunity for hearing to such State agency. If the review board approves the Secretary's proposed reduction, in whole or in part, notice that the approved reduction will be effected shall be given not less than 30 days prior to the date on which the amount to be paid to such State for the next succeeding quarter is to be certified to the Secretary of the Treasury. Unless with 30 days after the date of such notification such State agency has filed an appeal under subsection (b) of section 4, the Secretary shall reduce the amount to be certified to such State in accordance with paragraph (2) (A) of subsection (b) of this section. If within 30 days after such notification such State agency files an appeal under subsection (b) of section 4, the Secretary shall not reduce the amount to be certified for such State until the expiration of such 30-day period and until the United States Court of Appeals has sustained the findings of the review board in regard to such reduction, and the action of the Secretary with respect to such finding, by a final judgment which has been sustained on review by the Supreme Court of the United States or which is, because of the lapse of time, no longer subject to review by the Supreme Court of the United States."

Amend section 4 of the Social Security Act, entitled "Operation of State Plans" (and make similar changes in corresponding sections of titles IV, X, XIV and proposed XVI), as follows:

"SEC. 4. In the case of any State plan which has been determined to conform with the requirements of this title, if the Secretary has reason to believe (1) that the plan has been so changed as to impose any requirement prohibited by section 2(b), or that in the administration of the plan any such prohibited requirement is imposed, with the knowledge of such State agency administering or supervising the administration of such plan, in a substantial number of cases; or

"(2) that in the administration of the plan there is a failure to comply substantially with the provisions required by section 2(a) to be included in the plan; he may notify such State agency and the State's plan review board that he proposes to so find and to stop further payments to the State until such prohibited requirement is no longer so imposed and there is no longer any such failure to comply. If such board shall determine, after reasonable notice and opportunity for hearing to the State agency administering or supervising the administration of the plan, and after considering all the evidence, that the State has so imposed such prohibited requirements or has so failed to comply, such board may approve or disapprove the Secretary's proposed findings, in whole or in part, in accordance with the evidence; and, when appropriate, such board may also determine whether, and to what extent, and under what circumstances future payments shall be made to the State until the review board and the Secretary are satisfied that the prohibited requirement is no longer so imposed and that there is no longer such failure to comply. Any withholding of payments from a State shall be commensurate with the degree and wilfulness of the State's failure to comply, provided always the State's failure is substantial. If the board shall determine that further payments to a State shall not be made or shall be made only in part, the board shall notify the Secretary and the State agency affected, and thirty days after such notification the Secretary may make no further certification to the Secretary of the Treasury with

respect to payments to such State, except in accordance with the board's determination, until the board and the Secretary are satisfied that such prohibited requirement is no longer so imposed and that there is no longer any such failure to comply.

"Unless within such thirty-day period the State agency has filed an appeal under subsection (b), the Secretary, after the expiration of the thirty-day period, shall make no further certification to the Secretary of the Treasury with respect to such State until he is so satisfied. If within such thirty-day period, the State agency files an appeal under subsection (b), the Secretary shall not refuse to make a certification to the Secretary of the Treasury with respect to such State until the expiration of such thirty-day period and until the United States Court of Appeals has sustained the findings of the States' plan review board and the action of the Secretary and such board with respect to such findings, by a final judgment which has been sustained on review by the Supreme Court of the United States or which is, because of the lapse of time, no longer subject to review by the Supreme Court of the United States."

"(b) (1) Any State dissatisfied with or aggrieved by a finding of the review board, with respect to such State under subsection (a) of this section or paragraph (2) (A) of subsection (b) of section 3 may appeal to the United States Court of Appeals for the circuit in which such State is located. Such appeals shall be filed within the thirty-day periods referred to under such subsection and under subsection (c) of section 3. The summons and notice of appeal may be served at any place in the United States. The review board shall forthwith certify and file in the court the transcript of the proceedings and the record on which it based its findings.

"(2) The findings of fact by the review board, unless substantially contrary to the weight of the evidence, shall be conclusive; but the court, for good cause shown, may remand the case to the board to take further evidence, and the board may thereupon make new or modified findings, and shall certify to the court the transcript and record of the further proceedings. Such new or modified findings of fact shall likewise be conclusive unless substantially contrary to the weight of the evidence. So far as necessary to decision the court shall decide all relevant questions of law, and interpret constitutional and statutory provisions.

"(3) The court shall have jurisdiction to affirm the findings of the board, and the action of the board and Secretary with respect to such findings, or to set them aside, in whole or in part. The judgment of the court shall be subject to review by the Supreme Court of the United States upon certiorari or certification as provided in title 28, United States Code, section 1254 (1) and (3).”

Amend title VII, entitled "Administration," of the Social Security Act, by adding an appropriate provision making provision for the appointment of a States' plan review board of five or more substantial citizens to be appointed by the President, by and with the advice and consent of the Senate, whose duties shall be as indicated and who shall serve for such terms as shall be specified. Provisions relating to their qualifications should indicate that these persons should not be affiliated with the Federal Government in any other capacity.

Section 702, "Duties of the Secretary," should be amended to reflect specifically the substance of 4, 5, and 6 of II of the board's resolution.

III of the board's resolution has already been reflected in the above proposals.

RESOLUTIONS OF THE STATE BOARD OF SOCIAL WELFARE

Resolved, That this board recommends that the Social Security Act be amended as follows:

I. That titles I, IV, X and XIV be amended to require that a State's laws. instead of a State's "plan," conform to the requirements of those titles to qualify the State for Federal funds, thereunder;

II. That titles I, IV, X, XIV and related provisions of the Social Security Act be amended to make clear that the powers and duties of the Department of Health, Education, and Welfare be limited to

(1) Determining whether a State's laws conform to the requirements of the Federal legislation;

(2) Determining whether in the administration of the State's laws there be substantial compliance with the Federal legislation;

(3) Determining whether a State's claims for Federal funds are properly computed and are based on actual expenditures made in good faith, and whether a State has correctly computed and reported the Federal share of amounts recovered from recipients, their estates and relatives;

(4) Stimulating and assisting States to provide skilled social services for the prevention of dependency and for rehabilitation;

(5) Stimulating and subsidizing research into the causes of dependency and into methods of effective rehabilitation; and

(6) On request, to give advice and guidance to States for the better administration of the federally aided programs; and

III. That titles I, IV, X, and XIV and other related provisions of the Social Security Act be amended to provide that the Department of Health, Education, and Welfare shall not deny or withhold Federal funds made available to the States under any of the federally aided assistance programs except with the approval of an impartial administrative board (comprised, for instance, of three or five persons appointed by the President with the advice and consent of the Senate, and assured of facilities and services adequate to the discharge of its functions), issued after appropriate notice and opportunity to be heard shall have been afforded the State affected; and to provide further that the State affected shall have the right to appeal the determination of such board to an appropriate Federal court; and be it further

Resolved, That this board recommends that the Governor request the legislature to memorialize the Congress to amend the Social Security Act in accordance with the foregoing resolution.

The CHAIRMAN. The next witness is Julius Horwitz of New York City, N.Y.

Please take a seat, sir, and proceed.

STATEMENT OF JULIUS HORWITZ, NEW YORK, CITY, N.Y.

Mr. HOROWITZ. Mr. Chairman and members of the committee my name is Julius Horwitz. I am the author of the novel titled "The Inhabitants," the only American novel in existence, I believe, that has for its specific locale the newly emerged world of public assistance. "The Inhabitants" was published in August 1960 by the World Publishing Co., and the New American Library published the book in a Signet edition that has gone into every corner of America and into many European countries. A Danish edition is scheduled to appear soon and the rights have been purchased for the English edition.

I am also the author of "The City," a book dealing with life in New York City in fictional and nonfictional settings and my work has appeared in Commentary and Midstream magazines.

În 1954 I was awarded a Guggenheim fellowship for writing. And for the past 6 years I have been an employee of the Department of Welfare, City of New York, working as a social investigator, going daily into the awesome public assistance world of New York's West Side and Harlem.

Immediately after publication, "The Inhabitants" received astonishing reviews in the American press and magazines, characterizing the novel as shocking and a blight on the American conscience. Many people told me privately that they were horrified and shamed by the book. They did not believe that the social catastrophe I described in my book really existed in New York, or more accurately, existed without their knowledge and their horror was not so much horror of the physical conditions that I described but a horror of their own ig

norance.