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Cart I-Past and proposed programs
Das chart shows the administration's proposed program against the backdrop

and in relation to accomplishments in the past. At present about 60,000 disabled persons are being rehabilitated annually. Birministration's goal calls for 200,000 disabled persons to be rehabilitated melly by 1959, (–Erpanded rehabilitation program

Curt J shows that projected accomplishments, both of the present program o d' expanded program, for the fiscal years 1955–59.

I nscal 1955, although a substantial tooling up to establish the necessary addiou facilities and personnel would be required, the rehabilitation of 10,000 Litt persons than are now being rehabilitated annually would be achieved. biscal 1956, the second year, 40,000 more disabled persons would be rehabilired. Together with the 60,000 from the basic program, this would, for the first rict achieve the goal of 100,000 rehabilitations in a single year.

h the fifth year, fiscal 1959, the expanded program would achieve the rehabilitoob of 200,000 disabled persons.

Over the next 5 years, then, it is estimated that an additional 360,000 disabled resous could be rehabilitated. Together with the 300,000 from the basic promim, this would total 660,000 disabled persons established in productive work anng that period. Part –Espanded rehabilitation program, estimated cost, 1955-59

Chart K shows the projected estimate of the cost of continuing the existing program and of providing for the proposed expansion.

For the first year of the expanded program (fiscal 1955) total Federal grants in States and State matching funds are estimated at $42 million.

During the next 4 years, total program costs would continue to increase, präching $120 million in 1959. Chart I-Cost of 5-year proposed expansion

Chart L illustrates the computation of the estimated cost of the expanded program alone.

The bar at the left shows the estimated 360,000 more disabled persons to be rehabilitated. If special efforts are made to reach persons receiving public assistance, it is estimated that about 107,000, or 30 percent, of these persons

be rehabilitated would be taken from the public-assistance rolls. On the basis of past experience, it is estimated that the total cost of the capaded program will average about $580 per rehabilitant. Multiplying this by the estimated 360,000 disabled persons, the total program cost, both Federal sud State, for the proposed expansion would be about $209 million. Chart I-Erpanded rehabilitation program; costs and savings expected

It is self-evident that rehabilitation pays social dividends in restoring independence and confidence to a disabled person. But the dollars-and-cents returns 1o the Federal and State governments are striking. The first bar on the left side shows the estimated total Federal-State cost un million for the expanded part of the program of rehabilitating 360,000 more disabled persons during the 5-year period.

The right side of the chart shows two areas of possible savings. It is estimated that the 360,000 disabled persons who would be rehabilitated under the espanded program could be expected to pay Federal income taxes totaling $280 million during a 5-year work period after their rehabilitation--thereby more than repaying the program cost.

It is estimated that 107,000 of the disabled persons rehabilitated through the proposed expansion could be removed from public-assistance rolls. If they féminined on public assistance, they would require public aid for an average of 3 years at a total cost (Federal-State-local) of $722 million. About 58 percent of this cost would be borne by the States and local communities and 42 percent Is the Federal Government.

Thus, increased income tax revenues and the reduction in public-assistance payments would substantially exceed the cost of the proposed program.

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OVR

EXPACIO REHABILITATION PROGRAM

250.000 PERSONS DISABLED ANNUALLY
WHO CAN BE REHABILITATED

UNMET
NEEDS

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60.000
REHABILITATED
ANNUALS

ABOUT 30%
WILL BE REMOVED
FROM PUBLIC ASSISTANCE ROLLS

1959

1957 1958 AL YEARS

* BISNT PROGRAM FOR 3 YEARS 205 LION

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OVR

EXENOED REHAB. PROGRAM
CO3 á SANS EXPECTED

COST

POSSIBLE SAVINGS

$

722 MILLION

Grants.--The third part of the proposed new grant struc** grants, to assist States, localities and nonprofit organi

2 meeting special rehabilitation needs and problems.

? esample, the conduct of demonstrations or research.
cope of these project grants, there is no fixed allotment or
wcribed in the bill with respect to them. Instead, appli.
Rgrants would be submitted to the Secretary of Health,
tyre, with grant awards being made on the basis of the com.

dimmediacy of the various projects.
to the bill also provides authority under these special project
the nationwide expansion of the vocational rehabilitation
the administration.

s0w present some additional charts which reflect the
xt three-part grant system to the proposed expanded re-

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is types of grants

at the uniform grant structure proposed for 14 of the present
2 administered by the Department of Health, Education,
rad authorize three types of grants :
inte allotted on the basis of financial need to the States.
- afturement grants, to be allotted on the basis of population

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Tito be granted on the basis of special problems and op

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- the expanded program.

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vt formula
urizes the Department's proposed new grant structure for
(2. In the left-hand vertical bar are all three of the

parts-support, extension and improvement, and special

in are the formulas for the first two types—the hospital The present Vocational Rehabilitation Act does not provide adequate legis

*a formula for the support grants and the population and lative authority to attain the objectives and goals which we have outlined.

La for the extension and improvement grants. The bill would, therefore, substitute a new act for the existing vocational

L' at the bottom represents the special project grants to be rehabilitation law, to be effective July 1, 1934.

pored projects.

- Suide each year how much of the total appropriation would I. NEW THREE-PART GRANT STRUCTURE

the three types of grant-in-aid. The major change the bill would bring about is to revamp completely the

which rhabilitation program; estimated cost, 1955–59 (same as "open end” tinancing provisions of the present law, which have made administration both diffeult and uncertain. The bill would achiere this revision by

Bu the dollar cost to which the new grant structure would be adopting for this program the same new three-part grant structure which was

sed three part grant structure would be sufficiently flexible desi ribed at length at yesterday's hearings relating to S. 2778, the public bealth grant in aid bill. You will recall that the three types of grants proposed are: Support grants,

nhabilitation program; Federal and State shares, 1955-59 extension and improvement grants, and special project grants.

I will reslet briefly the major aspects of this three-part grant structure. Pas the distribution of projected total program costs between the meeting the costs of their basic vocational-rehabilitation services. The allot. h.-The left side of the chart reflects the application of the

(1) Support grants. The support grants would be to assist the States in al Government. metn and matching formula of the Hospital Survey and Construction Act woulded support grant formula to the present program. The be used, with provision for a minimum State allotment of $50,000.

The bill contains transition provisions designed to avoid serious dislocations State of $50,000. Provision is made for a transition period in the States while they adjust to the new system of financing. Under these 60 percent in 1955, 55 percent in 1956, and approximately 50 percent in 1957. it received for the previous year. It is expected that the transition provisions the average Federal share of total expenditures would be at would receive a reduction in its allotment greater than 10 Furthermore, the bill would limit to 10 percent the decrease in any one year of a State's total rehabilitation allotments which may result specifically from 150 percent for 1937 and thereafter,

ogrom-On the right side of the chart we see the Federalthe change in the allotment formula.

(2) Extension and Improvement Grants. The second part of the proposed States in meeting the costs of adding to and improving their vocational re

will be made toward use of the extension and improvement grants.

e the number of rehabilitated disabled persons by 10,000. In habilitation services.

Allotments would be made on the basis of State population, with provision seral share of the expanded program would drop to 90 percent for a minimum State allotment of $5,000. As described yesterday, the Federal share would be 75 percent for the first 2 years of a new activity, 50 percent for the fiscal year 1957, 1958, and 1959, would be on the use of

to improvement grants for continued program expansion. The the next 2 years and 25 percent for the last 2 years of the 6-year limitation for any one activity or project.

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Salted is the Hill-Burton formula. There would be a minimum

Le States will have opportunity to make the necessary adjust

grant structure would be the extension and improvement grants to assist the enl share. The proposal calls for use of special project grants

w therefore, decrease in the fiscal year 1957-59 in accordtriking requirements for extension and improvement grants

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(3) Special Project Grants.--The third part of the proposed new grant structure is special project grants, to assist States, localities and nonprofit organiestions and agencies in meeting special rehabilitation needs and problems. These could include, for example, the conduct of demonstrations or research.

Because of the nature of these project grants, there is no fixed allotment or mwaiching formula prescribed in the bill with respect to them. Instead, application for such project grants would be submitted to the Secretary of Health, Education, and Welfare, with grant awards being made on the basis of the comparatire importance and immediacy of the various projects.

For 1950 and 1956 the bill also provides authority under these special project
grants for initiating the nationwide expansion of the vocational rehabilitation
prgram proposed by the administration.

1r. Rockefeller will now present some additional charts which reflect the
application of the new three-part grant system to the proposed expanded re-
babilitation program.
Mart (-AEW propose8-3 types of grants

8.2759 would adopt the uniform grant structure proposed for 14 of the present
grant-in-aid programs administered by the Department of Health, Education,
and Welfare. It would authorize three types of grants :
1. Support grants, to be allotted on the basis of financial need to the States.
2. Extension and improvement grants, to be allotted on the basis of population
of the States.

3. Special projects, to be granted on the basis of special problems and op-
portunities as they arise.
Chart P-New allotment formula

This chart summarizes the Department's proposed new grant structure for
I grant-in-aid programs. In the left-hand vertical bar are all three of the
proposed types of grants-support, extension and improvement, and special
projects. At the right are the formulas for the first two types—the hospital
zurvey and construction formula for the support grants and the population and
special matching formula for the extension and improvement grants.

The horizontal bar at the bottom represents the special project grants to be
paid on the basis of approved projects.

Congress would decide each year how much of the total appropriation would
be available for each of the three types of grant-in-aid.
Chart (-Expanded rehabilitation program; estimated cost, 1955-59 (same as

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Chart K)

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The chart shows the dollar cost to which the new grant structure would be
applied. The proposed three-part grant structure would be sufficiently flexible
to meet the needs of the expanded program.
Chart R-Erpanded rehabilitation program; Federal and State shares, 1955-59

This chart shows the distribution of projected total program costs between the
States and Federal Government.
A. Present Program.-The left side of the chart reflects the application of the
Department's proposed support grant formula to the present program. The
pelbod recommended is the Hill-Burton formula. There would be a minimum
allotment to each State of $50,000. Provision is made for a transition period
during which the States will have opportunity to make the necessary adjust-
ments and no State would receive a reduction in its allotment greater than 10
percent of that which it received for the previous year. It is expected that the
Federal national percentage average will decrease to 60 percent for 1955; 55
Dercent for 1956; and 50 percent for 1957 and thereafter.

B. Erpanded Program.--On the right side of the chart we see the Federal-
State percentage for the expanded program. Here, too, we find a gradual re-
dortion in the Federal share. The proposal calls for use of special project grants
In 1965 to increase the number of rehabilitated disabled persons by 10,000. In
1958, a start would be made toward use of the extension and improvement grants.
As a result the Federal share of the expanded program would drop to 90 percent
The emphasis in the fiscal year 1957, 1958, and 1959, would be on the use of
the extension and improvement grants for continued program expansion. The
Federal share would, therefore, decrease in the fiscal year 1957-59 in accord-
abce with the matching requirements for extension and improvement grants
contained in S. 2759.

In 1936.

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