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into one package. We can understand their reasons for doing this, but feel that an analysis of what will happen to the basic support program under the variable grant formula is necessary for the committee to hare a clear picture of the entire financing situation. This is true, because, while we are reasonably certain that Congress will continue to appropriate funds for the basic support rebabilitation fund, we can be nowhere nearly so certain that additional funds will be made available for improvement and extension of the program and for special projects. Nor can we be sure how the States will accept the extension and improvement features of the bill. Accordingly, it is extremely important how the basic support program would fare under the proposed legislation, after the period of transition from one method of financing to the other is over. In order to show as clearly as possible what the effects of the rariable grant formula would be on an individual State operation, as they relate to the basic program, we have prepared a table which shows just how the various States would fare in 1957 with an appropriation of $23 million, the amount that is being appropriated for 1951.

You will notice from this table that $13,898,000 of State funds is now earning $23 million of Federal funds. Under S. 2759, $21,198,000 of State funds will be necessary to earn $23 million of Federal funds. You will note that the average Federal share of this fund in 1957 will be 52 percent. Now, in order to show how this method of financing will affect individual States, let us consider a high per capita income State, a middle per capita income State, and a low per capita income State. For the high income State let us consider Connecticut. At the present time $160,000 of State funds is earning $279,000 of Federal funds. In 1957, under S. 2759, $288,000 of State funds will be necessary to earn $197,000 of Federal funds, the maximum allotment to the State, assuming a $23 million appropriation.

Now let us consider Mississippi which is at the lower end of the per capita income table. At the present time, $231,000 of State funds is required to earn $385,000 of Federal funds. Under S. 2759, $333,000 of State funds will be necessary to earn $664,000 Federal funds.

For the middle State, let us take Wisconsin. At the present time, $280,000 of State funds is required to earn $550,000 of Federal funds. Under S. 2759, $471,000 will be required to earn $469,000 of Federal funds, the maximum allotment with the $23 million appropriation. It seems to me that a consideration of what would happen to these 3 States is sufficient to indicate the gravity of the situation, should this variable grant formula be applied, without revision, to the basic support rehabilitation program. From this table, it is seen that 23 States will receive allotments less than their present grants and that 20 States will have their Federal shares reduced from an average of 65 percent to less than 50 percent. Although transfer provisions of the bill are designed to make the transfer from one system of financing to another somewhat easier than otherwise they would be, particularly during 1955 and 1936, it seems inevitable that the proposed system of financing the basic program would result in at least one-half of the States struggling desperately to secure enough State funds to replace Federal funds that will be lost, and that these States will have no opportunity whatever to benefit from extension and improvement funds which may be available. Some States will be unable to replace lost Federal funds, and in such cases there will be actually less rehabilitation instead of more.

We agree with the authors of S. 2759 that rehabilitation services should be expanded and that larger investments of both State and Federal funds are justified. We agree, further, that changes need to be made in the method of financing the program. We feel, howerer, that any changes which are made, if the welfare of the handicapped is to be the principal factor to be considered, must protect investments of the States and the Federal Government in rehabili. tation, and that the best way to do this is to see that hardships from changing methods of financing are reduced to a minimum.

One way to do this is outlined in S. 3039, introduced at our request by Senator Potter. This proposal is the result of several years of work by a committee of the States council, an organization of State directors of vocational rehabilitation serving as advisors to the Office of Vocational Rehabilitation. The principles contained in this bill were worked out with the help of the staff of the Office of Vocational Rehabilitation, although, I must add, it has never been given official endorsement of the Office of Vocational Rehabilitation, so far as I know.

This bill provides that allotments to the States for the basic rehabilitation program shall be in two parts: First, an amount equal to 100 percent of the administration, guidance, and placement expenditures for 1953 and 50 percent of case service expenditures for the same year. If a State has less State money available than in 1953, it would receive proportionately less Federal funds. Second, Federal funds available in excess of the amount needed for the above purpose would be allotted on a population basis to States that have excess State funds beyond their expenditures of 1953. The Federal share of this latter fund would be 50 percent in all of the States.

This plan has the advantage of absolutely maintaining rehabilitation programs in the States at their present levels, while encouraging their expansion on a 30 50 basis. Incidentally, if the $120 million program visualized by the President should come about under this plan, the Federal share of a program at that level would be 54 percent.

Another proposal which would accomplish similar purposes and which deserves consideration is based upon the Administration's proposed method of financing public assistance to the handicapped, as found in II. R. 7200. As this committee knows, public assistance programs for the needy blind and the totally and permanently disabled are both supported by the Federal Government on an open end basis, the only limitation on the use of Federal funds being a certain percentage of $75 per month multiplied by the number of persons being served. The Administration now proposes to apply the variable grant based upon population and per capita income and that the Federal matching percentage be an average 6.5 percent, with a 60 percent minimum. If the factors of population and per capita income are to enter into the allotment and distribution of Federal funds for vocational rehabilitation, it seems that this formula would be far more acceptable and would come much nearer accomplishing the objectives of the President than the formula which is now found in S. 2759.

If the committee should decide that an overall limitation on Federal funds to be expended should be included in the bill, it might be done in one of several ways.

i. The limitation could be a certain number of dollars multiplied by the num: ber of people receiving rehabilitation services, the number being rehabilitated, the estimated number of handicapped in the State, or a combination of these factors.

2. The bill could state that allotments shall be made on the basis of certain specified sums of money: for instance, $30 million in 1955–56, $35 million in 1977-58, $10 million in 1959–60, etc.

The advantage of this latter proposal is:

1. That with the higher allotment base and higher Federal percentages, the existink programs would be maintaineli at approximately their present levels, and hence result in no reduction in the number of handicapped persons being rehabilitated in the States.

2. Definite encouragement would be offered to States with underdeveloped programs to expand their programs.

3. Financing of rehabilitation could be put on approximately the same basis as that of public assistance, and no longer could it be said that the Federal Government is more liberal with funds for assistance to the handicapped than it is for rehabilitation of the handicapped. And certainly no one would arrue that Federal encouragement for programs of vocational rehabilitation is less essential to public good than encouragement to the States to provide adequate public-assistance grants to the disabled, who, at least, currently cannot be rehabiliated.

In connection with the financing of the State-Federal program of vocational rehabilitation, we want to call the committee's attention to the fact that restric. tive language placed in the 1974 labor appropriation bill, which if not repeated in the 1975 bill, or otherwise, will result in a crippling blow to vocational rehabilitation in the States. This restrictive language was placed in the bill on the floor of the House of Representatives at the time of final passage. It provides that beginning in 19.5.5 ihe Federal share of vocational rehabilitation er. penses shall not exceert $1 for every 75 cents expended by the States for the same purpose. This would result in reducing the Federal share from approxi. mately 65 percent at the present time to not to exceed 57 percent. This would come in a year when very few of the State legislatures are meeting and would not, therefore, have any opportunity to make up for lost Federal funds. Dollarwise, it would mean that not more than $19 million of Federal funds could be

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expended for vocational rehabilitation in 1955, compared with $23 million for the current year.

S. 2873, now before the Senate, would repeal this restrictive language. Inasmuch as the language referred to would become effective July 1, 1954, and many States are in a quandary, not knowing how to plan their programs for 1955, we strongly urge the committee to report out favorably this bill without delay, even before it has time to report S. 2759. It would be ironic, indeed, if, at the time this committee is considering an expansion of vocational rehabilitation services, appropriation law language should be undermining the present program, already inadequate to meet the needs of the handicapped.

Federal allotments and State matching for vocational rehabilitation services in 1954 compared with projection for 1957 under 8. 2759. (This is the first year the full effect of change of methods of financing is felt. A Federal appropriation of $23 million is assumed for both years)

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New Hampshire
New Jersey.
New Mexico
New York
North Carolina
North Dakota.
Rhode Island
South Carolina
South Dakota.
West Virginia
District of Columbia
Puerto Rico

66.6 54.8 66.6 39.0 50.5 36.8 34. 5 59.5 65. 2 57. 5 39. 2 480 51.7 54.0 66.4 64.2 59. 1 45.9 45. 2 45.3 53. 5 66.6 52. 1 45.0 52.4 36.0 34.4 40.5 59.0 37.0 66, 6 55.7 43.2 62.7 47.9 47.5 46.7 66.6 51.8 66.4 55. 5 55.1 58.3 59.1 44.6 63.0 49.9 45.7 50.0 33.3 50.0 66.6

106, 224 96, 600 53,080
504, 961 579,600 260, 101
73, 492 105, 800

46, 975
650, 433 791, 200 360,000

561 1, 366, 200 489, 500
107,070 121, 900

40, 620
96, 325

486,762 692, 300 303, 925
463, 182 262, 200 357, 676
509, 272 425, 500 325,000
550, 953 469, 200 280, 600
76, 939 50,000

42, 148 38, 189 50,000

21,912 195,000

50, 600 85,000 167, 233 71,300

91, 483 290, 553 687, 700 228, 407

110, 252 290, 670

98, 447 400, 366 1,095, 421

99, 334 49,353 479, 104 325, 692 249, 896 471,050 59, 409 50,000 101,352

71,300 344, 882


42 2.52

46 3. 14 5.91 .53 .30 3.01 1.14 1. 85 2.04

15 .11 22

31 2. 99

I Minimum allotment to a State under S. 2759.

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Mr. WHITTEN. Mr. Chairman, the National Rehabilitation Association was organized in 1925 and continuously since that time has been preaching the doctrine that rehabilitation is the answer to the problem of disability in most instances. It was the chief sponsor of Public Law 113 of the 78th Congress, which is the present basic rehabilitation law, and since 1949 has had before Congress other measures to expand rehabilitation programs. The bills specifically sponsored by this organization at this time are S. 2436 and S. 2437 by Senator Potter, which are very similar in purpose and in much of the detail to the proposals of the President upon which these hearings have been specifically called.

We want to say in the beginning that we have appreciated a great deal the tremendous amount of time and effort which has been expended by the officials of the Department of Health, Education, and Welfare, Mrs. Hobby and Mr. Rockefeller particularly, in an effort to understand the implications of rehabilitation and to try to come forward with constructive suggestions to the Congress for the expansion of this work.

We are very grateful, of course, that the conclusions they have come to are that rehabilitation is sound, both socially and economically, actually saving taxpayers' money rather than being a drain upon the Treasury; that present efforts to rehabilitate the handicapped are not adequate; and finally that both the Federal Government and the States can afford to increase their financial investment in the rehabilitation of crippled people.

The President's personal interest in the problem of the rehabilita. tion of the handicapped has encouraged all of us who have been working so long in this field in attempting to do some of the things which we now see at the point of fruitation, so we are very grateful for the consideration that is being given this matter.

Mr. Chairman, over the last few years I have attended and participated in a number of hearings on rehabilitation legislation, and as a result of my experience in those hearings I feel that I understand, at least generally speaking, shall we say, the areas of agreement and the areas wherein there may be disagreement with respect to specific proposals that are being made.

For instance, I know that there is no quarrel among any people with respect to the fact that rehabilitation is economically and socially sound. Everyone is agreed upon that. Everyone is also agreed upon the fact that there are many more handicapped people who could profit from rehabilitation than are being served at the present time.

It is also generally agreed that the rehabilitation of the handicapped is both a State and a Federal responsibility and that both of these organizations should assist in bearing the load. There is also rather general agreement that the State-Federal rehabilitation program as it now exists is sound, and although there may be criticisms of the program coming from some sources, they generally are with respect to the fact that the State agencies are not able to serve all of the people who apply to them rather than being more fundamental.

Now, while we have these areas of agreement, there are some areas in which all people do not agree. For instance, there is not agreement with respect to how rehabilitation should be administered on the Federal level. There are some people, for instance, who think that

it should be administered in the Department of Health, Education, laire and Welfare, as it is now. There are those who think it should be

transferred to the United States Department of Labor. There are AP

others who think that an independent commission, responsible directly

to the President, should be organized in order to administer Teste rehabilitation.

There are also differences of opinion with respect to just how the xPz program should be financed; that is, what share should be provided go for by the Federal Government and what share by the States and I got that ratios of Federal matching and allotments should prevail. Ind

there may be some difference of opinion, while I do not think this is lup quite serious, with respect to low completely the rehabilitation agency beting should act as agencies emphasizing the vocational aspects of rehabilita

tion as opposed to the total concept of rehabilitation; that is, whether a person is erer going to be able to work or not as a result of the efforts that are made for it.

Sow, during the remainder of my statement I want to discuss the bills themselves, the specific bills that are before your committee, with emphasis upon the areas where I think problems exist that the committee has to resolve, instead of giving you orally here now a lot of material with respect to which I think there is general agreement and which you probably will hear repeated many times during the course of this testimony

First I wish to speak briefly about S. 2758, which is the administration's bill which would expand the Hospital Survey and Construction Act to make Federal funds available to assist the States in a number of new areas, and I am particularly concerned, of course, with the area of rehabilitation facilities.

I want to say that we support without reservation the bill as it was passed by the House of Representatives, so far as it pertains to rehabilitation facilities.

The only thing that is in the House bill that is not in the Senate bill is a provision that i State can assign its allotment of funds to another State for the creation of a regional facility which could serve the handicapped in more than 1 State. We think this is fundamentally sound. In fact, we testified in support of that amendment in the House of Representatives, and so we hope you will incorporate that in the bill as you report it.

Although we agree with the House bill, there are 2 or 3 factors that are so important that I want to emphasize them briefly, for I feel that these matters may come up before your commitee.

In the first place, we urge the retention of the earmarked fund for rehabilitation facilities.

Senator PURTELL. May I interrupt? The points you are covering now are also covered in your paper, are they not? Mr. WHITTEN. Yes. Senator PURTELL. Are these additions to it? Mr. WHITEN. No: they are not additions to it. They are just points of emphasis that I want to make. I have covered most of them in much more detail in the paper. Senator PURTELL. Yes, I realize that. Mr. Witten. So we urge the continuation of earmarked funds for rehabilitation facilities. We also urge the retention of the defi

46293_-54-pt. 25

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