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nition of a rehabilitation center that is found in the bill because it is a comprehensive definition that will allow the type of facility which we think is very badly needed.

Now, in that connection I would say that some questioning of witnesses, when this bill was being considered, seemed to infer that new legislation is not needed for the creation of rehabilitation facilities, that this could be done under the present bill, if interpretations were more liberal.

It is our opinion that the comprehensive rehabilitation center cannot be built under the present definition of a hospital found in the Hospital Survey and Construction Act. A department of physical medicine in a teaching hospital or a wing of a hospital devoted to rehabilitation cases might be constructed under the bill, but a rehabilitation center that encompasses the vocational aspects of rehabilitation as well the medical cannot be built under the present legislation. In fact, I think it is significant that some of the outstanding rehabilitation facilities in the country today, notably, for instance, the Institute for the Crippled and Disabled in New York and the Woodrow Wilson Rehabilitation Center at Fisherville, Va., neither could have been built under the present legislation.

We also would call attention to the fact that the $10 million a year, while it sounds like a good deal of money for rehabilitation facilities, doesn't go far when you divide it up among 48 States. For instance, Connecticut's share would be $73,000, which will not build very many rehabilitation facilities for that State, even with State matching.

I shall now shift to a consideration of S. 2759, which is the bill that I understand these hearings are principally directed at. As you know, this bill is a substitute for the entire present rehabilitation law and not just amendments thereto.

There are several features of this bill that we want to call attention to at this time. In the first place, I am going to say just briefly with respect to the administration of vocational rehabilitation at the Federal level that we feel very strongly that the Office of Vocational Rehabilitation is properly placed in the Department of Health, Education, and Welfare. Te do believe, however, that its influence and general operational efficiency could be increased, if it were giren bureau status, similar, for instance, to what was done in S. 4051, which passed the Senate in 1950, but was not considered by the House.

As it is now, the Office of Vocational Rehabilitation is strictly a creature of the Secretary and could even be abolished and the functions scattered among the various bureaus, if the Secretary thought that should be done; so we think that bureau status would be helpful, but other than that we have no suggestions to offer with respect to change on the Federal level.

In our statement we have gone into some detail with respect to why we feel that way, but we are not taking time here to go any further into this in the oral statement.

Next, we would call attention to the bill as pertains to administration at the State level. As you know, at the present time vocational rehabilitation in the State is administered by State boards for vocational education, with the exception that in States which have agencies for the blind with a legal responsibility for rehabilitating the blindthe rehabilitation of the blind can be carried on in these agencies, which

really means there are two rehabilitation agencies in States where that arrangement exists.

Now in S. 2759 there are 2 or 3 important changes suggested in the administration setup of the States. One, for instance, would provide for 2 State plans in States having 2 rehabilitation agencies, so that, for instance, the State agency for the blind would not have to do its business with the Office of Vocational Rehabilitation through the State board for vocational education.

We approve that change. Second, it is provided in S. 2759 that the State board for vocational education or a rehabilitation agency primarily concerned with rehabilitation may administer the program in the States, and we are approving that change, for we believe it is sound that if a State cares enough about its rehabilitation program to feel it can be advanced through an independent agency, we believe it should be allowed to take

this step;

I might add here, Mr. Chairman, that we would oppose opening the administration of rehabilitation in the States any further than that. In other words, we don't want a situation where a jurisdictional dispute could come to exist at the State level such as we have had for several years on the Federal level. There are sound reason why rehabilitation is being administered by State boards for vocational education, but we do not object to provisions for an alternative State rehabilitation agency.

Another thing we are somewhat concerned about, is that in this administrative section as it pertains to the States, the words "administer or supervise the administration of” are substituted for the words "administration, supervision, and control" in the present act. We are told that the reason for that is to enable a State agency to supervise a local rehabilitation program which is financed in whole or in part by local rehabilitation funds, and we approve that concept. Our attention, though, has been directed to the fact that the same language might be used as a justification for breaking down the rehabilitation program at a State level, so the State board of education could supervise the administration of rehabilitation in several different departments; for instance, physical restoration in one, training in another, and so forth, and we feel that we need more unity rather than less in

That being a problem, we are going to present to the committee right away some language which we think will accomplish the administration's purpose, but which will not have this possible danger in it. Senator PURTELL. Is that contained in your field statement ! Mr. WHITTEN. It is not. It will be filed as a separate statement. Senator PURTELL. It will be received and incorporated in the record. (The statement by Mr. E. B. Whitten above referred to is as follows:)

AMENDMENTS TO S. 2759 Designed to prevent breaking up administration of vocational rehabilitation, Page 4, lines 12 and 13, delete "or supervising the administration of", Page 7, lines 4 and 5, delete sor supervising the administration of”. Page 7, line 9, delete “ (or supervising the administration of)". Page 8, lines 23 and 24, delete "or supervise the administration of". Page 9, line 6, delete "or supervise the administration of”.

the program

Pages 8 and 9, section 5 (a) (1) shall read as follows: "(1) designate the State board of vocational education (herein referred to as the State board) or a State rehabilitation agency (primarily concerned with vocational rehabilitation) as the sole agency for the administration, supervision, and control of the State plan, except that where under the State's law, the State blind commission, or other agency which provides assistance or services to the adult blind, is anthorized to provide them vocational rehabilitation services, such State blind com. mission or other State agency may be designated as the sole State agency to administer or supervise the administration of the part of the plan under which vocational rehabilitation services are provided for the blind and the State vocational education agency or the State rehabilitation agency shall be designated as the sole State agency with respect to the rest of the State plan: Prorided, horr prer, That this section shall not be construed to prevent the State board from supervising the adıninistration of local rehabilitation programs financed in whole or in part by local funds."

Mr. WHITTEN. Now, I want to say briefly that the definition of rehabilitation services which is found in this bill is one with which we agree. It is a broadened definition of rehabilitation over that in the present bill. For instance, it removes the 90-day limitation on hospitalization, which has been found to restrict the rehabilitation of some of the more severely disabled. It also provides that Federal funds may be used to reimburse the States for initial stocks and supplies for small-business enterprises into which many of the very severely disabled are being rehabilitated.

It also provides that Federal money can be used to reimburse for the management and supervision of small-business enterprises, something that cannot be done under present legislation, and it also

provides that funds could be used for nonprofit rehabilitation facilities and workshops, and we think this broadened definition is all to the good.

It really means, very largely, that when the State receives a grant of Federal funds, it can do almost anything with those funds that will advance the rehabilitation of the handicapped, and we have always felt that the State should be the final determinants within reason, of course, with respect to how they use their funds for rehabili. tation purposes.

Mr. Chairman, I next would talk a bit about the three types of grants that are found in this bill and which are found in all of the administration's bills in the health field.

The first fund would be for rehabilitation services, which is really the main stream rehabilitation program; second, a fund for extention and improvement; and third, a fund for special projects.

I am going to speak of these in the reverse order to the way I have named them: First, with respect to special projects. Special projects are referred to in the bill as being projects which hold unique promise of helping solve rehabilitation problems on an interstate level. In others, for more than one State.

Now, we feel that such a provision could be very helpful in advancing rehabilitation. We wonder, however, if some definition of special projects in addition to what appears in the present bill would not be in order. We are not in position to suggest one this morning, but we think that is something that might be considered by the committee.

For instance, we hope that under the special projects category the Secretary might be able to finance research projects, the training of personnel, and many other useful things, but really it is not clear from the bill what kind of projects the Secretary might undertake under this bill, but I want to emphasize the fact that we do feel that having special funds available for the right kind of special projects can definitely help in the expansion of the program, and we are for that concept.

Next, with respect to extension and improvement, this fund would be allotted on a population basis and would be used to assist the States in developing projects to expand their rehabilitation programs within the respective States and without relation to whether that influence was felt beyond State lines.

Such projects would be 75 percent Federal the first 2 years of a specific project, 50 percent the second 2, and 25 percent the third 2 Fears, after which this program would have to be absorbed into the regular program, if the Federal Government participated in it at all.

We think the purpose of this extension and improvement fund is rery laudable, and we think it can do a great deal to expand rehabilitation services. We think, though, that the definition is not adequate. In fact, we think that a clearer definition of this fund is more essential, even, than of special projects. For instance, some questions about the use of this fund that we have not been able to clear up yet in talking to departmental officials are such as these: Can extension and improvement funds be used to establish rehabilitation facilities within a State?

Another question we have not been able to have cleared up is whether a project to be approvable under extension and improvement would hare to be, so to speak, a new project which gets the State into some new area of rehabilitation or whether these funds could be used to just increase the amount of general rehabilitation work that is being done. We think that latter is extremely important, Mr. Chairman, and we would sincerely hope that it is made clear, either in the law itself or in the report or some way that such funds can be used for the general improvement and extension of the program without having to be identified specifically with a project which would get the State into an absolutely new area of rehabilitation. The reason that is important is that we have a very broad rehabilitation law now. Most of the States are trying to do some rehabilitation in practically every area of disability. Therefore, if the fund is tied to specifically new projects, it may severely limit the use the States can make of it.

On the other hand, here is a State, let us say, that is rehabilitating 500 people a year. What it needs most is encouragement and help in increasing the number of rehabilitations to a thousand a year. If money for extension and improvement can be used for that purpose, it will really be a boon to the program. I think this matter ought to bé cleared up in the course of the hearings. Next, I would like to talk about the fund as it relates to rehabilitation services, the broad program which is already in operation and which would be continued. As you know, at the present time, rehabilitation is financed under a bill which was supposed to be openended. In fact, Congress thought it was open-ended when it passed it, and it was so financed for a number of years. It provided that the Federal Government would reimburse the States for 100 percent of administration, guidance, and placement expenditures and 50 percent of case service expenditures.

Experience over about a 5. or 6-year period indicated that this required approximately a 70 percent Federal share to carry the law

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out as it was written. Congress a few years ago stopped appropriating funds on the open-end basis, and the Federal share has gradu. ally declined to about 65 percent, but I might add that the decline is on account of the arbitarary position taken on the appropriation and not because of any change in the act.

The present financing has become complicated by the fact that in the appropriation bill last year, in conference some restrictive lan. guage was placed in the bill which, if not repealed this year, would result in reducing the Federal share for rehabilitation services to one dollar for every 75 cents appropriated in the State.

Now, we are told that the President's proposal would have the effect of repealing this language, and we believe that is right.

I am going to refer to this language briefly again before I stop talking.

Now, Mr. Chairman, S. 2759 discards the present method of financing rehabilitation and institutes a new method of allotment to the States; it is a closed-end appropriation, with allotments to the States based upon population, heavily weighted with per capital in. come and it substitutes a matching formula based upon per capita income alone with the ratio of Federal funds being 6623 percent in the poorer States and 3313 in the richer States, as that can be judged by per capita income.

It provides for a 2-year transition period to help the State to adjust to the new allotment and matching formulas.

We are very much concerned with the effect that this particular formula might have upon the basic rehabilitation program as exists today; that is, if it goes into the bill without any alteration at all.

In other words, we are very, very much afraid that States which are getting their Federal grants cut as a result of the institution of this formula will not be able to take advantage of improvement in extension funds and therefore the whole purpose of this bill, which is to expand rehabilitation very rapidly, might be defeated.

In order to call your attention specifically to the effect this formula has, if you will turn, in my statement, to the last 2 pages which constitute a table, I would like to refer you briefly to 3 or 4 lines which I think will illustrate what I have in mind.

By the way, this table is based upon an appropriation of $23 million, the same amount that is being appropriated at the present time. It merely shows the result in the States in 1957, after the transition period provided in S. 2759 is over, provided the same amount of money has been appropriated for the basic program.

For instance, if you will notice the summary line at the top, at the present time, column 3, something over $13 million of State funds is needed to match, column 1, $23 million of Federal funds.

Now, under S. 2759, column 4, $21 million State funds will be required to match $23 million Federal funds. In other words, more than $5 million additional State money would be required in 1957 to match the same amount of Federal money that is being appropriated at the present time,

Now, to see how this affects individual States, let us take a rich State, a poor State, and a middle State, which will give a pretty good illustration of the effect specifically. Let us take Connecticut, which is near the high-income level point. At the present time $ 160,000 of State

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