(B) the larger of the following amounts: (i) the Federal percentage of the amount by which such expenditures exceed the maximum which may be counted under clause (A) not counting so much of any expendi ture with respect to any month as exceeds (I) the product of $43 multiplied by the total number of such recipients of aid to the aged, blind, or disabled for such month, or (II) if smaller, the total expended as aid to the aged, blind, or disabled in the form of medical or any other type of remedial care with respect to such month plus the product of $35.50 multiplied by the total number of such recipients, or (ii) 15 per centum of the total of the sums expended during such quarter as aid to the aged, blind, or disabled under the State plan in the form of medical or any other type of remedial care, not counting so much of any expenditure with respect to any month as exceeds the product of $7.50 multiplied by the total number of such recipients of aid to the aged, blind, or disabled for such month; and

(3) in the case of any State, an amount equal to the Federal medical percentage (as defined in section 6(c)) of the total amounts expended during such quarter as medical assistance for the aged under the State plan (including expenditures for insurance premiums for medical or any other type of remedial care or the cost thereof); and

(4) in the case of any State, an amount equal to the sum of the following proportions of the total amounts expended during such quarter as found necessary by the Secretary of Health, Education, and Welfare for the proper and efficient administration of the State plan

(A) 75 per centum of such expenditures which are for

(i) services which are prescribed pursuant to section 1602(a) (10) and are provided (in accordance with the next sentence) to applicants for or recipients of aid or assistance under the plan to help them attain or retain capability for self-support or self-care, or (ii) other services, specified by the Secretary as likely to prevent or reduce dependency, so provided to such applicants or recipients,

or

(iii) such of the services prescribed pursuant to section 1602 (a) (10), and of the services specified as provided in clause (ii), as the Secretary may specify as appropriate for individuals who, within such period or periods as the Secretary may prescribe, have been or are likely to become applicants for or recipients of aid or assistance under the plan, and which are provided to such individuals in accordance with the next sentence, or

(iv) the training of personnel employed or preparing for employment by the State agency or by the local agency administering the the plan in the political subdivision; plus

(B) one-half of such expenditures (not included under subparagraph (A)) for services provided (in accordance with the next sentence) to individuals who are or, within such period or periods as the Secretary may prescribe, have been or are likely to become applicants for or recipients of aid or assistance under the plan; plus

(C) one-half of the remainder of such expenditures.

The services referred to in paragraph (4) (A) and (B) of the preceding sentence shall include only

(5) services provided by the staff of the State agency, or of the local agency administering the State plan in the political subdivision, and

(6) subject to limitations prescribed by the Secretary, services which in the judgment of the State agency cannot be as economically or as effectively provided by the staff of such State or local agency and are not otherwise reasonably available to individuals in need of them, and which are provided by the State agency by contract with nonprofit private agencies, and

(7) subject to limitations prescribed by the Secretary, services which in the judgment of the State agency cannot be as economically or as effectively provided by the staff of such State or local agency and are not otherwise reasonably available to individuals in need of them, and which are provided, pursuant to agreement with the State agency, by the State health authority or the State agency or agencies administering or supervising the administration of the State plan approved under the Vocational Rehabilitation Act or by any other State agency which the Secretary may determine to be appropriate (whether provided by its staff or by contract with public (local) or nonprofit private agencies).

The portion of the amount expended for administration of the State plan to which such paragraph (4)(A) applies and the portion thereof to which paragraph (4) (B) and (C) of such sentence applies shall be determined in accordance with such methods and procedures as may be permitted by the Secretary.

(b) (1) Prior to the beginning of each quarter, the Secretary shall estimate the amounts to which a State will be entitled under subsection (a) for such quarter, such estimates to be based on (A) a report filed by the State containing its estimate of the total sum to be expended in such quarter in accordance with the provisions of such subsection, and stating the amount appropriated or made available by the State and its political subdivisions for such expenditures in such quarter, and if such amount is less than the State's proportionate share of the total sum of such estimated expenditures, the source or sources from which the difference is expected to be derived and (B) such other investigation as the Secretary may find necessary.

(2) The Secretary shall then pay, in such installments as he may determine, to the State the amount so estimated, reduced or increased to the extent of any overpayment or underpayment which the Secretary determines was made under this section (or section 3, 1003, or 1403) to such State for any prior quarter and with respect to which adjustment has not already been made under this subsection (or subsection (b) of such section 3, 1003, or 1403).

(3) The pro rata share to which the United States is equitably entitled, as determined by the Secretary, of the net amount recovered during any quarter by the State or any political subdivision thereof with respect to aid or assistance furnished under the State plan (or with respect to assistance or aid furnished under the State's plan approved under title I, X, or XIV of this Act), but excluding any amount of such assistance (or aid) recovered from the estate of a deceased recipient which is not in excess of the amount expended by the State or any political subdivision thereof for the funeral expenses of the deceased, shall be considered an overpayment to be adjusted under this subsection.

(4) Upon the making of any estimate by the Secretary under this subsection, any appropriations available for payments under this section shall be deemed obligated.

Operation of State Plans

SEC. 1604. If the Secretary, after reasonable notice and opportunity for hearing to the State agency administering or supervising the administration of the State plan approved under this title, finds—

(1) that the plan has been so changed that it no longer complies with the provisions of section 1602; or

(2) that in the administration of the plan there is a failure to comply substantially with any such provision;

the Secretary shall notify such State agency that further payments will not be made to the State (or, in his discretion, that payments will be limited to categories under or parts of the State plan not affected by such failure), until the Secretary is satisfied that there will no longer be any such failure to comply. Until he is so satisfied he shall make no further payments to such State (or shall limit payments to categories under or parts of the State plan not affected by such failure).

Definitions

SEC. 1605. (a) For the purposes of this title, the term "aid to the aged, blind, or disabled" means money payments to, or medical care in behalf of or any type of remedial care recognized under State law in behalf of, needy individuals who are sixty-five years of age or older, are blind, or are disabled, but does not include

(1) any such payments to or care in behalf of any individual who is an inmate of a public institution (except as a patient in a medical institution) or any individual who is a patient in an institution for tuberculosis or mental diseases, or

(2) any such payments to any individual who has been diagnosed as having tuberculosis or psychosis and is a patient in a medical institution as a result thereof, or

(3) any such care in behalf of any individual, who is a patient in a medical institution as a result of a diagnosis that he has tuberculosis or psychosis, with respect to any period after the individual has been a patient in such an institution, as a result of such diagnosis, for forty-two days.

(b) For purposes of this title, the term "medical assistance for the aged" means payment of part or all of the cost of the following care and services for individuals who are sixty-five years of age or older and who are not recipients of aid to the aged, blind, or disabled but whose income and resources are insufficient to meet all of such cost

(1) inpatient hospital services;

(2) skilled nursing-home services;

(3) physicians' services;

(4) outpatient hospital or clinic services;

(5) home health care services;

(6) private duty nursing services;

(7) physical therapy and related services;

(8) dental services;

(9) laboratory and X-ray services;

(10) prescribed drugs, eyeglasses, dentures, and prosthetic devices;
(11) diagnostic, screening, and preventive services; and

(12) any other medical care or remedial care recognized under State law; except that such term does not include any such payments with respect to— (A) care or services for any individual who is an inmate of a public institution (except as a patient in a medical institution) or any individual who is a patient in an institution for tuberculosis or mental diseases; or

(B) care or services for any individual, who is a patient in a medical institution as a result of a diagnosis of tuberculosis or psychosis, with respect to any period after the individual has been a patient in such an institution, as a result of such diagnosis, for forty-two days.

SECTION 303 OF SOCIAL SECURITY AMENDMENTS OF 1961
(PUBLIC LAW 87-64)

ADDITIONAL FEDERAL PARTICIPATION IN PUBLIC ASSISTANCE PAyments

SEC. 303. (a) (1) Section 3(a)(1) of the Social Security Act is amended(A) by striking out "$30" and inserting in lieu thereof "$31";

(B) by striking out "$65" each place it appears therein and inserting in lieu thereof "$66"; and

(C) by striking out "$80" and inserting in lieu thereof "$81".

(2) Section 3 (a) (2) of such Act is amended—

(A) by striking out "$35" each place it appears therein and inserting in lieu thereof "$35.50"; and

(B) by striking out "$42.50" and inserting in lieu thereof "$43”.

(b) (1) Section 1003 (a) (1) of such Act is amended

(A) by striking out “$30” and inserting in lieu thereof "$31"; and
(B) by striking out "$65" and inserting in lieu thereof "$66”.

(2) Section 1003 (a) (2) of such Act is amended by striking out “$35” and inserting in lieu thereof "$35.50".

(c) (1) Section 1403 (a) (1) of such Act is amended—

(A) by striking out "$30" and inserting in lieu thereof "$31"; and
(B) by striking out "$65" and inserting in lieu thereof “$66”.

(2) Section 1403 (a) (2) of such Act is amended by striking out "$35" and inserting in lieu thereof "$35.50".

(d) Effective only for the fiscal year ending June 30, 1962, section 1108 of the Social Security Act (as amended by section 6 of Public Law 87-31) is amended by striking out "$9,425,000", "$318,750", and "$425,000" and inserting in lieu thereof "$9,500,000", "$320,000”, and “$430,000", respectively.

(e) The amendments made by subsections (a), (b), and (c) of this section shall apply only in the case of expenditures made after September 30, 1961, [and before July 1, 1962, under a State plan approved under title I, X, or XIV, as the case may be, of the Social Security Act.

SECTION 618 OF THE REVENUE ACT OF 1951, AS AMENDED

SECTION 618. PROHIBITION UPON DENIAL OF SOCIAL SECURITY ACT FUNDS No State or any agency or political subdivision thereof shall be deprived of any grant-in-aid or other payment to which it otherwise is or has become en

titled pursuant to title I (other than section 3(a)(3) thereof, IV, X, [or] XIV, or XVI (other than section 1603 (a)(3) thereof) of the Social Security Act, as amended, by reason of the enactment or enforcement by such State of any legislation prescribing any conditions under which public access may be had to records of the disbursement of any such funds or payments within such State, if such legislation prohibits the use of any list or names obtained through such access to such records for commercial or political purposes.

Our first witness today is our former colleague in the House, the Honorable Abraham Ribicoff, Secretary of Health, Education, and Welfare.

Mr. Secretary, we are always pleased to have you return to the House of Representatives and particularly to the Ways and Means Committee. We welcome you this morning and you may proceed in any manner that you desire.

STATEMENT OF HON. ABRAHAM RIBICOFF, SECRETARY, ACCOMPANIED BY WILBUR J. COHEN, ASSISTANT SECRETARY (FOR LEGISLATION); WILLIAM L. MITCHELL, COMMISSIONER, SOCIAL SECURITY ADMINISTRATION; AND CHARLES E. HAWKINS, LEGISLATIVE REFERENCE OFFICER, SOCIAL SECURITY ADMINISTRATION, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE

Secretary RIBICOFF. Thank you very much, Mr. Chairman and members of the committee. With me here at the table is Wilbur Cohen, Assistant Secretary; William Mitchell, Commissioner of Social Security; and Charles Hawkins, legislative reference officer, Social Security Administration.

I appear before you in support of H.R. 10032, which was introduced by Chairman Mills under the title of "Public Welfare Amendments of 1962."

This landmark bill will bring a new spirit in our public welfare program. Section 2 of the bill outlines the six new objectives of the legislation:

(1) Services: Services to help families become self-supporting and independent.

(2) Prevention: Prevention of dependency by dealing with the problems causing dependency.

(3) Incentives: Incentives to recipients of public assistance to improve their condition so as to make public assistance unnecessary and incentives to the States to improve their welfare programs.

(4) Rehabilitation: Services to rehabilitate recipients or those likely to become recipients of public assistance.

(5) Independence: Useful community work and training programs and other measures to assist recipients to become self-supporting and able to care for themselves.

(6) Training: Assistance in the provision of training in order to increase the supply of adequately trained public welfare personnel, this being necessary for achieving the foregoing objectives.

It is a quarter century since the Congress enacted the Social Security Act and authorized the basic Federal-State public welfare programs which have played such a vital part in building our Nation's strength and well-being.

Yet, as President Kennedy said in his special message of February 1 to the Congress on welfare:

The times, the conditions, the problems have changed-and the nature and objectives of our public assistance and child welfare programs must be changed, also, if they are to meet our human needs.

We now have the historic and constructive opportunity to reinforce these programs-to bring them up to date-and so to benefit our Nation and all of its people.

A CAREFUL REAPPRAISAL

With these thoughts in mind, I promised this committee and the Senate Finance Committee last year that we would undertake a careful and thorough review of the Federal welfare laws and have a legislative program ready to propose in 1962. This has now been done.

In making this thorough and extensive review, we have asked and received the help of State and local welfare officials and persons who are leaders in voluntary welfare throughout the Nation. First, we brought together a consultative group composed of the distinguished persons in public and private welfare, a group which was called the Ad Hoc Committee on Public Welfare.

With the help of a professional staff and financial aid from the Field Foundation, this Committee devoted many months to an intensive study of the problems and prospects for public assistance in the next decade. I am pleased to submit its final report for the record.

(The report referred to above follows:)