Mr. CORMAN. Thank you, very much, Governor.

Mr. Rangel?

Mr. RANGEL. I would just like to say, Mr. Chairman, that we recognize how important this is to the citizens of the Virgin Islands and the fact that you can take time out to join in with your distinguished Congressperson, Ron de Lugo, to come here, and I think the way you have ended up your statement highlight the importance of the inequities that exist between citizens of the United States, and, we, certainly, on the committee and in the Congress support that position, and we do hope that you might be able to use the political influence that you have to remind our President of his commitment to citizens throughout the United States and its territories.

Thank you for taking time out to come all the way over here to emphasize your point.

Mr. CORMAN. Mr. Vander Jagt?

Mr. VANDER JAGT. No questions, Mr. Chairman.

Mr. CORMAN. Thank you, Governor. I join Mr. Rangel in commending you for your coming here and I appreciate it.

I felt last year that if you had a delegate in the other body as vigorous as your delegate in the House, we would have done better for you.

Governor KING. Thank you, very much.

Mr. CORMAN. The subcommittee will stand in recess for 10 minutes. [Short recess taken.]

Mr. CORMAN. The Subcommittee on Public Assistance and Unemployment Compensation of the Ways and Means Committee will continue its hearing.

The next witness is Commissioner Corrada of Puerto Rico.

Mr. Commissioner, we are pleased to welcome you to the committee, and you may proceed.

STATEMENT OF HON. BALTASAR CORRADA, RESIDENT COMMISSIONER OF PUERTO RICO, ACCOMPANIED BY JENARO COLLAZO, SECRETARY OF SOCIAL SERVICES, PUERTO RICO

Commissioner CORRADA. Mr. Chairman and members of the subcommittee, my name is Baltasar Corrada, Resident Commissioner from Puerto Rico, and I appear before you today on behalf of the U.S. citizens residing in Puerto Rico who are at the present time being unfairly treated under several of the public assistance titles of the Social Security Act.

Appearing with me today is Dr. Jenaro Collazo, the new Secretary of Social Services of Puerto Rico, who is charged with the administration of these programs in our island.

Mr. Chairman, I have here a lengthy statement which I would like to submit for the record and read a summary. So, I would request that the full statement be made a part of the record.

Mr. CORMAN. Without objection, it is so ordered.

Commissioner CORRADA. Mr. Chairman, although I have introduced legislation which would bring immediate treatment as a State for Puerto Rico, Guam, and the Virgin Islands under all of the public assistance titles of the Social Security Act, I appear today in support

of the legislative initiatives proposed by this subcommittee and the Ways and Means Committee as reflected on the March 15 report to the Committee on the Budget.

We urge enactment of the proposed legislation as a measure of social justice. Its enactment will enable Puerto Rico to continue its struggle in making improvements in our socioeconomic conditions.

For years, we, the people of Puerto Rico have been struggling to pull from the poverty circle. We have made great strides through our own efforts to improve our economic and social conditions. Despite these efforts and assistance we have received from the U.S. Government, according to the 1970 census, 35.2 percent of the families in Puerto Rico had incomes of less than $2,000 per year. That is 198,544 families out of a total of 564,751 families.

In spite of the fact that between 1960 and February of 1977, 204,000 jobs have been created in Puerto Rico, the rate of unemployment stands at about 19 percent, almost four times the acceptable rate of unemployment.

A recent survey uncovered 62,000 families with no or next to no income at all. Puerto Rico's personal income per capita was $2,230 in 1975 and $2,422 in 1976, as compared to $4,052 in 1975, in the lowest per capita income state.

In combination, severe poverty and high unemployment have generated extensive public assistance needs in our island. While our needs are big and resources very limited, we have not been fortunate in receiving appropriate treatment under various sections of the Social Security Act.

Under the income maintenance provisions of the act, Puerto Rico has a ceiling of $24 million with 50-50 matching. Puerto Rico is excluded from participating in title XVI of SSI.

We are also excluded from the Prouty program. Funds for services to adults are matched on a 75 percent Federal to 25 percent local funding and on a 60 percent to 40 percent ratio for services to families with dependent children under title IV-A.

For example, Mississippi receives $87 for every $13 of local funds in their financial assistance programs. New Jersey receives $75 for every $25. In comparison to Puerto Rico, with a lower per capita income than Mississippi and New Jersey, is granted only $50 for every $50 locally apportioned.

The facts are that our local funds are limited because of lack of resources even though local taxes in Puerto Rico are exceedingly high. The present legislative recommendations bring forth funding levels and matching formulae which will allow for expansion of services while that expansion is within the fiscal possibilities of the Commonwealth.

With respect to the SSI program, though I have suggested treatment as a State for Puerto Rico, the Virgin Islands, and Guam, we are cognizant of the high cost of the program. Therefore, we would be willing to accept according to the ratio of Puerto Rico's income compared to Mississippi, as suggested in the request. However, we are suggesting that the subcommittee have a 5-year phase-in of the program as outlined in my statement for the record more extensively.

Mr. Chairman, I would like to suggest that in addition to the lifting of the ceiling, the matching ratio be set at 3 to 1, so that we may take full use of the funds included in the budget recommendations.

The justification for a participation rate of 66.6 percent by the Federal Government is clearly shown in the statistics referred to in my full statement, wherein the Commonwealth of Puerto Rico can only meet 23.5 percent of the children's minimum necessities and 24 percent of adult minimum necessities based on the June 1976 consumer price index updated standards.

Mr. Chairman, I must emphasize that increased Federal allocations amounting to $52 million would not help the Puerto Rican poor in the short run unless the formula of 50-50 matching is changed, because we do not have the resources to match the $52 million. Also, we urge that Puerto Rico should be treated like a State as soon as possible on a 5-year phase-in of the program.

With respect to title XX, for Puerto Rico we request a special allotment of $50 million for title XX, since it is only with this level of assistance that a meaningful service program can be implemented.

We consider that enactment of this legislation is crucial for consolidation of realized gains. The supply of indicated services require a great deal of management and programing. However, the provisions of section 2002 (c) and (d) do not facilitate the necesary planning contemplated under section 2001 of title XX.

Funds allotted to Puerto Rico are on a residual basis. The method of allocation of funds delays information on available funds. It also reduces the time during which the funds can be spent.

It increases the turnover of staff and consequently increases the cost of training and program administration. Therefore, we urge that a special allotment of $50 million of title XX funds for Puerto Rico be made as this allotment will further the continuation of the expanded services.

I believe that it is important to emphasize that Puerto Rico's participation in title XX under the special entitlement will not result in the reduction of the allotment under this title to any State since the $50 million allocation would be above and beyond any appropriation made for this title for distribution to the States under the legislative formula.

Mr. Chairman, I believe that in these times of high unemployment and decreased spending power, all Americans, regardless of place of residence, should share equally in those programs which are aimed at improving their existence.

The persons in this category, in these categories, the elderly, the disabled, the blind, need our help. The limits placed on the American citizens in Puerto Rico, Guam, and the Virgin Islands are unconscionable and should be removed, and this is the time to do it.

I consider this an act of justice, and mercy, to the most humble and needy in the community. Those that are really unproductive, this is not welfare for those who could be doing something else.

This is assistance to those who only have this recourse for justice. In his message to the Governor of Puerto Rico on the occasion of Governor Barcelo's inauguration, President Carter stated, and I was