Mr. TWINAME. I think it is important for the committee to see that what we project is legislation that is concerned with the kind of future that we want to build. We think of the Social Security Act in terms of where it is going. There are some very revolutionary things taking place, and one of them is the separation of the whole business of service provision from anything to do with cash welfare payments.

Secondly, the States have just really turned on to the whole idea of purchased services through the use of the voluntary and other agencies now, for elderly people. And these are programs that were only started by regulation only a little over a year ago and have expanded rapidly, and the States have defined their population as groups who are former, existing, or potential recipients of public assistance.

Well, that gets into a very broad category. Therefore, you are finding that all the services we are talking about here can in fact be provided in the States who are more liberal in their plans. They are providing nutritional services, homemaker, health services, and so forth.

What this Older Americans Act should do is to see that irrespective of the income, but with the priorities that Mr. Kurzman mentioned, construct a rational service for elderly people where anyone who needs it can get the services that are required to keep them independent personally. And it can be supported by the social services authorities budgeted under the Social Security Act to the extent that the services and provided to lower income people.

Mr. MURPHY. That would be just for the lower income range of people under the Social Security Act, would it not?

Mr. TWINAME. Yes; but then we get into a case of income range that is up above the poverty level and, as you know, there is a high proportion of older people, 60 percent of older people, are below the intermediate budget income range of the Bureau of Labor Statistics.

Mr. KURZMAN. Given the original point that we were making about how, even with the great expansion of the reach of the Older Americans Act, that we and the Congress have brought about, the proportion of the elderly who will even potentially be reached is still relatively small.

We are talking about potentially several hundred thousand elderly persons being reached by this program at best, as compared with several million who might potentially be in need of services of this kind.

So that I do not think, given the overlap between the proportion of the elderly population who does have a need that fits within those income ranges under the Social Security Act, and given what Administrator Twiname said about the fact the this goes above the poverty level and about the potential welfare recipients, someone, if he did not get the kind of services that are funded under the Social Security Act might well fall into the absolute poverty level and therefore need income assistance as well.

Given all those factors, I don't see any real problem in excluding from funding persons who should not be excluded from funding. We have that problem generally. It is not just the reference to the Social Security Act for the purchase of services.

Mr. REILLY. Another point on the purchase of services is that under the Social Security Act, social services agencies, as Mr. Twiname said, are moving more and more away from direct provision of services by staff into purchasing of services.

These services are normally in provider agencies around the community. This is the sort of thing we are talking about, building up the source of services.

The needs are clearly there and not being met fully in any community we know of around the country. What we are talking about is an expansion of the provider services. So that expansion or improvement of services by such providers can then provide more services over the longer term which the Social Security Act social service agency can use for providing services to low-income elderly people. But the provider itself, let's say, a homemaker agency in the community, does not have the income limits on that agency. In other words, it can be providing homemaker services to the low-income elderly who are having that service purchased for them by the social service agency. It can provide services to other elderly on the basis of the Older Americans Act funding.

What we are after is a buildup of providers so that the services are available in the community and not being cut off on an income level basis.

Mr. MURPHY. There is some talk that there is going to be a freeze or reduction of something under title I of the Social Security Act services, the first of the fiscal year.

Is there anything to that?

Mr. TWINAME. We have new regulations for the social services that are waiting to be aborning for the reform of the social service program. The first of these has already been issued, requiring separation of the service program from the welfare income program.

The new regulations have not been published yet. But they would not foresee a freeze of funds because this cannot be done administratively. That is a legislative matter for Congress.

Mr. MURPHY. I recognize perhaps the term is inadequate.

Is something being done in some fashion under those regulations to restrict the availability of certain services?

Mr. TWINAME. No; but they restrict the availability of funds. I will make a distinction there.

Some States are using the open-ended social services provision to refinance in part what has already been done. And what we want to insure is that whatever Federal money goes out can provide new services and expansion of services for people rather than the refinancing some of the services that are already available that could have been qualified under the Social Security Act, and have just been discovered, and therefore become an excuse for using some Federal money to kind of consolidate, supplant local and State investment in these services.

We are making a distinction and we are going to try to make sure that all of our investments result in new services or expansion of services. That is the object I am pursuing.

Mr. MARTIN. The importance of this social services discussion is that it emphasizes the fact that our own money can and really should be used as incentive money to get these programs in operation, to get them moving. If we do that effectively so that the community realizes the value of the service, then we think there will be a takeup on the part of the social security money or

Mr. MURPHY. In that connection, would you have an objection to authorizing that no program be funded for more than 3 calendar years.

A while back you mentioned that it was expected that the reliance would not be solely on State and local agencies to pick up the cost of the services.

Now, do you object to program projects that existed longer than 3 years be eligible for some Older Americans Act funds to be used as matched funds for other types of projects much as is being done in Model Cities?

Mr. MARTIN. I am not sure what the administration's position is on that.

The Model Cities funds have been very helpful in enabling—in matching funds.

Mr. MURPHY. I do not want to create a specter of no local participation of any program. But given, at least, say, certain guidelines, would it be objectionable to use Older Americans Act funds for matching funds for other Federal programs after the period of funding for the Older Americans Act?

Mr. TWINAME. We would be very reticent to open a new situation in which we have Federal funds matching Federal funds.

We have something like that in the Social Security Act with the section 1115 authority.

The problem is that you have got to get the local and State people to invest something. We are only kidding ourselves if we try to say that we can use Federal funds from the left hand and we will match them with funds from the right hand and the local investment has been fighting through the redtape to see how they can pull it off.

I would not underestimate that investment. The point is, if you do not have some kind of money coming from local and State people as a condition of the backup or of the political rhetoric at those governmental levels, you are not really going to get the kind of continuing responsibility for the provision of the services older people need.

Now, we have only superficially, through Federal interest, tried to alleviate the social problems that they face at the local level without really getting any kind of commitment in response or anything in

return.

When we are talking about 90 percent-10 percent matching-and even in the Nutrition Act, I think it said "in kind," I think really we are making it overly easy for local people to come up with the kind of commitment that is necessary. So I am just responding in the sense that we want the services there, but in order to have long-range social change in this country, we have got to ask people to put up something at that level that is an extension of their own resources. Mr. MURPHY. How about extreme hardship cases?

Mr. TWINAME. To keep our acts straight here, and subject to correction, the State has some flexibility in the matching arrangment as to what match they require from one area to another.

In other words, I think overall, for their plan, we reqiure a 90percent match. But this does not mean that it has to be done precisely the same each year. That is in a poverty area in a State they could move in with very little, if any matching required, if the State were administering it.

Mr. MURPHY. That is under the regulations just issued for the Nutrition Act. I do not recall it to be provided for in the Older Americans Act, S. 3391.

Is it contemplated that a similar regulation would be issued for this act?

Mr. REILLY. It is in the Nutrition Act regulation rather than in this proposal.

The flexibility in S. 3391 is for funding up to 90 percent. In the nutrition regulations, we provided that there would be a statewide match provision, so that the State agency could, at its option, fund, for example, an Indian reservation at 100-percent Federal if it balanced that off with other grants at a lower level which came out to a statewide match of 90 percent.

Mr. TWINAME. Under this program, this can be conditioned by the State's overall match of its own State money which can help to accommodate any local situation.

Mr. REILLY. We will have to consult with General Counsel. It may be that a slight modification of the language in here could permit that type of flexible match.

Mr. MURPHY. Would you let us know?

Mr. TWINAME. Yes.

Mr. REILLY. Yes, we will contact you.

Mr. MARTIN. We do make an effort to encourage State contribution in these situations.

In the existing Act, we provide that not less than 25 percent of the non-Federal share total expenditures under the plan should be met from funds from State or local public sources. So we are trying to push for more participation there.

Mr. MURPHY. Under section 307, "Model Projects," the Secretary is authorized to fund projects directly, rather than through the State units on aging after consultation with the States.

Given the budget estimate of fiscal 1973, how much money would be in that section?

Mr. KURZMAN. We anticipate that approximately $40 million would be allocated to the model projects which could be, as you say, direct Federal to local with State agencies into the basic Title III program and approximately 17 million more, would be the research and training funds.

Mr. MURPHY. So you have 8 percent off the top for State administration. 8 percent off the top for area agency administration

Mr. KURZMAN. Up to eight percent, in the case of area agencies.
Mr. MURPHY. Which means, I suspect, 8 percent.

Then, you are talking about $200 million for nutrition. Of the remaining $100 million, $16 million would come out for administration; $40 million would come out for model projects, leaving $44 million, roughly, under the existing title III program.

Mr. REILLY. To be sure we are talking about the same figures, you said take out a hundred for nutrition and take out the 8 percent for State planning and 8 percent for area planning? And then take out the full 10 percent for community projects? And then what is left? Mr. MURPHY. Ten-percent community projects.

Which community projects are you talking about, 307 authority? Mr. REILLY. Yes.

79-239 O - 72 - 33

Mr. MURPHY. You look upon that as a 10-percent figure? Mr. REILLY. They can use up to 10 percent of their allotment-outside

Mr. MURPHY. Outside, yes.

Mr. REILLY. If you include that in, it would be $30 million.

Mr. MURPHY. For what?

Mr. REILLY. For services.

Mr. KURZMAN. Not existing, now. For the now proposed type.
Mr. REILLY. Let me make a point about that.

That 30 is a rather misleading figure because you have to add back into it the 40 that is set aside under the model projects heading. It is really 70, because that model projects money is set aside for a number of purposes, but the primary purpose of it would be to serve as incentive money to the State and area agencies on aging to develop really effective comprehensive plans. It would be our intent to use the bulk of that money for supplementing the services in the best area plans, and that would be done through the State agencies.

Mr. MURPHY. The bill does not say

Mr. REILLY. It does not comment on that. That is true. It is our intent, however.

Mr. MURPHY. It is my feeling that salaries and expenses are funded out of the title III program.

Why is that rather than out of the separate salaries and expenses item?

Mr. REILLY. There was no additional salaries and expense money provided, so it in effect has to come out of the single hundred-milliondollar figure the President committed for title III.

Mr. TWINAME. We will intend to shift this so that the full program money here can be available for services in fiscal year 1974.

Mr. MURPHY. How much money is involved in salaries and expenses for AOA?

Mr. KURZMAN. $4 million.

Mr. MURPHY. Do you expect sometime during fiscal 1973, $4 million would go back?

Mr. TWINAME. Fiscal year 1974 is our time to get it back with the proper kind of support; yes.

Mr. MURPHY. The program will be paid back—

Mr. TWINAME. Yes.

Mr. KURZMAN. It might be useful at this point, Mr. Murphy, to insert in the record a table showing the breakdown for all these figures that we have referred to in covering fiscal years 1966 through 1973, and covering not only the Older Americans Act administered by AOA, but

also title VI.

Mr. MURPHY. All right.

(The information referred to follows:)