Social Security Amendments of 1957-60 Vol 1

.cJp41l f4p'7I?3 - d Ai Social Security Amendments of 1958 '/,i Public Law 8584015th CongressH.R. 13549 T. Volume I

MINOR AMENDMENTS TO THE SOCIAL SECURITY ACT

AND RELATED ACTS

195160

Public Law 85—109 -- 85th Congress -- H.R. 6191 Public Law 85—226 -- 85th Congress -- H.R. 8755 Public Law 85—227 -- 85th Congress -- H.R. 8753 Public Law 85—229 -- 85th Congress -- H.R.8821 Public Law 85—238 -- 85th Congress -- H.R. 1944 Public Law85—239 -- 85th Congress -- H.R. 8892 Public Law 85—785 -- 85th Congress -- H.R. 7570 Public Law 85—786 -- 85th Congress -- H.R.8599 Public Law 85—787 -- 8th Congress-- H.R. 11346 Public Law 85—798 --85th Congress-- H.R.5411 Public Law 85—927 -- 85th Congress -- S. 2020 Public Law 86—28-- 86th Congress -- H.R. 560 Public Law 86—284 -- 86th Congress -- H.R. 213 Public Law 86—442 -- 86th Congress -- H.R. 3472 Private Law 85—337 -- 85th Congress -- H.R.4992 Private Law 86—135 --86th Congress -- H.R.3240

Volume II

REPORTS,t. BILLS-Ii: DEBATES, AND ACTS

DEPARTMENT OF HEALTH,EDUCATION, AND WELFARE SOCIALSECURITY ADMINISTRATION TABLE OF CONTENTS

Volume 1

SOCIAL SECURITY AMENDMENTS OF 1958 I.Reported to House A. Committee on Ways and Mean Report House Report No. 2288 (to accompany H.R. 13549)-.July 28. 1958 B. Committee Bill Reported to the House H.R. 13549 (reported without amendment)—July 28. 1958 C. Director's Bulletin No. 283, Social Security Bills (H.R. 13549 and H.R. 13550) Reported Favorably by House Ways and Means Committee—July 28. 1958

II. Passed House A. House Debate—Congressional Record--July 31. 1958 B. House-Passed Bill H.R. 13549 (As Referred to Senate Committee on Finance)—August 1, 1958 C. Director's Bulletin No. 284, House Passage of Social Security Bill--August 1, 1958

III. Reported to Senate A. Committee on Finance Report Senate ReportNo. 2388 (to accompany H.R. l3549)--August 14. 1958 B. Committee Bill Reported to the Senate H.R. 13549 (reported with amendments)--August 14. 1958

[V. Passed Senate A. Senate Debate--Congressional Record—August 15—16. 1958 B. Senate-Passed Bill with Amendments Numbered--August 16. 1958 C. Senate Appoints Conferees—Congressional Record—August 16. 1958 D. Director's Bulletin No. 786, Senate Passage of H.R. 13549--August 16, 1958

V. House Concurrence Senate amendment agreed to by House--Congressional Record--August 19. 1958

VL Public Law A. Public Law 85-840--85th Congress--August 28. 1958 B. President's Signing Statement--August 28, 1958 C. Director's Bulletin No. 288, Enactment of the Social Security Amendments of 1958 and Minor Social Security Bills--August 29, 1958 D. Old-Age, Survivors, and Disability 'nsurance, Public Assistance, Maternal and Child Welfare Service, Showing Changes Made in the Social Security Act by the 85th Congress-- Committee on Finance, Committee Print-- 1958 TABLE OF CONTENTS (Continued)

VI. Public Law (Continued) E. Actuarial Cost Estimates and Summary of Provisions of the Old-Age, Survivors, and Disability Insurance System As Modified by the Social Security Amendments of 1958— September 2, 1958 F. Social Security Amendments of 1958: A Summary and Legislative History by Charles I. Schottland—Old-Age, Survivors, and Disability Insurance Financing Basis and Policy Under the 1958 Amendments by Robert J. Myers--Social Security Bulletin, October 1958 G. Old-Age, Survivors, and Disability Insurance Provision: Summary of Legislation, 1935-58 by Robert J. Myers--Social Security Bulletin, January 1959

Appendix Testimony A. Director's Bulletin No. 280, Social Security Hearings (with Secretary Folsom's testimony and Ways and Means Press Release) B. Director's Bulletin No. 285, Senate Hearings on H.R. 13549 (with Secretary Flemming's testimony)

Study Retirement Test under Social Security, A Report by the Department of Health, Education, and Welfare, Submitted to the Committee on Ways and Means pursuant to Public Law 85-840--March 29, 1960

Listing of Reference Materials TABLE OF CONTENTS

Volume 2

SOCIAL SECURITY AMENDMENTS OF 1958 I.Reported to House A. Committee on Ways and Mean Report House Report No. 2288 (to accompany H.R. 13549)--July 28, 1958 B. Committee Bill Reported to the House H.R. 13549 (reported without amendment)—July 28. 1958 C. Director's Bulletin No. 283, Social Security Bills (H.R. 13549 andH.R.13550) Reported Favorably by House Ways and Means Committee—July 28. 1958

II. Passed House A. House Debate—Congressional Record--July 31. 1958 B. House-Passed Bill H.R. 13549 (As Referred to Senate Committee on Finance)—August 1. 1958 C. Director's Bulletin No. 284, House Passage of Social Security Bill--August 1. 1958

III. Reported to Senate A. Committee on Finance Report Senate ReportNo. 2388 (to accompany H.R. 13549)--August 14. 1958 B. Committee Bill Reported to the Senate H.R. 13549 (reported with amendments)--August 14. 1958

V. House Concurrence Senate amendment agreed to by House--Congressional Record--August 19. 1958

VI. Public Law A. Public Law 85-840--85th Congress--August 28. 1958 B. President's Signing Statement—August 28. 1958 C. Director's Bulletin No. 288, Enactment of the Social Security Amendments of 1958 and Minor Social Security Bills--August 29. 1958 D. Old-Age, Survivors, and Disability Insurance, Public Assistance, Maternal and Child Welfare Service, Showing Changes Made in the Social Security Act by the 85th Congress-- Committee on Finance, Committee Print--1958 TABLE OF CONTENTS (Continued)

MINORAMENDMENTS TO THE SOCIAL SECURITY ACT (Continued) VII. Social Security Coverage for Employees of Certain Tax-Exempt Organizations Act of August 27, 1958, to amend section 403 of the Social Security Amendments of 1954 to provide social security coverage for certain employees of tax-exempt organizations which erroneously but in good faith failed to file the required waiver certificate in time to provide such coverage (Public Law 85—785, 85th Congress, H.R. 7570)

VUL State and Local Coverage--Definition of Wages Act of August 27, 1958, to amend title II of the Social Security Act so as to provide that the exception from "wages" made by section 209(i) of such Act shall not be applicable to payments to employees of a State or a political subdivision thereof for periods of absence from work on account of sickness (Public Law 85—786, 85th Congress, H.R. 8599)

IL State and Local Coverage--Massachusetts and Vermont Act of August 27, 1958, to amend title II of tne Social Security Act to include Massachusetts and Vermont among the States which are permitted to divide their retirement systems into two parts so as to obtain social security coverage, under State agreement, for only those State and local employees who desire such coverage, atid to permit individuals who have decided against such coverage to change their decision within a year after the division of the system (Public Law 85—787, 85th Congress, H.R. 11346)

X. Mother's Insurance Benefits and State and Local Coverage for Policemen and Firemen Act of August 28, 1958, to amend title II of the Social Security Act to provide that a widow or former wife divorced who loses mother's insurance benefits by remarriage may again become entitled if her husband dies within one year of such remarriage, to provide that interstate instrumentalities may secure coverage forpolicemen and firemen in positions under a retirement systems of the instrumentality (Public Law 85-798, 85th Congress, H.R. 5411)

XI. State and Local Coverage--Certain School Employees and Policemen and Firemen Act of September 16, 1959, to provide additional time within which certain State agreements under section 218 of the Social Security Act may be modified to secure coverage for non- professional school district employees, and to permit the States of California, Kansas, North Dakota, and Vermont to obtain social security coverage, under State agreement, for policemen and firemen in positions covered by a retirement system (Public Law 86—284, 86th Congress, H.R. 213)

XII. Unemployment Compensation for Federal Employees (and Definition of Quarters of Coverage for Social Security Purposes) Act of April 22, 1960, to repeal section 1505 of the Social Security Act so that in determining eligibility of Federal employees for unemployment compensation their accrued annual leave shall be treated in accordance with State laws, and for other purposes (Public Law 86—442, 86th Congress, H.R. 3472) TABLE OF CONTENTS (Continued) MINQRAMENDMENTS TO THE SOCIAL SECURITY ACT (Continued) XIII. Private Laws

A. Act of September 7,1957,for the relief of Michael D. Ovens (Private Law 85—3 37, 85th Congress, H.R. 4992) B. Act of September 1, 1959, for the relief of Mrs. Clare M. Ash (Private Law 86—135, 86th Congress, H.R. 3240)

AMENDMENTSTO THE RAILROAD RETIREMENT ACT--1958-59 I.Coordination with Social Security Act of September 6, 1958, to amend the Railroad Retirement Act of 1937, the Railroad Unem- ployment Insurance Act, and the Social Security Act (Public Law 85—927, 85th Congress, S. 2020)

II. Supplemental Annuities Act of May 19, 1959, to amend the Railroad Retirement Act of 1937, and the Railroad Unem- ployment Insurance Act, so as to provide increases in benefits, and for other purposes (Public Law 86—28, 86th Congress, H.R. 5610)

85th Congress, 2d Ses8ion - - - - - HouseReport No. 2288

SOCIAL SECURITY AMENDMENTS OF 1958

REPORT

OF THE COMMITTEE ON WAYS AND MEANS HOUSE OF REPRESENTATIVES

TO ACCOMPANY H. R. 13549 A BILL TO INCREASE BENEFITS UNDER THE FEDERAL OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE SYSTEM, TO IMPROVE THE ACTUARIAL STATUS OF THE TRUST FUNDS OF SUCH SYSTEM, AND OTHER- WISE IMPROVE SUCH SYSTEM; TO AMEND THE PUBLIC ASSISTANCE AND MATERNAL AND CHILD HEALTH AND WELFARE PROVISIONS OF THE SOCIAL SECURITY ACT; AND FOR OTHER PURPOSES w

JULY28, 1958.—Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

UNITED STATES GOVERNMENT PRINTING OFFICE 28801 WASHINGTON: 1968 CONTENTS

Page Organization of the report 1 I. Purpose and scope of old-age, survivors, and disability insurance provisions 1 A. Strengthening the financial basis of the system 3 B. Increase in benefit amounts 4 C. Increase in the maximum earnings base 4 D. Improvements in disability protcction: (1) Benefitsfordependentsofdisabilityinsurance beneficiaries 5 (2) Elimination of the disability benefits offset provision_ 5 (3) Retroactivity for applications for disability benefits and the disability freeze 5 (4) Modifications in the work requirements for eligibility for disability protection 6 E. Study of hospitahzation insurance for old-age, survivors, and disability beneficiaries 6 H. Study of coverage of tips 7 I.Study of the retirement test 7 II. Summary of principal provisions of the bill: A. Old-age, survivors, and disability insurance provisions 8 B. Public assistance provisions 10 C. Maternal and child welfare provision 10 III. Discussion of old-age, survivors, and disabihty provisions: A. Increaseinold-age,survivors,anddisabilityinsurance benefits 11 (1) General 11 (2) Increase in benefit amounts 11 (3) Family benefits 11 (4) Benefit table to replace formulas and conversion table 11 B. Earnings base 12 C. Benefits for dependents of disability insurance beneficiaries__ 12 D. Other improvements in the disability provisions 13 (1) Elimination of dis3bility benefit offset provision__._ 13 (2) Retroactive payment of distbility insurance benefits. 13 (3) Modification of work requirement for eligibility for disability protection 14 (4) Extension of the period forfiling disability freeze applications that are fully retroactive 15 E. Improvement of the retirement test: (1) Change from $80 to $100 in amount of wages used in determining whether benefits must be withheld for a month 16 (2) Change the order in which excess earnings are allocated to the months of the year 16 (3) Filing of annual report 17 F. Dependents' benefits: (1) Dependency of a disabled child 17 (2) Payment of parent's benefits where a widow or child survives 17 (3) Benefitsf.or an adopted child after the wqrker's death 17 (4) Removal of 3-year requirement for a child adopted by a retired worker 17 III IV CONTENTS

III. Discussion'of old-age, survivors, and disability provisions—Con. F. Dependents' benefits—Continued (5) Elimination of duration of marriage requirement where a child has been adopted by the deceased Page worker 18 (6) Elimination of duration of marriage requirement where a secondary beneficiary marries an old-age beneficiary 18 (7) Provision that marriage will not terminate benefits in certain situations 18 (8) Reinstatementofrightstomother'sinsurance benefits 18 0. Coverage: (1) Employment for nonprofit organization 19 (2) Retroactive coverage for certain employees of State and lcal governments 19 (3) Addition of Massachusetts to the States which may provide coverage through division of retirement systems 20 (4) Facilitating coverage under the provisions for division of State and local government retirement systems 20 (5) Facilitatesocial-security coverage of persons in positions under more than one retirement system 21 (6) Policemen and firemen under retirement systems employed b interstate instrumentalities 22 (7) Coverage of sick-leave payments to State and local government employees 22 (8) Turpentine workers 23 (9) Ooverage of partnership earnings in year of partner's death 23 (10) Social-security credits for certain American citizens who served in the Armed Forces of allied countries 23 H. Miscellaneous provisions: (1) Change in eligibility requirement for the lump-sum death payment 24 (2) Authorization to charge for certain services provided. by the Bureau of Old-Age and Survivors Insurance 24 (3) Description of offenses that constitute fraud 25 (4) Remove requirement in the law that attorney representing claimant before the Secretary file with the Secretary a certificate of his right to do so 25 I. Increases in contribution rates 25 J. Actuarial cost estimates for the old-age, survivors, and disability insurance system 26 IV. Discussion of public assistance and maternal and child welfare provisions: A. Public-assistance provisions 38 (1) General 38 (2) Federal matching formula 38 (3) Approval of certain plans for aid to the blind 41 (4) Repeal of section 9 of Public Law 474 41 (5) Technical amendment (6) Guam, Puerto Rico, and the Virgin Islands 42 B. Maternal and child-welfare provisions 42 1JSection-by-sectionanalysis 44 85 CONGRESS 1 HOUSE OF REPRESENTATIVES J Rpoi'r P2d Se88wn j No. 2288

SOCIAL SECURITY AMENDMENTS OF 1958

JuLY 28, 1958.—Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Mr. MILLS, from the Committee on Ways and Means, submitted the following REPORT [To accompany H. B. 13589]

The Committee on Ways and Means, to whom was referred the bill (H. R. 13549) to increase benefits under the Federal old-age, survivors, and disability insurance system, to improve the actuarial status of the trust funds of such system, and otherwise improve such system; to amend the public assistance and maternal and child health and welfare provisions of the Social Security Act; and for other purposes, having considered the same, report favorably thereon without amendment and recommend that the bill do pass. ORGANIZATION OF THE REPORT Your committee's bill would amend three important parts of the Social Security Act: Old-age, survivors and disability insurance, title II; Public Assistance, titles I, IV, X, and XIV; and Maternal and Child Welfare, title V.Sections I, II, and III of this report are concerned primarily with old-age, survivors, and disability insurance. Section IV is concerned with public assistance and maternal and child welfare, and section V is a section-by-section analysis of the bill. I. PURPOSE AND SCOPE OF OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE PROVISIONS The old-age and survivors insurance benefit structure and the contribution schedule by which the benefits are financed have iiot been reyised by the Congress since 1954.Since that date there have been significant increases in wages and prices; also, new cost estimates have shown an increase in the actuarial deficit of the program.In the light of these developments, it is imperative that the Congress take 2 SOCIAL SECURITY AMENDMENTS OF 1958 prompt action to assure that the program be kept both effective and actuarially sound. Twelve million now rely on monthly checks from the social-security system as the foundation of their economic security.For the overwhelming majority of these aged and disabled persons, widows and orphans, these benefits are the major source of their support.As prices have risen in recent years the purchasing power of social- security benefits has been cut. Your committee is equally concerned about the 75 million people who are currently contributing under the social-security program toward the benefits that they and their families will need when they in their turn become too old or too disabled to work or when they die.These 75 million persons, together with their dependents, represent practically all Americans not already in the retired group. The benefit protection toward which these workers are contributing has been deteriorating in relation to the wages they are now earning. For although wages have gone up, the system has not been adjusted to take this fact into account.In a dynamic economy such as ours it is necessary that the social-security system be periodically amended to keep up to date the maximum earnings base which governs how much of each worker's annual earnings is subject to contributions and counted toward his social-security protection, in order to keep benefit amounts generally in line with changing prices, wages, and levels of living. Your committee has not been able to recommend benefits at as high a level as, in our opinion, would be justified if one considered solely the need for this protection.The increase of approximately 7 percent provided by the bill is actually somewhat short of the rise in the cost of living that has taken place since 1954. We believe, however, that it is essential that a significant part of the additional contributions to the system that we are recommending be used to strengthen the financing of the system rather than to improve benefit protection. The latest long-range cost estimates prepared by the Chief Actuary of the Social Security Administration show that the old-age andsurvivors insurance part of the program (as distinct from the disability part) isfurther out of actuariaLbalance than your committee considers it prudent for the program to be.When the last major changes were made in 1956 the estimates prepared at that time showed an expected long-range actuarial deficit for old-age and survivors insurance of two- tenths of 1 percent of payroll on an intermediate cost basis. -More recent estimates show that the old-age and survivors insurance part of the program is now expected to be out of balance by fifty-seven one-hundredths of 1 percent of payroll.Your committee believes that a deficit of the size indicated by peresent cost estimates should not be permitted to continue. The disability insurance part of the program, on the other hand, shows a definite actuarial surplus.This is not unexpected; your committee, when it recommended the adoption of disability insurance benefits in 1956, decided that it would be best to go into the program on a conservative basis.Not only are the contributions imposed for the purpose of financing the disability side of the program fully adequate to meet outgo, so far as can be determined at this time, but thore is some room for improvements in the protection afforded to disabled workers and their families. SOCIAL SECURITY AMENDMENTS OF 1958 3

Morethan 500 bills dealing with. social security have been referred to your committee for its consideration during the present Congress. We have held over 2 weeks of public hearings on the program. We have heard testimony of the Secretary of Health, Education, and Welfare and of many interested individuals and groups. We have found as a result of our review and consideration that there are four major ways in which the old-age, survivors and disability insurance programs should be improved.In addition, the committee is recommending improvements in the public assistance and maternal and child welfare programs which are discussed later in this report. The committee's recommendations in the OASDI programs are as follows: 1. The financial basis of the old-age, survivors, and disability insurance program needs to be strengthened so as to make certain that it is sound. 2. Old-age, survivors, and disability insurance benefit amounts need to be increased. 3. The maximum limitation on the annual amount of earnings that can be credited toward benefits and taxed for old-age, survivors, and disability insurance purposes needs to be increased. 4. The disability insurance provisions of the program need to be improved through the provision of benefits for dependents of disabled workers, through the elimination of the provision offsetting certain other disability benefits, and in other ways.

A. STRENGTHENING THE FINANCIAL BASIS OF THE SYSTEM In addition to the need for action to reduce the insufficiency in the financing of old-age and survivors insurance over the long range, there is need for action to improve the condition of the system over the next few years.This year, for the first time in the 18 years since benefits were first paid, the income to the old-age and survivors insirance trust fund is slightly less than the expenditures from the fund.If no changes are made, outgo will continue to exceed income in each year until 1965.Your committee believes that a situation where outgo exceeds income for 7 or 8 years is one that should not be permitted to continue.We believe that public confidence in the system—so necessary if it is to provide real security for the people— may be impaired.if the trust fund continues to decline. Your committee also thinks it important that the present generation of contributors bear a greater proportion of th.e true cost of the benefits provided by the program than they will under the present schedule of contribution rates.The level-premium cost of the present program on an intermediate basis is estimated at about 8 percent of payroll—somewhat over 4 percent each if split equally between employers and employees.Under the present tax schedule the contributors will not pay taxes as high as their share of the level-premium cost until 1975.'While your committee believes that the taxes required to support the program should be imposed on the economy gradually, under the present schedule the reflection of the true cost of the program in the contribution rate is being too long postponed. All of these considerations have led the committee to recommend thata new scheduleofcontributionrates be put intoeffect immediately. 4 SOCIAL SECURITY AMENDMENTS OF 1958 Your committee is looking forward to the recommendations of the Advisory Council on Social Security Financing, which is due to report at the end of this year.We are particularly interested in thQ Coun- cil's evaluation of the procedures used in estimating costs, of the policies followed in the investment of the funds, and of the finaticial principles of the program.

B. INCREASE IN BENEFIT AMOUNTS Your committee believes that adjustments in old-age, survivors, and disability insurance benefit amounts are necessary at this time.Since the last benefit increase was put into effect in 1954, wages have increased by about 12 percent and prices by 8 percent.The generally higher level of the economy means that a benefit increase is required now if the program is to continue to be effective and if the serious hardships beneficiaries are facing are to be relieved. A survey of beneficiaries made by the Department of Health, Edu- cation, and Welfare in December 1957 showed that for most beneficiaries old-age and survivors insurance benefits constitute the major source of income.Of the married couples on the benefit rolls, 12 percent had no income other than their benefits, and 60 percent had less than $1,200 of such other income.If only permanent retirement income is considered, 30 percent of the married couples had no such income other than their old-age and survivors insurance benefits, and only 20 percent had as much as $1,200 of such other income.The situation of single retired workers and of aged widow beneficiaries is less favorable than that of the married couples.Clearly, since their benefits are such an important part of their income, the beneficiaries will be in real need if benefit amounts are not adjusted in the light of rising prices, wages, and levels of living.

C. INCREASE IN THE MAXIMUM EARNINGS BASE Provision is made in your committee's bill for increasing from $4,200 to $4,800 the maximum on the annual amount of earnings on which workers pay social-security taxes and which count in the computation of their benefits.Your committee believes the rise in earnings levels makes such an increase appropriate.If the earnings base is not increased as wages rise, the wage-related character of the system will be weakened and eventually lost.In 1950 about 64 percent of regularly employed men would have had all their wages credited toward benefits under the $3,600 base that was adopted in that year.The $4,200 earnings base adopted in 1954 would have covered all the wages of about 56 percent of such workers.In 1957 only43 percent had all their wages credited; about 56 percent would have received full credit under a $4,800 base.An increase to $4,800 would restore the situation which prevailed in 1954 and thus, in our opinion, would be a conservative adjustment to the rise in wages that has taken place.

D. IMPROVEMENTS IN DI5ABILrrY PROTECTION In 1955 your committee recommended that the insurance protection of the social security programs be extended to provide monthly benefits for insured workers who are no longer able to work because SOCIAL SECURITY AMENDMENTS OF 1958 5

ofan extended total disability.This much-needed improvement in the protection provided under the national social security system was accomplished by the Social Security Amendments of 1956.The disability provisions that were decided upon at that time were purposely conservative in order to reduce to a minimum the problems that are inevitable in a new program of this kind.It was expected that, as experience under these provisions was gained, and as the soundness of the program was confirmed by this experience, necessary improvements would follow.Your committee believes that it is now time to take steps in the direction of improving the disability insurance program.In recognition of the favorable experience that has developed not only under the cash benefit provisions but also under the so-called disability freeze provisioiis that have been in effect since 1955, your committee is recommending a broadening of the protection now provided against the risk of extended, total disability.It is also recommending removal of certain provisions that have proved unnecessarily strict and, in some situations, have caused inequities. All of the recommended improvements in the disability provisions of the program can be adequately financed from the contributions already earmarked for the Federal disability insurance trust fund. (1) Benefits for dependents of disability insurance beneficiaries Your committee believes that additional protection can and should be provided for the families of disabled workers.Present law provides monthly benefits for disabled workers who have attained age 50, but no provisions are made for the dependents of these people.This is a serious gap in the protection provided under the program and your committee believes it should be closed.Aecordingly, we are recommending the provision of monthly benefits for the dependents of disability insurance beneficiaries.These benefits would paralle] those now provided for the dependents of retired workers. (2) Elimination of the disability benefits offset provisiOn Your committee is recommending also that the disability benefits offset provision of present law be eliminated.This provision requires that the monthly social security benefits payable to disabled workers (and those payable to persons disabled in childhood) be reduced by the amount of any periodic benefit payable on account of disability under other Fedal programs (other than veteran's compensation) or a State workmen's compensation system.The application of this requiirement has produced inequitable effects. Your committee believes that disability benefits payable under the national social security system should be looked upon as providing the basic protection against loss of income clue to disabliig illness, and we have concluded that it is undesirable, and incompatible with the purposes of the program, to reduce these benefits on account of disability benefits that are payable under other programs. (3) Retroactivif,, for applications for disability benefits and the disability freeze Your committee is also recommending two changes in the disability 1)rovisioIs of the program that are designed to protect the benefit rigbts of disabled workers.To avoid penalizing disabled workers who do not file timely applications for disability benefits, the bill includes a provision under which these benefits, like old-age insurance benefits, may be payable retroactively for as many as 12 months before 28861—58——-—2 6 SOCIALSECURITY AMENDMENTS OF 1958 the month in which the worker applies for them.For a similar reason—to assure that disabled workers who are eligible to preserve their benefit status through the present disability freeze provision are not precluded from doing so only because they fail to file timely applications for a disability freeze—the bill provides for a 3-year postponement of the present deadline, June 30, 1958, for filing fully retroactive disability freeze applications. (4)Modificationsin the work requirements for eligibility for disability protection Under present law a disabled worker may fail to qualify for disability insurance benefits or a disability freeze only because he did not work in covered employment during the last year or two before his impairment developed into a total disability.A disabled worker in this unfortunate position is likely to be one who, because he has a progressive illness, is unemployed for quite a few months before his impairment meets the law's requirement of disability for all substantial gainful employment.Your committee would alleviate this problem by relaxing the present recency-of-work test.The work requirements for eligibility for disability benefits and for the disability freeze wouki be made identical—the worker would have to be fully insured and have about 5 years of covered work out of the last 10 years before his disability began. In addition to the four major areas of improvements outlined above, thebill provides for less important but nevertheless significant changes in the old-age, survivors, and disability insurance program. These changes will clear up certain inequitable situations under present law, will improve family protection, will make it easier for certain groups to obtain coverage under the program, and will facilitate administration of the program.These changes are spelled out in more detail in parts II and III of this report. In addition, the committee gave consideration to other problem areas in old-age, survivors, and disability insurance but did not find i possible to recommend solutions to these problems at this time. However, we are asking that further studies be made in three areas and that recommendations be made to the committee next year. These areas are (1) the provision of hospital and nursing home services for beneficiaries, (2) the coverage of tips, and (3) the retirement-tess provisions of the program.

E. STUDY OF HOSPITALIZATION INSURANCE FOR OLD-AGE, SuRvIvoRs, AND DISABILITY BENEFICIARIES Your committee is very much aware of the problems faced by the aged in paying for hospital services and nursing home services.A number of bills introduced in the 85th Congress would broaden the old-age, survivors, and disability insurance program to provide for payment of the cost of hospitalization and nursing home services for beneficiaries under this program.In the recent public hearings that your committee held on social security, a number of witnesses testified on these proposals. There was considerable testimony to the effect that, under existing arrangements, insurance against the costs of needed hospital and nursing home services is out of reach of many older people.There appears to be a need for making this protection available to older SOCIAL SECURITY AMENDMENTS OF 1958 7 people.Your committee believes, however, that more information on the practicability and the costs of providing this kind of protection through various methods should be available before it entertains any recommendation for legislation on the subject.A study of alternative ways of providing insurance against the cost of hospital and nursing home care for old-age, survivors, and disability insurance beneficiaries should be made. The alternatives explored should include among other proposals: a prepyment plan under which persons would, during their working years, pay additional social-security contributions which would be used to buy this type of insurance (to take effect when the individual becomes an old-age, survivors, and disability insurance beneficiary) from private and nonprofit health insurance organizations; other methods of providing insurance against the cost of hospital and nursing home care under title II; and any other method which offers reasonable prospects for protecting old-age, survivors, and disability insurance beneficiaries against the cost of needed hospital and nursing home care.The study would include, for each of the several alternatives, an evaluation of (1) cost of the benefits and (2) administrative implications. Your committee has asked the Secretary of Health, Education, and Welfare to conduct such a study and to report the results on or before February 1, 1959.With the results of such a study available, the Congress will be in a better position to decide what legislative measures, if any, should then be taken to meet the problem. H. STUDY OF COvERAGE OF Ties Your committee gave serious consideration to the question of including in creditable wages the tips that are received by an employee directly from the customer even though the employer does not require an accounting. We are aware that because such tips are not now counted toward benefits a largeriumber of employees have inadequate protection under the system.The average wages, without tips, of employees who customarily receive tips are relatively low; their benefits reflect only this level of earnings rather than the true level of their earnings from work. There are, however, considerable difficulties in determining the amounts of tips to be counted and in securing reports of these amounts. Your committee considered plans relating to the problems involved, but was not able, in the time at its disposal, to satisfy itself that such plans would be workable on a national scale.We have asked the Department of Health, Education, and Welfare and the Department of the Treasury to give further study to this question with a view to submitting recommendations on the problem to the committee as early as possible.

I. STUDY OF THE RETIREMENT TEST The committee has asked the Department of Health, Education, and Welfare to study certain aspects of the present test of retirement which seem to the committee to have questionable results.The pres-- ent test is basically on an annual basis but under one of the provisions benefits are nevertheless paid for any month in which an individual earns $80 or less ($100 or less under the bill) and does not render sub- 8 SOCIALSECURITY AMENDMENTS OF 1958 stantial services in self-employment.Thus a person may have very highearnings in a single month and yet get benefits for the remaining 11 months m the year. We have asked the Department to consider possible changes in this provision. In the meantime, your committee has determined that several minor modifications of the retirement test should be enacted to increase the equity of the test and to improve public understanding and administration.These are described in detail subsequently in this report. The total cost of the benefit proposals included in the committee bill is 0.59 percent of payroll so far as the old-age and survisors insurance part of the program is concerned.The increased revenue to the program that would result from the changes in the tax schedule and in the maximum earnings base would amount to 0.91 percent of payroll.Thus there would be an excess of income over outgo resulting from the proposals in the bifi of 0.32 percent of payrollon the level-premium basis.Since under present law itis estimated that the actuarial deficit in the program amounts to 0.57percent of payroll the net result of the bill would be to place theprogram in a position where it had an estimated actuarial deficit of 0.25 percent.This very substantial improvement in the financial basis of the program brings the anticipated deficit well within therange that will permit the program to be considered actuarially sound. Not only will the long-range financial picture be improved, but for the short range, too, the program will bemore adequately financed. Under present law the OASI trust fund is expected to incura deficit in every year from now until 1965.Under the committee bill, on the other hand, income wifi exceed outgo in everyyear from 1960 on for several decades, and even in 1959 the deficit will be substantiallycut. Moreover, the ultimate combined tax rate—9 percent under the committee bill—wffl be reached in 1969 rather than in 1975,so that the time when the true cost of theprogram becomes apparent in current tax rates will be reached sooner and contributors will pay more nearly what the benefits are worth. H. SUMMARY OF PRINCIPAL PROVISIONS OF THE BILL A. OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE PROVISIONS 1. Individuals now on the benefit rolls and all future beneficiaries would have their benefits increased by about 7 percent,more at the minimum, over the levels provided in the present law.The minimum increase in the benefit of a worker who retired at or afterage 65 would be $3.The average increase for workers now retired would be about 4.75.The increased benefits would be effective for months after the second month following the month of enactment. 2. The dollar ceiling on the total of benefits payable to a family would be raised from $200 to $254, which is equivalent to twice the maximum retirement benefit payable. :3. The total annual earnings on which benefits could be computed (and on which contributions would be paid) would be raised from $4,200 to $4,800, effective January 1, 1959. 4. Benefits would be provided for the dependents of disabled workers like those now provided for the dependents of retired workers. 5. The provision that now requires payments under certain other disability benefit systems to be offset against social security disability SOCIAL SECURITY AMENDMENTS OF 1958 9 benefitswould be repealed, so that a person eligible for a social security disability benefit and also for disability benefit under another system would receive the full amount of his social security benefit. 6. The work requirements that a disabled worker must meet to be eligible for cash disability benefits, and to have hisbenefitrights •frozen while he is disabled, would be changed to make it easier for a disabled worker whose disability has a gradual onset to qualify. Under the bill, the worker would no longer be required to have had 6 quarters of coverage out of the 13 calendar quarters before he became disabled. (He would be required to be fully insured and to have 20 quarters of coverage out of the 40°calendar quarters before he became disabled.) 7. Disability insurance benefits (like all other benefits now provided) would be paid for as much as 12 months before the month in which an application for the benefits is filed.Present law contains no provision for retroactive disability insurance payments. 8. The June 30, 1958, deadline for filing fully retroactive applications for the disability freeze would be postponed for 3 years. 9. The law would be changed to provide that a person will not lose a benefit under the retirement test for any month in which he has earned wages of $100 or less, rather than $80 or less as under present law. 10. Where earnings exceed the amount allowed under the retirement test without loss of benefits, the excess earnings would be charged to months beginning with the first month of the year. Under present law the excess is charged to months in reverse order beginning with the end of the year. The change means that where an individual's or a family's benefits are increased during a year, the benefits suspended by reason of earnings will be the smaller ones thatwere payable for the early months of the year. 11. The law would be change.d to provide that where a person over age 18 is the child of a deceased or retired insured worker and has

• been disabled since before age 18, benefits would, in generai, be paid to the child without requiring the proof required under present law that he has been dependent upon the worker for his support.The change would make the requirement for the disabled adult child the same. as for the child under age 18. 12. Benefits would be provided for the dependent parent of a deceased worker even though there is a widow or child of the worker • who is or may become eligible for benefits.Under present law a parent can qualify only if there is no such widow or child. 13. A lump sum would be paid to the widow of a deceased worker only if she was living in the same household with him or has paid his burial expenses. 14. Benefits would be paid to a child if the child had been living in the worker's household, if the. child had not been supported by auyone else, and if he w,as adopted by' the widow of a worker within 2 years after the worker died. 15. Benefits would be paid to the mother of a child if the child had been adopted by the mother's deceased husband even though they had not been married for as long as a year. 16. Beiwfits would be paid to the adopted child of a retired worker even though the child had not been adopted for as long as 3 years. 17. Where a survivor of a deceased worker was (or might at retirement age become) e1igib1 for benefits based on the worker's earnings 10 SOCIALSECURITY AMENDMENTS OF 1958 but loses eligibility by remarriage, the survivor could become e1igib1e immediately or upon attainment of retirement age, for benefits on her second husband's earnings record. 18. Where two secondary beneficiaries age 18 or over marry each other, for example, the dependent parent of one worker and the widow of another, the payment of benefits. to both beneficiaries would. he continued.Under present law, both lose benefits.Childhood disability benefits would be continued when the person receiving them marries a person receiving old-age or disability benefits. 19. Changes would be made in the coverage provisions of the program: (1) to facilitate coverage of certain State and local government employees who are in positions covered by a retirement system; (2) to facilitate coverage of employees of certain nonprofit organizations; (3) to extend coverage to turpentine workers; (4) to provide social security credits for earnings which a person has from a partnership during the year of his death; and (5) to provide that social security wage-credits of $160 will be credited for each month of service performed during World War II by American citizens in the armed forces of certain countries which fought against our enemies in that war. 20. Several changes in technical provisions would be made to facilitate administration of the program. 21. The tax rates now scheduled in the law would be increased by one-fourth of 1 percent each for employees and employers, and three- eights of 1 percent for the self-employed, above the rates now scheduled, and the scheduled increases in the rates would take place every 3 years instead of every 5 years.The revised schedule would be as follows: [Percenti

Employers EmployeesScIf.cmpioyed

1959 2Y 234 3% 1960-62 3 3 44 19R3—65 3/ 3 1966—8 4 4 8 1969 an1 thereafter 4 4 6

B. PUBLIC ASSISTANCE PRovIsIoNs The bill provides a new formula for Federal participation in public assistance providing additional funds to all States and maximum flexibility in meeting medical care needs and other special needs. The formula also recognizes the limited fiscal capacity of the lower income States. It extends the public assistance program to Guam, increases the Federal fund limitations for Puerto Rico and the Virgin Islands, and extends for 2 years a special provision applying to blind programs in Missouri and Pennsylvania. C. MATERNAL AND CHILD WELFARE PRovIsIoNs Authorizations are increased: for maternal and child health from $16.5 million to $21.5 million, for crippled children's services from $15 million to $20 million, and child welfare services from $12 million to $17 million. SOCIAL SECURITY AMENDMENTS OF 1958 11 Inthe child welfare services program existing differences itreat- ment of urban and rural children are eliminated and appropriate allotment and matching provisions are included. All three programs are extended to Guam. III. DISCUSSION OF OLD AGE, SURVIVORS, AND DISABILITY PROVISIONS

A. INCREASE IN OLD-AGE, SURvIvoRS, AND DISABILITY INS1JRANC BENEFITS (1) General During thesocial security hearings your committee received testimony relating to the level of old-age, survivors, and disability insurance benefits.Your committee's bill would raise the level of benefit payments to reflect changes in the economy and to assist in providing a more adequate basic protection for beneficiaries. (2) Increase in benefit amounts The bill would provide for an increase of about 7 percent over the levels provided iii the present law, with a minimum increase of $3 in the benefits payable to a retired worker who came on the rolls a or after age 65.Proportionate but slightly smaller increases, due to the actuarial reduction, would be received by women workers who elected to retire before age 65. For retired workers now n the benefit rolls, monthly payments would range from $33 to $118, as compared with $30 to $108.50 under present law.For those coming on the rolls in the future, the range of benefit payments, taking into account the increased earnings base, would be from $33 to $127, although it will be many years before anyone will be able to get the maximum amount. (3) Family benefits The bill would make a change in the maximum amount of monthly benefits payable to a family on the basis of an insured worker's earnings record.The bill would raise the present $200 per month limitation on family benefits to $254—an amount equal to twice the maximum benefit provided by the bill for a retired worker.The minimum benefit payable where there is only one survivor beneficiary would be increased from $30 to $33. (4) Benefit table to replace formulas and conversion table The bill would provide for a consolidated benefit table to be used in determining benefit amounts both with respect to future beneficiaries and those now on the benefit rolls.This benefit table would replace the formulas and table now in the law.It is believed to constitute an improvement in the method of determining benefit amounts by making it easier for covered workers and beneficiaries to determine what benefits they are entitled to, and by simplifying the benefit-computation process. In essence, this benefit table is based on the 1954 act benefit formula increased by 7 percent.The table, however, yields slightly higher benefits for very low average wages so as to reflect a minimum increase of $3.Amounts for retired workers have, in general, been rounded to the nearest dollar. 12 SOCIALSECURITY AMENDMENTS OF 1958

B. EARNINGS BASE Under your committee's billthe maximum amount of annual covered earnings counted for tax and benefit purposes would be raised from $4,200 to $4,800, effective January 1, 1959.This change.gives recognition to the principle that benefit levels should reflect varying levels of individual earnings.The American social-insurance system, in relating benefits to prior earnings, rests on the principle that conditions of individual security and individual incentive require a relationship between benefits and previous standards of living.Unless the earnings base is adjusted as earnings rise, practically all regular full-time workers may in time be earning niore than the current base, and their benefits will bear little relationship to their 'previous living standards.

C. BENEFITS FOR DEPENDENTS OF DISABiLITY INSURANCE BENEFICIARIES Under present law, benefits are provided for dependents of an insured worker who dies or becomes entitled to retirement benefits, but no provision is made for benefits for dependents of an insured worker who becomes entitled to disability insurance benefits. Your committee's bill would provide for the payment of monthly benefits to the dependents of persons receiving disability insurance benefits.The categories of dependents eligible for these benefits would parallel those eligible for benefits as dependents of old-age insurance beneficiaries—namely, wives and dependent husbands who have reached retirement age; unmariied dependent children (including sons or daughters disabled in childhood); and wives who have an eligible child in their care. The monthly benefits payable to dependents of disabled workers would be subject to the same conditions as are applicable to the dependents of old-age insurance beneficiaries, except that, in addition, the proposed dependents benefits would be suspended if the disabled worker refused, without good cause, to accept vocational rehabilitation. Under the bill itis estimated that about 180,000 dependents of workers eligible for disability insurance benefits could become eligible for these monthly benefits beginning with the first month after the month in which the bill is enacted. In providing monthly benefits for the dependents of workers entitled to disability insurance benefits, your committee has given recognition to the problems confronting families whose breadwinners have been forced to stop work because of total disability.The benefit amount payable to the disabled worker under the present di5ability insurance provisions does not provide adequate protection for his family.The needs of the family of a disability insurance beneficiary are as great as, or greater than, the needs of the family of an old-age insurance beneficiary.Although the wife of a disability insurance beneficiary will usually be younger than the wife of a person receiving retirement benefits (and so might be presumed more able to work and help support the family), the dependent children of the disability insurance beneficiary are also younger, making it desirable that the mother remain in the home.It is reasonable to assume, also, that in a great many cases the care which the disabled person requires makes SOCIAL SECURITY AMENDMENTS OF 1958 13 it difficult, if not impossible, for his wifeto increasethe familyincome by working.In addition, a person receiving disability insurance benefits frequently has high medical expenses. The provision recommended by your committee would close a serious gap in the disability insurance protection now provided under the social security program and can be adequately financed from the funds which will flow from social security taxes already provided and earmarked for the Federal disability insurance trust fund.

D. OTHER IMPROVEMENTS IN THE DISABILITY PROVISIONS (1) Elimination of disability benefits offset provision Your committee has given further consideration and study to the disability insurance benefit offset provision, under which the social security disability insurance benefits are reduced by the amount ofany periodic benefit payable to an individual on account of disability under certain other Federal programs or under State workmen's compensation laws.This offset provision was included in the law at the time that the provisions for social security disability benefitswere enacted to prevent duplication between the new social security disability benefits and other disability payments pending the development of administrative experience under the new program. In the light of experience in the operation of the offset provision, your committee has concluded that it can now be eliminated.Experi- ence with the social security disability provisions indicates that the danger that duplication of disability benefits might. produce undesirable results is not of sufficient importance to justify reduction of the social security disability benefits.The bill therefore provides for the elimination of this offset provision. ()Retroactivepayment of disability insurance benefits Under present law, old-age and survivors insurance benefitsmay be paid for as many as 12 months before the month in which application is filed.Disability insurance benefits, however, may not be paid retroactively except in the case of applications for such benefits that were filed before January 1,1958.Your committee's bill would remove this difference by providing that disability insurance benefits also would be payable for as many as 12 months before application is filed, provided the applicant meets all other conditions for eligibility for benefits for such prior months. Because of your committee's concern about possible loss of disability insurance benefits by disabled workers who failto make timely application, the Department of Health, Education, and Welfarewas asked to make a study of applications for disability insurance benefits filed after December 1957, and to report on the extent of loss of benefits suffered by disabled persons due to delay in filing application. The Department has advised your committee that a significant proportion of disabled persons applying for tlisability insurance benefits this year have failed to make timely applications and as a result have lost benefits for 1 or more months.The Department recommended enactment of a provision to meet this problem. In the opinion of your committee, it is reasonable to expect that, in the absence of a provision under which applications for disability insurance benefits may have a retroactive effect, loss of disability 28861—58--———3 14 SOCIAL SECURITY AMENDMENTS OF 1958 insurance benefits due to delays in claiming them will be a continuing problem.The bill therefore would provide that applicants for disability insurance benefits be allowed the same 12-month period in which to file application without incurring loss of benefits as is allowed applicants for old-age and survivors insurance benefits under present law. (3) Modificationof work requirement foreligibility for disability protection Under present law, to qualify for disability insurance benefits a disabled worker must meet three requirements insofar as his work under the old-age, survivors, and disability insurance program is concerned.He must be fully insured; he must be currently insured, which means that he must have at least 6 quarters of coverage (about 1% years of work) in the period of 13 calendar quarters ending with the quarter in which he became disabled; and he must have a total of 20 quarters of coverage (about 5 years of work) out of the 40 calendar quarters ending with the quarter in which he became disabled.At present the work requirements for a disability freeze differ from those for monthly disability insurance benefits in that fully insured status is not required for the freeze. It has come to your committee's attention that a substantial number of persons who have worked regularly and for long periods in employment or self-employment covered under the old-age, survivors, and disability program are not able to meet the work requirements for disability protection.Your committee's bill would delete the provisions of present law which require that a worker be currently insured in order to be eligible for disability benefits or for the clis- ability freeze and would make the work requirements for disability- insurance benefits and the disability freeze alike by adding fully insured status as a requirement for eligibility for the disability freeze. It is estimated that a result of the changed work requirements about 35,000 persons who cannot qualify for disability-insurance benefits under present law could, upon ffling applications, become immediately eligible for benefits, and that, in addition, about 15,000 persons could qualify immediately for a disability freeze. Under a program which provides protection against loss of earnings on account of disability, it is reasonable and desirable that there be reliable means of limiting such protection to those persons who have had sufficiently long and sufficiently recent covered employment to indicate that they probably have been dependent upon their earnings. It was to meet this purpose that the disability work requirements were designed, and, in most cases, the. pFesent work requirements produce results in accordance with this purpose.Experience under the program has indicated that the currently insured status requirement has operated to deny disability protection in some cases in which there is no doubt that a worker's earnings have been cut off as a result of disabihty.A large number of disabled workers fail to meet the currently insured status requirement even though they have worked for substantial periods in covered employment or self-employment and have normally been dependent upon their earnings.In many instances, these are persons whose work was interrupted bya progres-. sive illness and who are the onset of this impairment met the work requirements for disability protection.It is not uncommon that an SOCIAL SECURITY AMENDMENTS OF 1958 15 impairmentwhich is not severe enough to meet the definition of disability in the law causes a worker to be absent from work for extended periods.The result is that by the time the impairment becomes serious enough to meet the definition of disability, the worker has lost his currently insured status. Your committee's bill would provide for the elimination of the culTently insured eligibility requirement for disability protection. Beginning in July 1961, it will be possible for a worker who has qualified for the disability freeze under the present provisions to fail to qualify for either disability insurance benefits at age 50 or old-age insurance benefits at age 65 because he may not be fully insured. There will be instances, too, where dependents or survivors benefits will not be payable even though the worker had been allowed a disability freeze.The addition of the fully insured status requirement for the disability freeze will remove the anomalous situation wherein a period of disability may be established for a worker who cannot later qualify for benefits, whose dependents cannot qualify if he lives to retirement age, or whose survivors may not qualify if he dies. The requirement of 20 quarters of coverage our of the 40 calendar quarters ending with the quarter of disablement, together with the fully insured status requirement, should provide reasonable and adequate assurance that the protection afforded by the disability provisions will be keyed to loss of earnings on account of disability. (4)Extensionof the period for filing disability freeze applications that are fully retroactive Under the disability freeze provision of present law, an individual's social security earnings record can be frozen during a period of extended total disability so that his inability to work during such period of disability will not result in a reduction in, or loss of, his old-age, survivors, and disability insurance entitlement.Under present law, applications for the disability insurance freeze that were ified before July 1, 1958, were fully retroactive—to the actual beginning date of the individual's disability in most instances—thus enabling applicants to preserve their rights under the program even though they had been disabled for a number of years.In the case of applications for the freeze that are filed after June 33, 1958, however, an applicant's period of disability cannot be determined to have begun more than 1 year before the date his application is filed.As a consequence, persons with longstanding disabilities whose applications are filed after June 30, 1958, are likely to be ineligible for the disability freeze and thus are exposed to loss of all protection under the program. Your committee's bill would postpone through June 30, 1961, the June 30, 1958, deadline for filing applications for the disability freeze that are fully retroactive.As a result of this change, it is estimated that about 30,000 additional disabled workers could, upon filing application, become immediately eligible for disability insurance benefits; and an additional 10,000 could become immediately eligible for a disability freeze. Your committee's bill would also provide that in the case of applications for the freeze that are ified after June 30, 1961, an applicant's period of disability cannot be determined to have begun more than 18 months before application is ified. 16 SOCIALSECURITY AMENDMENTS OF 1958

E. IMPROVEMENT OF THE RETIREMENT TEST Monthly benefits under the old-age, survivors, and disability insurance system are paid upon the retirement, disability, or death of the family earner.The law has always contained a "retirement test" provision designed to assure that, so far as possible, benefits are paid only to those among the aged who are substantially retired and to dependents and survivors who do not have substantial income from work. Your committee received considerable testimony on this subject. The committee believes this principle should be maintained.If the retirement test were eliminated or materially liberalized, not only would the cost of the program be substantially increased, but the increased cost would go to pay benefits to people who are working and earning substantial incomes.Your committee was informed that the elimination of the retirement test would place an added long- range cost of $2.9 billion per year. Your committee has determined that several minor modifications of the retirement test should be enacted to improve public understanding and administration of the test. (1) Change from $80to$100 amount of wages used in determining whether benefits must be withheld for a month Under present law, when beneficiaries earn more than $1,200 in a year, benefits may be withheld for months in which wages exceed $80. This provision is very difficult for beneficiaries to understand because it does not seem to be consistent with the $1,200 exempt amount, whiëh is óttri interpreted as meaning $100 per month.Increasing the $80 figure to $100 would facilitate administration by improving public understanding and acceptance of the testIt would also eliminate hardships to beneficiaries who lose benefits because they misunderstand the present test. ()Changetheorderin which excess earnings are allocated to the month.s of theyear Under the present law, any earnings in excess of the $1,200 annual exempt amount are divided into units of $80 and the units are charged to months beginning with the last month of the taxable year and then to the reuainiig months of the year, working backward, for the purpose of determiiing which monthly benefit checks must be withheld under the retirement test.The committee bill reverses the order of çiarging excess earnings to months so that the $80 units are charged to months starting with the first month of the taxable year and working forward.This provision will alleviate the problems relating to the present order of charging excess earnings.In many cases the wife of a beneficiary attains the qualifying age and comes on the rolls during a year in which the husband is on the rolls for the entire year.If, in such cases, the husband has excess earnings, the wife may lose some or even all of her benefit payments because the excess earnings are allocated starting with the last month of the year. Also, where benefits are recomputed or otherwise increased during the year the present method of allocating excess earnings operates to the disadvantages of beneficiaries. SOCIAL SECURITY AMENDMENTS OF 1958 17

(3)Filing of annual report Present law requires all beneficiaries under age 72 to make a report of earnings if they earn over the exempt amount.Your committee's bill would modify this requirement so that a beneficiary who receives no benefits for the year because he has already notified the Bureau of Old-Age and Survivors Insurance that he expected to earn over the exempt amount would not have to file another report at the end of the year. F. DEPENDENTS' BENEFITS (1) Dependency of a disabled child Under present law, a disabled child who is 18 or over at the time he applies for child's insurance benefits is required to show that he is receiving at least one-half of his support from his parent, or that he was receiving at least one-half of his support from the parent at the time the parent died.On the other hand, a child who is under 18 when he applies for benefits is generally assumed to have been dependent on his father (and on his mother if she has had a significant amount of recent work).Your committee believes that the older child who has been totally disabled since before age 18 is also likely to be dependent on his parent.Under the committee bill, disabled children who are 18 or over would be deemed dependent on their parents just as younger children are. (2) Payment of parent's benefits where a widow or child survives The existence of a widow or child actually or potentially entitled to monthly benefits now prevents the payment of monthly benefits to the dependent parent of a deceased worker.This bar operates even if the potentially entitled wife or child never becomes entitled to benefits.The situation has been aggravated by the fact that the 1957 amendments made possible the payment of benefits to a widow who was not living with her husband at the time of his death, so that the existence of a widow who was not living with the worker now prevents payment of benefits to a parent who was living with and dependent on the worker at the time of his death.Your committee's bill would remove this restriction. (3) Benefits for an adopted child after the worker's death An adoptable child living as a member of a worker's family and supported by him is, from the point of view of the purposes of the social security program, the same as the worker's own child.If after the worker's death the surviving spouse adopts the child, the child should, for purposes of receiving child's insurance benefits, be treated as an adopted child of the deceased worker.The committee bill provides for payment of benefits to a child in such cases if at the time of the worker's death the child was a member of the worker's household, if the child was not being supported by any other person, and if the worker's spouse adopts the child within 2 years after the worker dies. (4)Removalof 3-year requirement for a child adopted by a retired worker Present law requires that the adopted child of a retired worker must have been adopted for at least 3 years before becoming eligible for child's insurance benefits.This provision was intended to provide protection against abuses through adoptions undertaken to secure 18 SOCIAL SECURITY AMENDMENTS OF 1958 rights to benefits.Adoptioiisare subject to approval by the courts of the various States, and it does not seem that benefits should be denied to all adopted children in order to prevent a rare case of abuse. Your committee's bill would make benefits payable to an adopted child immediately after adoption. (5) Elimination of duration of marriage requirement where a child haYs been adopted by the deceased worker In order to eliminate an anomalous situation where a child can qualify for benefits but his mother who is caring for him cannot, the bill would provide that where a child of a surviving spouse had been adopted by the deceased worker, the surviving spouse can qualify for mother's, widow's, or widower's benefits even if married to the deceased worker for less than a year. (6) Elimination of duration of marriage reuirernents where a potential secondary beneficiary marries Under present law, the benefit rights of a dependent or secondary beneficiary are terminated if the dependent marries and yet the dependent cannot qualify for benefits on the new spouse's earnings record until the marriage has lasted for some time.Where, for example the dependent has reached retirement age and marries an old-age beneficiary, the dependent cannot qualify for benefits on the basis of the new spouse's earnings until after 3 years, or until after 1 year if the new spouse should die.Your committee believes that when a person who has rights to a dependent's benefit marries and the rights to the previous benefit are terminated, there should be no delay in permitting the person to qualify as a dependent of the new spouse for a benefit based on the new spouse's earnings record.The bill would remove the duration-of-marriage requirements for husband's, wife's, widow's, and widower's benefits if at the time of the marriage the person was or could have become entitled to a dependent's benefit. (7) Provision that marriage will not terminate benefits in certain 8itua— tions When a secondary beneficiary marries, such person's benefit is terminated under present law.If he marries a person who is or who will become entitled to an old-age insurance benefit, he may qualify for a new benefit based on the earnings of the new spouse.But if the new spouse is also receiving a secondary benefit, the benefits of both are terminated and ordinarily neither beneficiary can become entitled to any new benefits.Your committee's bill would eliminate the hardship in these cases by providing that marriage would not terminate a benefit where a person receiving mother's, widow's, widower's, parent's, or childhood disability benefits marries a person receiving any of these benefits or where a person receiving mother's or childhood disability benefits marries a person entitled to old-age insurance benefits. (8) Reinstatement of rights to mother's insurance benefits Your committee's bill would reinstate rights to mother's insurance benefits which were terminated by remarriage if the new husband dies before the marriage has lasted long enough for the wife to qualify as his widow. SOCIAL SECURITY AMENDMENTS OF 1958 19

G. COVERAGE (1) Employment for nonprofit organization Under present law when two-thirds of the employees of a religious, charitable, or other nonprofit organization. desire coverage under the OASDI program and the organization files a certificate waiving its tax-exemptstatus, coverage may be effective on the first day of the calendar quarter in which the certificate is filed, or the first day of the succeeding calendar quarter.Your committee has found that, because of a number of circumstances, some nonprofit organizations find it difficult to file the certificate promptly.Since present law makes no allowance for reasonable delays in filing waiver certificates, and since coverage can be effective no earlier than the quarter in which a certificate is filed, employees of these organizations are deprived of coverage for a period of time. Your committee therefore recommends that provision be made for a reasonable period of retroactive coverage. The bill includes a provision under which organizations filing certificates after the enactment date ofthe bill and prior to 1960 could choose to be covered as of the beginning of 1956.In addition tothis temporary provision for coverage retroactive to the beginning of 1956, your committee's bill includes a permanent provision under which coverage could be retroactive for 1 year before the certificate is filed. Coverage would also be made possible under your committee's bill for employees of certain nonprofit organizations which under present law cannot secure the necessary concurrence of two-thirds of their employees because some of their employees are covered by a public retu'ement system and do not desire social-security coverage.For social-security coverage purposes, theemployees ofa nonprofit organization who are members of such a retirement system will be treated as a group separate from the employees who are not members. The bill also includes minor technical changes in present law to provide that, under certain circumstances in addition to those already specified in the law, social-security tax returns filed by a nonprofit organization before it filed a waiver certificate could establish social- security credits for the employees reported on those returns if the wages reported were for services performed befo'e August 1, 1956. (2) Retroactivecoverage forcertain employeesofState and local governments Under the preselit provisions of the Social Security Act, employment occurring before the execution of a State-Federal coverage agreement may, within limits specified in the law and at the option of the State, be credited under old-age, survivors, and disability insurance.This retroactive coverage is available only for individuals who are still employees on the date the agreement providing coverage is approved by the Secretary of Health, Education and Welfare.Your committee's bill would permit States to provide retroactive coverage, within the general time limits applying to State and local employment, for individuals who are employees on any date specified by a State which is (1) not earlier than the date the State submits its agreement or modification to the Secretary of Health, Education, and Welfare and (2) not later than the date the agreement is executed by the Secretary. If an individual is in the employ of the State or local government 20 SOCIALSECURITY AMENDMENTS OF 1958 on the date specified by the State he would be covered for whatever retroactive period is provided for the group of which he is a member, even though his employment is terminated before the agreement is executed. This provision would help to prevent hardships which can occur under present law in cases where an individual leaves the employ of a State or locality—because of death, a change of jobs, retirement, or for some other reason—during the period when a coverage agreement between the State and the Secretary of Health, Education, and Welfare is in the process of being negotiated or executed.At present, due to the time that may elapse during this period of negotiation, employees who had reason to expect they would get social-security coverage but whose employment is terminated before the agreement is executed lose the coverage that would otherwise have been provided.In some such situations, because of this loss of coverage, the employee has been unable to qualify for old-age insurance benefits when he retired.In other instances, the employee has died and his family has not been able to qualify for survivors benefits. (3) Addition of Massachusetts to the States which may provide coverage through division of retirement systems The Social Security Amendments of 1956 included a provision permitting eight States (Florida, Georgia, New York, North Dakota, J?ennsylvania, Tennessee, Washington, and Wisconsin) and the Terri- tory of Hawaii to divide their retirement systems into two parts so as to obtain old-age, survivors, and disability insurance coverage, under the States' coverage agreements with the Department of Health, Education, and Welfare, for only those States and local government employees who desire such coverage, provided all future entrants into the retirement system are covered under old-age, survivors, and disability insurance.In 1957 this provision was extended to four additional States (California, Connecticut, Minne- sota, and Rhode Island) and to all interstate instrumentalities. Your committee's bill would extend this provision to the State of Massachusetts, which has expressly requested such extension. (4)Facilitatingcoverage under the provisions for div'ision of State and local government retirement systems The bill would make two changes which would facilitate coverage of certain retirement system members under the provision permitting specified States to extend coverage to only those members who desire such coverage provided all persons who later become members are covered.Underone of the changes, those persons not originally choos- ing coverage would have an additional opportunity to elect such coverage.The other change would provide for the coverage under this provision of persons who have an option to join a State or local retirement system but have not exercised that option. Under present law, when a State or local government retirement system is divided to provide social-security coverage for those members who want coverage, the members who fail to choose coverage do not get a second chance to obtain it.Your committee believes that there is a need for legislation which would allow individuals not initially in the group desiring coverage to have a limited additional period of time to consider, or reconsider, whether they wish to come under old-age, survivors, and disability insurance.Problems have SOCIAL SECURITY AMENDMENTS OF 1958 21 arisenin some instances because individuals who would have expressed a desire for coverage if they had an opportunity to do so did not have this opportunity for various reasons, such as absence from work because of illness.In other cases, persons who indicated that they did not desire social-security coverage later changed their minds. Your committee's bill would afford an additional opportunity for ob- taininging social-security coverage to individuals who were included in the group of persons not desiring coverage.Under the bill, a State would be permitted to modify its coverage agreement with the Department of Health, Education, and Welfare at any time before 1960, or, if later, within 1 year after coverage is approved for the group in question, to transfer these people to the group desiring coverage.Such a transfer would be made only in the case of individuals who filed a request with the State before the date of approval by the Secretary of the modification proposing the transfer. Under present law, only persons who are actually members of a State or local government retirement system may obtain coverage under the provision permitting specified States to provide coverage for only the members who want coverage.Your committee's bill would provide for the coverage under this provision of individuals who have an option to join the State or local system but who have not joined.Under the bill, when coverage is provided under the divided retirement system procedure by means of a coverage action that is approved after 1959, the State would be required to treat individuals having an option to join the State or local system in the same manner as members of the system.Thus, the State would be required to give these persons. the same opportunity to obtain social- security coverage as is given to members, and all persons who later become eligible to join the State or local system would automatically be covered under social security, just as new members are covered. The coverage under the divided-retirement-system provision of persons whohave not exercised their option to join a system would be at the discretion of the State in the case of coverage actions that are completed before 1960.In the case of coverage actions which have already been completed, such persons could be covered under the provision of the bill which would afford individuals a second chance to join the group of persons desiring social-security coverage. (5) Facilitate social security coverage of persons in positions under more than one retirement system Under present law, State and local government employees in positions under retirement systems may be covered under old-age, survivors, and disability insurance only upon a favorable referendum vote by the members, or under the provisions which permit specified States to cover only those members of a system who desire coverage, provided all future members are covered. A person in a position covered under more than one State or local retirement system cannot be brought under social security unless aU of the State and local retirement systems under which his position is covered take action to come under social security.Even if this action is taken, there are some circumstances under which he cannot be brought under social security.Moreover, a person who is a member of one State and local retirement system and, though not a member, has the option of joining another such system cannot be brought under social security in the absence of action by both systems. 28861—58--———4 22 SOCIALSECURITY AMENDMENTS OF 1958 As a result of the present restriction, it is often difficult for persons in positions covered by more than one State or local retirement system to gain old-age, survivors, and disability insurance protection even when a retirement system group of which they are members comes under the program.Your committee's bill would permit these people to come under social security with a retirement-system coverage group without regard to what action, if any, the other retirement system that covers their positions takes on social security coverage.However, this provision would not apply to individuals who, on the date the State's coverage agreement is made applicable to a retirement system, are not actually members of such system (though their positions are covered by the system) and are members of another system; nor would the provision apply to persons in policemen's and firemen's positions in States where persons in such positions cannot be covered.The proposed change would be optional for the States with respect to retirement systems covered before 1959; beginning in 1959, States would be required to apply the changed procedure when they extend coverage to retirement system groups. (6) Policemen and firemen underretirementsystems employed by interstate instrumentalities The Social Security Amendments of 1954, which made old-age and survivors insurance coverage available to most members of State or local government retirement systems, continued to exclude from coverage under the program persons in policemen's and firemen's positions covered by a State or local retirement system.This exclusion applied to policemen and firemen employed by interstate instrumentalities, as well as to those employed by States or localities.The Social Security Amendments of 1956 and 1957 made coverage available for persons in such positions in 10 specified States (Florida, North Carolina, Oregon, South Carolina, South Dakota, Alabama, Georgia, Maryland, New York, Tennessee), and the Territory of Hawaii. Your committee's bill would make coverage available to policemen and firemen who are employed by an instrumentality of two or more States and who are under a retirement system of such instrumentality, or of any State or subdivision thereof.This coverage would be available on the same basis as in the States in which coverage for policemen and firemen is now available.Your committee believes that existing law provides adequate assurance that old-age, survivors, and disability insurance coverage will be extended under this provision only to groups of policemen or firemen who want such coverage. (7) Coverage of sick-leave payments toState and local government employees Under present law most State and local sick-leave payments are wages until the employee reaches retirement age, but are excluded from wages after retirement age if the employee did not work during the pay period. Since most State and local governments do not give different treatment to wage payments to employees after the employees reach a specific age, their payroll records do not show the employee's age; and since sick-leave payments are treated like other wage payments the records do not show whether the employee was on sick leave durmg the pay period.A number of the State officials administering SOCIAL SECURITY AMENDMENTS OF 1958 23 old-age and survivors insurance coverage agreements have indicated that, as a result, they find it difficult to comply with the present requirement that they exclude from their wage reports Certain sick- leave payments to employees who have reached retirement age. H. R. 8599, which was passed by the House in 1957, would correct this situation; however, it also affected standby and other payments to such employees for periods during which the employees rendered no service.Your committee now feels that the treatment of these latter payments should not be changed without further study.The committee bill would correct the situation with respect to State and local government sick-leave payments and would leave the other payments unchanged.Under its provisions sick-leave payments made for periods during which the employee rendered no services would be treated the same for employees past retirement age as they are for the great majority of employees, who, of course, have not reached retirement age. (8) Turpentine workers The bill would extend coverage to work performed in the production of turpentine and gum naval stores.These workers would be covered under the provision applicable to other agricultural workers.Many of the people in this group are employed only temporarily or seasonally in the production of turpentine and gum naval stores so that they are likely to have already earned credits under the social security program in other work.Even those workers covered for the first time will, after a relatively short period of regular covered work, acquire survivors protection for their families, and after a somewhat longer period of covered work will acquire retirement and disability protection under the program. (9) Coverage of partnership earnings in the year of partner's death As a result of a change made in the Internal Revenue Code of 1954, a member of a partnership cannot get social security credit for his earnings from the partnership in the year of his death.Your committee's bill provides that a deceased partner's distributive share of partnership income shall be included for social security purposes in computing his net earnings from self-employment for the year of his death.The distributive share of a partner who dies after the date of enactment of the bill would be, for social security purposes, mandatorily included in his net earnings from self-employment.The distributive share of a partner who died after 1955 and on or before the date of enactment may be so included upon the filing of an amended social security tax return.Although this amendment affects only a small number of people, it corrects an inequity in present law.The amendment will enable some farm operators, lawyers, and others who were brought under the program under the 1954 and 1956 amendments to acquire an insured status which they would otherwise be unable to attain.In the future the amendment will, in some cases, provide needed social security credits for persons ho die while members of a partnership. (10) Social security credits for certain American citizens who served in the armed forces of allied countries Under present law, to assure that veterans who served in the Armed Forces of the United States have approximately the same 24 SOCIAL SECURITY AMENDMENTS OF 1958 status under old-age, survivors, and disability insurance as they might have had if military service had not interfered with their employment, wage credits of $160 are provided for each month of their active service in the Armed Forces of the United States during World War II and the post-World War II period.Your committee's bill would make comparable provision for American citizens who served in the armed forces of countries which fought with the United States against our enemies during the World War II period from September 16, 1940, to July 24, 1947. Before the United States entered World War II a number of Ameri- cans joined the armed forces of countries traditionally friendly with the United States.These citizens either left employment covered by social security to enter service abroad or probably would have worked in covered employment had they not entered military service.Your committee is concerned that they may have a gap in their social security coverage because of service with our allies during the time of war. Your committee's bill provides safeguards to assure that the military service wage credits will be given only to persons who could reasonably have been expected to be in covered employment had they not been in service.The wage credits would be provided only for American citizens who entered into service in the armed forces of a foreign country before the United States entered World War II, provided the foreign country was, on September 16, 1940, at war with a country which became an enemy of he United States during World War II.

H. MISCELLANEOUS PROVISIONS (1) Change in. eligibiiy requirement for the lump-sum death paymen.t Under present law, to qualify for the lump-sum death payment a spouse must have been "living with" the worker.The "living with" requirement is met if the spouse was living in the h'usehold with the worker or receiving contributions from him, or if the worker was under a court order to contribute to the spouse's support.Your committee's bill would change the requirement to one that the sjouse must have been living in the same household with the worker.Your committee believes that since the purpose of the lump-sum death payment is to help with the expenses incidental to the death of the worker, it is appropriate for the payment to be made only to the spouse who was actually living in the same household with the worker since it can be assumed that she will take responsibility for those expenses.The widow who meets the requirement because her husband was contributing to her support, or because he was under court order to do so, cannot be presumed to have assumed the expenses incident to her husband's death.The spouse who was not living in the same household with the worker may receive the lump-sum death payment if she actually did pay the worker's burial expenses. ()Authorization.to charge for certain. services provided by the Bureau of Old-Age and Survivors Insuran.ce The law now authorizes the Bureau of Old-Age and Survivors Insurance to charge for furnishing information, but not for services, for purposes not directly related to the administration of the old-age and survivors insurance program.Your committee'sbill would SOCIAL SECURITY AMENDMENTS OF 1958 25 provide an authorization for the Bureau to charge for service, such as forwarding letters to account numbers holders for health research purposes, which ar unrelated to the program and therefore could not properly be provided at the expense of the trust funds, and provides for the charges to be deposited in the trust funds. (3) Description of offenses thatconstitutefraud The present provision in the law prescribiiig penalties for fraudu- lent actions does not take into account the major amendments adopted in 1954 and 1956, such as the amendments relating to disability and the application of the earnings test to noncovered work The bill would make the penalty provision applicable in connection with willful failure to disclose information, as well as with respect to positive actions, in connection with uncovered as well as covered. earnings, and in connection with suspensions, terminations, and misuse of benefits, and disability determinations, as well as applications for benefits. (4) Remove requirement in the law that attorney representing claimant before the Secretary file with the Secretary a certificate of his right to practice before a court Under present law only a qualified attorney may represent claimants.The attorney must filewiththe Secretary a certificate, from the presiding judge or clerk of a court before which he is admitted to practice, of his right to practice before that court.It is the opinion of your committee that, inasmuch as a person who misrepresents himself as an attorney is subject to penalties outside the provisions of the Social Security Act, this provision should be eliminated.The committee bill provides statutory authority for the Secretary no longer to require the filing of a certificate by an attorney and would conform to longstanding administrative practice in other fields.

I. INCREASES IN CONTRIBUTION RATES As indicated, your committee believes that the actuarial status of the old-age and survivors insurance part of the program needs to be strengthened in part by providing that the ultimate tax rates should go into effect sooner than scheduled in present law.Accordingly, the committee bill increases the scheduled contribution rates on earnings paid by employers and employees by one-fourth percent above the rates now scheduled, with a corresponding increase for the self-employed, and provides that the future increases in the tax rate shall take place at 3-year, rather than 5-year intervals.The new schedule would be as follows:

Rate for em-Rate for self- Years ployee and employed employer

Percent Percent 1959 33% l960—O2jnclusjve 3 43,Z 1963—6ô inclusive 1966—68inclusjve 4 6 l969andlater 43 6 26 SOCIAL SECURITY AMNDMENTBOF 1958

J. ACTUARIAL COST ESTIMATES FOR THE OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE SYSTEM (1) Financing poUcy The Congress has always carefully considered the cost aspects of the old-age, survivors, and disability insurance system when amendments to the program have been made.In connection with the 1950 amendments, the Congress was of the belief that the program should be completely self-supporting from contributions of covered individuals and employers.Accordingly, in that legislation, the provision permitting appropriations to the system from general revenues of the Treasury was repealed,This policy has been continued in subsequent amendments,Thus, the Congress has always very strongly believed that the tax schedule in the law should make the system self-supporting s nearly as can be foreseen and therefore actuarially sound. The concept of actuarial soundness as it applies to the old-age, survivors, and disability insurance system differs considerably from this coilcept as applicable to private insurance although there are certain points of similarity—especially as concerns private pension plans.Thus, the concept of "unfunded accrued liability" does not by any means have the same significance for a social insurance system as it does for a plan established under private insurance principles.In a private insurance program, the insurance company or other administering institution must have sufficient funds on hand so that if operations are terminated, the plan will be in a position to pay off all the accrued liabilities.This, however, is not a necessary basis for a national compulsory social insurance system.It can reasonably be presumed that under Government auspices such a system will continue indefinitely into the future.The test of financial soundness then is not a question of sufficient funds on hand to pay off all accrued liabilities. Rather the test is whether the expected future income from tax contributions and from interest on invested assets will be sufficient to meet anticipated expenditures for benefits and administrative costs. Thus, it is quite proper to count both on receiving contributions from new entrants to the system in the future and on paying benefits to this group.These additional assets and liabilities must be considered to determine whether the system is estimated to be in actuarial balance. Accordingly, it may be said that the old-age, survivors, and disability insurance program is actuarially sound if it is in actuarial balance by reason of the fact that future income fromcontributions and from interest earnings on the accumulated trust funds will over the long run support the disbursements for benefits and administrativeexpenses.Obviously,futureexperience may beexpected to vary from the actuarial cost estimates made now.Nonetheless, the intent that the system be self-supporting (or actuarially sound) can be expressed in law by utilizing a contribution schedule that, according to the intermediate-cost estimate, results in the system being in balance or substantially close thereto. The actuarial balance under the 1952 act was estimated, at the time of enactment, to be virtually the same as in the estimates made at the time the 15O act was enacted.(See table 1.)This was the case because of the rise in earnings levels in the 3 years preceding the enactment of the 1952 act being taken into consideration in the estimates for that act and this virtually offset the increased cost due to SOCIAL SECURITYAMENDMENTSOF 1968 27 the benefit liberalizations made. New cost estimates made 2 years after the enactment of the 1952 act indicated that the level-premium cost(i.e.,the average long-range cost, based on discounting at interest, relative to payroll) of thebenefit disbursements and administrative expenses were somewhat more than 0.5 percent of payroll higher than the level-premium equivalent of the scheduled taxes (including allowance for interest on the existing trust fund). The 1954 amendments as passed by the House of Representatives contained an adjusted contribution schedule that met not only the increased cost of the benefit charges in the bill, but also reduced the aforementioned lack of actuarial balance to the point where, for all practical purposes, it was sufficiently provided for.The bill as it passed the Senate, however, contained several additional liberalized benefit provisions without any offsettir.g increase in contribution income.Accordingly, although the increased cost of the new benefit provisions was met, the "actuarial insufficiency" as then estimated for the 1952 act was left substantially unchanged under the Senate- approved bill.The benefit costs for the 1954 amendments as finally enacted fell between those of the House- and Senate-approved bills. Accordingly, it may be said that under the 1954 act, the increase in the contribution schedule met all of the additional cost of the benefit changes proposed and at the same time reduced substantially the "actuarial insufficiency" which the then current estimates had indicated in regard to the financing of the 1952 act. The estimates for the 1954 act were revised in 1956 to take into account the rise in the earnings level that had occurred since 1951—52, which period had been used as the basis for the estimates made in 1954.Taking this factor into account reduced the lack of acturial balance under the 1954 act to the point where, for all practical purposes, it was nonexistent; accordingly, the system was in approximate actuarial balance.The benefit changes made by the 1956 amend- iients were fully financed by the increased contribution income provided so that the actuarial balance of the system was unaffected, and the program thus remained actuarially sound; this same situation also prevailed for the House-approved and Senate-approved bills. New cost estimates have been made for the old-age, survivors, and disability insurance program taking into account recent experience and modified assumptions as to anticipated future trends.In the past 2 years, there has been a very considerable number of retire- ments from among the groups newly covered by the 1954 and 1956 amendments so that benefit expenditures have run appreciably higher than had been previously estimated.Moreover, the analyzed experience for the recent years of operation indicate that reti1ement rates have risen or, in other words, that the average retirement age has dropped significantly.This may be due in large part to the liberalizations of the retirement test made in recent years, under which aged persons are better able to effectuate a smoother transition from lull employment to full retirement.These new cost estimates indicate that the program as it is under the provisions of the 1956 act is out of actuarial balance by over 0.4 percent of payroll. Your committee believes that not only should any liberalizations in benefit provisions be fully financed by appropriate changes in the tax schedule or through other methods, 'but also that the acturial status of the system should be improved in similar manner so that the 28 SOCIALSECURITY AMENDMENTS OF 1958 actuarial insufficiency is reduced to the point where it is virtually eliminated, namely below one-fourth of 1 percent of payroll, as has been the case generally in the previous legislation. (2) Basic assumptions for cost estimate Estimates of the future cost of the old-age, survivors, and disability insurance program are affected by many factors that are difficult to determine.Accordingly, the assumptions usedintheactuarial cost estimates may differ widely and yet be reasonable.Benefit payments may be expected to increase continuously for at least the next 50 to 70 years because of factors such as the aging of the population of the country and the slow but steady growth of the benefit roll that is inherent in any retirement program, public or private, which has been in operation for a relatively short period. The cost estimates are presented here on a range basis so as to indicate the plausible variation in future costs depending upon the actual trend developing for the various cost factors.Both the low- and high-cost estimates are based on high economic assumptions, intended to represent close to full employment, with average annual earnings at about the level prevailing in 1956.In addition to the presentation of the cost estimates on a range basis, intermediate estimates developed directly from the low- and high-cost estimates (by averaging them) are shown so as to indicate the basis for the financing provisions. In general, the costs are shown as a percentage of covered payroll. This is the best measure of the financial cost of the program.Dollar figures taken alone are misleading.For example, a higher earnings level will increase not only the outgo but also, aid to a greater extent, the income of the system.The result is that the cost relative to. payroll will decrease. In general, the cost estimates have been prepared on the basis of the same assumptions and methodology as those contained in the Eighteenth Annual Report of the Board of Trustees of the Federalt Old-Age and Survivors Insurance Trust Fund and the Federal Dis- ability Insurance Trust Fund (H. Doc. No. 401, 85th Cong.). It should be especially mentioned that the assumptions used in connection with the disability benefits are essentially the same as those used in the original cost estimates for these benefits when they were first incorporated in the law in 1956 (but with certain minor modifications of methodology that result in the cost being shown somewhat lower than originally estimated).The actual experieice to date under the very strict definition of "disability" in the law has been significantly lower in cost than the iiitermediate-cost assumptions would indicate.Nevertheless, until somewhat more experience is available and can be analyzed, it is believed that these cost bases for the monthly disability benefits should be maintained.Disability incideiice and termination rates can vary widely—much more so than mortality rates, which are a basic factor in the retirement and survivor benefit cost calculations. The cost estimates are extended beyond the year 2000 since the aged population itself cannot mature by then. The reasoi for this is that the number of births in the 1930's was very low as compared with subsequent experielice.As a result, there will be a dip in the relative proportioi of the aged from 1995 to about 2010, which would tend SOCIAL SECURITY AMENDMENTS OF 1958 29 to yield low benefit costs for that period.Accordingly, the year 2000 is by no means a typical ultimate year. An important measure of long-range cost is the level-premium contribution rate required to support the system into perpetuity, based on discounting at interest.It is assumed that benefit payments and taxable payrolls remain level after the year 200.If such a level rate were adopted, relatively large accumulations in the trust fund would result, and in consequence there would be sizable eventual income from interest.Even though such a method of financing is not followed, this concept may nevertheless be used as a convenient measure of long-range costs.This is a valuable cost concept, especially in comparing various possible alternative plans and provisions, since it takes into account the heavy deferred benefit costs. The estimates are based on level-earnings assumptions.This, however, does not mean that covered payrolls are assumed to be the same each year; rather, they rise steadily as the population at the working ages is estimated to increase.If in the future the earnings level should be considerably above that which now prevails, and if the benefits for those on the roll are at some time adjusted upward so that the annual costs relative to payroll will remain the same as now estimated for the present act, then the increased dollar outgo resulting will offset the increased dollar income. This is an important reason for considering costs relative to payroll rather than in dollars. The cost estimates have not taken into account the possibility of a rise in earnings levels, although such a rise has characterized the past history of this country.If such an assumption were used in the cost estimates, along with the unlikely assumption that the benefits, nevertheless, woUld not be changed, the cost relative to payroll would, of course,belower.If benefits are adjusted to keep pace with rising earnings trends, the year-by-year costs as a percentage of paytoll would be unaffected.In such case, however, this would not be true as to the level-premium cost—which would be higher, since under such circumstances, the relative importance of the interest receipts of the trust funds would gradually diminish with the passage of time. If earnings do consistently rise, thorough consideration will nced to be given to the financing basis of the system because then the interest receipts of the trust funds will not meet as large a proportion of the benefit costs as would be anticipated if the earnings level had not risen. An important element affecting old-age, survivors, and disability insurance costs a.rose through amendments made to the Railroad Retirement Act in 191.These provide for a combination of railroad retirement compensation and social security covered earnings in determining benefits for those withless than 10 years of railroad service (and also for all survivor cases). Financial interchange provisions are established so that the old-age and survivors insurance trust fund and the disability insurance trust fund are to be placed iii the same financial position in which they would have been if there never had been a separate railroad retirement program.It is estimated that, over the long range, the net effect of these provisions will be a relatively small gain to the old-age, survivors, and disability insurance system since the reimbursements from the railroad retirement system will be somewhat larger than the net additional benefits paid on the basis of railroad earnings. 28861—8---—— 30 SOCIALSECURITY AMENDMENTS OF 1958 (3) Results of intermediate-cost estimates The intermediate-cost estimates are developed from the Iow-cost and high-cost estimttes by averaging them (using the dollar estimates anddeveloping therefrom the corresponding estimates relative to payroll).The intermediate-cost estimate does not represent the most probable estimate, since it is impossible to develop any such figures. Rather, it has been set down as a convenient and readily available single set of figures to use for comparative purposes. The Congress, in enacting the 1950 act and subsequent legislation, was of the belief that the old-age, survivors, and disability insurance program should be on a completely self-supporting basis or, in other words, actuarially sound.Therefore, a single estimate is necessary in the development of a tax schedule intended to make the system self-supporting.Any specific schedule will necessarily be somewhat different from what will actually be required to obtain exact ba'ance between contributions and benefits.This procedure, however, does make the intention specific, even though in actual practice future changes in the tax schedule might be necessary.Likewise, exact self-support cannot be obtained from a specific set of integral or rounded fractional tax rates increasing in orderly intervals, but rather this principle of self-support should be aimed at as closely as possible. The contribution schedules contained in the 1956 act and in the bill are as follows (in each case, one-fourth percent of the employer rate and of the employee rate, and three-.eighths percent of the self-. employed rate is used for monthly disability benefits):

Employee rate Self-employed rate (same for employer) Calendar year 1956 act Bifi 19ô6 act Bill

Percent Percent Percent Percent 1958 2 2 3% 3 199 2 2 3% 3( 1960to 1962 28% 3 4 4 1963to1964 28% 3 4 W 1966 3 3 4 5 1966to1968 3( 4 4 6 1969 3 4 4 6% 1970to1974 % '4 6/ 1976andalter 4 4 6% 68,

Table 1 has shown that the bill would reduce the lack of actuarial balance of the old-age and survivors insurance system from 0.57 percent of payroll to 0.25 percent of payroll, or about the same level as was the case for the 1956 act at the time it was enacted.At the same time, the disability insurance system would have an actuarial surplus of 0.01 percent of payroll under the bill, as compared with 0.15 percent under the provisions of the 1956 act.The effect of the bill on the èombined old-age, survivors, and disability insurance system would be to reduce the actuarial deficit from 0.42 percent of payroll to 0.24 percent, which is well within the margin of variation possible in actuarial cost estimates, and which is about the same as has generally prevailed in the past when the system has been in substantial actuarial balance. If the cost estimates had been based on current earnings levels (instead of those for 1956), the lack of actuarial balance would have been shown as somewhat less than 0.24 percent of payroll. SOCIAL SECURITY AMENDMENTS OF 1958 31 Table2 traces through the change in the actuarial balance of the system from its situation under the 1956 act according to the latest estimate to that under the bill, according to the major changes proposed. It should be emphasized that in 1950 and in subsequent amendments the Congress did not recommend that the system be financed by a high, level tax rate in the future, but rather recommended an increasing sehedule, which, of necessity, ultimately rises higher than the level-premium rate.Nonetheless, this graded tax schedule wifi produce a considerable excess of income over outgo for many years so that sizable trust funds will develop, although not as large as would arise under a level-premium tax rate.This fund wifi be invested in Government securities (just as is also the case for the tru$t funds of the civil-service retirement, railroad retirement, national service life insurance, and United States Government life-insurance systems).The resulting interest income will help to bear part of the higher benefit costs of the future. The revised contribution schedule in the bill has a twofold effect on the financing of the system.First, there is a uniform one-half of 1 percent increase in the combined employer-employee rate for all future years beginning with 1959.Second, the subsequent increases in the contribution rate, which are scheduled at 5-year intervals in present law, are advanced to 3-year intervals.As shown in table 2, the first of these changes quite naturally has the effect of producing additional income equivalent to 0.50 percent of payroll on a level- premium basis.The other change in the tax schedule, namely accelerating the interval between increases has the level-premium effect of increasing income to the system by 0.19 percent of payroll. Another change that would be made by the bill also has the 'effect of increasing the income to the system, namely, raising the maximum taxable and creditable earnings base from $4,200 to $4,800 a year. This change has the effect of increasing income by a gross amount equivalent to 0.55 percent of payroll on a level-premium basis, but this is partially offset by the additional benefits that will be paid on the higher earnings credited (namely, 0.32 percent of payroll on a level-premium basis).Accordingly,theneteffectisequivalent additional income of 0.23 percent of payroll on a leve1premium basis. The level-premium cost of the old-age and survivors insurance benefits (without considering administrative expenses and the effect of interest earnings on the existing trust fund) under the 1956 act; according to the latest intermediate-cost estimate, is about 8.0 percen of payroll, while the corresponding figure for the bill is 8.4 percent. Similarly, the corresponding figures for the disability benefits are 0.35 percent for the 1956 act and 0.4 percent for the bill. Table 3 presents the benefit costs under the bill for each of the various types of benefits. The level-premium contribution rates equivalent to the graded schedules in the 1956 act and in the bill may be computed in the same manner as levehpremium benefit costs.These are shown in table 1for income and disbursements after 1957 (except forthe original estimate for the 1956 act, which figures are based on operations after 1955).The figures for the net actuarial balance are also shown in table 1. 32 SOCIALSECURITY AMENDMENTS OF 1958 If the bill were to become law in August 1958, old-age and survivors insurance benefit disbursements for the calendar year 1958 would be mcreased by about $50million,while there would, of course, be no additional income to the fund during the year.In calendar year 1959, such benefit disbursements under the bill would total about $9.5 billion, or an increase of about $700 million over present law.At the same time, contribution income for old-age and survivors insurance for 1959 would amount to about $8.6 billion under the bill, or $1.1 billion more than under present law.Thus, the excess of benefit outgo over contribution income would be reduced from $1.4 billion under present law to $800 million under the bill.The decreases in the old-age and survivors insurance trust fund would not be as large as the figures just given because the interest receipts would exceed outgo for administrative expenses and transfers to the railroad retirement accounts. In 1960, old-age and survivors insurance benefit disbursements under the bill would, according to the intermediate cost estimate, be $10.0 billion, or an increase of $700 million over the present law.At the same time, contribution income for old-age and suirvivors insurance for 1960 would be $10.6 billion under the bill, or $1.5 billion more than under present law.Accordingly, in 1960, there would be an excess of contribution income over benefit outgo of about $600 million under the bill, whereas under present law there would be a deficit of about $300 million.Under the bill, the excess of contribution income would be about $500 million in 1961, abOut $50 million in 1962, and about $1.5 billion a year in 1963 and in 1964.On the other hand, under present law, during each year of, the period 1961—64, there would be deficits of contribution income as compared with benefit outgo ranging up to as much as $1 billion. As to the disability insurance system, if the bill were to become law in August 1958, benefit disbursements for the calendar year 1958 would be increased by about S20 million, while there would, of course, be no additional income to the trust fund during the year.In calendar year 1959, such benefit disbursements under the bill would total about $435 million, or an increase of about $200 million over present law.At the same time, contribution income for disability insurance for 1959 would amount to about $980 million, or only a small increase over present law (solely because of raising the taxable earnings Jase, since there is no change made in the amount of contributions assignable to this program).Nonetheless, in 1959 there would be an excess of contribution income over benefit outgo of about $500 million.Similarly, in 1960 and the years immediately followmg, contribution would be well in excess of benefit outgo—by as much as $300 million in 1965 and, of course, somewhat larger amounts in the earlier years. Table 4 gives the estimated operation of the old-age and survivors insurance trust fund under the bill for the long-range future, based on the intermediate-cost estimate.It will, of course, be recognized that the figures for the next two or three decades are the most reliable (under the assumption of level-earnings trends in the future) since the populations concerned—both covered workers and beneficiaries— are already born.As the estimates proceed further into the future, there is, of couEse, much more uncertainty—if for no reason other than the relative difficulty in predicting future birth trends, but itis SOCIAL SECURITY AMENDMENTS OF 1958 33 desirableand necessary nonetheless to consider these long-range possibilities under a social-insurance piogram that is intended to operate in perpetuity. In every year after 1959, for almost the next 30 years, contribution income is estimated to exceed old-age and survivors insurance benefit disbursements. Even after the benefit outgo curve ñses ahead of the contribution income curve in 1985, the trust fund will nonetheless continue to increase because of the effect of interest earnings (which more than meet the administrative expense disbursements and any financial interchanges with the railroad retirement program). Asa result, this trust fund is estimated to grow steadily, reaching $50 billion in 1970, $99 billion in 1980, and $163 billion at the end of this century.In the very far distant future; namely, in about the year 2030, the trust fund is estimated to reach a maximum of about $295 billion, and then decrease slowly.Nevertheless, even 90 years from now, this estimate would show a trust fund of about $200 billion. The fact that the trust fund would not become exhausted until somewhat more than a century hence, indicates that the proposed tax schedule is not quite self-supporting although it is, for all practical purposes, sufficiently close so that the system may be said to be actuarially sound.This general situation was also true for the 1950 act and for subsequent amendments, according to the estimates made when they were being considered. On the other hand, the disability insurance trust fund grows steadily.(See table 5.)In 1970, it is shown as being $5.7 billion, while in 1980 and 2000, the corresponding figures are $6.8 billion and $13.2 billion, respectively.There is an excess of contribution income over benefit disbursements for every year up to about 1975, and even thereafter the trust fund continues to grow because of its interest earnings.In fact, this trust fund is never shown to decline in any future year, which is to be expected since the level-premium cost of the disability benefits according to the intermediate-cost estimate is slightly lower than the level-premium income of one-half of 1 percent of payroll. (4)Resultsof cost estimates on range basis Table 6 shows the estimated operations of the old-age and survivors insurance trust fund for the low-cost and high-cost estimates, while table 7 gives corresponding figures for the disability insurance trust fund.Under the low-cost estimate, the old-age and survivors insurance trust fund builds up quite rapidly and in the year 2000 is shown as being about $280 billion and is then growing at a rate of about $14 billion a year.Likewise, the disability insurance trust fund grows steadily under the low-cost estimate, reaching about $45 billion in the year 2000, at which time its annual rate of growth is about $2 billion.For both trust funds, after 1959, benefit disbursements do not exceed contribution ijicome in any year in the foreseeable future. On the other hand, under the high-cost estimate, the old-age and survivors insurance trust fund builds up to a maximum of about $85 billion in about 25 years, but decreases thereafter until it is exhausted in the year 2010.Under this estimate, benefit disbursements from the old-age and survivors insurance trust fund are smaller than contribution income during all years before 1980, except 1959 and 34 SOCIAL SECURITY AMENDMENTS OF 1958

1962(inthe latter year a relatively small deficit would be shown). As to the disability msurance trust fund, in the early years of operation, contribution income materially exceeds outgo, and this is so until 1965.Accordingly, the disability insurance trust fund, as shown by this estimate, would be about $3 billion in 1965 and would then slowly decrease until being exhausted in 1976. These results are consistent and reasonable, since the system on an intermediate-cost estimate basis is intended to be approximately self- supporting, as indicated previously.Accordingly, a low-cost estimate should show that the system is more than self-supporting, whereas a high-cost estimate should show that a deficiency would arise later on. In actual practice, under the philosophy in the 1950 and subsequent acts, as set forth in the committee reports therefor, the tax schedule would be adjusted in future years so that neither of the developments of the trust funds shown in tables 6 and 7 woi.ild ever eventuate. Thus, if experience followed the low-cost estimate, and if the benefit provisions were not changed, the contribution rates woi.ild probably be adjusted downward—or perhaps would not be increased in future years according to schedule.On the other hand, if the experience followed the high-cost estimate, the contribution rates would have to be raised above those scheduled.At any rate, the high-cost estimate does indicate that under the tax schedi.ile adopted, there woi.ild be ample funds to meet benefit disbursements for several decades, even under relatively high-cost experience. (5) Summary of actuarial cost estimates The old-age, survivors, and disability insurance system, as modified by the bill, has a benefit cost that is very closely in balance with contribution income.This also was the case for the 1950 act and subsequent amendments at the time they were enacted.In fact, the system as modified by the bill is significantly closer to actuarial balance, according to the intermediate-cost estimate, than is the present law. The system as modified by the bill, and the system as it was modified by the previous amendments, has been shown to be not quite self- supporting under the intermediate-cost estimate.There is very close to an exact balance, especially considering that a range of error is necessarily present in the long-range actuarial cost estimates and that rounded tax rates are used in actual practice.Accordingly, the old-. age, survivors, and disability insurance program, as it would be amended by this bill, is actuarially sound.In fact, the actuarial status of the program is very much improved over that of present law since the cost of the liberalized benefits is more than met by the increased contributions that are schedi.iled (with such rise going fully into effect almost immediately upon the inauguration of the new benefit provisions). The separate disability insurance trust fund established under the 1956 act shows a small favorable actuarial balance because the contribution rate allocated to this fund is slightly in excess of the cost for the disability benefits, based on the intermediate-cost estimate.Con- sidering the variability of cost estimates for disability benefits, this small actuarial excess is not significant. SOCIAL SECURITY AMENDMENTS OF 1958

TABLE 1.—Actuarial balance of old-age, survivors, and disability insurance program under various acts for various estimates on an intermediate-cost basis (Percenti

Level-premium equIvalent 2 Date of Legislation estimate Benefit Coritribu.ActuarIa' costs 3 tions balance'

Old-age, survivors, and disability Insurance

1950 act 1950 6.05 5. 95 —0. 10 1952 act 1952 5.85 5.75 —.10 1952act 1954 6.62 6.05 —.57 1954 bill (House) 1954 7 34 7 12 —. 1954 act 1954 7. 51) 7. 12 —.38 1954 act 1956 7. 45 7. 29 —. 16 1956 act 1956 7. 85 7.72 —. 13 1956 act 198 8. 25 7.83 —. 42 198 blU (House) 198 8.76 8. 62 —. 24

Old-age and survivors insurance I

1956 act 1956 7.43 7.23 —0. ) 1956 act 198 7. 90 7.33 —. 57 198 blU (House) 198 8.27 8.02 .25

Disabilityinsurance'

1956 act 1956 0. 42 0.49 -1-0.07 1956 act 198 .35 . 50 -1-. 15 198 bill (House) 198 .49 .50 +.01

I The disability insurance program wa8 inaugurated in the 1956 act so that all figures for previous Jegis- latlon are for the old-age and survivors insurance program only. 2 Expressed as a percentage of taxable payroll. a Including adjustments (a) to reflect the lower contribution rate for the self-employed as compared with the combined employer-employee rate, (b) for the interest earnings on the existing trust fund, and (c) for administrative expense costs. 4A negative figure indicates the extent of lack of actuarial balance. A positive figure Indicates more than sufficient financing, according to the particular estimate. TABLE 2.—Changes in estimated level-premium cost of benefit payment8 as percentage of taxable payroll, by type of change, intermediate-cost estimate at 3 percent interest, 195fl act andbill

Old-age and Disability Item survivors Insurance insurance

Percent Percent Present lack of balance (—) or surplus (+) —0.57 +0.15 Increase of -percent In tax schedule +. 50 Acceleration of tax schedule (3-year rises) +. 19 Increased income from higher earnings base +. 62 -I-. 03 Additional benefit cost from higher earnings base —.34) —.02 Increase of benefit level by 7 percent (or $3, if more) —.57 —.03 Supplementary bencfits for disability beneficthries —.06 limlnation of disability benefit offset provision —.03 Modification of insured status requirements —.03 Liberalizing retirement test —. 01 Paying parent's benefits In. all cases —.01 -- Lack of balance (—) or surplus (+) under bill —.25 +.O1 36 SOCIALSECURITY AMENDMENTS OF 1958

TABLE 3.—Estimated level-premium cost of benefit payments, administrative expenses, and interest earnings on existing trust fund under bill as percentage of taxable payroll, 1bytype of benefit, intermediate-cost estimate at 3 percent interest

Old-age and Disabi1tty Item Survivors insurance Insurance

Percent Percent Primary benets 5.92 0.43 Wife's benefits .57 .03 Widow's benets 1.23 (2) Parent'sbenets .02 (2) OhUd'sbenets .43 .03 Mother's benefits .11 (2 Lump-sum death payments .12 (2 Total benefits 8.40 .49 Administrative expenses .09 .01 Interest on exlstlngtrustfund8 •—.22 —.01

Net total level-premium cost 8.27 . 49

Including adjustment to reflect the lower contribution rate for the self-employed as compared with the combined employer-employee rate. 'ThIS type of benefit not payable under this program. Tills item Is taken as an offset to the benet and administrative expense co6ts. TABLE 4.—Progress of old-age and survivors insurance trust fund under bill, high- employment assumptions, intermediate-cost estimate at 3 percent interest (In millions]

Rai1road Contribu- Benefit Adminls-retirementInterest onBalance In Calendar year tions payments trative financial fund 2 fund expenses interchange I

ActuaI data

1951 $3,367 $1,885 $81 $417 $15,540 1952 3,819 2,194 88 365 17, 442 1953 3,945 3,00(i 88 414 18,707 19ö4 5,163 3,670 92 468 20,576 19ö5 5,713 4,968 119 461 21,663 1956 6,172 5,715 132 31 22,519 1957 6,826 7,347 162 537 22,393

Estimated data l9ôS $7, 297 $8, 368 $156 —$124 $565 $21, 606 1D59 8,632 9,455 161 —219 567 20.971 1960 10,621 10,027 166 —196 590 21,794 196k 11, lOfi 10,618 19 —195 64 22552 1962 11,256 11,207 172 —11)9 672 22902 196 13, 124 11,678 175 —156 704 24,722 1964 13,652 12,016 178 —156 761 26,784 195 13,80 12,333 181 —160 820 28,762 1970 19,404 15,030 201 —70 1,406 50,330 1975 20,880 17, 766 222 —59 2,185 76, 432 1980 22,301 20,874 24 12 2,856 98,678 2000 29,695 29,672 332 192 4,762 163,448 2020 36, 124 40,716 426 192 8,379 285,282

A positive figure indicates payment to the trust fund from the railroad retirement account, and a negative figure indicates the reverse. IAt3 percent, eccept 2.6 percent in 1958, 2.7 percent in 1959, 2.8 percent In 1960, and 2.9 percent in 1961. 8Notincluding amounts in the railroad retirement account to the credit of the old-age and survtvors insurance trust fund.In millions of dollars, these amounted to $377 for 1953, $284 for 1954 $163 for 1955, $60 for 1956, and nothing for 197 and thereafter. 4Thisgure is artificially high because reimbursements from the disability Insurance trust fund, called for by the law, had not been made in calendar year 1957.These amounted to about $14 million. SOCIAL SECURITY AMENDMENTS OF 1958 37

TABLF5.—Progress of disability insurance trust fund under bill, high-employment assumptions, intermediate-cost estimate at 3 percent interest [Inmillions]

Railroad Contribu- Benefit Admlnis.retirementInterest onBalance In Oalendar year tions payments. trative financial fund 2 fund expenses Inter- change I

ActuaI data

1957 $702 $7 1 3 $3 $7 $649

Estimated data

1958 $914 $265 $19 $25 $1,304 1959 980 434 21 $10 42 1,882 1960 991 492 23 —20 59 2,397 1961 1,004 555 23 —23 76 2,876 1962 1,018 613 24 —26 92 3,322 1963 1,032 675 24 —28 104 3,731 1964 1,046 7343 25 —31 116 4,101 1965: 1,059 796 25 —34 126 4,431 1970 1,141 1,052 27 —34 165 5,679 1975 1,227 1,249 30 —31 187 6,384 1980 1,311 1,380 30 —22 201 6,835 2000 1,745 1,649 40 —2 383 13, 177 2020 2, 125 2, 330 51 1 520 17, 734 . d 'A positive figure Indicates payment to the trust fund from the railroad retirement account, and a negative figure indicates the reverse. 2 At 3 percent, except 2.6 percent in 1958, 2.7 percent in 1959, 2.8 peicent In 1960, and 2.9 percent In 1961. This figure is artificially low because reimbursements to the old-age and survivors insurance trust fund, called for by the law, had not been made In calendar year 1957.These amounted to about $14 million. TABLE 6.—Estimated progress of old-age and survivors insurance trust fund under bill, high-employment assumptions, low-cost and high-cost estimates at 3 percent interest [In millions]

Railroad Contribu- Benefit Adnilnis-retirementInterest onBalance In Calendar year tions payments trative financial fund 8 fund expcnses Inter- change

Low-costestimate

1965 $13, 866 $12,055 $167 —$145 $883 $31,076 1970 19,458 14,663 186 —49 1,542 55,226 1970 21,072 17,217 206 —32 2,441 85,607 1980 22, 773 19,905 228 39 3,328 115, 570 2000 32,137 26,835 310 21S S,071 279,701 2020 41,754 36,432 408 218 20,249 697,772

High-costestimate

1960 $13,794 $12,609 $195 —$176 $758 $26,447 1970 19,351 15,398 216 —91 1,270 45,434 1975 20,688 18,315 239 —S5 1,929 67,256 1980 21, 829 21, 782 263 —14 2,385 81,786 2000 27, 253 32, 511 354 167 1,454 47, 194 2020 30,495 45, 001 445 167 (3) (3)

I A positive figure indicates payment to the trust fund from the railroad retirement account, and a negative figure indIcates the reverse. At 3 percent, except 2.6 percent in 1958, 2.7 percent In 1959, 2.8 percent in 1960, and 2.9 percent in 1961, S Fund exhausted In 2010. 28861—58————6 38 SOCIAL SECURITY AMENDMENTS OF 1958

TABLE 7.—Estimated progress of disability insurance trust fund under bill, high- employment assumptions, low-cost and high-cost estimates at 3 percent interest (In millions]

Railroad Contribu- Benefit AdmIns-retirementInterest onBalance in Calendar year tions payments trative financial fund 2 fund expenses Inter- change I

Low.costestimate

1965 $1. 063 $535 $22 —$S2 $164 $5. 870 1970 1, 144 699 23 —32 259 9,092 1975 1,239 834 25 —29 360 12, 519 1980 1 339 930 27 —20 474 16,440 2000 1,889 1,110 38 1,310 45,355 2020 2, 456 1,798 50 3 2,889 99, 48

High-costestimate

1965 $1, 056 $1, 059 $28 —$35 $88 $2, 992 1970 1,138 1,407 30 —35 71 2,2 1975 1,216 i,o 33 —33 15 250 1980 1,283 1,828 35 —24 (3) (8) 2000 1,602 2,189 44 —4 (3) (3 2020 1, 793 2, 864 52 —1 () (8

I Apositive figure Indicates payment to the trust fund from the railroad retirement account, and a negative figure Indicates the reverse. IAt3 percent, except 2.8 percent in 1958, 2.7 percent In 1959, 2.8 percent In 1960, and 2.9 percent in 1961. Fund exhausted in 1978. IV. DISCUSSION OF PUBLIC ASSISTANCE AND MATER- NAL AND CHILD WELFARE PROVISIONS

A. PUBLIC ASSISTANCE PRovisIoNs

(1) GeneraL Your committee's bill would amend those provisions of the Social Security Act relating to old-age assistance (title I), aid to dependent children (title IV), aid to the blind (title X), and aid to the permanently and totally disabled (title XIV), so as to: (1) Change the formula determining the Federal share of assistance payments to provide an average maximum on State expenditures for assistance in which there can be Federal sharing, including assistance in the form of medical care and as money payments, and make a portion of the Federal contribution related to the per capita income of the States; (2) Extend the benefits of the four titles to Guam, with a dollar limitation on the total Federal grant; (3) Increase the dollar limitation on the total Federal grant to Puerto Rico and the Virgin Islands; (4 Extend for an additional 2 years the special matching provisions for certain State aid-to-blind programs. (2) FederaL matching formuLa Under the old-age assistance, aid to the permanently and totally disabled aid to the blind, and aid to dependent children titles of the Social ecurity Act, the Federal Government participates in State expenditures made to needy individuals in the form ofmoney pay- SOCIAL SECURITY AMENDMENTS OF 1958 39 ments,and in behalf of an individual in the form of medical care or other forms of remedial care recognized under State law.The law provides a maximum on State expenditures in which the Federal Gov- ernment can participate, separately stated for money payments to the individual for assistance and medical care on his behalf.For money payments made to the individual the present maximum, in old-age assistance, aid to the blind, and aid to the permanently and totally disabled is $60 a month; for aid to dependent children, the present maximum is $32 a month for the first dependent child in the home, $23 for each additional child in the home, and $32 a month for the relative caring for the dependent child or children.For medical care costs paid in behalf of a needy person to vendors of medical care (doctors, hospital, etc.), the Federal Government participates in expenditures up to a total determined by multiplying $6 a month times the number of adults receiving assistance in a particular State, and $3 a month by the number of children receiving assistance.The Fed- eral share of the payments made which are within the maximums described above, is for old-age assistance, aid to the blind, and aid to the permanently and totally disabled, four-fifths of the first $30 of the average assistance payment and one-half of the remainder up to a maximum of $60, and in the aid to dependent children, fourteen- seventeenths of the first $17 of the average assistance payment made under the program, and one-half of the remainder up to the maximum of $32 or $23.For medical care, the Federal share of payments made within the maximums of $6 and $3 is one-half or $3 and $1.50. Under your committee's bill, the method of determining the Federal share of State expenditures would be changed in two respects: (1) The maximums on the payment made to the recipient and on the vendor expenditures made in his behalf in the form of medical or remedial care in which the Federal Government will participate would be combined into one maximum and on the basis of the average payment to.all recipients in a State which maximum is applicable to the entire assistance expenditure, including both money payments to the needy recipients and medical care in their behalf. For old-age assistance, aid to the blind, and aid to the permanently and totally disabled, this maximum would be $66 a month.In aid to dependent children, the maximum would be $33 a month for each individual receiving assistance. (2) The Federal share would be determined in part by the relative fiscal ability of the State as measured by average State per capita income. The Federal share of assistance expenditures for the aged, blind, and disabled would be four-fifths of the first $30 of the average monthly assistaTice expenditure (as at present). For needy dependent children, the Federal share would be changed from fourteen-seventeenths of the first $17 of the average monthly assistance expenditures for individuals receiving aid to five-sixths of the first $18 of such expenditures. Federal participation iTi the assistance expenditures made above these maximums but within the overall limits determined by multiplying by $66 the number of persons receiving old-age assistance, aid o the blind, and aid to the permanently and totally disabled each month; and by $33 the number of persons receiving aid to dependent children 40 SOCIALSECURITY AMENDMENTS OF 1958 each month would be increased above the present 50—50 inatching for the lower income States.Federal participation in such payments would be 50 percent for States whose per capita income was equal to or above the average per capita income for the Umted States, and would range upwarã to 70 percent for States whose per capita income is below the national average. Under the new formula, the lowest m- come States will receive Federal funds per recipient on a basis more nearly equivalent to the highest income States.Federal funds will average $32.23 per recipient in the 12 highest income States, and $28.84 in the 12 lowest income States. The Federal funds under your committee's bill, together with State and local funds now being spent, would provide assistance payments to recipients averaging $64.89 in the 12 highest income States and $38.62 in the 12 lowest income States. The bill directs that the Secretary of the Department of Health, Edu- cation, and Welfare, between July 1 and August 31 of each even numbered year, shall promulgate the Federal percentage for each State on the basis of average per capita income of each State and of thecontinental United States, for the three most recent calendar years for which satisfactory data are available from the Department of Com- merce.Such promulgation shall be used in determining the Federal share of State assistance expenditures for the succeeding 2 years. Special provision is made in the bill for the Secretary to promulgate a percentage as soon as possible after the enactment of this act, which shall be used for the 11 quarters in the period beginning October 1, 1958, through June 30, 1961. Your committee believes that the change to an average maximum holds many advantage for the States in simplification of administrative procedures by eliminating some detailed recordkeeping and by enabling the States, with Federal participation, to meetmore adequately the unusual needs of individuals.This is difficult to do under the present law, inasmuchatheFederal maximums are stated in terms of payments to an individual.Your committee also believes that the combining of the Federal maximumon assistance paid as money payments to the individual and medical care in his behalf also is advantageous.This change will enable a State to decide to what extent it wishes to pay for medical care received by the needy through the method of making a payment in his behalf to the vendor of the medical care or giving him money so that hecan purchase his own medical care, without being influenced by consideration of Fed- eral financial sharing.The bill will make it clear that the Federal Government will be able to participate financially in State expenditures for medical care in those instances in which the recipientwas eligible at the time the medical care was authorized, but who subsequently became ineligible for such reasons as death prior to thepay- inent of the bill. Under your committee's bill, each State would receive additional Federal funds which would enable the States to increase thepayments to individuals receiving aid as needed or to give assistance to additional needy people.The revised formula in the bill for determining the Federal share of assistance will be of particular assistanceto States with limited fiscal resources and will enable these Statesto make more nearly adequate assistance payments.This will help to more nearly balance the level of assistance made available to needy SOCIAL SECURITY AMENDMENTS OF 1958 41 people in the various parts of the country. The committee considered the possibility of including in the bill language to require the States to use the additional funds made possible under the bill for additional assistance, or for the money to tevert. to the Federal Treasury, but your committee has not been able to find such a provision that would operate equitably.Your committee believes, however, that the States should make available to the needy as promptly as possible the additional Federal funds made available under this bill. IJ8timae inCrea8C1 in Federa2 fun4s by States under proposal in committee bill

All programs corn- All programs corn- bined bined State (in order of per capita State (In order of per capita income, 1954—56) Total Monthly incorne, 1954—56) Total Monthly annual Increase annual Increase Increase per Increase per (thousands)recipient (thousands) recipient

United States totaL.. $287,818 $455 Minnesota 6,303 6.33 Kansas 2,928 4.30 12 highest States 59,221 2.89 FlorIda 9,136 4.42 27 rniddle States.... 121,906 6.10 Arizona 3,179 6.45 12 lowest States.. 106,691 5.64 Iowa 7,276 8.83 Texas 14, 117 3.46 Delaware 311 3.10 Nebraska 2,583 7.13 Connecticut 1, 625 3. 52 MaIne 2, 507 6. 72 Nevada 221 3.06 virgInia 3,229 4.52 New Jersey 1, 95 2.97 Utah 1,638 6.14 District of Columbia 1,168 5.14 verrnont 1,193 9.05 California 9,416 1.66 Idaho 1,842 10.32 New York 13,273 3.00 Oklahorna 23,803 11.41 illinois 8,186 3.18 New Mexico 4,684 9.26 Michigan 8,453 4.54 LouIsiana 24,771 8.27 Massachusetts 4,375 2.61 Georgia 21,689 9.88 Ohio 7,973 3.61 South Dakota 2,900 11.40 Maryland 2,355 4.25 North Dakota 1,936 9.08 Wasfflngton 3,693 3.26 Westvlrglnia 10,321 8.51 Rhode Island 1,473 4.86 Tennessee 10,333 6.32 Pennsylvania.._ 9,228 4.00 Kentucky 7,401 4.27 Indiana 3,592 4.24 North Carolina 7,127 3.80 Oregon 1,725 4.08 Alabama 6,690 2.36 Wyorning 249 3.66 South Carolina 2,967 3.09 Montana 1,335 6.24 Arkansas 9,682 8.66 Missouri 6,582 2.11 MissIssippi 874 .47 Colorado 3,571 3.61 Alaska 226 2.90 WIsconsin 5,578 6 52 HawaII 588 3.59 New Hampshire 649 5.42

I AssumingStates continue to spend as rnuch per recipient per month frorn State and local funds as under present forrnula.based on estimates by the States of recipients and expenditures for fiscal year 1959. U. S. Department of Health, Education, and Welfare, Social Security Administration, Thireau of Public Assistance. (3) Approval of certain State plan$ for aid to the blind Your committee's bill provides for an additional 2-year extension of section 344(b)of the Social Security Act, relating to aid to the blind programs in Pennsylvania and Missouri. (4)Repealof section 9 of Public La'zii 474 Section9 of Public Law 474, 81st Congress, approved April 19, 1950, provided special Federal financing of public assistance under State plans approved under the Social Security Act, for public assistance to Navajo and Hopi Indians residing on reservatiops or on alloted or trust lands.The formula change set forth in your com- inittee's bill providing an •average maximum, and recognizing the economic capacity of the States, makes unnecessary these special provisions.Your committee's bill therefore repeals section 9 of Public Law 474. 42 SOCIAL SECURiTY AMNDMETS OF 19 8

(5)TechnicaZamendment The Social Security Amendments of :1956 emphasized the importance of helpmg recipients attain self-care and required that State plans provide a description of the services the States agencies make available to recipients of public assistance.Inadvertently the language requiring this description was omitted from the amendments to title I in 1956. Your committee is therefore adding this technical amendment. (6) Guam, Puerto Rico, and the Virgin I8lands The bill would amend the definition of "State" in th general provisions (title XI) so as to include Guam and thus extend the old- age assistance, aid to dependent children, aid to the blind, and aid to the permanently and totally disabled programs to that island possession.Federal sharing in expenditures for public assistance in Guam would be on a 50—SO basis, the same as now in effect for Puerto Rico and the Virgin Islands. The limitation of the total amount of Fed- eral grants for public assistance in Guam would be $400,000. There are many points of comparability between Guam and the Virgii Islands, and Puerto Rico, both of which jurisdictions have pub1ic- assistance programs with Federal participation.Such programs s public health, vocational educational; vocational rehabilitation and employment services have already been exthnded to Guam. 2Your committee believes that the public-assistance programs should also be extended. The bill also increases the dollar amount of the authorization for both Puerto Rico and the Virgin Islands.Both of these territories have made very substantial fiscal effort to support their programs. The present formula for the Federal financing of public assistance f or Puerto Rico and the Virgin Islands provides relatively less Fed- eral funds than the formula in effect for other jurisdictions. In order to enable these territories to have more adequate financing of their public-assistaiice programs within the limits of the special formula applicable to them the bill increases the authorization for Puerto Rico from $5,312,500 to $8,500,000 and for the Virgin Islands from $200,000 to $300,000. The bill continues the 50 percent mitchin for Puerto Rico and the Virgin Islands. For the aged, blind, and disabled, the former maximum of $30 on money payments and $6 on medical care vendor payments are combined into an average maximum of $36.For aid to dependent children, the former maximums of $18 and $12 per recipient plus the $6 and $3 vendor payment medical care maximums are combined into a single average of $18. The new formulas are extended to Giiu.m.

B. MATERNAL AND CHILD WELFAREPRoVISIoNS Your committee's bill would— (1) Raise the ceilings on the amounts authorized for annual appropriations for maternal and child health services, crippled children's services, and child welf.re services under title V of the Social Security Act; and (2) Improve the child welfare provisions of the present law by removing inequities which now exist in extending these services as between children in urban areas and children in rural areas, SOCIAL SECURITY AMENDMENTS OF 1958 43

andby liberalizing certain other provisions which have caused problems. Your committee received impressive testimony from representatives of a wide variety of public, voluntary, civic, and professional organizations, which clearly established the need for expanding these three programs. The unprecedented increase in the child population, the rising costs of care and services, the development of new techniques and measures for helping children, and the great inequality of distribution of the basic child-health and child-welfare services are factors which combine to produce an urgent need for increased Fed- eral funds for all three of these programs. With respect to the maternal and child-health program, many well- baby clinics are overcrowded, only a beginning has been made in providing adequate health services for mentally retarded children, and there is a need for expansion of services in rural areas where resources are still inadequate for promoting the health of mothers and children. In the crippled children's program, urgent need exists for expanding programs for surgical treatment of children with congenital heart lesions to prevent the needless loss of life among children with this condition.Services for children with speech and hearing dis- ordered are grossly inadequate—only 1 child in 4 of the speech-handicapped children is receiving necessary diagnostic or remedial assistance. Many other children with orthopedic and other types of handicaps are also helped through this program. (ireat need exists in the child-welfare program for expanding provisions for foster care so as to afford better care and protection for children who must be cared for away from their own homes and families.Only half of the counties in the country have the services of a public child welfare worker in the face of a nationwide increase in juvenile delinquency and increased neglect and abuse of children. In order to make possible in the immediate future more assistance to the States in extending and improving these important services for children, your committee is recommending an increase of $5 million in the amounts authorized for annual appropriation for each of these programs as follows:

Current Au- Recom. thorization mended

Maternal and cbild health services $16, 600,000 $21, 600,000 Orippled ohildren8 services 16 000,000 20,000,000 Ohild welfare services 12,000,000 17,000,000

Numerous witnesses have urged your committee to remove the present child welfare provisions of the law whereby Federal child welfare funds are allotted to the States on the basis of the rural child population without relating the funds to children in urban areas. The present law also limits the useof these funds to predominantly rural areas and other areas of special need.Three out of five children in the Nation now live in urban areas. Many families have shifted in the last decade from farms and small towns to cities where services have not expanded to meet their needs. In the light of these developments, your committee believes that the present law should be amended so as 44 SOCIAL SECURITY AMENDMENTS OF 1958 to make child welfare services geqerafly available not only in rural areas but also in urban areas and to give equal consideration to children in urban areas as to children in rural areas. In line with this recommendation, your committee's bill provides for removing from the present law the provisions specifying the use of Federal child welfare funds in predominantly rural areas or other areas of special need. The bill also includes a new formula for the allotment of these funds whereby the allotment will be related directly to the total child population under 21 and inversely to the per capita income of the State.In order to assure that presentsenices to children in rural areas are not reduced because of this change the committee -has also included a provision for a base allotment.k'he billpro- vides that if the amount allotted under the new formula is less than the State's base allotment, the amount shall be increased to the base allotment and the necessary adjustment made by reducing the allotments of other States. The base allotment is the amount which would have been allotted to the State for the particular year in which the appropriaion is made, under the provisions of section 521 of the law in effect prior to the enactment of the 1958 amendments as applied to an appropriation of $12 million (the amount currently authorized and which has been appropriated for the fiscal year ending June 30, 1959). The formula used for computing this base allotment would be, therefore, the same as in the present law, using rural child population statistics which subsequently become available and represent the current statistics for the year in which the appropriation is made. Your committee has also made several other improvements in the chtild welfare provisions of the law. One of these would establish a new provision authorizing reallotment of these funds, thereby enabling full utilization of funds appropriated for child welfare services Another provision liberalizes the present provisions concerning the use of these funds for the return of runaway children. The age limit of children who may be returned through these funds would be raised from 16 to 18 and the States would be authorized to use these funds for maintenance of runaway children, for a period not exceeding 15 days, pending their return. A matching provision has been added in order that the financial provisions for these grants are in the future consistent with those of other Federal-grant programs. V. SECTION-BY-SECTION ANALYSIS The first section of the bill contains a short title2 the Social Security Amendments of 1958.The remainder of the bill is divided into seven titles as follows: Title I—Increase in benefits under title II of the Social Secunty Act. Title TI—Amendments relating to disability freeze and disability insurance benefits. Title III—Pzovisions relating to eligibility of claimants for social security benefits, and fniscellaneous provisions. Title TV—Amendments to the Internal Revenue Code of 1954. Title V—Amendments relating to public assistance. Title VT—Maternal and child welfare. Title Vu—Miscellaneous provisions. SOCIAL SECURITY AMENDMENTS OF 198 45 TITLE I—INCREASE IN BENEFITS UNDER TITLE II OF THE SOCIAL SECURITY ACT SEC. 101. INCREASE IN BENEFIT AMOUNTS Section 101 of the bill contains provisions for effectuating the benefit increases that the bill would provide, including provisions for determining the new primary insurance amounts for both present and future beneficiaries through a benefit table and provisions to adjust minimum benefits for a sole survivor and maximum benefit amounts for families to the higher rates. Primary •insuranee amovn Subsection(a)of section 215 of the Social Security Act, as amendedby section 101 (a) of the bill, sets forth a table to effectuate the benefit increases provided by the bill for people who are on the benefit rolls before the third month following the month in which the bill is enacted to determine the benefit amounts of people who will come on the benefit rolls after the second month following the month in which the billis enacted.The new primary insurance amounts, shown in column IV of the table, are stated in whole dollars only.(The primary insurance amount is the amount payable to the retired worker and the amount on which all other benefits are based.) The amounts in the table were computed by increasing the primary insurance amounts of present law by 7 percent and rounding the resulting amounts to the nearest whole dollar (with some minor ad- jiistments to provide a smooth progression of dollar values), witha minimum increase of $3. The primary insurance amounts that would be provided by the table range from a minimum of $33 for people whoseaverage monthly wage is $54 or less to a maximum of $127 for people who will have the new maximum average monthly wage of $400 that will become possible in the future with the $4,800 annual earnings base that the bill would provide. The primary insurance amounts of retired workers who are now on the benefit rolls at the $30 minimum would be raised to $33. Retired workers who are now at the maximum primary insurance amount of $108.50 would be raised to $116. The amended section 215 (a) also provides the method forcoin- puting primary insurance amounts through theuse of the table. The subsection provides that a person's primary insurance amount shall be the largest amount for which he can qualify under condi-. tions set forth in the fol1oing subsections of thenew section 215: (1) Section 215 (b), which provides for computation ofan average monthly wage based on earnings after 1950 only, with up to 5 years of lowest earnings excluded.This is the way in which benefits will be computed for most future beneficiaries.If this method is used, the worker's primary insurance amount is the amount in column IV of the table on the same line on which his average monthly waoe appears in column III. ('2)Section 215 (c) which provides for determination of a primary insurance amount under the provisions of present law.The new primary insurance amount of a person for whom this method is used is the amount in column IV of the table on the same line on which his present-law primary insurance amount appears in co1urni 46 SOCIALSECURITY AMENDMENTS OF 1958 II.Basically, this is the method that will be used for peopie who are already on the benefit rolls, or who die, before the third month following the month in which the bill is enacted. (3) Section 215 (d), which provides for determination of a primary insurance benefit under the rules generally applicable before the Social Security Act Amendments of 1950, with an average monthly wage computed over the period beginning with 1937 after dropping out up to 5 years of lowest earnings.Generally this method will be used for future beneficiaries who have not had significant earnings after 1950.If this method is used, the worker's primary insurance amount is the amount in column IV of the table on the same line on which appears his primary insurance benefit in colunm I of the table. Under paragraph (4) of the nw section 215 (s), 'a person who was entitled to a disability insurance benefit in the month before the month in which he became entitled to an old-age insurance benefit would have a primary insurance amount equal th the amount of his disability insurance benefit if hat was larger 4h.n any other amount for which he could qulify'(See sec. 101 (b) of the bill, discussed below, for transitional conversion from disability benefit to prim.ry insurance rnounL) Average monthly wage Section101 (b) of the bill amends seotion 215 (b) of the Social Security Act (relating to the computation of the average monthly waoe) to make that section applicable solely to benefits determined uner column III of the th.ble.Itfurcther provides that th amended seotion 215 (b) could be used to determine the average monthly wage only of people with at least 6 quarters of coverage a.fter 1950 who, after the seoond month following th month in which the bill is enacted, either (1) become entitled to old-age insurance benefits or disability insurance benefits, or (2) die without becoming entitled to such benefits, or (3) file an application for a "work" reoomputation under section 215 (f) (2) (A) of th Social Security Act and meet the conditions for such a recomputation as specified in such section 215 (f)(2)(A), or (4) die and in the month of death meet the conditions for such a "work" recomputation s specified in section 215 (f) (2) (A). Primaryin8uraneeamount wnder 1954 act Section 101 (c) of the bill amends section 215 (c) of the Social Security Act to provide that people who became entitled to o1dage or disability insurance benefits pnor th the effective datje of the bill, or who died prior to th'at effeotive date, would have their primi.ry insurance amount com,putd under the provisions of the present law; this primary insurance amount would .ppear in eolunm II of the table and would be converted to the new amount on the same line in column IV of the 4able. Primary in8uranee benefit under 1939 act Scotion 101 (d) of the bill amends section 215 (d) of the Social Security Act, which relates to provisions for computing rimary insurance benefits under the general provisions of the law as in effect prior th the Social Security Act Amendments of 1950. An mdi- SOCIAL SECT1RITY AMENDMENTS OF 1958 47 vidual who had his benefit coinputal by this method would have his primary insurance benefit, shown in colunm I of the tb1e, conveited to the primary insurance amount on the same line in column IV of the table. The primary insurance benefit is used in present law to deterniine primary insurance amounts mainly in those cases where the worker's earnings in years before 1951 were more substantial than his earnings after 1950, and it would be so used under the bill.The primary insurance benefit computation would be applicable to people who have at least one quarter of coverage before 1951, provided that they meet the conditions which permit the computation of an individual's average monthly wage under the proposed section 215 (b) (except the requirement of 6 quarters of coverage after 1950). As under present law, this method of computation would not be available to people who attained age 22 after 1950 and had at least 6 quarters of coverage after 1950. Minimum survivors or dependents benefits Section101 (e) of the bill amends section 202 (ni) of the Social Security Act to raise from $30 to $33 (the last figure in column IV of the table in the new sec. 215 (a) of the Social Security Act) the minimum benefit payable to a sole survivor beneficiary. Maimrarnbenefits Section 101 (f) of the bill aniemids section 203 (a) of the Social Security Act (relating to the total amount of benefits payable toa family on the basis of a single earnings record) to provide that the maximum amount of total family benefits payable on the basis of a single earnings record shall be the amount appearing in column V of the benefit table (provided in sec. 101 of the bill) on the line on which, in column IV of the tablø, the primary insurance amountappears. The amended subsection also makes the maximum limitation applicable to family benefits payable on the earnings of disability insurance beneficiaries. Under present law, family benefits totaling $50 or less are not subject to any maximum limitation.If the family benefits total more than $50, they are limited to the largest of the following: $50; 11/2 times the worker's primary insurance a.inount; and 80 percent o his average monthly wage.In no event can the total be more than $200.For the purposes of the table, the $50 minimum of present law was increased to $53 and the $200 maximum was increased to $254.The maximum family benefit amounts between $60 and $254 were establishedas the greater of (a) 11/2 times the primary insurance amount, and (b) 80 percent of the average of the upper and lower average-monthly-wage amounts in each bracket.The only exceptions to this method are at the very lowest levels, where the maximum amounts are se.t at $1 imiter- vals from the $53 minimum to $60 in order to effect a smoothprogres- sion of maximum family benefit amounts. Paragraph (1) of the amended section 203 (a) contimiues in the benefit table th effect of the provisions of Present law for reducing family benefits in cases where (but for the provisions ofsec. 202 (k) (2) (a) of the act which limits the benefit payments ofa child entitled to more than one benefit to the amount payable on theearnings record yiBlding the largest amount) a child would •be entitled 48 SOCIALSECURITY AMENDMENTS OF 1958 to benefits on the basis of the wages and self-employment income of more than one insured individual.In that case, the maximum amount of benefits payable to the family would be the sum of the maximum amounts payable on the earnings records of all the insured individuals on whose earnings records family members could be entitled to benefits. In no event, though, could the total family benefits exceed the largest amount oJ maximum family benefit payable ($254). Paragraph ('2) of the amended subsection provides a saving clause to assure an increase in family benefits for people already on the benefit rolls when the bill becomes effective.In the absence of such a provision, some families now on the benefit rolls could receive little or no increase in benefits because their benefits are already at or near the maximum payable to the family as provided in the benefit table. The maximum family benefit in such cases would be the larger of (a) the maximum amount permitted under column V of the table, and (b) the maximum amount permitted under present law plus the increase made by section 101 (a) of the bill in the primary insurance amount of the insured individual on whose wages and self-employment income such family benefits are based. Paragraph (3) of the amended subsection makes special provision relating to family benefits based on the earnings record of an individual for whom a period of disability was established if the period began before the effective date of the bill and continued beyond that date until he became entitled to disability insurance benefits or old- age insurance benefits or until he died. The purpose of this provisio is to assure that the family of such a person, regardless of when the family goes on the beifit rolls, will receive .an increase in benefits as a result of the enactment of this bill.The family of a disabled person will be in approximately the same position, with regard to maximum family benefits payable, as the family already receiving benefits based on the earnings of a worker who died or became entitled as of the time the period of disability began. This provision is needed for this purpose only at levels of primary insurance amount at which maximum family benefits are in effect limited to 80 percent of the worker's average monthly wage—$68 or over in column IV of the benefit table—and its application is limited to those levels of primary insurance amount. In no case could the provision raise the total of benefits payable to a family to more than the overall family maximum ($254). Whenever a reduction in family benefits is made under this subsection, each benefit, except the old-age insurance benefit and the disability insurance benefit would be proportionately decreased. In any case in which benefits were reduced pursuant to the provisions of this subsection, the reduction would be made after any other deductions under section 203 of the Social Security Act (such as deductions on account of earnings) and any deductions under section 222 (b) of that act (relating to refusal of a disability insurance beneficiary to accept rehabilitation services). Effective date Section 101 (g) of the bill provides that the amendments made by section 101 shall be effective for monthly benefits beginning with the month after the second month following the month of enactment, SOCIAL SECURITY AMENDMENTS OF 1958 49 and for lump-sum death payments where death occurs after that second month. Transitional conversion from disability insurance benefit to primary insurance amount Section 101 (h) of the bill is a special transitional provision which will apply to an individual who was entitled to a disability insurance benefit for the second month following the month of enactment of the bill and who died or became entitled to old-age ilisurance benefits in the third month following the month of enactment.Under the general rule in section 215 (a) (4), as set out in section 101 (a) of the bill, an individual entitled to a disability insurance benefit in the month before he dies or becomes entitled to old-age insurance benefits will have as his primary insurance amount (for retirementor survivor benefits) the amount in column IV of the table that is equal to his disability insurance benefit, if that is the largest amount to which he could become entitled.In the situation outlined above, the individual's disability insurance benefit, since it was derived froma primary insurance amount determined under the present law, does not have any direct tie in with column IV of the table, which contains the new benefit amounts.Thus, the general rule caiinot be applied to this individual.Instead, section 101 (h) of the bill provides that his primary insurance amount shall be the amount in column IV of the table on the same line in column II on which appears his present primary insurance amount.(This primary insurance amount in col. II is equal to his disability insurance benefit under present law.) Saving provision Section 101 (i) of the bill is a saving clause which wouldprevent benefits from being reduced because certain provisions ofpresent law are not applicable to benefits for months after the effectivedate. Where benefits are payable retroactively (in accordance withsec. 202 (j)(1)of the Social Security Act) for months before the effective date, the primary insurance amount on which the benefits for these months are based will be computed under the provisions ofpresent law.If the amount so computed is larger than the amountas computed under section 215 as ameiided by the bill, this largeramount will be the individual's primary insurance amount for months after the effective date.If such primary insurance amount is nota multiple of a dollar, it will be rounded to the next higherdollar. SECPION 102.—INCR.EASE IN WAGE BASE FROM $4,200 TO $4,800' Definition of wages Section 102 (a) of the bill amends paragraph (2) of section209 (a) of the Social Security Act (relating to the definition of "wages") to make the new $4,800 wage base applicable towages after 1958. Definition of self-employment income Section 102 (b) of the bill amends paragraph (1)of section 211 (b) of the Social Security Act (relatmg to the definitionof "self- employment income") to make thenew $4,800 wage base applicable for taxable years ending after 1958. 50 SOCIALSECtIRITY AMENDMENTS OF 1958 Quarter and quarter of coverage Section 1O (c) of the bill amends clauses (ii) and (iii) of section 213 (a) (2) (B) of the Social Security Act (relating to the definition of "quarter of coverage") to provide that, for calendar years after 1958, an individual shall be credited with a quarter of coverage for each quarter of the year if his wages for that year equal $4,800 (rather than $4,200 as in present law). He would also be credited with a quarter of coverage for each quarter of a taxable year ending after 1958 in which the sum of his wages and self-employment income equal $4,800 (rather than $4,200). Average monthly wage Subsection 102 (d) of the bill amends section 215 (e) of the Sociil Security Act (relating to the amount of annual earnings that can be counted in computing an individual's average monthly wage) so as to increase from $4,200 to $4,800 the maximum amount of annual earnings that may be counted in the computation of old-age, survivors, and disability insurance benefits, effective for calendar years after 158, and to conform a reference to subsection 215 (d) to the changes made in that subsection by the bill. TITLE Il—AMENDMENTS RELAI1NG TO DISABILiTY FREEZE AND DISABILITY INSURANCE BENEFITS SECTION 201. APPLICATION FOR DISABILITY DETERMINATION Section 201 of the bill amends section 216 (i)(2) of the Social Security Act, which defines the term "period of disability," to effect a clarifying change.The amendment makes it clear that the dis- ableci person must file an application while under the disability with respect to which he seeks to secure a "disability freeze." Section 201 further amends sction 216 (i) (2) of the act to provide that a period of disability may begin as early as the first day of the 18-month period which ends with the day before the day on which an individual files application for a disabilitydetermination. Section 216 (i) (2) of the Social Security Act now provides that a period of disability may begin no earlier than the first day of the 1-year period which ends with the day before the day on which the individual files ajplication. This amendment is (under sec. 207 of the bill) effective with respect to applications for disability determinations filed after June 1961.Applications for a disability determination filed on or before June 30, 1961, are governed by section 216 (i) (4) of the Social Security Act, amended by section 203 of the bill. SECTION 202. RETROACTIVE PAYMENT OF DISABILITY INSURANCE BENEFITS Section 202 (a) of the bill amends section 223 (b) of the Social Security Act to provide that an individual who would have been entitled to a disability insurance benefit for any month after June 1957 had he filed application therefor prior to the8nd of such month shall be entitled to such benefit for such month if he files application therefor prior to the end of the 12th month immediately succeeding SOCIAL SECURITY AMENDMENTSOF 1958 51 such month. Under the existing law, applications filed prior to Jan- uary 1958 were effective as far back as July 1, 1957, if the applicant was eligible.No benefits are now payable for months ending prior to the filing of an application where the application is filed after 1957. Section 202 (b) of the bill amends section 223 (c) (3) of the Social Security Act, which defines the term "waiting period' for purposes of disability-insurance benefits, to provide that a waiting period may begin as early as the 1st day of the 18th month before the month in which an application for disability-insurance benefits is filed. The amendment complements the amendment in subsection (a).Section 223 (c) (3) of the act now provides that a waiting period may begin no earlier than the 1st day of the 6th month before the month in which an application is filed. SECTION 203. RETROACTIVE EFFECT OF APPLICATIONS FOR DISABILITY DETERMINATION Section 20 of the bill amends paragraph (4) of section 216 (i) of the Social Security Act to extend for 3 years (through June 30, 1961) the time within which disabled workers can file applications on the basis of which the beginning of a period of disability would be established as early as the actual onset of disablement (provided the other requirements of the law are met).It also eliminates a provision of this paragraph (requiring the applicant to be alive on July 1, 1955) which by virtue of the effective date applicable to this section would no longer be necessary. SECTION 204. INSURED STATUS REQUIREMENTS• Period ofdi8abiUty Section 204 (a) of the bill amends section 216 (i) (3) of the Social Security Act in two respects.It would remove the requirement that, in order for a period of disability to begin with respect to any quarter, an individual have 6 quarters of coverage during the 13- quarter period ending with such quarter.The second amendment would add a new requirement that an individual be fully insured. This new requirement will be satisfied with respect to any quarter if the individual would have been fully insured in such quarter had he attained retirement age and filed application for old-age insurance benefits on the first day of such quarter.Substantially the same requirement is already contained in section 223 (relating to disability-insurance benefits).It, of course, is met now by anyone who complies with the other requirement for the disability freeze and disability-insurance benefits—that he have 20 quarthrs of coverage during the last 40 quarters. Di8ability insurance benefits Section 204 (b) amends section 223 (c)(1) (A) of the act to remove the requirement that, in order to be insur&E for disability- insurance benefits in any month, an individual must be currently insured (as defined in sec. 214 of the act).This is in effect the same as the first amendment described above for the disability freeze. 52 SOCIAL SCflRITY AMENDMENTS OF 1958 SECTION 205. BENEFITS FOR THE DEPENDEWS OF DISABILITY INSURANCE BENEFICIABIES AND ELIM- INATION OF THE OFFSET PROVISIONS Payments from c&ability insurance trust fwncl Section 205 (a) of the bill amends section 201 (h) of the Social Security Act to provide that the payment of monthly benefits of individuals entitled thereto on the basis of the wages and self -employment income of any individual gntitled to disability-insurance benefits shallbe made from the Federal disability insurance trust fund. Wife's insurance benefits Paragraph (1) of section 205 of the bill amends section 202 (b) of the act to provide that the wife of an individual entitled to disability- insurance benefits shall be entitled to wife's insurance benefits if she otherwise meets the existing requirements applicable to the wife of an individual entitled to old-age insurancebenefits. Paragraph (2) of subsection (b) amends paragraph (1) of section 202 (b) of the act to provide that the entitlement 0±awife of a disability-insurance beneficiary shall terminate if her husband's entitlement to disability-insurance benefits ceases before he hasattained retirement age. Husband's insurance benefits Paragraph (1) of section 205 (c) of the bill amends section 2Q (3) (1) (C) of the act.Under this section of present law, a husband of an individual entitled to old-age insurance benefits,in order to be entitled to husband's insurance benefits, musthave been receiving at least one-half of his support from suchindividual at the time she became entitled to such benefits.Under the amendment, the husband of an individual entitled to old-age insurance benefits ordisability- insurance benefits will meet this support requirement in casesuch individual had a period of disability which did not end prior to her entitlement to such benefits, if he was receiving at leastone-half of his support from such individual either at the beginningof her period of disability or at the time she became entitled to suchbenefits. Proof of such support must be filed within 2 years after the month in which she filed application with respect to such periodof disability or 2 years after she becameentitled to such benefits, depending on whether the support was claimed as of the beginning of theperiod of disability or the time she became entitled to old-age ordisability- insurance benefits. Paragraph (2) of section 205 (c) further amends section 202 (c)of the act to provide that the husband of a currently insuredindividual entitled to disability-insurance benefits shall be entitled tohusband's insurance benefits if he otherwise meets the requirementsapplicable to the husbahd of an individua' entitled to old-ageinsurance benefits. Paragraph (3) of section 205 (c) amends section 202 (c)(1) of the act to provide that a husband's entitlement tohusband's insurance benefits based on his wife's entiflement to disability-insurancebenefits shall terminate in the event she ceases, beforeshe becomes entitled to old-age insurance benefits, to be entitled todisability-msurance benefits. SOCIAL SECURITY AMENDMENTS OF 1958 53

ChiZd'8inBurance be'n,e fits Section 205 (d) of the bill amends section 202 (d) (1) of the act to provide monthly benefits for the child of a disability insurance beneficiary.The amendment also adds, as a time at which the dependency of a child on an individual is determined in certain cases, the beginning of a period of disability.If the parent has had a period of disability which did not end before he became entitled to old-age or disability insurance benefits or died, the dependency of the child may be determined as of the beginning of such period, at the time the parent became entitled to such benefits, or at the time of his death.Under therevised section 208 (d) (1) of the act, the benefits payable to the child of a disability insurance beneficiary would terminate with the month before the month in which the disability insurance beneficiary ceases to be entitled to such benefits unless he is, for the month in which he ceases to be so entitled, entitled to old-age insurance benefits or unless he dies in such month.The other bases for terminating the child's insurance benefits in existing law (e.g., death, attainment of age 18 when not under a disability, etc.) would also apply. Widower'sin.sura',uebenefits Section 205 (e) of the bill amends section 202 (f) (1) (D) of the act.Under this section of present law, in order to be entitled to widower's insurance benefits, the widower of an individual who died a fully and currently insured individual must have been receiving one-half of his support from such individual at the time of her death or at the time she became entitled to old-age insurance benefits. Under this amendment, if the woman worker had a period of disability which did not end before her death or before she became entitled to old-age or disability insurance benefits, the support requirement would be met if the widower was receiving at least one-half of his support from her at the time her period of disability began, or at the time of her death, or at the time she became entitled to old-age or disability insurance benefits.Proof of support must be filled within 2 years after the month in which she filed application with respect to her period of disability, or 2 years after the date of her entitlementor death, depending on the time as of which the suppoitis claimed. Mother's in.surance be'1efit8 Section 205 (f) of the bill amends section 202 (g) (1) (F) of the act to provide that, in the case of a former wife divorced, the requirement that she be receiving at least one-half of her support from him may be met, if her deceased former husband had a period of disability which did not end prior to his death, either at the time such period began or at the time of his death. Parent'8 in.sura',ue benefits Section 205 (g) of the bill amends section 202 (h) (1) (B) of the act to provide that the requirement that a parent be receiving at least one-half of his support from the deceased individualmay be met, if such individual had a period of disability which did not end priorto his death, either at the time such period beganor at the time of the individual's death. Proof of such support must be filed within2 years 54 SOCIAL SECURITY AMENDMENTS OF 1958 after such period began or two years after the date of such death., depending on the time as of which the support is claimed. ,Simultaneou8 entitlement to beneflt8 Section 205 (h) of the bill amends section 202 (k) of the Actto make it applicable in the case of receipt by an individual of both disability insurance benefits and other benefits.The amended section would provide that whenever an individual is entitled to more than one monthly benefit (other than an old-age or disability insurance benefit) he shall be entitled to only the largest of such monthlybenefits.If the individual is entitled to a disability insurance benefit for any month and to any other monthly insurancebenefit for such month, such other benefit, after any reduction under section 202 (q) (relating to actuarial reduction of benefits in the case of certain female beneficiaries) and any reduction under section 203 (a) (relating to maximum benefits), shall be reduced, but not below zero, by an amount equal to the disability insurance benefit. Adjustment of benefits of female beneficiary Section 205 (i) of the bill amends section 202 (q) of the act (relat-. ing to actuarial reduction of benefits of female beneficiaries who receive wife's or old-age insurance benefits prior to age 65). This section now provides for redetermination of the amount of these benefits when the beneficiary becomes 65 to eliminate future reductions on account of months before 65 when her benefits were subject to reductions. The amendment would also provide for eliminating future reductions on account of the months for which she was no longer entitled to her benefits because her husband's disability ended or for which her benefits were suspended because of his refusal, without good cause, to accept available vocational rehabilitation. Deduction provision Section205 (j)ofthe bill amends section 203 (c) of the act to make it clear that it applies only to benefits based on the record of an old- ae insurance beneficiary. This section of the law provides for reductions from dependents benefits on account of earnings of the old-age insurance beneficiary. Circumstances under which dediuctio'nB not required Section 205 (k) of the bill amends section 203 (h) of the act, which deals with cases in which deductions, which would otherwise be made from the benefits of a membr of a household, are not made because the total of the benefits to all members of the householdwould remain the same. The amendment takes account of the repeal of section 224 (by sec. 206 of the bill) which relates to reduction of benefits based on disability in cases in which benefits under certain other programs are payable to the same beneficiary on account of disability. Currently M.iured individual Section205 (1) of the bill amends section 214 (b) of the act to include in the definition of "currently insured individual," an individual who has not less than 6 quarters of coverage during the 13-quitrter period ending with the quarter in which he became entitled to disability insurance benefits. Any quarter any part of which was included in a period of disability would not be counted as a part of the 13-quarter, period unless such quarter was a quarter of coverageThis SOCIAL SECURITY AMENDMENTS OF 1958 55 definition now relates only to cases of individuals who die or have become entitled to old-age insurance benefits. Rounding of benefits Section 205 (m) of the bill amends section 215 (g) of the act, which relates to the rounding of benefit amounts (to maltiples of $0.10) to take account of the repeal of section 224 (relating to the reduction of benefits based on disability). Deductiort on accovn,t of refusal to accept rehabilitation services Section 205 (n) of the bill amends section 222 (b) of the act to provide that deductions shall be made from the benefits of a wife, hus- baid or child, entitled on the basis of the earnings record of a worker entided to disability insurance benefits, forany month in which the disabled worker refuses, without good cause, to accept rehabilitation services and he suffers deductions from his benefits on account of the refusal. Su8penBion of benefits based on di8ability Section 205 (o) of the bill amends section 225 of the act to provide that whenever the benefits of a disability insurance beneficiary are suspended for any month, pending a determination as to whether or not his disability has ceased, the benefits to which his dependents are entitled on the basis of his earnings record shall also be suspended for such month. SECTION 206. REPEAL OF REDUCTION OF BENEFITS BASED ON DISABILITY Section 206 of the bill repeals section 224 of the Social Security Act., which requires that the disability insurance benefit, and the child's insurance benefit, of a disabled child who has attained age 18, be reduced by the amount of any other periodic Federal benefit (except compensation paid to a veteran by the Veterans' Administration for his service-connected disability, a reduction which was eliminated last year) or State workmen's compensation benefit paid on account of disability.The repeal of section 224 is effective with respect to benefits for the month in which the bill is enacted and succeeding months. SECTION 207. EFFECTIVE DATES Section 207 (a) provides effective dates for the amendments made by title II of the bill. The amendments relating to applications for a disability determination (sec. 201 of the bill) would apply with respect to applications filed after June 1961. The amendments relating to the retroactive payment of disability- insurance benefits (sect. 202 of the bill) woald apply with respect to applications filed after December 1957. The amendments relating to the retroactive effect of applications for disability determinations (sec. 203 of the bill) would apply with respect to applications filed after June 1958. The amendments relating to the insured status requirements fora disability freeze and for disability insurance benefits (sec. 204 of the bill) would apply with respect to (1) applications for disability-insur- 56 SOCIALSECURITY AMENDMENTS OF 1958 ance benefits or for a disability determination filed on or after the date of enactment of the bill, and (2) applications for. such benefits or for such a determination filed after 1957 and prior to date of enactment of the bill if notice to the applicant of the decision of the Secretary of Health, Education, and Welfare with regard to the application has not been given on or prior to the date of enactment of the bill. No benefits for the month in which the bill is enacted or for any prior month would be payable or increased by reason of these amendments: Redetermination of the amount of monthly benefits to exclude periods of disability established by virtue of these amendments would not be prevented by the limitations placed on benefit recomputations by section 215 (f) (1) of the law. The amendments relating to benefits for the dependents of disability insurance beneficiaries (sec. 205 of the bill) would apply with respect to monthly benefits under title II of the Social Security Act for months after the month in which the bill is enacted, but only if application for such benefits is filed on or after the date of enactment of the bill.The provision relating to repeal of reduction of benefits based on disability (sec. 206 of the bill) would apply with respect to monthly benefits under title II of the Social Security Act for the month in which the bill is enacted and succeeding months. Section 207 (b) of the bill provides that in the case of an individual who would not be entitled to monthly benefits under section 202 of the act as a husband widower, former wife divorced, or parent except for the enactment oi section 205 of the bill, the requirement that such an individual file proof of support within a 2-year period shall not apply if such proof is filed within 2 years after the month in which the bill is enacted. TITLE Ill—PROVISIONS RELATING TO ELIGIBILITY OF CLAIMANTS FOR SOCIAL SECURITY BENEFITS, AND MISCELLANEOUS PROVI- SIONS SECTION 301. ELIGIBILITY OF SPOUSE FOR DEPEND- ENTS OR SUIWIVORS BENEFITS Husband's inuranee benefits Section301 (a) (1) amends section 202 (c) of the Social Security Act by making inapplicable in certain cases the requirement for husband's insurance benefits that the wife be currently insured and that the husband be dependent on her—cases in which the husband was actually or potentially entitled to widower's, parent's, or (disabled) child's insurance benefits in the month before his marriage to the person on the basis of whose earnings he is claiming husband's insurance benefits. Section 301 (a) (2) 'amends the definition of "husband" in section 216 (f) of the Social Security Act to include a man who in the month prior to the month of his marriage to an individual was actually or potentially entitled to widower's, parent's, or (disabled) child's benefits. Under existing law, he must be married to her for *t least 3 years or be the father of her son or daughter. SOCIAL SECURITY AMENDMENTS OF 1958 57 Widow'sinsurance benefits Section 301 (b)(1,) amends subparagraph (B) of section 202 (e (3) of the Social Security Act to provide for reinstating widow s benefits which were terminated becal4se the widow remarried in cases where the widow's husband dies within 1 year after the remarriage and he was not fully insured.Present law permits reinstatement of widow's benefits only if the new husband dies within 1 year and she does not qualify as his widow. Section 301 (b) (2) amends the definition of "widow" in section 216 (c) of the Sociall Security Act by eliminating the requirement that the woman have been married to the man for at least a year in cases where a woman's deceased husband had legally adopted her son or daughter while she was married to him and while the son or daughter was under age 18.The 1-year marriage requirement is removed also for cases in which, in the month before the month of a woman's marriage to the person on the basis of whose earnings she is claiming benefits, she was actually or potentially entitled to widow's, parent's, or (disabled) child's insurance benefits. Widower'8 i'lwurance benefits Section 301 (c) (1) amends section 202 (f) of the Social Security Act by making inapplicable in certain cases the requirement for widower's insurance benefits that the deceased wife have been a currently insured person and that the widower have been dependent on her— cases in which he was actually or potentially entitled to parent's or (disabled) child's insurance benefits in the month prior to his marriage to her. Section 301 (c) (2) amends the definition of "widower" in section 216 (g) of the Sociall Security Act to include a man whose son or daughter was adopted by the deceased wife while he was married to her and while the son or daughter was under age 18.Also included would be a man who, in the month before his marriage to the person on the basis of whose earnings he is claiming benefits was actually or potentially entitled to widower's, parent's, or (disailed) child's insurance benefits. Definition of "wife" Section 301 (d) amends the definition of "wife" in section 216 (b) of the Social Security At to include a woman who, in the month prior to the month of her marriage to the mdividual on whose reoord benefits are claimed, was actually or potentially entitlled to widow's, parent's, or (disabled) child's insurance benefits. Definition of "former wife divorced" S&,tion 301 (e) 'amends the definition of "former wife divorced" in section 216 (d) of the Social Security Act to incllude the woman whose husband legally adopted her son or daughter while she was married to him and while the child was under age 18. Effectve date

• Section 301 (f) provides that the amendments made by section 301 shall applly with respect to monthly benefits for months folllowiig the month in which the amendments are enated, but only ifan app]i- øation for th benefits is filled on or after the date of enactment. 58 SOCIALSECURITY AMENDMENTS OF 1958 SECTION 30. ELIGIBILITY OF CHILD FOR DEPEND- ENTS OR SURVIVORS BENEFITS Definition of "child" Section 302 (a) amends the definition of "child" in section 216 (e) of the Social Security Aot o include the legally adopted child of a retired person without compliance with the requirement in present law that the child have been adopted for at lcast 3 years.It further includes a child who was living as a member of a deceased person's household would be considered the adopted child of the deceased person if, at the time that person died, the child was not receiving regular contributions toward his support from someone other than the deceased or his spouse or from a welfare organization furnishing services or 'assistiance for children, tnd if the surviving spouse legally adopts the child within 2 years after thvt person dies. Effective date Section 302 (b) provides that the amendment made by section 302 shall apply with respect to monthly benefits beginning after the date of enactment of the bill, but only if an application for the benefits is filed, on or after that date. SECTION 303. ELIGIBILITY OF REMARRIED WII)OWS FOR MOTHER'S INSURANCE BENEFITS Section 303 adds a new paragraph (3) to section 202 (g) of the Social Security Act to provide that, where mother's benefits were terminated because of the remarriage of a widow or former wife divorced, they shall be reinstated if the remarriage is ended within 1 year by the husband's death and if she is not his "widow" as defined in the law.Benefits under this section would not be payable erIier than the month in which the husband dies, the 12th month before the month in which an application is filed to reinstate t.he earlier benefits, or the month after the month in which these amendments areenacted, whichever is the latest. SECTION 304. ELIGIBILITY FOR PARENT'S INSURANCE BENEFITS Provisions relating to eligibility Section 304 (a) amends section 202 (h) (1) of the Social Security Act by removing the bar to payment of parent's insurance benefits where a widow or child actually or potentially entitled to bcnefits survives a deceased worker.The amendment is made effective for months following the month in which the bill is enacted, but only if an application for benefits is filed on or after the date of enactment. Deaths before effective date Section 304 (b) is a saving clause to provide that benefits for persons who are on the benefit rolls when the amendment made by sub— section (a) becomes effective shall not be reduced, through the operation of the provisions which limit the amount of the benefits which may be paid on the basis of a single earnings record (sec. 203 (a) of SOCIAL SECURITY AMENDMENTS OF 1958 59 theSocial Security Act), because of a parenfs entitlement which results from the provisions of this section of the bill. Proof of support in cases of death8 before effective date Section 304 (c) extends, for parents entitled to benefits under the provisions of this section for 2 years after the month in which this bill is enacted, the period in which a parent may file proof of support by the deceased son or daughter in order to qualify for such benefits. SECrION 305. ELGBrILrITY FOR LUMP-SUM DEATH PAYMENTS Requirement that sur'viving spouse be a member of deceased's household Section 202 (i) of present law provides that a spouse may receive a lump-sum death payment on the death of the worker if he or she was "living with" the worker at the time of death.The term "living with" is defined to mean that the spouse was living in the same household with the worker, or that the spouse was receiving regular contributions from the worker, or that the worker was undera court order to contribute to the spouse's support. Section 305 (a) amends section 202 (i) to delete this provision and substitute a requirement that the spouse be living in thesame household with the worker at the time of death. Section 305 (b) removes the definition of "living with" fromsee- tion 216 (h) of the Social Security Act since it is no longer required for any purpose. Effective date The amendments made by section 305 are made effective for lump- sum payments based on the earnings of workers who die after the month of enactment. SFCTION 306. ELIfflBIIATY OF DISABLED PERSONS FOR CHthD'S INSTJRANCE BENEFITS Provisio relating to dependency Section 306 (a) amends section 202 (d) of the Social Security Act to provide that the dependency of a disabled child who is over 18 (a condition of his eligibility for benefits) shall be determined in the manner provided in present law for the child who is under age 18. This would eliminate the special, additional, requrement that the disabled child over 18 be receiving at least half his support from the worker in order t.o be deemed dependent on him. Effective date The amendment is made effective for monthly benefits payable after the month in which this bill is enacted, but only if an application for such benefits is filed on or after the date of enactment of the bill. 60 SOCIALSECURITY AMENDMENTS OF 1958 SECTION 307. ELIMINATION OF MARRIAGE AS BASIS FOR TERMINATING CERTAIN SURVIVORS BENEFITS Child's in8ura'iwe benefits Section 307 (a) amends section 202 (d) of the SQcial Security Act to provide that a (disabled) child's insurance benefits shall not be terminated because of marriage Of the (disabled) child marries a person entitled to old-age insurance benefits, disability insurance benefits, widow's insurance benefits, widower's insurance benefits, mother's insur- arice benefits, or parent's insurance benefits. In the case of such child's marriage to a man entitled to disability insurance benefitsor (disabled) child's insurance benefits, her benefits will end when her spouse is no longer entitled to his benefits unless the spouse dies or, in case he was entitled to disability insurance benefits, he becomes entitled to an old-age insurance benefit. Widow's inBurance benefits Section 307 (b) amends section 202 (e) of the Social Security Act to provide that a widow's insurance benefits shall not be terminated by reason of the remarriage if the remarriage is to a person entitled to widower's, parent's, or (disabled) child's insurance benefits.In case of her remarriage to an individual entitled to (disabled) child's insurance benefits, her entitlement will end if he ceases to be under a disability. Widower's inBurance benefits Section 307 (c) amends section 202 (f) of the Social Security Act to provide that a widower's insurance benefits shall not be terminated because of his remarriage if the remarriage is to a person entitled to widow's, mother's, parent's, or (disabled) child's insurance benefits. Mother's insurance benefits Section 307 (d) amends section 202 (g) of the Social Security Act. to provide that a mother's insurance benefits shall not be terminated by reason of her remarriage if the remarriage is to a person entitled to old-age, disability, widower's, parent's, or (disabled) child's insurance benefits.In case of her remarriage to an individual entitled to (disabled) child's insurance benefits, her entitlement will end if he ceases to be under a disability. Parent's in8ura'rwe benefits Section 307 (e) amends section 202 (h) of the Social Security Act to provide that a parent's insurance benefits shall not be terminated because of remarriage if the remarriage is to a person entitled to widow's, widower's, mother's, parent's or (disabled) child's insurance benefits.In case the remarriage is to a male individual entitled to (disabled) child's insurance benefits, the female parent's entitlement will end if her new husband ceases to be under a disability. Deduction provi8ion3 Section 307 (f) amends section 203 (c) of the Social Security Act by redesignating the present subsection (c) as paragraph (1) of sub— section (c) and adding a new paragraph (2) to provide for deductions from a (disabled) child's or mother's insurance benefits for any month in which the person entitled thereto is married to someone SOCIAL SECURITY AMENDMENTS OF 1958 61 entitledto an old-age insurance benefit who incurs deductions from his old-age insurance benefits because of his earnings. Deductions on account of ref u8a1 to accept rehabilitation ervees Section 307 (g) amends section 222 (b) of the Social Security Act to provide for deductions from a (disabled) child's or mother's insurance benefits for any month in which the person entitled thereto is married to someone entitled to disability insurance benefits who incurs deductions for refusal to accept rehabilitation services. Effective date Section 307 (h) provides that the amendments made by seqtion 307 (other than the amendments to the deduction provisions made by subsections (f) and (g)shall be effective for months following the month in which this bill is enacted.In 'the case of benefits terminated before enactment which would not have been terminated had this bill been in effect.However, the amendments will be effective only ifan application for such benefits is filed after the month in which the bill is enacted.The amendment made by subsection (f) applies to benefits for months in any taxable year of the workingspouse beginning after the month in which this bill is enacted; the amendment made by subsection (g) applies to benefits for months after such month ofenactment in which deductions are incurred by the spouse for refusal th accept rehabilitation services. SECTION 308. AMOUNT WHICH MAY BE EARNED WITH- OUT LOSS OF BENEFITS Section 308 of the bill makes several changes in section 203of the Social Security Act, which relates to imposition of deductions from old-age and survivors insurance benefitson account of earnings over the exempt amount or occurrence of other events. Section 308 (a) of the bill amends section 203 (e) (2) of theact to change the order of charging earnings in excess of the exempt amount ($1,200 for a full taxable year) to months of the taxable year. Excess earnings are to be charged (at the rate of $80 per month) to the first month of the taxable year and then to each succeeding month, instead of (as under existing law) to the last month and then to each preceding month. Section 308 (b) of the bill amends section 203 (e) (3) (A) of the act to make a conforming change. Section 308 cc) of the bill amends sections 203 (e) (2) (D) and 203 (e)(3) (B)(ii) of the act to increase from $80 to $100 the amount of wages that a beneficiary may earn in a month without having benefits withheld even if excess earningsare charged to such month, as indicated above, provided he does not perform substantial services in self-employment in such month.(This change does not affect the provision, described above, which requires that earnings in excess of the exempt amount be charged to the months of the year in uits f $80.) Section 308 (d) of the bill amends section 203 (g) (1) of the act to provide that a beneficiary who has had his benefits suspended under the earnings test for all months (of a taxable year) in which he is under 72, do not have to file an annual report of earnings with 62 SOCIALSECURITY AMENDMENTS OF 1958 the Secretary for that year.It further provides that the beneficiary (or his survivors) has a period of 3 years, 3 months, and 15 days after the close of the year in which to file information that benefits are due for any month in the year; if this is not done, no benefits shall be paid for such month. Section 308 (e) makes a conforming change in section 203 (1) of the act, which relates to good cause for failure to make required reports. Section 308 (f) of the bill makes the amendments made by the section effective for taxable years beginning after the month of enactment. SECTION 309. REPRESENTATION OF CLAIMANTS BE- FORE SECRETARY OF HEALTH, EDUCATION, AND WELFARE Section 309 of the bill amends section 206 of the Social Security Act to eliminate the requirement that an attorney desiriiig to represent claimants before the Secretary must, as a matter of course, file a certificate of his right to practice. SECTION 310. OFFENSES UNDER TITLE II OF THE SOCIAL SECURITY ACT Section 310 amends section 208 of the Social Security Act, which is designed to protect the old-age and survivors system against fraud. The present section 208 specifically applies to the making of false statements (such as tax returns, tax claims, and the like) about covered earnings for the purpose of obtaining or increasing beneflts; and to the making of false statements, affidavits or documents in connection with an application for benefits, regarãless of whether made by the applicant or some other person.Section 310 of the bill amends section 208 to make the penalty provision clearly applicable in connection with willful failure to disclose material information as well as positive action; in connection with noncovered as well as covered earnings; and in connection with suspensions, terminations, and misuse of benefits, and disability determinations, as well as in connection with applications for benefits.The penalty provision would thereby be clarified and brought up to date to take account of major amendments to the program adopted in 1954 and 1956, such as the provisions on disability and the application of the earnings test to noncovered work. SECTION 311.SICK-LEAVE PAY OF STATE AND LOCAL EMPLOYEES Section 209 (i) of the Social Security Act excludes from wages remuneration paid to an individual who has reached retirement age if the employee did not work for the employer during the pay period unless the pay is "vacation or sick pay."Subsection (a) of section 311 of the bill amends section 209 (i) to include as sick pay any remuneration for service in the employ of a State or local government which is paid during any period he is absent from work on account of sickness.Subsection (b) provides that the change. made by subsection (a) will apply to payments made after enactment.It will SOCIAL SECURITY AMENDMENTS OF 1958 63 also apply to payments made b8f ore enactment if the State has paid, or agre before January 1, 1959, to pay, the amomt that would have been payable to cover such payments for all employees of the coverage group (of which the employees in question are members) had the amendment made in subsection (a) been in effect on or after January 1, 1951.If such payments are not made prior to January 1, 1959, interest will be charged as on any other overdue payment. SECTION 312. EXTENSION OF COVERAGE IN CONNECTION WITH GUM RESIN Section 312 (a) of the bill amends section 210 (a) (1) of the Social Security Act by removing the specific exclusion from employment of service performed in connection with the production or harvesting of crude gum (oleoresin) from a living tree or the processing of such crude um into gum, spirits of turpentine, and gum resin, if such processing is carried on by the original producer of the crude gum. Subsection (b) provides that the amendment made by subsection (a) shall apply to service performed after 1958. SECTION 313. EMPLOYMENT FOR NONPROFIT ORGANIZATION Section 313 (a) of the bill amends section 210 (a) (8) (B) of the Social Security Act to make the exclusion from employment now provided by section 210 (a) (8) (B) conform to the changes that section 405 of the bill makes in section 3121 (k) of the Internal Revenue Code of 1954.Subsection (b) provides that the amendment made by subsection (a) shall be effective with respect to certificates filed after the date of enactment. SECTION 314. PARTNER'S TAXABLE YEAR ENDING AS RESULT OF DEATH Section 314 (a) of the bill provides for the crediting of a deceased partner with a share of the partnership's earnings or loss, for social- security purposes, for the year of his death. A detailed discussion of this amendment appears in the explanation (in this report) of section 403 (a) of the bill. Section 314 (b) of the bill provides that the amendment made by subsection (a) shall apply with respect to individuals who die after the date of enactment of the bill; and with respect to individuals who die after 1955 and on or before the date of enactment, but only if the requirements of section 403 (b) (2) of the bill are met. SECTION 315. GRATUITOUS WAGE CREDITS FOR UNITED STATES CITIZENS FOR ACTIVE SERVICE IN ARMED FORCES OF WORLD WAR II ALLIES Generalrule Section315 (a) of the bill amends section 217 of the Social Security Act to extend the noncontributary wage credits, provided undersection 217 of the act, to certain American citizens who, prior to Decem- 64 SOCIAL SECURITY AMENDMENTS OF 1958 ber 9, 1941, entered the active military or naval service of countries that, on September 1, 1940, were at war with a country with which the United States was at war during World War II.Wage credits of $160 would be provided for each month of such service performed after September 15, 1940, and before July 25, 1947. To qualify or such wage credits, an individual must either haye been a United States citizen throughout the period of his active service or have lost his United States citizenship solely because of his entrance into such active service.He must have resided in the United States for at least 4 years during the 5-year period ending on the day of his enrance into such active service and must have been domiciled in the United States on such day. Separation from such active service must either have been (1) through discharge under conditions other than dishonorable after active service of at least 90 days or by reason of an injury incurred or aggravated in line of duty, or (2) through death in such service. Paragraph (2) of the new subsection provides that the parent of an individual to whom paragraph (1) applies shall have 2 years after the date of enactment of the bill, or after the date of the death of such individual, whichever is later, in which to file proof of support as required in section 202 (h) of the Social Security Act. Reinthursement to disability insurance tru8t fund Section 315 (b) of the bill makes a technical change in section 217 (g) of the Social Security Act, which authorizes appropriations to reimburse the "trust fund" for costs arising out of the granting of noncontributory wage credits under such section 217.The term "trust fund" is changed to "trust funds," in recognition of the creation of the separate Federal disability insurance trust fund by the 1956 amendments. Effective date Paragraph (1) of section 315 (c) of the bill provides that the amendment made by section 315 (a) shall apply only with respect to monthly benefits under sections 202 and 223 of the Social Security Act for months after the month in which the bill is enacted, to lump-sum death payments under section 202 of the act in the case of deaths occurring after the month in which the bill is enacted, and to periods of disability under section 216 (i) of the act in the ease of applications for a disability determination filed after the month in which the bill is enacted. Paragraph (2) of section 315 (c) of the bill provides that the primary insurance amount of an individual to whom the amendment made by section 315 (a) of the bill is applicable shall be recomputed to reflect, in any benefit to which such individual (or his survivors) may already be entitled, the wage credits provided by the amendment made by section,315 (a) of the bill. SOCIAL SECURITY AMENDMENTS OF 1958 65 SECTION316. POSITIONS COVERED BY STATE AND LOCAL RETIREMENT SYSTEMS Divigion o/ retirement 8y8teQThs Paragraph(1) of section 316 (a) of the bill divides section 218 (d) (6) of the act into a number of subparagraphs, and modifies the provisions of such section which permit coverage to be extended to only those members of a retirement system who desire such coverage. These provisiOns are modified in three ways. First, the State of Massachusetts is added to the list of States to which such provisions apply. Second, the provisions (for exteiiding coverage to only those members ofretirement system who desire such coverage) are modified by the addition of a new subparagraph (E) which makes coverage available, under these provisions, for persons who have an option to join a State or local system but who have not chosen to become inem- bers of the system.If the modification providing coverage under the divided retirement systemprocedure is approved after 1959, individuals having an option to join the State or local system would have to be treated in the same manner as members of the system; the State would have no option as to the treatment of such individuals. How- ever, if the modification is approved before 1960, the State would have the option as to whether these persons would be given an opportunity, under the divided retirement system provision, of securing coverage. In the case of coverage actions which have been completed (whether before or after enactment date) coverage could be made available by the State, if it so desired, to persons having an option to join a State or local system under the procedure (described below) provided for in a new subparagraph (F). Third, the provisions for covering only those members of a retirement system who desire such coverage would be modified by the addition of a subparagraph (F).This new subparagraph would give individuals who are in the group of persons which did not desire coverage another chance to obtain coverage.The State could transfer these persons to the group of persons desiring coverage if a modification providing for such coverage is mailed, or otherwise delivered, to the Secretary before 1960, or, if later, within 1 year after coverage was approved for the group which elected in favor, of coverage.Coverage could be provided under this procedure only for those persons who filed a request therefor with the State before the date of approval by the Secretary of the modification providing for the coverage of the additional persons. Paragraph (2) of section 316 (a) of the bill amends section 218 (d)(7)of the act (providing a simplified procedure for social security coverage under the provisions of sec. 218 (d)(6) which relate to extension of coverage to those persons under retirement systems desiring such coverage) to take account of the rearrangement of section 218 (d) (6). Paragraph (3) of section 316 (a) of the bill amends section 218 (k) (2) of the act, which makes applicable to interstate instrumentalities the provisions of section 218 (d) (6) which permit the extension of coverage to only those persons under retirement systems who desire such coverage.Paragraph (3) makes applicable to interstate 66 SOCIAL SECURITY AMENDMENTS OF 1958 instrumentalities the provisions of paragraph (1) of the bill which relate to the coverage of an individual who is not a member of a State or local retirement system but is eligible to become a member of such system.Paragraph (3) further amends section 218 (k) (2) of the uct to take into account the rearrangement of section 218 (d) (6). Coverage under other retirement 87J8ten18 Section 316 (b) amends section 218 (d) of the act by adding a new paragraph (8)to facilitate coverage for persons iii positions which are covered under more than one State or local retirement system.Subparagraph (A) of the new paragraph provides that if, after December 31, 1958, an agreement is made applicable to service in positions covered by a State or local retirement system, service performed by an individual in a position covered by sucha system may not be excluded from the agreement because the position is also covered under another retirement system. Subparagraph (13) of the new paragraph provides that subparagraph (A) shall not apply to services performed by an individual in a position covered under a retirement system if such individual, on the day the agreement is niade applicable to service performed in positions covered by such retirement system, is not a member of such system but is a meiiiber of another system.Subparagraph (C) provides that in cases where, prior to 1959, an agreement is made applicable to service in positions covered by aiiy retirenent system, the State may modify the agree- rneiit to make subparagraphs (A) and (B) .applic;ible to such sys- teni.Thus, in the case of retirement systems brought under coverage before 1959, the operation of subparagraphs (A) and (B) would be at the option of the State; in the case of retirement systems brought under coverage after 1958 subparagraphs (A) and (B) voiild apply automatically.The new subparagraph (D) states that nothing iii the paragraph authorizes the application of an agreement to services in any policeman's Or fireman's position in those States where such coverage is not specifically authorized in the act. Retroactive coverage for certain State and local government ems- ployees Section 316 (c) of the bill amends section 218 (f) of the act by ddiiig a new l)aragIpl1 (2) to make retroactive coverage avail:ihle under State agreements to certain persons whose employment with the State or locality may be terminated before the agreenient or modification extending coverage to the individual's position is executed.Under present law only persons who ure employed on the date the coverage modification is executed may obtain retroactive coverage.Under the new paragraph the State could obtain retroactive covernge for all persons employed by the State or locality on a date specified by the State.The date specified could not be earlier than the date the State submits the modification.If no date is specified by the State, retroactive coverage would be available only for individuals who are still employees on the date the modification is approved by the Secretary.The new provision would be effective for agreements or modifications executed after the enactment date. SOCIAL SECURITY AMENDMENTS OF 1958 67 SECTION317. POLICEMEN AND FIREMEN OF INTER- STATE INSTRUMENTALITIES Section 317 of the bill amends section 218 (k) of the ct by adding a new paragraph (3) to make coverage 'available to individuals in policemen's or firemen's positions covered by a retirement system who re employed by any instrumentality of two or more States.This coverage would be available on the same basis as in the specified States in which coverage is available (under 218 (p) of the act) to individuals in policemen's or firemen's positions. TITLE IV—AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1954 SECTION 401. CHANGES IN TAX SCHEDULES Self-employment i'ncome tax Section 401 (a) amends section 1401 of the Internal Revenue Code of 1954 to increase the social-security tax rate on self-employment income. Under present law the taxes on self-employment income are 'as follows: Taø rate Taah1eyearsbeginning after: (percent) 1950 3.V/ 1).i9 41/s 1964 4 19(n) 5% 1914 6% Thetax rates provided by the bill are as follows: Tax rato Taxable years beginning after: (percent) 198 199 4 19( 51/4 19(i 6 1908 6% Taxon employees and employers Sections 401 (b) and 401 (c) amend section 3101 and section 3111, respectively, of the Internal Revenue Code of 1954 to increase the socml security tax rate on wages for both employees and employers. Under present law the tax rates are as fo11ows: Ta rate, empLoyeraM empliyee.each Ca1endar years: (percent) 1957—59 inclusive 21/4 19110—64 inclusive 2% 19Gi—9inclusive 3% 1970—74inclusive 3% 1975andafter 414 Thetax rates provided by the bill are as follows: Ta rate, employeran employee, each Calendaryears: (percent) 19.)9 2½ 1900—62 inclusive 3 1963—65(inclusive) 3% 1966—68inclusive 4 1969andafter 4V2 68 SOCIALSECURITY AMENDMENTS OF 1958 Effective dates Section 401 (d) provides that the amendment made by section 401 (a) of the bill, shall apply with respect to taxable years which begin after December 31, 1958, aiid t.ht the amendments madeby siibsectiomis (b) and (c) of section 401 of the bill shall apply with respect to remuneration paid after December 31, 1958. SECTION 402. INCREASE IN TAX BASE Definition of self-em plozjment income Section 402 (a) of the bill amends section 1402 (b) (1) of the code by increasing the limitation on self-employment income subject to the self-employment tax (for taxable years ending after 1958) from. $4,200 to $4,800. Definition of wages Section 402 (b) of the bill amends section 3121 (a) of the code relating to the definition of the term "wages" for purposes of the Federal Insurance Contributions Act.Section 3121 (a) (1) of exist- inglawprovides that the term "wages" does not include that part of the remuneration paid within any calendar year by an employer to an employee which exceeds the first $4,200 of such remuneration (exclusive of remuneration excepted from wages by the succeeding paragraphs of sec. 3121 (a)) paid within such calendar year by such employer to such employee for employment. Th amendment would increase the amount of the limitation from $4,200 to $4,800 but otherwise would make no change in the provisions of section 3121 (a). Federal service Section 402 (c) of the bill amends section 3122 of the code, relating to Federal service, so as to conform the provisions of such sectiomi to. the increase made by the bill in the limitation on wages from $4,200 to $4,800. Special refunds of employee tav Section 402 (d) of the bill amends section 6413 (c) of the code,. relating to special refunds of employee tax paid on aggregate wages. in excess of $4,200 received by an employee from more than 1 employer during a calendar year, so as to conform (for calendar years after 1958) the special refund provisions to the increase made by thern bill in the limitation on wages from $4,200 to $4,800. Effective date Under section 402 (e), the amendments made by subsections (b) and (c) of section 402 are made applicable only with respect to remuneration paid after 1958. SECTION 403. PARTNEWS TAXABLE YEAR ENDING AS THE RESULT OF DEATH Section 403 of the bill amends section 1402 of the Internal Revenue Code of 1954 by adding a subsection (f), relating to the computation of the "net earnings from self-employment" of a p'artrier whose taxable year ends, because of his death, within the taxable year of the partnership. SOCIAL SECURITY AMENDMENTS OF 1958 69

Ge'nrali'uie Under section 1402 (a) of the 1954 Code the distributive share of partnership income which the partner is required to include in computing his net earnings fromself -employment is based on the ordinary income or loss of the partnership for the taxable year of the partnership ending within or with the partner's taxable year. If the partner's taxable year ends, because of his death, on any day other than the last day of the partnership's taxable year, the partner's final taxable year would not include any part of the ordinary income or loss of the parLnership for its current taxable year because such current taxable year does not end within the partner's Ilast taxable year. Thus, for such partner's list taxable year no amount of his distribu- t.ive share of the partnership income or loss for the current partnership taxable year would be included in his net earliings from self- employment. The new section 1402 (f) provides that if, as ft result of a partner's death, his taxable year ends within (but iiot with) the taxable year of the partnership there will be included in computing such partner's net eariings fromself -emp'oyment for the taxable year ending with his death so much of the deceased partner's distributive share of the partnership's ordinary income or loss for the partnership taxaMe year as is not attributable to an interest in the partnership during any period beginning oil the first day of the first calendar month following the month in which the partner died. Under paragraph (1) of new section 1402 (f) the ordinary income or loss of the partnership is treated as if it had beeii realized or sustained ratably over the partnership taxable year for purposes of determining under new section 1402 (f) the decreasd partner's distributive share which is attributable to any interest in the partnership during any period on or after the first day of the first calendar month following the month in which such partner died. Under paragraph (2) of secLion 1402 (f) the term "deceased partner's distributive share" is defined, for purposes of the new subsection, to include the share of his estate or of any other person succeeding, by reason of the death of the partner, to rights with respect to his partnership interest. The "deceased partner's disribut.ive share" does not include any share attributable to a partnership interest which was not held by the deceased partner prior to his death.Thus, if a deceased partner's estate should increase its interest in the partnership the amount of the distributive share attributable to such a,ddi- tional interest acquired by the estate would not be included in coin puting the "deceased partner's distributive share" of the partnership's ordinary income or loss for the partnership taxable year. Effective date Subsection (b) of section 403 of the bill contains the effective date provision applicable to new section 1402 (f).The new section 1402 (f) applies with respect to individuals who die after the date of the enactment of this bill.It will also apply to an individual who died after 1955 and on or before the date of the enactment of this bill if (1) there is filed before January 1, 1960, a self-employment tax return •(Or amended return) for the taxable year ending as a result of the individual's death, and (2) where the return is filed solely for the 70 SCIA12SECURITY AMENDMENTS OF 1958 purpose of reporting net earnings from self-employmentresulting Irom the new section 1402 (f), the return is accompanied by the amount of self-employment tax attributable to such net earnings.In a case in which new section 1402 (f) does apply to an individual who died after 1955 and on or before the date of the enactment of this bill,. no interest or penalty is to be assessed or collected on the amount of any self-employment tax due solely by reason of the operation of new section 1402 (f). SECTION 404. SERVICE IN CONNECTION WITH GUM RESIN PRODUCTS Removal of exclu8ion from definition of employment Section 404 (a) of the bill amends section 3121 (b) (1) of the code1 relating to the exclusion from employment of certain types of agricultural labor.Section 3121 (b) (1), as amended by the bill, retains the exclusion contained in subparagraph (B) of section 3121 (b) (1) of existing law.however, the amendment removes the exclusion contained in existing section 3121 (b) (1) (A) applicable to service performed in connection with the production or harvesting of any commodity defined as an agricultural commodity in section 15 (g) of the Agricultural Marketing Act as amended. Under the amendment services referred to in the preceding sentence will be coiered under the Federal Insurance Contributions Act on the same basis as other agricultural labor. Effective date Under section 404 (b) of the bill, the amendment made by section 404 (a) is made effective with respect to service performed after 1958. SECTION 405. NONPROFIT ORGANIZATIONS WAIVER CERTIFICATES General rule Section 405 (a) of the bill amends section 3121 (k) (1) of the In- ternal Revenue Code of 1954, relating to waivers of tax exemtion which may be filed by certain religious, charitable, etc., organizations. Under present law, such an organization may file a certificate waiving exemption from tax under chapter 21 of such code only if two-thirds or more of its employees concur in the filing of such certificate, and such certificate is accompanied by a list containing the signature, address, and social security account number (if any) of each employee who concurs in the filing of such certificate. Such list may be amended, pursuant to existing law, by the filing of a supplemental list at any time before the expiration of 2.4 months following the first calendar quarter for which the certificate is effective or at any time before Jan- uar,y 1, 1959, whichever is later.The certificate becomes effective, under present law, for the calendar quarter in which filed or the following calendar quarter, whichever is specified in the certificate, except that in the case of employees coricurrilig on a supplemental list filed after the first month following the first calendar quarter for which the certificate is in effect, the certificate becomes effective with respect to services performed by such employees in the calendar quarter following the calendar quarter in which the supplemental list is filed. SOCIAL SECURITYAMENDMENTS OF 1958 71 Section 405 (a) of the bill amends section 3121 (k) (1) of the code so as to provide that a certificate filed by an organization pursuant to that section shall become effective for the calendar quarter in which filed, for the following calendar quarter, or for any calendar quarter preceding the calendar quarter in which the certificate is filed, whichever is specified in the certificate by the organization, except that, in the case of a certificate filed before January 1, 1060, the certificate may not be made effective earlier than January 1, 1956.In the case of a certificate filed after 1959, the certificate may not be made effective for a calendar quarter earlier than the fourth calendar quarter preceding the caleiidar quarter in which the certificate is filed.Furthermore, in the case of employees concurriiig on a supplemental list filed after the first month following the calendar quarter in whicli the certificate is filed, the certificate is effective with respect to services performed by such employees in the calendar quarter iii which the supplemeiital list is filed.Iii addition, section 405 (a) of the bill ameiids section 3121 (k) (1) of the code so as to provide that an organization described in section 3121 (k) (1) which employs iiidividuals who are in positions covered by a pension, annuity, retirement7 or similar fund or system established by a State or political subdivision thereof, and which employs individuals who are not in such positions, shall separate its employees who are in such positions and its employees who are not in suchpositions into 2 groups for purposes of section 3121 (k) (1) of the code. A waiver may be filed with respect to the employees in either group, or separate waivers may be filed with respect to the employees in the two groups, provided two-thirds or more of the employees in the particular group concur in the filing of the certificate.Section 405 (a) of the bill also amends section 3121 (k) (1) of the code so as to provide that, in the case of any certificate filed pursuant to section 3121 (k) (1) which is effective earlier than the calendar quarter in which it is filed, all returns and taxes for the earlier calendar quarters shall be due on the last day of the first calendar month following the calendar quarter in which the certificate is filed.The statutory period for assessment of such taxes shall not be less than 3 years from such due date. Conforming amendment Section 405 (b) of the bill amends section 3121 (b) (8) (B) of the Internal Revenue Code of 1954, which, in effect, provides an exemption from the tax under chapter 21 of the code in respect of services performed for certain religious, charitable, etc., organizations.The amendment made by section 405 (b) of the bill is a conforming amendment made necessary by reason of the new subparagraph rE) contained in the amendment of section 3121 (k) (1) of the code made by section 405 (a) of the bill. Under present law, services performed as an employee of such an organization are excepted from employment (and the remuneration •therefor is thus exempt from tax) under chapter 21 unless the employee's signature appears on the list of employees concurring in the filing of a certificate under section 3121 (k) (1) of the code (relating to waivers of tax exemption which may be filed by such an organization) and such services are performed on or after the date on which. 72 SOCIAL SECURITY AMENDMENTS OF 1958 the certificate became effective with respect to such employee, or unless the employee entered the employ of the organization after the calendar quarter in which the certificate was filed. Section 405 (b) of the bill amends section 3121 (b)(8) (B) so as to add a new provision in respect of employees of an organization which, under the new section 3121 (k) (1) (E) of the code, is required to divide its employees into 2 groups for purposes of section 3121 (k)(1)(see the discussion in this report of the amendments made by sec. 405 (a) of the bill).Pursuant to this new provision, services performed as a member of such a group by an individual who became a member of that group after the. calendar quarter in which a certificate under section 3121 (k) (1) was filed with respect to such group shall not be excepted from employment under section 3121 (b) (8) (B) of the code. However, a member of one such group with respect to which a certificate is in effect who becomes a member of the other group shall not, as to his services as a member of such other group, be covered by the certificate filed with respect to the first group. Effective date Pursuant to section 405 (c) of the bill, the amendments made by sections 405 (a) and 405 (b) of the bill are effective only with respect to certificates under section 3121 (k) (1) of the code which are filed after the date of enactment of the bill. SECTION 406. EXEMPTION OF UNEMPLOYMENT BENEFITS FROM LEVY Section 406 of the bill amends section 6334 (a) of the code, relating to enumeration of property exempt from levy, by adding a paragraph (4) dealing with unemployment benefits.Pursuant to such paragraph (4), amounts payable to an individual under an unemployment compensation law of the United States of any State or Territory1 or of the District, of Columbia or of the dommonwealth of Puerto Rico, with respect to the unemployment of such individual, including any portion of the amount which is payable with respect to dependents, are expressly exempted from levy for the collection of any tax imposed by the Internal Revenue Code of 1954. TITLE V—AMENIMENTS RELATING TO PUBLIC ASSISTANCE Sections 3 (a), 1003 (a), and 1403 (a) of the Social Security Act now provide for paying to each State with a plan approved under titles I, X, and XIV, respectively, four-fifths of the first $30 of the average monthly money payment per recipient, plus one-half of the remainder of such average payment, but excluding that part of any payment to any individual in excess of $60. With respect to assistance expenditures for medical care or any other type of remedial care in behalf of recipieiits the Federal payment is oiie-half within an average monthly expenditure of $6 per recipient. SOCIAL SECURITY AMENDMENTS OF 1958 73 SECTION501. OLD-AGE ASSISTANCE Section 501 of the bill would amend section (3) of the Sociai Security Act so as 'to provide for an average monthly maximum of $66 on the amount of State expenditures for old-age assistance in which the Federal Government would share, and to relate a portion of the Federal contribution to the fiscal ability of the State. The Federa' payment would be four-fifths of the first $30 of the average monthiy payment per recipient, including assistance in the form of money payments and in the form of medical or any other remedial care, plus an amuimt that would be equal to the Federal percentage of the it- mainder (determined for each State as set out in sec. 505 of the bill), but excbding that part of the average monthly payment per recipient in excess of $66. The number of recipients to be used in determining the Federa' payment with respect to any month would be the number who received cash payments for that month, plus the number with respect to whom expenditures were made in such month as old-age assistance in the form of medical care.In determining 'the later number, individuals who were el%ible when the care was provided would be counted even though not eligible when the medical bill was paid. SECTIONS 503 AND 504. AID TO THE BLIND AND TOTALLY DISABLED Sections 503 and 504 amend sections 1003 (a) and 1403 (a) of the Social Security Act relating to aid to the blind and aid to the permanently and totally disabled, respectively, so as to provide a similar formula for the programs of assistance for the blind aiid disabled. SECTION 502. AID TO DEPENDEN'T CHILDREN Section 403 (a) of the Social Security Act now provides for paying to each State with a plan approved under title IV, fourteen-seventeenths of the first $17 of the average monthly payment per recipient plus one-half the remainder of such average payment, but excluding that part of any payment with respect to the first dependent child in the home and the adult caretaker in excess of $32 each, and withrespect to each of the other dependent children in the home in excess of $23.With respect to assistance expenditures for medical care or any other type of remedial care in behalf of recipients of aid to dependent children, the Federal payment is one-half within an average monthly expenditure of $3 per dependent child, and with respect to the adult caretaker within an average monthly expenditure of $6. Section 502 of the bill would amend section 403 (a) of the Social Security Act so as to provide for an average monthly maximum of $33 on the amount of State expenditures for aid to dependent children in which the Federal Government would share, and to relatea portion of the Federal contribution to the fiscal ability of the State.The Federal payment would be five-sixths of the first $18 of theaverage monthly payment per recipient, including assistance in the form of money payments and in the form of medical or any other remedial care, plus an amount that would be ecjual to the Federal percentage of the remainder (determined for each State as set out in sec. 505 of the 74 SOCIALSECURITY AMENDMENTS OF 1958 bill), but excluding that part of the average monthly payment per recipient in excess of $33. The number of recipients for purposes of determining the maximum Federal share with respect to any month would be determined in the manner described above for old-age assistance. SECTION 505. FEDERAL MATCHING PE1CENTAGE Section 505 would amend subsection (a) of section 1101 of the Social Security Act by adding a new paragraph defining the Federal percentage of State expenditures under titles I, IV, X, and XIV. The Federal percentage for any State (other than Puerto Rico, the Virgin Islands, and (xuam) would be derived by relating the State's per capita income to the national per capita income.For a State with a per capita income equal to or above the national per capita income, the Federal percentage would be 50 percent.Where a State's per capita income was less than the per capita income of the Nation, the Federal percentage would be more than 50 percent.The bill provides that the Federal percentage shall in no case be less than 50 percent or more than 70 percent.The Federal percentage for Alaska and Hawaii is specified to be 50 percent. The Federal percentage would be promulgated each even-numbered year, based on data of the Department of Commerce on per capita income for the 3 most recent calendar years for which satisfactory data are available, and would be conclusive for 8 successive quarters beginning July 1 after such promulgation.Provision is made for a promulgation to be made as soon as possible after enactment of the bill and such promulgation would be conclusive for each of the 11 quarters in the period from October 1, 1958, through June 30, 1961. SECTION 506. EXTENSION TO GUAM Section 506 amends the term "State" when used in titles I, IV, V, VII, X, and XIV to include Guam, thus making Federal grants-in- aid under these titles available to Guam. SECTION 507. INCREASE IN LIMITATIONS ON PUBLIC- ASSISTANCE PAYMENTS TO PUERTO RICO AND VIR- GIN ISLANDS Section 507 amends section 1108 of the Social Security Act to increase the limitation on the total annual Federal payments for public assistance under title I, IV, X, and XIV to Puerto Rico from $5,312,500 to $8,500,000.The limitation with respect to the Virgrn Islands would be increased from $200,000 to $300,000.Section 1108 is also amended to establish a limitation of $400,000 on such payments to Guam to which Federal grants are made available under section .506 of the bill. SOCIAL SECURITY AMENDMENTS OF 1958 75 SECTION508. MATERNAL AND CHILD-CARE GRANTS FOR GUAM Section 508 provides that, until such time as the Congressmay by appropriation or other law provide, the Secretary shall; in p'ace of the uniform grant of $60,000 now authorized for each State for each of the 3 grant programs under title V, allot such smaller amounts to Guam as he may deem appropriate. SECTION 509. TEMPORARY EXTENSION OF CERTAIN SPECIAL PROVISIONS RELATING TO STATE PLANS FOR AID TO THE BLIND Section 509 would amend section 344 (b) of the Social Security Act Amendments of 1950, as amended, so as to extend from June 30, 1959, through June 30, 1961, the special provisions relating to the approval of certain State plans for aid to the blind under title X. SECTION MO. SPECIAL PROVISION FOR CERTAIN INDI- ANS REPEALED Section-510 of the bill repeals section:9 of the act of April 19, 1950, amended, relating to additiona' Federal sharing under titles I, IV, and X in assistance provided to Navajo and Hopi Indians residing on reservations. SECTION 511. TECHNICAL AMENDMENT Section 511 ofthe bill would make a technical amendment in section 2 (a) (11) of the Social Security Act to make clear that in the description in the State plan of services relating to self-care there shall be included a description of the steps taken to assure, in the provision of such services,, maximum utilization of other agencies providing similar or related services. SECTION 512. EFFECTIVE DATES Section 512 specifies the effective dates for certain amendments made by title V of the bill.The sections of the bill relating to the formula for Federal matching of State public-assistance expenditures (secs. 501, 502, 503, 504, and 505) are effective for months after September 1958. The amendments relating to the extension of titles I, IV, X, and XIV of the Social Security Act to Guam in section 506 would become effective for the months after September 1958. The amendments relating to the extension of title V of the Social Security Act to Guam and to the allocation to Guam of Federal funds under that title, made by sections 506 and 508, respectively, of the bill, would become effective for fiscal years ending after June 30, 1959. The amendments made by section 507 relating to the limitation on Federal public-assistance grants to Puerto Rico, the Virgin Islands, and Guam, would become effective for fiscal years ending after June 30, 1958. . Thetechnical amendment made by section 511 of the bill would become effective October 1, 1958. 76 SOCIALSECURITY AMENDMENTS OF 1958

TITLE VI—MATERNAL AND CHILD WELFARE SECTION 601. CHILD WELFARE SERVICES Section 601 amends the present provisions of part 3, title V of the Social Security Act as follows: 1. It increases the amount authorized for annual appropriation for grants to the States for child-welfare services from the present $1 million to $17 million. 2. It removes the present provisions of the law with respect to the use of Federal child-welfare funds in predominantly rural areas or other areas of special need. 3. It changes the formula for allotment of Federal child-welfare funds. The present law provides for a uniform grant of $40,000 to each State, with the remainder allotted on the basis of the proportion that the rural child population under 18 years of age of each State bears to the total rural population of the United States under such age.The bill provides that the sums appropriated for each fiscal year shall be allotted by the Secretary for use by cooperating State public-welfare agencies which have plans developed jointly by the btate agency and the Secretary as follows: To each State, he shall allot such portion of $60,000 as the amount appropriated bears to the amount authorized to be appropriated, and he shall allot to each State an amount which bears the same ratio to the remainder of the sums appropriated for such year as the product of (1) the population of such State under the age of 21 and (2) the allotment percentage of such State bears to the sum of the corresponding products of all the States.The allotment percentage for any State would be 100 percent less the State percentage; 'and the State percentage would be that percentage which bears the same ratio to 50 j?ercent as the per capita income of such State bears to the per capita income of the continental United States (excluding Alaska); except that (a) the allotment percentage shall in no case be less than 30 percent or more than 70 percent, and (b) the allotment percentage shall be SOjer- cent in the case of Alaska and 70 percent in the case of Puerto Rico, the Virgin Islands, and Guam. The bill also provides that if the amount so allotted is less than the State's base allotment, the amount shall be increased to such base allotment, and the total of the increases thereby required shall be derived by proportionately reducing the allotments of the other States, but with such adjustments as may be necessary to prevent the allotment of any State from being reduced to less than its base al- ]otment. The base allotment of any State for any fiscal year is defined as the amount which would be allotted to such State for such year under the provisions of section 521 of the law as in effect prior to the enactment of the Social Security Amendments of 1958, as ap- p1id to an appropriation of $12 million. 4. It adds new sections on payments to the States and on the Fed- eral share.The bill provides that the Secretary shall from time to time pay to each State with a plan developed jointly by the State agency and the Secretary, an amount equal to the Federal share. For the fiscal year ending June 30, 1960, and each year thereafter, the Federal share for any State shall be 100 percent less that per- SOCIAL SECURITY AMENDMENTS OF 1958 77 centagewhich bearsthe sameratio to 50 percent as the per capita income of such State bears to the per capita income of the continental United States (excluding Alaska), except that (1) in nocase shall the Federal share be less than 331/3percentor more than 662/3 percent, and (2) the Federal share shall be 50 percent in thecase of Alaska and 662/3 percent in the case of Puerto Rico, the Virgin Islands, and Guam. For the fiscal year ending June 30, 1959, the Federal share shall be determined pursuant to the provisions ofsection 521 as in effect prior to the enactment of the Social Security Amendments of 1958. The bill provides that the Federal share and the allotment percentage for each State shall be promulgated .by the Secretary between July 1 and August 31 of each even-numberedyear, on the basis of the average per capita income of each State and of the continental United States (excluding Alaska) for the 3 most recent calendar years for which satisfactory data are available from the Department of Commerce. Such promulgation shall be conclusive for each of the 2 fiscal years in the period beginning July 1 next succeeding such promulgation, provided that the Secretary shall promulpte such Federal shares and allotment percentages assoon as possible after the enactment of t.he Social Security Amendments of 1958, which promulgation shall be conclusive until July 1, 1961. 5. It modifies the provisions of the present law with respect to the use of Federal child-welfare funds for the return ofrunaway children. The bill provides that these funds may be used for paying the costs of returning any runaway child who has not attained the age of 18 to his own community in another State, and of maintaining such child until such return (for a period not exceeding 15 days), in cases in which such costs cannot be met by the parents of such child or by any person, agency, or institution legally responsible for the support of such child.The present law provides that these funds may be used for paying the cost of returning any runaway child who has not attained the age of 16 to his own community in another State in cases in which such return is in the interest of the child and the cost thereof cannot otherwise be met. 6. It adds a new section to authorize reallotment of Federal child welfare funds.This section provides that the amount of any allotment to a State for any fiscal year which the State certifies to the Secretary will not be required for carrying out the State plan shall be available for reallotment from time to time,on such dates as the Secretary may fix, to other States which the Secretary determines (1) have need in carrying out their State plansso developed for sums in excess of those previously allotted to them, and (2) will be able to use such excess amounts during such fiscal year. Such reallotments shall be made on the basis of the State plans, after taking into consideration the population under the age of 21, and theper capita income of each such State as compared with the pqpuhation under the age of 21, and the per capita income of all such States with respect to which such a determinatioii by the Secretary has been made. Any amount so ieallotted to a State shall be deemed part of its annual allotment. 78 SOCIALSECURITY AMENDMENTS OF 1958 SECTION 602. MATERNAL AND CHILD HEALTH Section 602 amends the present provisions of part 1, title V of the Social Security Act by increasino the amount authorized for annual appropriation for grants to the 'tates for maternal and child health services from the present $16.5 million to $21.5 million. The bill also increases correspondingly the amounts specified in section 502 (a) and (b) of the present law so that they continue to represent, respectively, one-half of the amount authorized to be appropriated, namely, $10,750,000.With respect to the uniform grant of $60,000 to each State, now provided under section 502 (a) of the law the bill provides that the Secretary shall allot this amount to each tate each year even though the amount appropriated for such year is less than $21,500,000. SECTION 603. CRIPPLED CHILDREN'S SERVICES Section 603 amends the present provisions of part 2, title V of the Social Security Act by increasing the amount authorized for annual appropriation for grants to the States for crippled children's services from the present $15 million to $20 million.The bill also increases correspondingly the amounts specified in section 512 (a) and (b) of the present law so that they continue to represent, respectively, one- half of the amount authorized to be appropriated, namely, $10 million. With respect to the uniform grant of $60,000 to each State, now provided under section 512 (a) of the law, the bill provides that the Secretary shall allot this amount to each State each year even though the amount uppropriated for such year is less than $20 million. TITLE VIl—MISCELLANEOUS PROVISIONS SECTION 701. FURNISHING OF SERVICES BY DEPART- MENT OF HEALTH, EDUCATION, AND WELFARE Section 1106 (b) of the Social Security Act now authorizes the furnishing, and charging therefor, to persons requesting it, of information permitted under applicable regulations; it does not provide for furnishing of services and the imposition of charges therefor where the Secretary of Health, Education, and Welfare deems such charging appropriate.Section 701 of the bill amends section 1106 (b) to provide for furnishing services, and for collecting and depositing in the old-age and survivors insurance and disability insurance trust funds appropriate charges for such services.Such services will not be provided, however, where they would unduly interfere with the administration of the old-age and survivors insurance program. SECTION 702. COVERAGE FOR CERTAIN EMPLOYEES OF TAX-EXEMPT ORGANIZATIONS WHICH PAID TAX Section 702 of the bill amends paragraphs (1), (3), and (5) of section 403 (a) of the Social Security Amendments of 1954. Amendments madebysection 702 (a) Under section 403 (a) of the Social Security Amendments of 1954, remuneration for service, performed by an individual at any time SOCIAL SECURITY AMENDMENTS OF 1958 79 after1950 and before August 1, 1956,foran organization which had failed to file a valid certificate pursuant to section 3121 (k) of the 1954 Code prior to the performance of such service may, under specified circumstances, be deemed to constitute remuneration for employment as defined in section 3121 (b) of the 1954 Code and section 210 of the Social Security Act, provided the taxes imposec by sections 3101 and 3111 of the 1954 Code were paid in good faith and upon the assumption by such organization that a valid certificate had been filed. (As used in the preceding sentence, references to provisions in the 1954 Code include references to the corresponding provisions of the 1939 Code.) Section 702 (a) of the bill amends paragraph (1) of section 403 (a) of the Social Security Amendments of 1954 to substitute for the phrase "has failed to file prior to the enactment of the Social Security Amendments of 1956" the phrase "did not have in effect, during the entire period in which the individual was so employed".The effect of this amendment is to permit employees of organizations which filed valid waiver certificates before the enactment of the Social Security Amendments of 1956 to have their remuneration for service treated in the same manner as employees of organizations which failed to file valid waiver certificates before the enactment of such 1956 amendments. Conforming amendment Section 702 (b) of the bill adds a phrase to paragraph (3) of such section 403 (a) to conform to the change made by section 702 (a) of the bill. Amendment made by Bubseetion (c) Section 702 (c) of the bill amends paragraph (5) of suth section 403 (a) to add as an additional acceptable reason for the organization's failure to file a certificate, pursuant to section 3121 (k) (1) of such code, that the organization was "without knowledge that a waiver certificate was necessary." SECTION 703. MEANING OF TERM "SECRETARY" Section 703 of the bill provides that the term "Secretary," as used in the provisions of the Social Security Act, set forth in the bill, means the Secretary of Health, Education, and Welfare where the context does not otherwise require. 0

Union Calendar No. 950

85THCONGRESS 2n SESSION . .1 49 [ReportNo. 22881

IN THE HOUSE OF REPRESENTATIVES

JULY 28, 1958 Mr. MILLS introduced the following bill; which wasreferred to the Com- mittee on Ways and Means

JULY 28, 1958 Committed to the Committee of the Whole I-louse on theState of the Union and ordered to be printed A BILL To increase benefits under the FederalOld-Age, Survivors, and Disability Insurance System, to improve theactuarial status of the Trust Funds of such System,and otherwise improve such System; to amend the public assistanceand maternal and child health and weliare provisions of theSocial Security Act; and for other purposes.

1 Be it enacted by the Senate and House ofRepresenta-

2 tives of the United States of America in Congressassembled,

3That this Act may be cited as the "Social SecurityAmend-

4ments of 1958". I 2

1TITLE I—INCREASE IN BENEFITS UNDER TITLE

2 II OF THE SOCIAL SECURITY ACT

3 INCREASE TN BENEFIT AMOUNTS

4 Primary Insurance Amount

5 SEC. 101.(a)Subsection(a)of section 215 of the 6Social Security Act is amended to read as follows:

7 "Primary Insurance Amount 8 "(a) Subject to the conditions specified in subsections 9 (b),(c), and (d)of this sectioii, the primary insurance 10amount of an insured individual shall be whichever of the

1].following is the largest:

12 "(1) The amount in column IV on the lineoii 13 whichin column ITT of the following table appears his

14 average monthly wage (asdeterminedunder subsection 15 (b));

16 "(2) The amount in column IV on the lineon 17 which in column II of the following tableappears his 18 primary insurance amount (as determined under sub-

19 section(c) ) 20 "(3) The arnouiit in cohimn IVon the line on 21 \V1Ii(h in columnIof the following tableappears his

22 primary insurance beneFit(as determinedunder sub—

section(d) );or

24 "(4)Iii the cise ofanindividual who was entitled

25 to a disability insurance benefit for the month before the

26 monthinwhich iiebecame entitled to old-age insurance .3 I benefits or died, the amount in column IV which is equal

2 to his disability insurance benefit.

''TABlE FOR DETERMIN! N(T'RIMAUY INSLJRAtJClJ\MOJtJT Arfl)1\1 AXtMUMFAMILY

II IT' Iv V '(Primary insurancc (Prirntry insurance (Average monthly (Primary insur- (Maximum benefit under 1939 amount under 1954 wage) ance amount) family Act, as modified) Act) benefits)

If an !ndividual's Or his primary insur-Or histvcrtgemonthly And the maxL. primary insurrnce ance aniouiit(as leter- wage(i dcterrnined The amount re-mum amount of benpfit (t5 determined minedtindet subsc. tindr subsec. (b))is— furred to In thebeneflts )ayabIe under subsec. (d)) is— (c)) is— preceding iur- (sprovided in graphs Ofthis sec. 203 (a)) on subsection the haSS of his But not But not But not halI be— wausandscir- At Inist— more At ltst— more At Iust— more (nIpIoynIent than— than— than— income shull be—

$10. 00 $30. 00 $54 $33 $53. 00 "$10.01 10. 48 $30.0 31.00 $55 56 34 54. 00 10.49 II. 00 3!.10 32.00 57 58 35 55. 00 11.01 11.48 32. 10 33.00 59 (iO 36 56. 00 11.49 12.00 33.10 34. 00 61 37 57. 00 12.01 12.48 34. 10 35.00 02 63 38 58. 0)0 12.40 13.00 35.10 G. 00 6'] tis 39 59.00 13. 01 13.48 36.10 37. 00 06 67 40 60.00 13. 49 14.00 37.0 38. 00 68 k) 41 61. 50 14. 01 14.48 38.0 3ft 00 70 70 42 63. 00 14. 49 15.00 3).10 40. 00 71 72 43 64. 50 15.01 15. 60 40.10 4•l00 73 74 44 66. 00 15. 61 16.20 41.10 42. 00 75 76 45 67. 50 16.21 16. 84 42. 10 43. 00 77 78 40; 69. 00 16. 85 17.(30 43. .10 44.00 79 80 47 70. 50 17.(U 18.40 44. 10 45. 00) 81 81 48 72.00 18.41 19.24 45. 10 46. 00 82 83 4U 73. 50 19.25 20.00 46.10 47.Of) 84 85 50 75.00 20. 01 20. 64 47. 10 48.00 86 87 51 7G.50 20.05 21.28 48.10 4ft 00 88 89 52 78.00 21. 29 21.88 4J.10) 50. 00 90 53 79.50 21. 8U 22.28 50. 10 50. 90 92 54 81. 00 22.29 22. G8 51.00 51.80 93 94 55 82.50 22. 69 23.08 51.)0 52. 80 95 96 56 84.00 23.09 23. 44 52. 90 53.70 97 97 57 85. 50 23. 45 23. 7U 53. 80 54.60 98 58 87. 00 23. 77 24.20 54. 70 55.GO 100) 101 59 88.50 2.4.21 24. Go 55.70 56. 50 102 102 60 90.00 24. 61 25. 00 56.60 57. 40 103 104 61 91.50 25.01 25. 48 57.50 58. 40 105 106 62 93. 00 25. 49 25.02 58.50 59. 30 107 107 63 94.50 25.03 2(3. 40 59. 40 (0. 20 108 109 64 96.00 26.41 26. 94 60. 3() 61.20 110 Ii: 65 97.50 26. 95 27. 40 GI.30 (2. 10 114 118 66 99. 00 27. 47 28. 00 62. 20 (.0() 119 122 "7 100. 50) 28. 01 28.68 10 4. 00 123 .127 68 102.00 28. 09 2).25 04.0 64. 90) 128 I 2 () 104.00 29. 26 29. (S (. 00 65. 80 133 I36 70) 107.60 29.69 30.36 6.. 90) 6. 80 137 141 71 111.20 30. 37 30.92 (G. )0 67. 70 142 146 72 115.20 30. 03 fl. 52 67. 80 68. 70 147 151 73 119.20 31.53 32. U0 68. 80 69. 60 152 155 74 122. 80 32. 01 32.Go 69.70 70. 50 156 160 75 126.40 32.61 33. 40 70.60 71. 50 161 165 76 130. 40 33.41 33. 88 71.0 72. 40 166 169 77 134.00 33.89 34.50 72. 50 73. 30 1.70 174 78 137.60 34. 51 35.20 73.40 74. 30 175 170 79 141.60 35. 21 35.80 74. 40 75. 20 180 183 80) 145. 20 35. 81 36.40 75. 30 76. 10 184 188 81 148,80 36. 41 37. 08 76.20 77.10 189 193 82 152.80 37. 09 37. 60 77.20 78.00 194 197 83 156. 40 37.61 38.20 78. 10 78. 90 198 202 84 160. 00 38.21 39. 12 79.00 79. 90 203 207 85 164.00 :o.13 39. 68 80.oO 80.80 208 211 86 167.60 4

"TABLE FOR DETERM1NIO PRIMARY INSURANC1 AMOUNT AND MAXIMUM FAMILY BENEFITS—Continued

"I H III IV V "(Primary Insurance (Primary insurance (Average monthly (Primary insur- (Maximum benefitunder 1939 amount under 1954 wage) ance amount) family Act, as modified) Act) benefits)

'It an Individual's Or his primary Insur-Or hs average monthly And the max- primary insurance anee amount (as deter- wage (as determined The amount re-mum amount of benefit (as determined mined under subsec. under subsec. (h)) is— ferred to in thebenefits payable under subsec. (d)) is— (c)) IS-— preceding para- (as provithd in graphs of this e.c. 203 (a)) on subsection the basis of his But not Butnot But not shaH he— wages and self- At least—- more At 1at— more At cst•— more employment than— than— thin— income shall he—

"$39. 69 $40. 33 $80. 90 $81. 70 $212 $216 $87 $171. 20 40. 34 41. 12 81. 80 82. 70 217 221 88 175.20 41. 13 41. 76 82. 80 83. 60 222 225 89 178. 80 41. 77 42. 44 83. 70 84. 50 226 230 90 182. 40 42. 45 43. 20 84. 60 85. 50 231 235 91 186. 40 43. 21 43. 76 85. .60 86. 40 236 •239 92 190. 00 43. 77 44. 44 86. 50 87. 30 240 244 93 193. 60 44.45 44. 88 87. 40 88. 30 245 249 94 197. 60 44.89 45. 60 88. 40 89. 20 250 253 95 201. 20 89. 30 90 10 254 258 96 204. 80 90. 20 91. 10 259 263 97 208. 80 91. 20 92. 00 264 267 98 212. 40 92. 10 92. 90 268 272 99 216. 00 93. 00 93. 90 273 277 100 220. 00 94. 00 94. 80 278 281 101 223. 60 94. 90 95. 80 282 286 102 227. 20 95. 90 96. 70 287 291 103 231. 20 96. 80 97. 60 292 295 104 234. 80 97. 70 98. 60 296 300 105 238. 40 98. 70 99. 50 301 305 106 242. 40 99. 60 100. 40 306 309 107 246. 00 100.50 101.40 310 314 108 249.60 101.50 102.30 315 319 109 253.60 102.40 .103.20 320 323 110 254.00 103.30 104.20 34 328 111 254.00 104.30 105.10 329 333 112 254.00 105.20 106.00 334 337 113 254.00 106. 10 107. 00 338 342 114 254. 00 107. 10 107. 90 343 347 115 254. 00 108.00 108.50 348 351 116 254.00 352 356 117 254.00 357 361 118 254.00 362 365 119 254.00 366 370 120 254. 00 371 375 121 254. 00 376 379 122 254. 00 380 384 123 254.00 385 389 124 254. 00 390 393 125 254. 00 394 398 126 254. 00 399 400 127 254. 00"

AverageMonthly Wage 2 (b) Section 215 (b)(1) of such Act is amended by 3stikingout "An" and inserting in lieu thereof the following:

4"For the purposes of column III of thetable appearing in 5subsection(a) of this section, an". 5

1 (2) Suchsection 215(b) isfurther amended byaddilig

2at the end thereof the followingparagraph:

3 "(5) The provisions of this subsection shall beappli-

4cable only in the case of an individual with respect towhom

5not less than six of the quarterselapsing after 1950 are

6quarters of coverage, aS—

7 "(A) who becomes entitled to benefits under see-

8 tion 202 (a) or section 223 after thesecond month lot-

9 lowing the month in which the SocialSecurity Amend-

10 mentaofl9s8areenacted,or

11 "(B) who dies afuir such second monthwithout

12 being entitled to benefits under such section202 (a) or

13 iction 223, or 14 "(0) who files an application for arecomputation

15 under section 215(f)(2)(A)after such second

16 mouth and is (or would, but for theprovisions of see-

17 tion 215 (f)(6), be) entitled to have his primary in-

18 suranee amountrecomputed under such section, or

19 "(D) who dies after such second month andwhose

20 survivors are (or would, but for theprovisions of section

21 215 (f)(6), be) entitled to a recomputationof his

22 primary insurance amount under section 215(f)(4) ." 6

1 Primary Insurance Amount Under 1954 Act

2 (c)Section 215 (c)of such Act is amended to read

3 as follows:

4 "Primary Insurance Amount Under 1954 Act

5 "(c)(1) For the purposes of colunin II of the table

6 appearing in subsection (a)of this section, an individual's

7primary insurance amount shall be computed as provided in,

8and subject to the limitations specified in, (A) this section

9as in effect prior to the enactment of the Social Security 10 Amendments 011958, and (B)the applicable provisions

11of the Social Security Amendments of 1954.

12 "(2)The proviion of this ubsettion shall be appli—

13(table oiily in the case of an individual who—

14 '(A)became entitled to benefits under section 202 15 (a)or eetioii 22:priorto the third month following 16 the month in whichthe SocialSecurity Amendments of 17 1958 were euacted, or 18 "(B)died prior to suchthird month." 19 Primary Insurance Benefit TJnder 1939 Act 20 (d) Section 215 (d)of such Act is amended to read 21as follows:

22 "Primary Insurance Benefit Under 1939Act

23 "(d)(1) For the purposes of column I of thetable 24appearing in subsection(a)of this section, an individual's

25primary insurance benefit shall be computedas provided in 7

1 this title as in effect prior to the enactment of the Social

2 Security Act Amendments of 1950, except that—

3 "(A) In the computation of such benefit, such in-

4 dividual's average rrionthly wage shall (in lieu of being

5 determined under section 209(f)of such title as in

6 effect prior to the enactment of such amendments)be

7 determinedas provided insubsection (b) of this section

8 (but without regard to paragraph (5) thereof), except

9 that his starting date shall be December 31, 1936.

10 "(B) For purposes of such computation, the date

11 lie became entitled to old-age insurailcebenefits shall

12 b deemed to be the date he becameentitled to pu-

13 mary insurance benefits.

14 "(C) The I per centuni additiomiprovided for in

15 section 209 (e)(2) of this Act as iii effect prior to the

16 enactmrierit of the Social Security ActAmendments of

17 1950 shall be applicable onlywith respect to calendar

1.8 years prior to 1951, exceptthat any wages paid in any

19 year prior tosuch year any part of which was included

20 in a period of disability shall notbe counted.Notwith-

21 standing the preceding sentence, the wagespaid in the

22 year in whichsuch period of disability began shallbe

23 counted if the counting of such wages wouldresult in a

24 higher primary insurance amount. 8

1 "(D) The provisions of subsection (e) shall be ap-

2 plicable to such computation.

3 "(2) The provisions of this subsection shall be appli-

4cable only in the case of an individual—

5 "(A) with respect to whom at least one of the

6 quarters elapsing prior to 1951 is a quarter of coverage;

7 "(B) who meets the requirements of any of the

S subparagraphs of paragraph (5)of subsection(b)of

9 this section; and

10 "(C) who a.ttained age 22 after 1950 and with

11 respect to whom less than six of the quarters elapsing

12 after 1950 are quarters of coverage,or who attained

13 such age before 1951."

14 Minimum Survivors or Dependents Benefit 15 (e) Section 202 (m)of the Social Security Act is 16amended by striking out "$30" wherever itoccurs and 17inserting in lieu thereof "the first figure in column IV of 18the table in section 215 (a) ".

19 Maximum Benefits 20 (f)Subsection (a)of section 203 of the Social Secu-

21rity Act is amended to readas follows: 22 "Maximum Benefits

23 "(a) Whenever the total of monthly benefitsto which 24 individuals are entitled under sections 202 and223 fora. 25month on the basis of thewages and self-employment income 9 appearing 1of an insured individual isgreater than the amount on theline 2in column V of the tablein section 215 (a) insured individual's 3on which appearsin column IV such shall be 4primary insurance amount,such total of benefits

5 reduced to such amount; exceptthat— soentitled 6 "(1) when anyof suchindividuals of section 202 (k)(2) 7 would (but for the provisions benefits on the 8 (A) )beentitled to child's insurance self-employment income of one 9 basis of the wages and

10 or moreother insured individuals,such total of benefits (A) 11 shall not be reduced to lessthan the smaller of: of benefits payable on 12 the sum of the maximum amounts self-employment income of 13 the basis of the wages and

14 all such insured individuals, or(B) the last figure in

15 column V of the table appearingin sectiomi 215 (a), or

16 "(2) when any of such individuals wasentitled to 17 (without the application of section202(j)(1))

18 momithly benefits umider section 202 orsection 223 for

19 the second month following themonth in which the

20 Social Security Arriendnients of 1958 wereemiacted, and

21 the primary insurance amountof the insured individual

22 on the basis ofwhose wages and se1f-empoyrrientincome

23 such monthly benefits arepayable is determined under

24 the provisions of section 215(a)(2), then such total

25 benefits shall not be reduced to less thanthe larger of— 10

1 "(A) the amount determined under this sub-

2 section without regard to this paragraph, or

3 "(B) the amount determined under this sub-

4 section as in effect prior to the enactment of the

5 Social Security Amendments of 1958 or the amount

6 determined under section 102(h)of the Social

7 Security Amendments of 1954, as the case may be,

8 plus the excess of—

9 "(1) the primary insurance amount of such

10 insured individual in column IV of the table

11 appearing in section 215 (a), over

12 "(ii) his primary insurance amount deter-

13 mined uiider section 215 (c),

14 "(3) when aiiyofsuch individualsisentitled

:15 (without the application of section 202(j)(1))to

16 monthly benefits based on the wages and self-employ-

17 ment income of an insured individual with respect to

18 whom a period of disability (as defined in section 216

19 (i) )beganprior to the third month following the

20 month in which the Social Security Amendments of

21 1958 were enacted and continued uninterruptedly until—

22 "(A) he became entitled to benefits under sec-

23 tion 202 or 223, or

24 "(B) he died, which ever first occurred,

25 and the primary insurance amount of such insured mdi- 11

1 vidual is determined under the provisions of section 215

2 (a)(1)or (3) and is not lessthan $68, then such

3 totalof benefits shall not be reduced to less than the

4 smaller of—

5 "(0) the last figure in column V of the table

6 appearing in section 215 (a), or

7 "(D)the amount in column V of such table on

8 the same line on which, in column IV, appears his

9 primary insurance amount, plus the excess of—

10 "(i) such primary insurance amount, over

11 "(ii)the smallest amount in column II of

12 the table oii the line on which appears such pri-

13 mary insurance amount.

14In any case inwhichbenefits are reduced pursuaiit to the

15precedingprovisions of this subsectioii, such reduction shall

16be made after any deductions under this seetioii and after

17any deductions under section 222(b).Whenever a reduc-

18tionis made under this subsection, each benefit, except the

19old-age or disability insurance benefit, shall he proportion-

20ately decreased."

21 Effective Date

22 (g)The amendments made by this section shall be

23applicable in the case of monthly benefits under title II of the

24Social Security Act, for months after the second month fol-

25lowing the month in which this Act is enacted, and in the 12

1 caseof thelunip—suindeath payments under such title, with

2 respect to deiltils occurring after suchsecond month.

3Primary Isisuraiice A niotuit for Certain 1)isability Insurance

4 Beneficiaries

5 (Ii)If' an iidividiiah was entitled toa disability insur—

6alice benefit uiider section 223 of the Social Security Act

7for the ecoiid month after themonthiii which this Act is

8cI('te(1 and becanic cuhitle(1to old—tgc insurance benefits

9under e(tioIi2O(a)of u(1i Act:,or (lied,jfl the third

10nioiitli after theiiiontliiii w1ich this Act is enacted, then,

11br purposes of paragraph(4)of ectioii 215 (a)of the

12So(u11 c(ilrity Act., as ilhiieli(led by this Act, thearnouiit in

13('OlUlilli IV of Ilie table appearingiiisuch section 215 (a) 14for sII(li individud 1iahl be theamount in such column on

15the line oii wliwhi in colutini 11appears his primary insur—

16a.iue aiiiouiit (a detcriiiinccl uiidcr subsection(c)of such.

17 scl jol i 215)ii istead of the aiiiount in column IV equalto 18his dtahi1ity insurance benefit.

19 Saving Provision

20 ()Withnspet to iiioiithly benefits undertitle11 of 21the Social Seunty Act payablepursuant to section 202 22 (j)(1)of such Act for any month priorto the third month 23following the month of enactment of thisAct, the primary 24insurance amount of the individualon the basis of whose

25wages and self-employineiit hicorne such monthly benefitsare 13

1 payable shall be determined asthough this Act had not been iridi- 2 enacted; such primary insuranceamount shall be such

3 viduaVs primary insurance amountfor purposes of section fo]iow- 4 215 of such Act formonths after the second month

5 ing the month in whichthis Act is enacted ifit is larger

6 than the primary insurance amountdetermiiied i.mder section Act, arid 7 215 of the Social SecurityAct as amended by this it 8 shaH be rounded to the nexthigher dollar if is not a

9 mutipe of a dollar.

10 INCREASE IN EARNINGS BASEFROM$.4,200TO $4,800 ii Definition of Wages

12 SEc. 102.(a)(1) Paragraph (2) ofsection 209 (a) follows: 13of the Socia' SecurityAct is arneiided to read as

14 "(2) That part ofremimeration which, after re-

15 muneration (other thanremuneration referred to in the

16 succeeding subsections of thissection) equa' to $4,200

17 withrespect to employmenthas been paid to an in-

18 dividua during any ca'endar yearafter 1954 and prior

19 to 1959, is paid tosuch individiufi duringsueh calendar

20 year;". by 21 (2) Section 209 (a) ofsuch Act is further amended

22adding at the end thereof thefollowing new paragraph:

23 "(3) That part of remunerationwhich, after re-

24 muneration (other than remunerationreferred to in the

25 succeeding subsections of this section)equal to $4,800 14

1 with respect to cmployment has boon paid to an in-

2 dividnal during any calendar year after 1958, is paid

8 to such individual during such calendar year;".

4 Definition of Self-Employment Income

5 (b) Paragraph (1) of section 211 (b) of the Social 6 SecurityActisamendedtoreadasfollows:

7 "(1) That part of the net earnings from self- 8 employment which is in excess of— 9 "(A) For any taxable year ending prior to 10 1955,(i)$8,600, minus (ii)the amount of the 11 wages paid to such individual during the taxable

12 year;and

13 "(B) For any taxable year ending after 1954

14 and prior to 1959,(i)$4,200, minus(ii)the 15 amount of the wages paid to such individual during 16 the taxable year; and 17 "(0) For any taxable year ending after 1958,

18 (i) $4,800, minus (ii) the amount of thewages 19 paid to such individual during the taxableyear; or". 20 Definitions of Quarter and Quarter of Ooveragc

21 (c) Clauses(ii)and(iii)of section 213 (a)(2) 22 (B) of the Social Security Actare amended to read as 23follows:

24 "(ii) if the wages paid toany individual in any 25 caiendaryearequal$3,600inthecaseofa&enthr 15

1 year after 1950andbefore 1955, or $4,200 in the

2 case of a calendar year after 1954 andbefore 1959,

3 or $4,800 in the case of acalendar year after 1958,

4 each quarter of such year shall(subject to clause

5 (i) )bea quarter of coverage;

6 "(iii)if an individual has self-employment in-

7 come for a taxable year,and if the sum of such

S incomeand the wages paid to him during such year

9 equals$3,600 in the case of a taxable year begin-

10 ning after 1950 and ending before 1955, or $4,200

11 in the case of a taxable year ending after 1954

12 and before 1959, or $4,800 in the case of a taxable

13 year ending after 1958, each quarter any partof

14 which falls. in suchyear shall(subject to clause

15 (i) )bea quarter of coverage ;".

16 Average Monthly Wage

17 (d)(1) Paragraph (1)of section 215(e)of such

18Act is amended to read as follows:

19 "(1) in computing an individual's average monthly

20 wage there shall not be counted the excess over$3,0O iii

21 the case of any calendar year after 1950 and before 1955,

22 the excess over $4,200 in the caseofany calendar year

23 after 1954 and before 1959, and the excessover$4,800

24 in the case of any calendar year after 1958, of (A) the

25 wages paid to him in such year, plus(B) the self-em- 16

1 ployment income credited to iicli year (as determined

2 under section 212) ;".

3 (2) Section 215 (e) of SudlActis further amended by

4striking out "(d)(4) "eachplace it appears and inserting

5 in lieu thereof "(d) ".

6 TITLE IT—AMENDMENTS RELATING TO P15-

7 ABILITY FREEZEANDDISABILITY INSUR-

8 ANCE BENEFITS

9 APPLICATIONFOR J)ISABTLITY DETERMINATION

10 SEc.201.Section 2i (i)(2)of the Social Security Act is amended—

12 (1) by striking out "while undera disability," in

13 the second senten(e and inserting in lieu thereof "while

14 under such disahiflty,"; find

15 (2)hy strildrig out "one—year" in clause(ii)of subparagraph (A) and inserting in lien thereof "eight-

1 7 eeri-month".

18 RETROACTIVEPAYMENT OFDISABILITYINSURANCE

19 BENEFITs 20 SEc. 202.(a.) Section 223 (b) of such Act is amended 21by fI(lding at the end tlIert(i the followingnew sentence: 22"An individual who would have been entitledto a disability 23insurance benefit forany month after June 1957 had he 24filedapplication thereforprior to the end of such month 17

1 shall be entitled to suchbenefit for such month if he files

2 application therefor prior to theend of the twelfth month

3immediately succeeding• suchmonth."

4 (b) The first sentence ofsection 223 (c)(3)of such

5Act(defining the term "waitingperiod" for purposes of

6 applications for disability insurancebenefits)is amended to

7read as follows:

8 "(3) The term'waiting period' means, in the case

9 of any application for disabilityinsurance benefits, the

10 earliest period of six consecutivecalendar months—

11 "(A) throughout which theindividual who

12 Ii les such application 1in beenunder a disability such 13 whichcontinueswithout interruptionuiitil

14 application is filed, and

15 "(B)(i) which begins not earlierthanwith

16 the first day of theeighteenth month before the

17 month in which such applicationis filed if such in—

18 dividual is insured for disabilityinsurance benefits

19 in such eighteenth month, oi(ii)if he is not so

20 insured in such month, whichbegins not earlier

21 than with the first day of thefirst month after such

22 eighteenth month in which he is soinsured."

IFLR.13549 2 18

1 RETROACTIVE EFFECT OF APPLICATIONS FOR DISABILITY

2 DETERMINATION

3 Sic. 203.Paragraph (4)of section 216 (i)of such

4Act is amended by striking out "July 1957" and inserting

5in lieu thereof "July 1960", by striking out "July 1958"

6and inserting in lieu thereof "July 1961", and by striking

7out ",ifsuch individual does not die prior to July 1, 1955,".

8 INSURED STATUS REQUIREMENTS

9 Disability Freeze

10 SEC. 204. (a) Paragraph (3)of section 216(i)of

11such Act is amended to read as follows:

12 "(3) The requirements referred to in clauses (A) and

13 (B) of paragraphs (2) and (4)are satisfied by an individual

14with respect to any quarter onily if—

15 "(A)lie would have been a fully insured in- 1€ dividual(as defined in section 214) had he attained

17 retirement age and filed application for benefits under 18 section 202 (a) on the first day of such quarter; and 19 "(B) he had not less than twentyquarters of 20 coverage during the forty-quarter period which ends 21 with such quarter, not countingas part of such forty- 22 quarter period any quarter any part of whichwas in- 23 eluded in a. prior period of disability uiiless suchquarter

24 was a quarter of coverage." 19

1 Disability Insurance Benefits

2 (b) Section 223 (c)(1) (A) of such Act is amended

3by striking out "fully and currently insured" and inserting

4in lieu thereof "fully insured".

5BENEFITS FOR TRE DEPENDENTS OF DISABILITY INSURANCE

6 BENEFICIARIES

7 Payments from Disability Insurance Trust Fund

8 SEC. 205.(a) The first sentence of section 201 (h) of

9such Act is amended by inserting ",andbenefit payments

10required to be made under subsection (b), (c), or (d) of

11section 202 to individuals entitled to benefits on the basis

12of the wages and self-employment income of an individual

13entitled to disability insurance benefits," after "section 223". 14 Wife's Insurance Benefits 15 (b)(1) Subsection (b)of section 202 of such Act is 16amended by inserting "or disability" after "old-age" where- 17ever it appears therein. 18 (2) So much of paragraph (1)of such subsection as 19follows the colon is amended by striking out "or" the first 20time it appears and inserting immediately before the period

21at the end of such paragraph ",orher husband ceases, prior 22to the month in which he attains retirement age, to be 23entitled to disability insurance benefits". 20

1 Husband's Insurance Benefits 2 (c)(1) Subparagraph(C)of subsection (c)(1) of 3such section 202 is amended to readas foliows:

4 "(C) was receiving at least one-half of hissupport,

5 as detennined in accordance with regulations prescribed

6 by the Secretary, from such individual—

7 "(i) if she had a period of disability which did 8 not end prior to the month in which she became 9 entitled to old-age or disability insurance benefits, 10 atthebcginningofsuchperiodoratthctimeshe

11 became entitled to such benefits,or

12 "(ii) if she did not have sucha period of disa-

13 bility, at the time she became entitledto such bane- 14 fits,

15 and filed proof of such support withintwo years after the

16 month in which she filed application withrespect to such

17 period of disability or after the month in whichshe 18 became entitled to such benefits,as the case may be, or, 19 if she did not have sucha period, two years after the 20 month in which she became entitledto such benefits, 21 and"

22 (2) The remainder of such subsection(c)(1)is 23 amended by inserting"or disability" after "old-age" wher- 24ever it appears therein.

25 (3) So much'ofsuch subsection(c)(I) as follows 21

1 the colon is further amended by striking out "or" the first

2 time it appears and inserting immediately before the period

3at the end thereof ",orhis wife ceases, prior to the month

4in which she becomes entitled to old-age insurailce benefits,

5 to be entitled to disability insurance benefits".

6 Child's Insurance Benefits

7 (d)Section 202 (d)(1)of such Act is amended to

8read as follows:

9 "(d)(1) Every child (as defined in section 216 (e) )

10of an hidiviclual entitled to old-age or disability insurance

11beneflt, or of an individual who dies a fully or currently in—

12sured individual after 1939, if such child—

13 "(A) has filedapplicationforchild'sinsurance

14 benefits,

15 "(B) at the time such application was filed was

16 unmarried and either(i)had riot attained the age of

17 eighteen or(ii) was under a (iisaJ)ihty(as defined in

18 section 223(c) )whichbegan before he attained the

19 age of eighteen, and

20 "(C) was dependent upon such individual—

21 "(1)if such individual had a period of dis-

22 ability which did not end prior to the month in

23 which he became entitled to old-age or disability

24 insurance benefits or(if he has died) prior to the

25 month in which lie died, at the beginning of such 22

1 period or at the time he became entitled to such

2 benefits ordied,

3 "(ii)if such individual did not have sucha 4 period and is living, at the time such application 5 was filed, or

6 "(ill)if such individual did not have sucha 7 period and has died, at the time of such death,

8shall be entitled to a child's insurance benefitfor each month, 9beginning with the first month after August1950 in which

10such child becomes so entitled to such insurance benefitsand 11ending with the month preceding the firstmonth in which 12any of the following occurs: such child dies, marries, is 13adopted (except for adoption bya stepparent, grandparent,

14aunt, or uncle subsequent to the death of such fullyor cur- 15rently insured individual), attains theage of eighteen and 16is not under a disability(as defined in section 223 (c)) 17which began before he attained suchage, or ceases to be 18under a disability(as so defined)on or after the day on. 19 which he attains age eighteen.Entitlement of any child 20to benefits under this subsectionon the basis of the wages and

21self-employment income ofan individual entitled to disabifity 22insurance benefits shall also endwith the month before the

23 month in which suchindividual ceases to be entitledto such 24benefits unless such individualis, for the month in which he 23

1ceases to be so entitled, entitled to old-age insurance benefits

2or unless he dies in such month."

3 Widower's Insurance Benefits 4 (e) Subparagraph (D) of section 202 (f)(1) of such

5Act is amended to read as follows:

6 "(D) (i) was receiving at least one-half of his sup-

7 port, as determined in accordance with regulations pre-

8 scribed by the Secretary, from such individual at the

9 time of her death or, if such individual had a period of 10 disability which did not end prior to the month in which 11 she died, at the time such period began or at the time 12 of her death, and filed proof of such support within

13 two years after the date of such death, or, if she had 14 such a period of disability, within two years after the 15 month in which she filed application with respect to 16 such period of disability or two years after the date of 17 such death, as the case may be, or (ii) was receiving at 18 lease one-half of his support, as determined in accordance 19 with regulations prescribed by the Secretary, from such 20 individual, and she was a currently insured individual, 21 at the time she became entitled to old-age or disability 22 insurance benefits or,if such individual had a period 23 of disability which did not end prior to the month in which she became so entitled, at the time such period 24

1 began or atthetime she became entitledto such

2 benefits, and filed proof of suchsupportwithintwo

3 years after the iiiontliinwhich she became entitled to

4 such benefits, or, if she had sucha period of disal:ility,

5 within two years after the month irt whichshe filed 6 application with respect to suchperiod of disability or

7 two years after the month in which she becameentitled 8 to such benefits, as the casemay be, arid".

9 Mother'sinsuranceBenefits

10 (1) I?) Sectioii 202 (g)(1) ( of such Act is aniended ii.by iiisci'tiiig''or, ifsuchindividualhad a period of disability 12which did not end prior to the monthiii which he died, at 13 the time such period beganor at the time of such death" 14after "death". 15 Parent's Insurance Benefits

16 (g)Subparagraph(B)of section 202(Ii)(1)of 17such Act is amended to readas follows: 18 "(B)(i)was receiving at least one-half of his

19 support from such individual at the time ofsuch mdi- 20 vidual's deathor,if such individual hada period of 21 disability which did not end priortothe month in 22 which lie died, at the time suchperiod began or at the

23 time of such death, arid(ii)filed proof o. suchsupport 24 within two years after the date ofsuch death, or, if such 25 individual had sucha period of disability, within two 25

1 years after the month in which such individual filed ap-

2 plication with respect to such period of disability or

3 two years after the date of such death, as the case may

4 be,".

5 SimultaneousEntitlement to Benefits

6 (h)Section 202 (k)of such Act is amended by in-

7 Serting"or disability" after "old-age" each time it appears

8therein.

9 Adjustment of Benefits of Female Beneficiaries

10 (i)(1) Subparagraph (B) of paragraph (5)of sec- iition 202 (q) of such Act is amended to read as follows:

12 "(B) the number equal to the number of months

13 for which the wife's insurance benefit was reduced under

14 such paragraph(2), bitt for which such benefit was

15 subject to deductions under paragraph (1) or (2)of

16 section 203(b), under section 203(c), or uhder

17 sectioii222 (b) ,".

18 (2)Such.paragraph is further amended by striking out

19theperiod at the end of subparagraph (C) and inserting in

20lieu thereof ",and",by striking out "(A), (B), and (0)"

21 inthe material following subparagraph (0) and inserting

22inlieu thereof "(A), (B), (C), and (D) ",andby adding

23after subparagraph (C) the following new subparagraph:

24 "(D) the number equal to the number of months

25 for which such wife's insurance benefit was reduced un- 26 1 der such paragraph (2), but inor after which her en-

2 titlement to wife's insurance benefitswas terminated be- 3 cause her husband ceases to be uiider a disability, not 4 includingin such number of monthsany month after 5 such termination in which shewas entitled to wife's 6 insurance benefits.".

7 (3) Subparagraph (A) of paragraph (6)of such sec-

8tion 202 (q) is amended to readas follows:

9 "(A) the number equal to the number ofmonths

10 forwhich such benefit was reduced under suchpara- 11 graph,but for which such benefitwas subject to deduc- 12 tionsuiider paragraph (1) or (2) of section203 (b), 13 undersection 203 (c), or under section 222 (b), and".

14 (4)Such paragraph is further amended bystriking out 15the periodat the end of subparagraph (0) and inserting in

16 lieu thereof ",and",by striking out "(A), (B),and(0) 17inthe material following subparagraph (0)and inserting 18 inlieu thereof "(A), (B), (C), and (D)",andby adding 19aftersubparagraph (0) thc followingnew subparagraph: 20 "(D)the number equal to the number ofmonths 21 forwhich such wife's insurance benefitwas reduced 22 under such paragraph, but inor after which her entitle- 23 mentto wife's insurance benefitswas terminated because 24 herhusband ceased to be undera disability, not includ- 27 1 ing in such number of months any month after such 2 termination in which she was. entitled to wife's insur-

3 ance benefits.".

4 Deduction Provision

5 (j)Section203 (c) of such Act is amended by insert- 6ing"basedon the wages and self-employment income of an

7individualentitledtoold-ageinsurancebenefits"after

.8 "child's insurance benefit" the first time it appears therein. 9 Circumstances Under Which Deductions Not Required 10 (k) Section 203 (h)of such Act is amended to read 11as follows: 12 "Circumstances Under Which Deductions Not Required 13 "(h) In the case of any individual, deductions by reason 14of the provisions of subsection (b), (f), or (g) of this sec- 15tion, or the provisions of section 222 (b), shall, notwitli-

16standing such provisions, be made fromthe benefits to winch 17such individual is entitled only to the extent that such de- 18ductions reduce the total amount which would otherwise he 19paid, on the basis of the same wages and self-employment 20income, to such individual and the other individuals living 21in the same.household." 22 Currently Insured Individual

23 (1)Section 214 (b) of such Act is amended by inserthg "or disability" immediately after "old-age". 28

1 Rounding of Benefits

2 (m) Section 215 (g) of such Act is amended by strik-

3ing out "sections 203 (a) and 224" and inserting in lieu 4thereof "section 203 (a) ".

5 Deductions on Account of Refusal To Accept Rehabilitation

6 Services 7 (n) Section 222 (b) of such Act is amended by insert- 8ing after paragraph (2)(added by section 307 (g) of this 9Act) the following new paragraph: 10 "(3) Deductions shall be made fromany wife's, hus- 11band's, or child's insurance benefit basedon the wages and 12self-employment income of an individual entitled to disability

13insurance benefits to which a wife, husband,or childis 14entitled until the total of such deductions equal such wife's,

15husband's, or child's insurance benefitor benefits under sec- 16tion 202 for any month in which the individual,on the basis 17of whose wages and self-employment income such benefit 18was payable, refuses to accept rehabilitation services and 19deductions, on account of such refusal,are imposed under 20paragraph (1)." 21 Suspension of Benefits Based on Disability

22 (o) Section 225 of such Act is amended by addingat 23theend thereof the following new sentence: "Whenever the 24benefits of an individual entitled to a disability insurance

25benefit are suspended for any month, the benefits ofany 29

1 individua.1 entitled thereto under subsection (b), (c), or (d)

2of section 202 on the basis of the wages and se1f-erniloyment

3income of such individual,shall be suspended for such

4month."

5REPEAL OF REDUCTION OF BlNEFiTS BASED ON DiSABILITY

6 SEC. 206. Section 224 of suchActis hereby repealed.

7 EFFECTIVE DATES

8 SEC. 207.(a) The amendments made by section 201

9shall apply with respect to applications for a disability deter-

10mination under section 216 (i)of the Social Security Act

11filed after June 1961.The amendments made by section

12202 shall apply with respect to applications for disability

13insurance benefits under section 223 of such Act filed after

14December 1957.The amendments made by section 203

15shall apply with respect to applications for a disability deter-

16mination under such section 216 (i)filed after June 1958.

17The amendments made by section 204 shall apply with

18respect to(1) applications for disability insurance benefits

19under such section 223 or for a disability determination under

20such section 216 (i)filed on or after the date of enactment

21of this Act, and (2)applications for such benefits or for

22 such a determination filed after 1957 and prior to such date of 23enactment if notice to the applicant of the Secretary's decision 24with respect thereto has not been given to him on or prior to 25such date, except that (A) no benefits under title TI of the 30

1Social Security Act for the month in which this Act is enacted

2or anypriormonth shall be payable or increased by reason of 3the amendments made by section 204 of this Act, and (B) 4the provisions of section 215 (f)(1) of the Social Security 5Act shall not prevent recomputation of monthly benefits under

6section 202 of such Act (but no such recomputation shall be

7regarded as a recomputation for purposes of section 215 (f)

8of such Act). The amendments made by section 205 (other 9than by subsection (k)) shall apply with respect to monthly 10benefits under title II of the Social Security Act for months

11after the month in which this Act is enacted, but only ifan 12application for such benefits is filed on or after the date of 13enactment of this Act.The amendments made by section 14206 and by subsection (k) of section 205 shall apply with 15respect to monthly benefits under title II of the Social 16Security Act for the month in which this Act is enacted and 17succeeding months. 18 (b) In the case of any husband, widower,or parent 19who would not be entitled to benefits under section 202 (c), 20 section 202 (f), and section 202 (h), respectively, ofthe 21 Social Security Act except for the enactment of section205 22 of this Act, the requirement in such section 202 (c),sec.. .31

1 tion 202 (f), or section 202 (h), as the case may be, that

2 proof of support be filed within a two-year period shall not

3apply if such proof is filed within two years after the month

4in which this Act is enacted.

5 TITLE 111—PROVISIONS RELATING TO ELIGI-

6 BILITY OF CLAIMANTS FOR SOCIAL SECTI-

7 IRITY BENEFITS, AND MISCELLANEOUS PRO-

8 VISIONS

9 ELIGIBILITY OF SPOUSE FOR DEPENDENTS OR SURVIVORS

10 BENEFITS

11 Husband's Insurance Benefits

12 SEC. 301.(a)(1) Section 202(c)of the Social

13Security Act is amended by redesignating paragraph (2)

14as paragraph(3)and a.dding after paragraph(1)the

15following new paragraph:

16 "(2) The requirement in paragraph (1) that the mdi-

17vidual entitled to old-age or disability insurance benefits be

18a currently insured individual, and the provisions of sub-

19paragraph (C) of such paragraph, shall not be applicable in

20the case of any husband who—

21 "(A) in the month prior to the month of his mar-

22 riage to such individual was entitled to, or on application 32

1 therefor and attainment of retirement age in such prior

2 month would have been entitled to, benefits under sub-

3 section(f)or (h) ; or

4 "(B) in the month prior to the month of his mar-

5 riageto such individual had attained age eighteen and

6 was entitled to, or on application therefor would have

7 been entitled to, benefits under subsection (d) ."

8 (2) Section 216 (f)of such Act is amciided to read a

9follows:

10 "(f)The term 'husband' means the husband ofan

11individual, bt only if('1)he is the father of her son or 12daughter,(2)lie was iflalTied to her fora period of not

13less than three years immifihiately pl'ece(liug the ilayon 14which his application is filed, or (3) in the month prior to 15the month of his marriage to her (A) hewas entitled to, 16or on application therefor and attainment of rctirernent age 17in such prior month would have bcen entitled to, benefit, 18under subsection (f) or (h) of section 202,or (B) he had 19attained age eighteen and was titled to,or on application 20therefor would have been entitled to, benefits under stibsec- 21tion (d) of such section." 22 Widow's Insurance Benefits

23 (b)(1) Subparagraph (B)of section 202(e)(3) 24of suchAct. is amended by striking out "but she isnot 25his widow (as defined in section 216 (c))" and inserting 33

1 in lieu thereof "which occurs within one year after such

2marriage and he did not die a fully insured individual".

3 (2) Section 216 (c) of such Act is amended to readas

4follows:

5 "(c) The term 'widow' (except when used in section

6202 (1)) means the surviving wife of an individual, but

7 only if(1) she is the mother of his son or daughter, (2)

8 she legally adopted his son or daughter while she was married

9to him and while such son or daughter was under the ago

10of eighteen,(3) he legally adopted her son or daughter

11while she was married to him and while such son or daughter

12 was under the age of eighteen, (4) she was married to him

13at the time both of them legally adopted a child under the 14age of eighteen, (5) she was married to him for a period of 15not less than one year immediately prior to the day on 16which he died, or (6) in the month prior to the month of

17her marriage to him (A) she was entitled to, or on applica- 18tion therefor and attainment of retirement age in such prior 19month would have been entitled to, benefits under subsection 20 (e)or (h)of section 202, or (B) she had attained age 21 eighteen and was• entitled to,or on application therefor 22would have been entitled to, benefits under subsection (d) 23of such section."

ILR. 13549 3 34

1 Widower's Insurance Benefits

2 (c)(1) Section 202 (1)of such Act is amended by

3redesignating paragraph(2)as paragraph(3)and by 4adding after paragraph (1) the following new paragraph:

5 "(2)Therequirementin paragraph(1)that the

6deceasedfully insured individual also be a currently insured

7individual, and the provisions of subparagraph (B) of such

8paragraph, shall not be applicable in the case of any inch-

9vidual who— 10 "(A)in the month prior to the month of his

11 marriage to such individual was entitled to, or on ap- 12 plication therefor and attainment of retirement age in

13 such prior month would have been entitled to, benefits

14 under this subsection or subsection (h) ; or

15 "(B)in the month prior to the month of his mar-

16 riage to such individual had attained age eighteen and

17 was entitled to, or on application therefor would have

18 been entitled to, benefits under subsection (d) ."

19 (2) Section 216 (g)of such Act is amended to read 20as follows: 21 "(g) The term 'widower' (except when used in section 22202(i)) means the surviving husband of an individual, 23but only if(1) he is the father of her son or daughter, (2) 24he legally adopted her son or daughter while he was married 25to her and while such son or daughter was under the age 35

1of eighteen,(3)she legally adopted his son or daughter

2 while he was married to her and while such son or daughter

3was under the age of eighteen, (4) he was married to her

4at the time both of them legally adopted a child under the

5 age of eighteen, (5) he was married to her for a period of

6not less than one year immediately prior to the day on which

7 she died, or(6)in the month before the month of his

8marriage to her (A) he was entitled to, or on application

9therefor and attainment of retirement age in such prior 10 month would have been entitled to, benefits under subsec-

11tion(f) or (h) of section 202, or (B) lie had attained age

12eighteen and was entitledto,or on application therefor

13would have been entitled to, benefits under subsection(d)

14of such section."

15 Definition of Wife

16 (d) Section 216 (b) of suh Act is amended by striking

17out "or" at the end of the clause (1), and byinsertingbefore

18the period at the end thereof: ",or(3)iii the month prior

19to the month of her marriage to him (A )wasentitled to,

20or on application tlierefor and attairimetit of rotirerneiit age

21in such prior month would have been entitled to, benefits

22under subsection(e)or(h)of section 202, or (B) had 23attained a.ge eighteen and was entitled to, or on application 24therefor would have been entitled to, benefits under subsection 25 (d) of such section". 3,6

1 Definition of Former Wife Divorced 2 (e) Section 216 (d)of such Act is amended to read 3as follows:

4 "(d) The term 'former wife divorced'means a woman 5divorced from an individual, but only if (1) she is the mother

6of his son or daughter, (2) she legally adopted hisson or

7daughter while she was married to him and while suchson 8or daughter was under the age of eighteen, (3) he legally 9adopted her son or daughter while shewas married to him 10 and while such son or daughterwas under the age of eighteen, 11or (4) she was married to him at the time both of them 12legally adopted a child under theage of eighteen." 13 Effective Date 14 (f) The amendments made by this section shaM apply 15with respect to monthly benefits under section 202 of the 16Social Security Act for months beginning after the date of 17enactment of this Act, but only if an application for such 18benefits is ified on or after such date.

19ELIGrBILIT'y OF CHILD FOR DEPENDENTS OR SURVIVORS

20 BENEFITS 21 Definition of Ohild 22 SEC. 302 (a) Section 216 (e) of such Act is amended 23to read as follows:

24 "(e) The term 'child' means (1) the childor legally 25adopted child of an individual, and (2)in the case of a 37

1 living individual, a stepchild who has been such stepchild

2for not less than three years immediately preceding the

3day on which application for child's benefits isfiled, and

4 (3)in the case of a deceased individual, a stepchild who

5has been such stepchild for not less than one year immedi-

6ately preceding the day on which such individual died.For

7purposes of clause(1), a person shall be deemed, as of

8the date of death of an individual, to be the legally adopted

9child of such individual if such person was at the time of

10such individual's death living in such individual's household

11and was legally adopted by such individual's surviving spouse

12after such individual's death but before the end of two

13years after the day on which such individual died; except 14that this sentence shall not apply if at the time of such 15individual's death such person was receiving regular con' 16tributions toward his support from someone other than such 17individual or his spouse, or from any public or private wel- 18fare organization which furnishes services or assistance for 19children." 20 Effective Date 21 (b) The amendment made by this section shall apply 22with respect to monthly benefits under section 202 of the 23Social Security Act for months begimilng after the date of 24enactment of this Act, but only if an application for such 25beiiefits is filed on or after such date. 38

1 ELIG1BIJJTY OF REMARR1EDWIDOWSFOE MOTHER'S

2 INSURALNCE BENEFITS

3 SEC. 303. Section 202 (g)ofthe Social Security Act is

4amended by adding at the cnd thereof the followingnew

5 paragraph:

6 "(3) In the case of any widow or former wife divorced

7 of an individual—

8 "(A) who marries another individual, and 9 "(B) whose marriage to the individual referred to 10 in subparagraph (A) is terminated by his death but she

11 is not his widow as defined in section 216 (c),

12the marriage to the individual referred to in clause(A)

13shall, for tht purpose of paragraph (1),bedeemed not to 14have occurred. No beiiefits shall be payable under this sub— 15se(t1011 by reasoti of the pre(e(ling senencc for any month

16prior to whichever of the following is the latest:(i)the 17mouth iii which the (leathi referred to in subparagraph (B)

18of the preceding sentenec occurs,(ii)the twelfth month 19before the month in which such widowor former wife 20divorced files application forpurposes of this paragraph,

21or(iii)the month following the month in which thisparar 22graph is enacted." 39

1 ELIGIBILITY FOR PAEENT'S INSURANCE BENEFITS

2 Provisions Relating to Eligibility

3 So. 304. (a)(1) So much of section 202 (h)(1) of

4the Social Security Act as precedes subparagraph (A) is

5amended to read as follows:

6 "(1) Every parent (as defined in this subsection) of an

7 individual who died a fully insured individual after 1939,

8if such parent—".

9 (2) The amendment made by this subsection shall apply

10with respect to monthly benefits under section 202 of the

11Social Security Act for months beginning after the date of

12enactment of this Act, but only if an application for such

13benefits is filed on or after such date.

14 Deaths Before Effective Date

15 (b) Where—

16 (1) one or more persons were entitled(without

17 the application of section 202(j)(1)of the Social

18 Security Act) to monthly benefits under section 202 of

19 such Act for the month in which this Act is enacted on

20 the basis of the wages and self-employment income of an

21 individual; and

22 (2) a person isentitled to a parent's insurance 40

1 benefit under section 202(h)of the Social Security

2 Act for any subsequent month on the basis of suchwages 3 andse1femploymentincome and such person would 4 not be entitled to such benefit but for the enactment of 5 this section; and

6 (3) the total of the benefits to which allpersons are

7 entitled under section 202 of the Social Security Acton 8 the basis of such wages and se1femp1oyment income for

9 such subsequent month are reduced byreason of the ap- 10 plication of section 203 (a) of such Act,

11then the amount of the benefit to which each suchperson 12referred to in paragraph (1)of this subsection is entitled 13for such subsequent month shall be increased, after the appli- 14cation of such section 203(a), to the amount it would 15have been if no person referred to in paragraph (2) of this 16subsection was entitled to a parent's insurance benefit for

17such subsequent month oil the basis of suchwages and seW 18employmeiit income. 19 Proof of Support in Cases of Deaths Before Effective Date 2') (c) In the case of any parent who would not be entitled

21 topa.reiit's benefits rnder section 202 (h) of the Social Secu 22rityAct except for tue enactment of this section, the require- 2:3 mentin such section 202 (h) that proof of support be filed 24within two years of the date of death of the insured individual

25 referred to therein shall riot apply if such proof is filed within 41

1 the two-year period beginning with the first day of the month

2after the month in which this Act is enacted.

3 ELIGIBILITY FOR LUMP-SUM DEATH PAYMENTS

4 Requirement That Surviving Spouse Be a Member of

5 Deceased's Household

6 SEc. 305. (a) The first sentence of section 202(i)

7of the Social Security Act is amended by inserting "in the

8same household" after "living".

9 Provisions Relating to Widows and Widowers

10 (b) Section 216(h)of such Act is amended by

11striking out paragraph (3).

12 Effective Date

13 (c) The amendments made by this section shall apply

14in the case of lump-sum death payment9 under such section

15202(i)on the basis of the wages and self-employment

16income of any individual who dies after the month in which

17this Act is enacted.

18ELIGIBILITY OF DISABLED PERSONS FOR cmLD'S INSURANCE

19 BENEFITS

20 Provisions Relating to Dependency 21 SEC. 306. (a) Section 202 (d) of the Social Security

22Act is amended by striking out "who has not attained the 23age of eighteen" each place' it appears in paragraphs (3), 24(4), and (5) thereof, and by striking out paragraph (6). 42

1 Effective Date

2 (b) The amendments made by this section shall apply

3with respect to monthly benefits under section 202 of the

4SocialSecurityAct for months beginning after the date of

5enactment of this Act, but only if an application forsuch

6benefitsis filed on or after such date,

7ELIMINATIONOF MARRIAGE AS BASIS FOR TERMINATING

8 E.RTAIN SURVIVORS BENEFITS

9 Child'sInsurance Benefits 10 SEc. 307. (a) Section 202 (d) of the Social Security

11Act is amended by inserting immediately after paragraph

12 (5) thereof the following new paragraph:

13 "(6) In the case of a child who has attained the age of

14eighteen and who marries— 15 '(A)an individual entitled to benefits under sub

16 section(a)(c), (f), (g),or(h)of this section or

17 undersection 223 (a), or

18 "(B) another individual who has attained theage

19 of eighteen and is entitled to benefits under this sub-

20 section,

21such child's entitlement to benefits under this subsection

22shall,notwithstanding the provisions of paragraph (1), not

23 beterminated by reason of such marriage; except that, in

24the ease of such a marriage to a male individual entitled to

25benefits under section 223(a)or this subsection, the pre 43

1ceding provisions of this paragraph shall not apply with

2respect to benefits for months after the last month for which

3such individual is entitled to such benefits under section 223

4 (a) or this subsection unless (i) he ceases to be soentitled

5by reason of his death or(ii)in the case of an individual

6who was entitled to benefits under section 223 (a), he is

7entitled, for the month following such last month, to benefits

8under subsection (a) of this section."

9 Widow's Insurance Benefits

10 (b) Section 202 (e) of such Act is amended by insert-

11ing at the end thereof the following new paragraph:

12 "(4) In the case of a widow who marries—

13 "(A) an individual entitled to benefits under sub-

14 section (f) or (h) of this section, or

15 "(B)an individual who has attained the age of

16 eighteen and is entitled to benefits under subsection (d),

17 suchwidow's entitlement to benefits under this subsection

18shall, notwithstanding the provisions of paragraph (1), not

19be terminated by reason of such marriage; except that, in

20the case of such a marriage to an individual entitled to

21benefits under subsection (d), the preceding provisions of

22this paragraph shall not apply with respect to benefits for

23months after the last month for which such individual is

24entitled to such benefits under subsection(d)unless he

25ceases to be so entitled by reason of his death." 44 1 Widower's Insurance Benefits 2 (c) Section 202 (f) of such Act is amended by adding 3at the end thereof the following new paragraph:

4 "(4) Tn thecase of a widower who marries— 5 "(A) an individual entitled to benefits under sub 6 section (e), (g), or (h),or 7 "(B) an individual who has attained theage of 8 eighteen and is entitled to benefits under subsection (d), 9such widower's entitlement to benefits under this subsection 10shall, notwithstanding the provisions of paragraph(1), ii.not be terminated by reason of such marriage."

12 Mother's Insurance Benefits 13 (d) Section 202 (g) of such Act is amended by adding 14after paragraph (3)(added by sectin 303 of this Act) 15the following new paragraph: 16 "(4) In the case ofa widow or former wife divorced 17 who marries 18 "(A) an individual entitled to benefits under sub 19 section (a), (f), or(h),or under section 223 (a), or 20 "(B) an individual who has attained theage of 21 eighteen and is entitled to benefits under subsection (d), 22the entitlement of such widow or former wife divorced to

23benefits under this subsection shall, notwithstanding thepro- 24visions of paragraph (1), not be terminated byreason of 25such marriage; except that, in the case of sucha marriage 45

1to an individual entitled to benefits under subsection(d),

2the preceding provisions of this paragraph shall not app'y

3with respect to benefits for months after the last month for

4which such individua' isentitled to such benefits under

5subsection (d) unless he ceases to be so entitled by reason

6of his death."

7 Parent's Insurance Benefits

8 (e) Section 202 (h) of such Act is amended by add-

9ing at the end thereof the following new paragraph:

10 "(4) In the case of a parent who marries—

11 "(A) an individual entitled to benefits under this

12 subsection or subsection (e), (f), or (g), or

13 "(B) an individual who has attained the age of

14 eighteen and isentitled to benefits under subsection

15 (d),

16 such parent's entitlement to benefits under this subsection

17shall, notwithstanding the provisions of paragraph (1), not

18be terminated by reason of such marriage; except that, in

19the case of such a marriage to a male individua' entitled

20to benefits under subsection (d), the precedingprovisions

21of this paragraph shall not apply with respect to benefits

22for months after the last month for which such individual

23is entitled to such benefits under subsection(d) unless he

24ceases to be so entitled by reason of hisdeath." 46

1 Deduction Provisions

2 (f)Subsection(c)ofsection 203ofsuch Act is

3amended by inserting "(1)" after "(c) ",byredesignating

4subparagraphs(1)and(2)as subparagraphs (A) and

5 (B), respectively, by striking out "paragraph (1)" and

6inserting in lieu thereof "subparagraph (A) ",andby add-

7ing at the end of such subsection the following new para-

8graph:

9 "(2) Deductions shall be made from any child's insur- 10ance benefit to which a child who has attained the age of 11eighteen is entitled or from any mother's insurance benefit 12to which a person is entitled until the total of such deductions 13e(juals such child's insurance benefit or benefits or mother's

14insurance benefit or benefits undcr section 202 for any 15 month—

16 "(A)in which such child or persoli entitled to

17 mother'sinsurancebenefitismarriedtoan mdi- 18 vidual entitled to old-age insurance benefits under sec-

19 tion 202 (a) who is under the age of seventy-two and 20 for which month such individual is charged with any 21 earnings under the provisions of subsection (e)of this 22 section, or 23 "(B)in which such child or person entitled to

24 mother's insurancebenefitsismarriedtothe mdi-

25 vidual referred to in subparagraph (A) and onseven 47

1 or more different calendar days ofwhich such mdi-

2 vidual engaged in noncovered remunerative activity out-

3 sidethe United States."

4Deductions on Account of Refusal To Accept Rehabilitation

5 Services

6 (g)Section 222 (b) of such Act is amended by insert-

7ing "(1)" after "(b) ",andby adding at the end thereof

8thefoflowing new paragraph:

9 "(2) Deductions shall be made from any child's in-

10surance benefit to which a child who hasattained the age of

11eighteen is entitled or from any mother's insurance benefit

12to which a person is entitled until the total of such deduc-

13tions equals such child's insurance benefit or benfits or

14mother's insurance benefit or benefits under section 202

15for any month in which such child or person entitled to

16mother's insurance benefits is married to an individual who

17is entitled to disability insurance benefits and in which such

18individua' refusesto accept rehabilitation services and a

19deduction, on account of such refusal,is imposed under

20paragraph (1).If both this paragraph and paragraph (3)

21are applicable to a child's insurance benefit for any month,

22only an amount equal to such benefit shall be deducted."

23 Effective Date 24 (h)(1) The amendments made by this section (other 25than by subsections(f) and (g)) shaH apply with respect 48

1to monthly benefits under section 202of the Social Security

2Act for months following the month in which this Actis

3enacted;except that in any case in which benefits were ter- 4 minated with the closeof the month in which this Act is

5enacted or any prior month and, if the amendments made by

6this section had been in effect for such month, such benefits 7 would iiothave been terminated, the amendments made by

8this section shall apply with respect to monthly benefits

9under section 202 of the Social Security Act for months

10beginning after the date of enactment of this Act, but only ii an application for such benefits is filed after such date.

12 (2) The amendment made by subsection(f)shall ap-

13ply with respect to monthly benefits under section 202 (d)

14of the Social Security Act for months in any taxable year,

15of the individual on the basis of whose wages and self-em-

16ployment income such benefits are payable, beginning after

17the month in which this Act is enacted.

18 (3) The amendments made by subsection (g)shall

19apply with respect to monthly benefits under section 202 of

20the Social Security Act for months, occurring after the month

21in which this Act is enacted, in which a deduction is incurred

22under paragraph (1)of section 222 (b)of the Social Se-

23curity Act. 49

1 AMOUNTWhICH MAY BE EARNED WiTHOUT LOSS O

2 BENEFITS

3 SEC.308.(a)Section 203(e)(2)of such Act is

4amendedby strikingout"last month" and "preceding

5month"wherever they appea.r and substituting in licu thereof

6"first month" and "succeeding month", respectively.

7 (b)Section 203 (e)(3)(A) of such Act is amended

8by striking out "the term 'last month of such taxable year'

9means the latest month" andsubstituting in lieu thereof

10"the term 'first month of such taxable year' means the

11earliest month".

12 (c)Subsections (e)(2)(D) and (e)(3)(B)(ii)

13of section 203 of such Act are each amended by striking 14out "$80" and inserting in lieu thereof "$100". 15 (d) Section 203 (g)(1)of such Act is amended to 16read as follows: 17 "(g)(1)(A)If an individual isentitled to any 18monthly insurance benefit under section 202 during any 19taxable year in which he has earnings or wages, as com- 20puted pursuant to paragraph(4)of subsection(e), in 21excess of the product of $100 times the numberof months 22in such year, such individual (or the individual who is in

H.R13549 4 50 ireceipt of such benefit on his behalf) shall make a report to

2the Secretary of his earnings (or wages) for such taxable

3year.Such report shall be made on or before the fifteenth

4day of the fourth month following the close of such year,

5and shall contain such information and be made in such

6manner as the Secretary may by regulations prescribe.Such

7report need not be made for any taxable year (i) beginning

swith or after the month in which such individual attained

9the age of 72, or (ii)if benefit payments for all months (in iosuch taxable year) in which such individual is under age 72

11have been suspended for all such months of such year under

12the provisions of the first sentence of paragraph (3) of this

13subsection.

14 "(B) If the benefit payments of an individual have

15been suspended for all months in any taxable year under

16the provisions of the first sentence of paragraph (3) of sub-

17section(g), no benefit payment shall be made to such

18individua' for any such month in such taxable year after the

19expiration of the period of three years, three months, and

20fifteen days following the close of such taxable year unless

21within such period the individual, or some other person

22entitled to benefits under this title on the basis of the same

23wages and self-employment income, files with the Secretary 51

1information showing that a benefit for such month is payable

2to such individual." (e) Section 203 (1) of such Act is amended by striking out "(g)" and inserting in lieu thereof "(g)(1)(A) ".

(f)The amendments made by this section shall be

6applicable with respect to taxable years beginning a.fter the month in which this Act is enacted.

8PSENTATION OF CLAIMANTS BEFORE SECRETARY OF

9 HEALTH, EDUCATION, AND WELFARE

10 SEC. 309. The second sentence of section 206 of the Social Security Act is amended by striking out "upon filing

12with the Administrator a certificate of his right to so practice

13from the presiding judge or clerk of any such court".

14OFFENSES UNDER TITLE II OF THE SOCIAL SECURITY ACT

15 SEC. 310. Section 208 of the Social Security Act is

16amended to read as follows:

17 "PENALTIES

18 "SEC. 208. Whoever—

19 "(a) for the purpose of causing an increase in any

20 payment authorized to be made under this title, or for

21 the purpose of causing any payment to be made where

22 no payment is authorized under this title, shall make or

23 cause to be made any false statement or representation 52

1 (including any false statement or representation in con-

2 nection with any matter arising under subchapter E of

3 chapter 1, or subchapter A or E of chapter 9 of the

4 Internal Revenue Code of 1939, or chapter 2 or 21 or

5 subtitle F of the Internal Revenue Code of 1954) as to—

6 "(1) whether wages were paid or received for

7 employment (as said terms are defined in this title

8 and the Internal Revenue Code), or the amount of

9 wages or the period during which paid or the person

10 to whom paid; or

11 "(2) whether net earnings from self-employ-

12 ment (as such term is defined in this title and in the

13 Internal Revenue Code) were derived, or as to

14 the amount of such net earnings or the period dur-

15 ing which or the person by whom derived; or

16 "(3) whether a person entitledtobenefits

17 underthis title had earnings in or for a particular

18 period(as determined under section 203(e)of

19 thistitle for purposes of deductions from benefits),

20 or as to the amount thereof; or 21 "(b)makes or causes to be made any false state-

22 mentor representation of a material fact in any appli-

23 cationfor any payment or for a disability determination

24 underthis title; or 25 "(c)at any time makes or causes to be made any 53

1 false statement or representation of a material fact for

2 use in determiningrights to payment under this title; or

3 "(d) having knowledge of the occurrence of any

4 event affecting (1) his initial or continuedright to any

5 payment under this title, or (2) the initial or continued

6 rigIt to any payment of any other individual in whose

7 behalf he has applied for or is receiving such payment,

8 conceals or fails to disclose such event with an intent

9 fraudulently tosecure payment eitherinagreater

10 amount than is due or when no payment isauthorized;

11 or

12 "(e) having made application to receive payment

13 under this title for the use and benefit of another and

14 having received such a payment, knowingly and willfully

15 converts such a payment, or any part thereof, to a use

16 other than for the use and benefit of such other person;

17shall be guilty of a misdemeanor and upon conviction thereof

18shall be fined not more than $1,000 or imprisoned for not

19more than one year, or both."

20 SICK-LEAVE PAY OF STATE AND LOCAL EMPLOYEES

21 SEC. 311. (a) Subsection (i) of section 209 of the Social

22Security Act is amended by inserting immediately before

23the semicolon a period and the following: "As used in this

24subsection, the term 'sick pay' includes remuneration for

25 service in the employ of a State, or a political subdivision 54

1 (as defined in section 218 (b)(2))of a State, paid to

2 an employee thereof for a period during which he was absent

3from work because of sickness".

4 (b) The amendment made by subsection(a)shall be

5 applicable to remuneration paid after the enactment of this

6 Act, except that, in the case of any coverage group which

7 is included under the agreement of a State under section 218

8of the Social Security Act, the amendment made by subsection

9 (a) shall also be applicable to remuneration forany member 10of such coverage group with respect to services performed 11after the effective date, specified in such agreement, for such

12coverage group, if such State has paid or agrees, prior to Jan-

13uary 1, 1959, to pay, prior to such date, the amounts which 14under section 218 (e) would have been payaMe with respect 15to remuneration of all members of such coverage group had

16the amendment made by subsection (a) been in effecton and 17after January 1, 1951.Failure by a State to make such 18payments prior to January 1, 1959, shall be treated the same 19as failure to make payments when due under section 218 (e).

20EXTENSION OF COVERAGE IN CONNECTION WITH GUM RESIN

21 PRODUCTS

22 SEC.312.(a)Section 210(a)(1)of the Social 23Security Act is amended to read as follows: 24 "(1)Servke performed by foreign agricultural 55

1 workers (A) under contracts entered into in accord-

2 ance with title V of theAgricultural Act of 1949, as

3 amended, or (B) lawfully admitted to the United States

4 from the Bahamas, Jamaica, and the other British

5 West Indies, or from any other foreign country or

6 possession thereof, on a temporary basis to perform

7 agricultural labor;".

8 (b) The amendment made by subsection (a) shall apply

9with respect to service performed after 1958.

10 EMPLOYMENT FOR NONPROFIT ORGANIZATION

11 SEc. 313.(a) Section 210 (a)(8)(B) of title II of

12the Social Security Act is amended to rea.d as follows:

13 "(B) Service performed in the employ of a reli-

14 gious, charitable, educational, or other organizationde-

15 scribed in section 501 (c)(3) of the Internal BMvenue

16 Code of 1954, which is exempt from income taxunder

17 section 501(a)of such Code, but this subparagraph

18 shall not apply to service performed during theperiod

19 for which a certificate, filed pursuant to section 3121

20 (k) of the Internal Revenue Code of 1954, is in effect

21 if such service is performed by an employee— 22 "(i)whose signature appears on the list filed

23 by such organization under such section 3121(k),

24 "(II)who became an employee of such organi- 56

1 zation after the calendar quarter in which the cer-

2 tificate (other than a certificate referred to in clause

3 (iii) )wasfiled, or

4 (lii) who, after the calendar quarter in which

5 the certificate was flIed with respect to a group

6 described in paragraph(1)(E)of such section

7 3121 (k), became a member of such group,

8 except that this subparagraph shall apply with respect

9 to service performed by an employee as a member of

10 a group described in such paragraph(1)(E) with

11 respect to which no certificate is in effect;".

12 (b) The amendment made by subsection(a)shall

13apply with respect to certificates filed under section 3121

14 (k)(1)of the Internal Revenue Code of 1954 after the

15date of enactment of this Act.

16PARTNER'S TAXABLE YEAR ENDING AS RESULT OF DEATH

17 SEC. 314. (a) Section 211 of the Social Security Act is

18amended by adding at the end thereof the fOllowing new

19subsection:

20 "Partner's Taxable Year Ending as Result of Death

21 "(f) In computing a partner's net earnings from self-

22employment for his taxable year which ends as a result of his

23death (but only if such taxable year ends within, and not

24with, the taxable year of the partnership), there shall be in- 57 Ieluded so much of the deceased partner's distributive share

2 of the partnership's ordinary income or loss for the partner-

3ship taxable yea.r as is not attributable to an interest in the

4partnership during any period beginning on or after the first

5 day of the first calendar month following the month in which

6such partner died. For purposes of this subsection—

7 "(1) in determining the portion of the distributive

8 share which is attributable to any period specified in the

9 preceding sentence, the ordinary income or loss of the

10 partnership shall be treated as having been realized or

11 sustained ratably over the pa.rtnership taxable year; and

12 "(2)the term 'deceasedpartner'sdistributive

13 share' includes the share of his estate or of any other

14 person succeeding, by reason of his death, torights with

15 respect to his partnership interest."

1.6 (b)The amendment made by subsection(a)shall

17apply—

18 (1) with respect to individuals who die after the

19 date of the enactment of this Act, and

20. (2) with respect to any individual who died after

21 1955 and on or before the date of the enactment of this

22 Act, butonly if the requirements of section 403 (b) (2)

23 ofthis Act are met. 58

1GRATUITOUS WAGE CREDITS FOR AMERICAN CITIZENS WHO

2 SERVED iN THE ARMED FORCES OF ALLIED COUNTRIES

3 General Rule

4 SEC. 315.(a) Section 217 of such Act is amended by

5adding at the end thereof the following new subsection:

6 "(h)(1) For the purposes of this section and section

7215 (d), any individual who the Secretary finds—

8 "(A) served during World War II (as defined in

9 subsection(d)(1))in the active military or naval

10 service of a country which was on September 16, 1940,

11 at war with a country with which the United States

12 was at war during World War II;

13 "(B) entered into such active service on or before

14 December 8,1941;

15 "(C) was a citizen of the United States through-

16 out such period of service or 'ost his United States

17 citizenship soe1y because of his entrance into such

18 service;

19 "(D) had resided in the United States fora period

20 or periods aggregating four years during the five-year

21 period ending on the day of, and was domiciled in the

22 United States on the day of, such entrance into such

23 active service; and

24 "(E)(i)was discharged or released from such 59

1 service under conditions other than dishonorable after

2 active service of ninety days or more or by reason of a

3 disability or injury incurred or aggravated in service in

4 line of duty, or

5 "(ii) died while in such service,

6shall be considered a World War II veteran (as defined in

7subsection (d)(2)) and such service shall be considered

8to have been performed in the active military or naval serv-

9iceof the United States.

10 "(2) In the case of any individual to whom paragraph

11 (1)applies, proof of support required under section 202

12 (h) may be filed by a parent at any timepriorto the ex

13piration of two years after the date of such individual's 14death or the date of the enactment of this subsection, which- 15ever is the later." 16 Reimbursement to Disability Insurance Trust Fund

17 (b)(1) Section 217 (g)(1) of the Social Security 18Act is amended by deleting "Trust Fund" and inserting fri

19lieu thereof "Trust Funds". 20 (2) Section 217 (g)(2) of the Social Security Act is 21 amended by deleting "the Trust Fund" each time itappears 22therein and inserting in lieu thereof "the Federal Old-Age 23and Survivors Insurance TrustFund"the first time and 24"such Trust Fund" the other times. 60

1 Eflective Date

2 (c)(1)The amendment made by subsection(a)

3shallapply only with respect to(A) monthly benefits

4under sections 202 and 223 of the Social Security Act for

5months after the month in which this Act is enacted, (B)

6lump-sum death payments under such section 202 in the

7case of deaths occurring after the month in which this Act

8is enacted, and. (0) periods of disability under section 216

9 (i) in the case of applications for a disability determination

10filed after the month in which this Act is enacted. ii (2) In the case of any individual—

12 (A) who is a World War II veteran (as defined

13 in section 217(d)(2)of the Social Security Act) 14 wholly or partly by reason of service described in section

15 217 (h)(1)(A) of such Act; and

16 (B) who (i) became entitled to old-age insurance

17 benefits under section 202 (a)of the Social Security 18 Act or. to disability insurance benefits under section 223 19 of such Act prior to the first day of the month follow-

20 ing the month in which this Act is enacted,or(ii) 21 died prior to such first day, and whose widow, former 22 wife divorced, widower, child,or parent is entitled for 23 the month in which this Act is enacted,on the basis of 24 his wages and self-employment income,to a monthly 25 benefit under section 202 of such Act; and 61

1 (C) any part of whose service deseribedin section

2 217 (h)(1)(A) of the Social Security Act was not

3 included in the computation of his primary insurance

4 amount under section 215 of such Act but would have

5 been included in, such computation if the amendment

6 made by subsection (a) of this section had been effective

7 prior to the date of such computation,

8the Secretary of Health, Education, and Welfare shall, not-

9withstanding the provisions of section 215 (f)(1)of the

10SocialSecurityAct,recomputetheprimary insurance

11amount of such individual upon the filing of an application,

12after the month in whioh this Act isenacted, by him

13or(if he has died without filing such an application) by 14any person entitled to monthlybenefits under section 202

15of the Social Security Act on the basis of his wages and

16self-employment income. Such recomputation shall be made

17only in the manner provided in title Ii of the Social Security

18Act as in effect at the time of the last previous computation

19or recomputation of suchinthvidual's primaryinsurance

20amount, and as though application therefor was filed in the 21 month in which application for such last. previous computa

22tion or recomputation was filed.No recomputation made

23under .this subsection shall be regarded as a recomputation

24under section 215 (f) of the Soeiai Security Act. Any such 2 recomputation shall be effective for and after the twelfth 62

1 month before the month in which the application is fried, but

2in no case for the month in which this Act is enacted or

3any prior month.

4POSITIONS COVERED BY STATE AND LOCAL RETIREMENT

5 SYSTEMS

6 Division of Retirement Systems

7 SEc. 316. (a)(1) Section 218 (d)(6) of the Social

8Security Act is amended to read as follows:

9 "(6)(A) If a retirement system covers positions of

10employees of the State and positions of employees ofone or

11more political subdivisions of the State, or covers positions

12of employees of two or more political subdivisions of the

13State, then, for purposes of the preceding paragraphs of this 14subsection, there shall, if the State so desires, be deemed to 15be a separate retirement system with respect toany one or 16more of the political subdivisions concerned and, where the

17retirement system covers positionsof employees ofthe 18State, a separate retirement system with respect to the State

19or with respect to the State and any one or more of the 20political subdivisions concerned.

21 "(B) If a retirement system covers positions ofem- 22ployees of one or more institutions of higher learning, then, 23for purposes of such preceding paragraphs there shall, if the

24State so desires, be deemed to be a separate retirementsys- 25tem for the employees of each such institution of higher 63

1learning.For the purposes of this subparagraph, the term

2'institutions of higher learning' includes junior colleges and

3teachers colleges.

4 "(0)Forthepurposesofthissubsection,any

5retirement system established by the State of California,

6Connecticut, Florida, Georgia, Massachusetts, Minnesota, 7 New York, NorthDakota, Pennsylvania, Bhode Island,

8Tennessee, Washington, Wisconsin, or the Territory of Ha-

9wail, or any political subdivision of any such State or Tern-

10tory, which, on, before, or after the date of enactment of this

11 subparagraphisdividedintotwodivisionsorparts,

12one of which is composed ofpositions of members of such

13system who desire coverage under an agreement under this

14section and the other of which is composed of positions of

15members of such system who do not desire such coverage,

16shall, if the State or Territory so desires and if it is provided

17that there shall be included in such division or part composed

18of members desiring such coverage the positions of individ-

19uals who become members of such system after such cover-

20age is extended, be deemed to be a separate retirement sys-

21tern with respect to ea.ch such division or part.

22 "(D) The position of any individual which is covered by

23any retirement system to which subparagraph (C) is appli- 24cable shall, if such individual is ineligible to become a mem-

25ber of such system on August 1, 1956, or, if later, the day 64

1 he first occupies such- position, be deemed to be covered

2by the separate retirement system consisting of the positions

3 of members of the division or part who do not desire cover-

4age nndvr the insurance system established under this title.

5 "(E) An individual who is in a position covered by a.

6retirement system t.o which subparagraph (C)is applicable

7and who is not a member of such ystem but is eligiMe to

8become a member thereof shall, for purposes of this subsec-

9tion (other than paragraph (8) )beregarded as a member 10of such system; except that, in the case of any retirement

11syst.em a division or part of which is covered under the

12agreement (either in the original agreement or by a modi-

13fication thereof), which coverage is agreed to prior to 1960, 14the preceding provisions of this subparagraph shaH apply 15 on1y if the State so requests and any such individual re- 16ferred to in such preceding provisions shaH, if the State so 17requests, be treated, after division of the retirement system 18pursuant to such subparagraph (C), the same as individua's 19in positions referred to in subparagraph (F).

20 "(F) In the case of any retirement system dividedpur- 21suant to subparagraph (C), the position of any member of 22the division or part composed of positions of members who

23do not desire coverage may be transferred to theseparate 24retirement system composed of positions of members who

25desire such coverage if it is so provided ina modification of 65

1such agreement whichismailed, or delivered by other

2 means, to the Secretary prior to 1960 or, if later, theexpira-

3tion of one year after the date on which such agreement, or

4the inothfication thereof making the agreement applicable to

5such separate retirement system, as the case may be,is

6agreed to, but only if,prior to such modification or such

7laterinodifleation, as the case may be, the individual occii-

8pying such position files with the State a written request

9for such transfer.

10 "(G) For the purposes of this subsection, in the case

11of any retirement system of the State of Florida, Georgia,

12Minnesota, North Dakota, Pennsylvania, Was1iiigton, or

13the Territory of Hawaii which covers positions of employees

14of such State or Territory who are compensated in whole

15or in part from grants made to such State or Territory under

16title III, there shall be deemed to be, if such State or Tern-

17tory so desires, a separate retirement system with respect to

18any of the following:

19 "(i) the positions of such employees;

20 "(ii) the positions of all employees of such State

21 or Territory covered by such retirement system who are

22 employed in the department of such State or Territory

23 in which the employees referred to in clause(i)are

24 employed; or

H.R.13549 5 60

1 "(iii) emp'oyees of such State or Territory coy-

2 ered by such retirement system who are emp'oyed in

3 such department of such State or Territory in positions

4 other than those referred to in c'ause(i) ."

5 (2) Paragraph (7)of section 218 (d)of such Act is

6amended by striking out "(created under the fourth sentence

7 of paragraph (6) )"andinserting in lieu thereof "(created

8under subparagraph (C)of paragraph(6)or the corre-

9sponding provision of prior law) ";andby striking out "the

10fourth and fifth sentences of paragraph (6)" and inserting

11in lieu thereof "subparagraphs (C) and (D) of paragraph

12 (6)".

13 (3) The second sentence of paragraph (2)of section

14218 (k)of such Act is amended by striking out "the pre-

15ceding sentence" and inserting in lieu thereof "the first sen-

16tence of this paragraph".The 'ast sentence of such para-

17graph is amended bystrikingout "the fourth sentence of

18subsection(d)(6)" and inserting in lieu thereof "sub-

19paragraph (C)of subsection(d)(6) ".Suchparagraph

20is further amended by inserting after the first sentence the

21following new sentence: "An individual who is in a position

22covered by a retirement system divided pursuant to the

23preceding sentence and who is not a member of such system

24but is ehigiMe to become a member thereof shaH, for purposes

25of this subsection, be regarded as a member of such system. 67

1 Coverage under the agreement of any such individual shall

2 be provided under the same conditions, to the extent prac-

3 ticable, as are applicable in the case of the States to which

4the provisions of subsection(d)(6)(C) apply."

5 Coverage Under Other Retirement Systems

6 (b) Section 218 (d) of such Act is amended by adding

7at the end thereof the following new paragraph:

8 "(8) (A) Notwithstanding paragraph (1), if under the

9 provisions of this subsection an agreement is, after December

1031, 1958, made applicable to service performed in positions

11 covered by a retirement system, service performed byan

12individual in a position covered by such a system may not be

13excluded from the agreement because such position is also

14 covered under another retirement system. 15 "(B) Subparagraph (A)shall not apply to service

16performed by an individual in a position covered undera 17retirement systemif such individual, on the day the agree- 18ment is made applicable to service performed in positions coy- 19ered by such retirement system, is not a member of such 20system and is a member of another system. 21 "(C) If an agreement is made applicable, prior to 1959, 22to service in positions covered by any retirement system, the 23preceding provisions of this paragraphshall be applicable

24in the case of such system if the agreement is modifiedto so 25provide. 68

1 "(1)) Except in the case of agreements with theStates

2named in subsection(p)and agreements with interstate

3instrumentalities,nothing in this paragraphshall authorize

4the application of an agreement to service inany policeman's

5or fireman's position."

6 Retroactive Coverage

7 (c)(1)Section 218(f)of such Act is amended

8by inserting "(1)" immediately after "(f) ",byredesignat- 9ing clauses (1), (2), (3), and (4) thereofas clauses (A), 10 (B), (C), and (D), respectively, and by addingat the 11 end thereof the followingnew paragraph:

12 "(2) In the case of service performed bymembers

13of any coverage group— 14 "(A) to which an agreement under this section 15 is made applicable, and

16 "(B) with respect to which theagreement, or

17 modification thereof making the agreementso applicable,

18 specifies an effective date earlier than the date ofexecu- 19 turnofsuch agreement and such modification, re— 20 spectively,

21the agreement shall,if so requested by the State, beap-

22plieable to such serviees(to the extent the agreementwas

23not iIready applieable) performed before such date ofexecu- 24tiori and after such effective date byany individual as a 25member of sneh coveragegroup if lie is such a member on 69

1 a date, specified by the State, which is earlier than such date

2of execution, except that in no case may the date so specified

3be earlier than the date such agreement or such modification,

4as the case may be, is mailed, or delivered by other means,

5to the Secretary."

6 (2) The a.mendment made by this subsection shall ap-

7ply in the case of any agreement, or modification of an

8agreement, under section 218 of the Socia' Security Act,

9which is executed after the date of enactment of this Act.

10 POLICEMEN ANI) FIREMEN OF INTERSTATE INSTRU-

11 MENTALITIES

12 SEC. 317. Subsection (k)of section 218 of the Social

13Security Act is amended by adding at the end thereof the

14following new paragraph:

15 "(3) Any agreement with any instrumentality of two

16or more States entered into pursuant tothis Act may,

17notwithstanding the provisions of subsection (d)(5)(A)

18and the references thereto in subsections (d)(1) and (d)

19 (3), app'y to service performed by employees of such in-

20trlurEentai.ity in any policeman's or fireman's position covered

21byaretirement system, but only upon compliance, to the

22extent practicable, with the requirements of subsection (d)

23 (3).Forthe purpose of the preceding sentence, a retire- 24 ment system which covers positions of policemen or firemen.

25or both, and other positions shall, if the instrumentality con- 70

1 cerned so desires, be deemed to be a separate retirerneiit

2 system with respect to the positions of such policemen or firemen, or both, as the case may be." TITLE TV—AMENDMENTS TO THE INTERNAL

5 REVENUE CODE OF 1954

6 CHANGES IN TAX SChEDuLES Sell-Employment Income Tax

8 SEC. 401. (a)Section 1401 of the Iriterna Revenue Code of 1954 (reliiting to rate of tax on self-employment jjincome)is amended to read as follows: "SEC. 1401. RATE OF TAX.

12 "In addition to other taxes, there shaH be imposed for

13each taxaMe year, on the sell-employment income of every

14individua', a tax as follows:

15 "(1) in the case of any taxable year beginning

16 after December 31, 1958, and before January 1, 1960,

17 the tax shaH be equa' to 3*percentof the amount of

18 the se].f-empoyment income for such taxable year;

19 "(2) in the case of any taxable year beginning after

20 December 31, 1959, and before January 1, 1963, the

21 tax shall be equa' to 4+ percent of the amount of the

22 sef-empoyment income for such taxable year;

23 "(3) in the case of any taxabk year beginning 71

1 after December 31, 1962, and before January 1, 1966,

2 the tax shall be equal to 5+ percent of the amount of

3 the self-employment income for such taxableyear;

4 "(4) in the case of any taxable year beginning

5 after December 31, 1965, and before January 1, 1969,

6 the tax shall be equal to 6 percent of the amount of

7 theself-employment income for such taxableyear; and

8 "(5) in the case of any taxable year beginning

9 after December 31, 1968, the tax shall be equal to

10 6* percent of the amount of the self-employment income

11 for such taxable year."

12 Tax on Employees

13 (b) Section 3101 of such Code (relating to rate of tax

14on employees under the Federal Insurance Contributions

15Act) is amended to read as follows:

16"SEC. 3101. RATE OF TAX.

17 "In addition to other taxes, there is hereby imposed

18on the income of every individual a tax equal to the follow-

19ing percentages of the wages (as defined in section 3121

20 (a) )receivedby him with respect to employment(as

21defined in section 3121 (b) )—

22 "(1) with respect to wages received during the

23 calendar year 1959, the rate shall be 24- percent; 72

1 "(2) with respect to wages received during the

2 calendar years 1960 to 1962, both inclusive, the rate

3 shall be 3 percent;

4 "(3) with respect to wages received during the

5 calendar years 1963 to 1965, both inclusive, the rate

6 shall be 3+ percent;

7 "(4) with respect to wages received during the

S calendar years 1966 to 1968, both inclusive, the rate

9 shall be 4 percent; and

10 "(5) with respect to wages received after iDecein-

11 her 31, 1968, the rate shall be 4fpercent."

12 Tax on Employers

13 (c) Section 3111 of such Code (relating to rate of tax

14on employers under the Federal Tnsurante Contributions

15Act) is amended to read as follows:

16"SEC. 3111. RATE OF TAX.

17 "In addition to other taxes, there is IiereJ.y imposed oii

18every employer an excise tax, withrespect to havingmdi-

19 viduals in his employ, equal to the following percentages of

20the wages (as defined in section 3121(a) )paidby him 21with respect to employment(as defined in sectioi 3121 22 (b))— 23 "(1) with respect to wages paid during the calen- 24 dar year 1959, the rate shall he 2+ percent; 25 "(2) with respect to wages paid during the calen- 73

1 dar years 1960 to 19G2, both inclusive, the rate shall he

2 3 percent;

3 "(3) 'with respe(t t wages paid during the ca1eti

4 dar years 1963 to 1965, both inclusive, the rate shall be

5 3+ percent;

6 "(4) with respect to wages paid during the calen-

7 dar years 1966 to 1968, both inclusive, the rate shall be

8 4 percent; and

9 "(5) with respect to wages paid after T)ecember

10 31, 1968, the rate shall be 4- percent."

11 Effective Dates

12 (d)The amendment imule by subsection(a)shall

13apply with respect to taxable years beginning after J)ecein—

14her 31, 11958.Thearnerithnentsinide by siibscctions(b) i and (c)shall app'y with respect to rerrwrieratioii paid after

16December 31, 1958.

117 INCREASE IN BASE

18 Definition of Self-Employment Income

19 SEC. 402.(a)(1) Subparigraph (B) of section 1402

1954 20 (b) (1) ofthe Jnt.eina]Revenue(iode of is iiiiciided

21to read as follows:

22 "(B) for any taxable year eridmg after 1954

23 andbefore1959,(i)$4,200, minus(ii)the

24 amount of the wages paid to such individual duniig

25 the taxab'e year; and". 74

1 (2) Paragraph (1) of section 1402 (b) of such Code

2is further amended by adding at the end thereof the following

3new subparagraph:

4 "(C) for any taxable year ending after 1958,

5 (i)$4,800, minus(ii)the amount of the wages

6 paid to such individual during the taxable year; or".

7 Definition of Wages

8 (b) Section 3121(a)of such Code (relating to the

9definition of wages)is amended by striking out "$4,200"

10wherever it appears and inserting in lieu thereof "$4,800".

11 Federal Service

12 (c)Section 3122 of such Code (relating to Federal

13service)is amended by striking out "$4,200" wherever it 14appears and inserting in lieu thereof "$4,800".

15 Refunds

16 (d)(1) Paragraph (1)of section G413(c)of such 17Code is amended to read as follows: 18 "(1) IN GENERAL.---If by reason of an employee 19 receiving wages from more than one employer during a 20 calendar year after the calendar year 1950 and prior to 21 the calendar year 1955, the wages received by him during 22 such year exceed $3,600, the employee shall be entitled

23 (subject to the provisions of section 31 (b) )toa credit 24 or refund of any amount of tax, with respect to such 25 wages, imposed by section 1400 of the Internal Revenue 75

1 Code of 1939 and deducted from theemployee's wages

2 (whether or not paid to the Secretary orhis delegate),

3 which exceeds the tax with respect to thefirst $3,600

4 of such wages received; or if by reason of anemployee

5 receiving wages from more than oneemployer (A)

6 during any calendar year after the calendar year1954

7 and prior to the ca'endar year 1959, the wagesreceived

8 by him during such year exceed $4,200, or(B) during

9 anycalendaryear after thecalcndar year 1958, the

10 wagesreceivedbyhuinduringsuch yearexceed

11 provisions of section 31 (b) )toa credit or refundof

12 any amount of tax,with respect to such wages, imposed

13 by section 3101 and deducted from theemployee's

14 wages (whether or notpaid to the Secretary or his

15 delegate), which exceeds the tax with respect tothe

16 first $4,200 of such wages received in suchcalendar

17 yearafter 1954 and before 1959, or which exceedsthe

18 tax with respect to thefirst $4,800 of such wages

19 received in such calendar yearafter1958."

20 (2) Subpan1glap}1 (A)ol section 6413(c)(2)of

21such Code is amended to read as follows:

22 "(A) FEDERAL E1PJ2OYEES.—In thc case of

23 remuneration received fromthe United States or a

24 wholly owned instruinentaity thereof during any

25 calendar year, each head of a Federal agency or 76

1 instrumentality who makes a return pursuant to

2 section 3122 and each agent, designated by the head

3 of a Federal agency or instrumentality, who makes

4 a return pursuant to such section shall, for purposes

5 of this subsection, be deemed a separate employer,

6 and the term 'wages' inc'udes for purposes of this

7 subsection the amount, not to exceed $3,600 for the

8 calendar yeai 1951, 1952, 1953, or 1954, $4,200

9 for the calendar year 1955, 1956, 1957, or 1958,

10 or $4,800 for any calendar year after 1958, deter-

11 mined by each such head or agent as constituting

12 wages paid to an employee."

13 Effective Date

14 (e) The amendments made by subsections (b) and (c)

15shall be applicable only with respect to remuneration paid

16after 1958.

17PARTNER'S TAXABLE YEAR ENDING AS RESULT OF DEATH

18 General Rule

19 SEC. 403.(a)Section 1402 of the Internal Revenue

20Code of 1954 is amended by adding at the end thereof the

21following new subsection:

22 "(f)PARTNER'S TAXABLE YEAR ENDING AS THE

23RESULT OF DEATII.—In computing a partner's net earnings

24from self-employment for his taxable year which ends as a

25result of his death (but only if such taxable year ends within, 77

1 and not with, the taxable year of the partnership), there

2shall be included so much of the deceased partner's distribu-

3tive share of the partnership's ordinary income or loss fo'r

4the partnership taxable year asis not attributable to an

5interest in the partnership duril1g any period beginning on

6or after the first day of the first calendar month following

7the month in which such partner died.For purposes of this

8subsection—

9 "(1) in determining the portion of the distributive

10 share which is attributable to any period specified in the

11 preceding sentence, the ordinary income or loss of the

12 partnership shall be treated as having been realized or

13 sustained ratably over the partnership taxable year; and 14 "(2) theterm'deceasedpartner'sdistributive 15 share' includes the share of his estate or of any other 16 person sucucedinig, by reason of his death, to rights with

17 respect to }ispartnershipinterest." 18 Effective Date

19 (b)(1) Except as provided inparagraph (2), the 20amendment made by subsection(a)shall apply only with 21respect to individuals who die after the date of the enact- 22nient of this Act.

2: (2)In the case of an individual who died after 1955 and 24on or before the date of the eniactrnemit of this Act, the amend-

25 mnentmade by subsection (a) shall apply only if— 78

1 (A) before January 1, 1960, there is filed a return

2 (or amended reurn of the tax imposed by chapter 2

3 of the Internal Revenue Code of 1954 for the taxable

4 year ending as a result of his death, and

5 (B) in any case where the return is filed soe1y

6 for the purpose of reporting net earnings from sellem-

7 poymeiit resulting from theamendmentmade by sub-

8 section (a), the return is accompanied by the amount

9 of tax attributable to such net earnings.

10In any case described in the preceding sentence, no interest

11or penalty shallbeassessed or collected on the amount of

12any tax due under chapter 2 of such Code soiey byreason

13of the operation of section 1402 (f) of such Code.

14 SERVICETN CONNECTION WITh 1JM RESIN P1ODTJCTS

15 SEC. 404.(a)Section 3121(b)(1)of the Internal 16Revenue Code of 1954 (relating to definition of empoy 17ment)is amended to read as follows: 18 "(1)service performed by foreign agricukural 19 workers (A) under contracts entered into in accord

20 ance with title V of the Agricu1tura Act of 1949,as

21 amended (65 Stat. 119; 7 U. S. C. 1461—1468),or

22 (B) awfu11y admitted to the United States fromthe 23 Bahamas, Jamaica, and the other British WestIndies, 24 or from any other foreign country or possession thereof,

25 on a temporary basis to performagricultural labor;". 79

1 (b) The amendment made by subsection(a)shall

2apply with respect to service performed after1958.

3 NONPROFIT ORGANIZATION'S WAIVER CERTIFICATES

4 SEC. 405. (a) Section 3121 (k)(1)of the Internal

5Revenue Code of 1954 is amended to read asfollows:

6 "(1) WAIVER OF EXEMPTION BY ORGANIZA-

7 TION.—

8 "(A) An organization described in section 501

9 (c)(3) which is exempt from income tax under

10 section 501 (a) may file a certificate (in such form

11 and manner, and with such official, as may be pre-

12 scribed by regulations made under this chapter)

13 certifying that it desires to have the insurance sys-

14 tem established by title II of the SocialSecurity

15 Act extended to service performed by its employees

16 and that at least two-thirds of its employees concur

17 in the filing of the certificate.Such certificate may

18 be filed only if it is accompanied by a list contain-

19 ing the signature, address, and social security ac-

20 count number(if any)of each employee who 21 concurs in the filing of thecertificate.Such list 22 may be amended at any timeprior to the expira- 23 tion of the twenty-fourth month following the calen-

24 dar quarter in which the certificate is filed by filing 25 with the prescribed official a supplemental list or 80

1 lists containing the signature, address, and social

2 security account number (if any) of each additional

3 employee who concurs in the filing of the certificate.

4 The list and any supplemental list shall be filed in

5 such form and manner as may be prescribed by

6 regulations made under this chapter.

7 "(B)The certificateshall be in effect(for 8 purposes of subsection (b)(8)(B) and for pur-

9 poses of section 210 (a)(8)(B)of the Social

10 Security Act) for the period beginning with which-

11 ever of the following may be designated by the

12 organization:

13 "(i) the first day of the calendar quarter 14 in which the certificate is filed, 15 "(ii)the first day of the calendar quarter 16 succeeding such quarter, or 17 "(ill)the first day of any calendar quarter 18 preceding the calendar quarter in which the

19 certificateisfiled,except that,inthe case 20 of a certificate filed prior to January 1, 1960, 21 such date may not be earlier than January 1, 22 1956, and in the case of a certificate filed after 23 1959,such date may not be earlier than the 24 first day of the fourth calendar quarter preced- 25 ing the quarter in which such certificate is filed. 81

1 "(C) In the case of service performed by an

2 employee whose name appears on a supplemental

3 listfiledafterthefirstmonthfollowingthe

4 calendar quarter in which the certificate is filed, the

5 certificate shail be in effect (for purposes of subseo-

6 tion (b)(8)(B) and for purposes of section 210

7 (a)(8)(B) of the Social Security Act) only with

8 respect to service performed by such individual fGr

9 the period beginning with the first day of the calen-

10 dar quarter in which such supplemental list is filed4

11 "(D) The period for which a certificate filed

12 pursuant to this subsection or the corresponding sub-

13 section of prior law is effective may be terminated

14 by the organization, effective at the end of a ca1en-

15 dar quarter, upon giving 2 years' advance notice in

16 writing, but only if, at the time of the receipt of

17 suchnotice, the certificate has been in effect for a

18 period of not less than 8 years.The notice of ter-

19 mination may be revoked by •the organization by

20 giving, prior to the close of the calendar quarter

21 specified in the notice of termination, a written

22 noticeof such revocation.Notice of termination or

23 revocationthereof shall be filed in such form and

ELR. 13549 6 82

1 manner, and with such official, as may be prescribed

2 by regulations made under this chapter. 3 "(E) If an organization described in subpara- 4 graph (A) employs both individuals who are in

5 positions covered by a pension, annuity, retirement, 6 or similar fund or system established by a State or 7 by a political subdivision thereof and individuals

B who are not in such positions,theorganization shall 9 divide its employees into two separate groups. One 10 group shall consist of all employees who are in

11 positionscovered by suchafundorsystem,

12 and theothergroupshallconsistofallre 13 maining employees. An organization which has

14 so divided its employees into two groups may file

15 a certificate pursuant to subparagraph (A) with

16 respect to the employees in one of the groups if at

17 least two-thirds of the employees in such group con-

18 cur in the filing of the certificate.The organiza-

19 tion may also file such a certificate with respect to

20 the employees in the other group if at least two-

21 thirds of the employees in such other group concur

22 in the filing of such certificate.

23 "(F) If a certificate ified pursuant to this para-

24 graph is effective for one or more caIendar. quarters 83

1 prior to the quarter in which the certificate is filed,

2 then—

3 "(i) for purposes of computing interest

4 and for purposes of section (3(351(relatingto

5 addition to tax for failure to file tax return), the

6 due date for the return and payment of the tax

7 for such prior calendar quarters resulting from

8 the fiuuig of such certificate shall be the last

9 day of the calendar month following the calen-

10 dar quarter in which the certificate is filed; and

11 "(ii) the statutory period for the assess-

12 ment of such tax shall not expire before the

13 expiration of 3 years from such due date."

14 (b) Section 3121 (b)(8)(B) of the Internal iReve-

15nue Code of 1954 is amended toread as follows:

16 "(B) service performed in the employ of a

17 religious,charitable, educational, or other organiza-

18 tion described in section 501(c)(3)which is

19 exempt from income tax under section 501(a),

20 but this subparagraph shall not apply to service per-

21 formed during the period for which a certificate, filed

22 pursuant to subsection (k)(or the corresponding

23 subsection of prior law), is in effect if such service

24 is performed by an employee— 84

1 "(i) whose signature appears on the list

2 filed by such organization under subsection (k)

3 (or the corresponding subsection of prior law),

4 "(ii) who became an employee of such

5 organization after the calendar quarter in which

6 the certificate (other tha.n a. certificate referred

7 toiii clause (iii))wasified, or

8 "(iii)who,after the calendar quarter in

9 which the certificate was filed with respect to a

10 group described in section 3121 (k)(1)(E), 11 became a member of such group, 12 except that this subparagraph shall apply with re- 13 spect to service performed by an employee as a 14 member of a group described in section 3121 (k) 15 (1)(E) with respect to which no certificate is in

16 effect;". 17 (c) The amendments made by subsections (a) and (b) 18shall apply with respect to certificates filed under section 193121 (k)(1) of the Internal Revenue Code of 1954 after 20the date of enactment of this Act.

21EXEMPTION OF UNEMPLOYMENT BENEFITS FROM LEVY 22 SEC. 406. Section 6334 (a)of the Internal Revenue 23Code of 1954 (relating to enumeration of property exempt 24from levy)is amended by adding at the end thereof the 25following new paragraph: 85

1 "(4) UNEMPLOYMENT BENEFITS.—Afly amount

2 payable to an individual with respect to his unemploy-

3 ment (including any portion thereof payable with re-

4 spect to dependents) under an unemployment compensa-

5 tion law of the United States, of any State or Territory,

6 or of the District of Columbia or of theCommonwealth

7 of Puerto Rico."

8TITLE V—AMENDMENTS RELATING TO PUBLIC

9 ASSISTANCE

10 OLD-AGEASSISTANOE

11 Sic. 501. Subsection(a)of section 3 of the Social

12Security Act is amended to read as follows:

13 "(a) From the sums appropriated therefor, the Secre-

14tary of the Treasury shall pay to each State which has an

15approved plan for old-age assistance, for each quarter, be-

16girming with the quarter commencing October1,1958,

17 (1)in the case of any State other than Puerto Rico, the

18Virgin Islands, and Guam, an amount equal to the sum of

19the following proportions of the total amounts expended

20during such quarter as old-age assistance under the State

21plan(including expenditures for insurance premiums for

22medical or any other type of remedial care or the cost

23thereof) —

24 "(A) four-fifths of such expenditures, not counting

ILR. 13549 7 86

1 So much of any expenditure with respect to any month

2 a.sexceedS the product of $O multiplied by the tota1

3 number ofrecipientsofold-ageassistance forsuch

4 month (which total number, for purposes of this clause

5 and clause (B) and for purposes of clause (2), means

6 (i)the number of individuals who received old-age

7 assistance in the formof money payments for such

S month, plus(ii)the number of other individuals with

9 respect to whom expenditures were made in such month

10 as old-age assistance in the form of medical or any other

11 type of remedial care) ; plus

12 "(B) the Federal percentage of the amount by

13 which such expenditures exceed the maximum which

14 may be counted under clause(A), but not counting

15 50 much of any expenditure with respect to any month 16 as exceeds the product of $66 multiplied by the total

17 number of such recipients of old-age assistance for such

18 month; 19and (2) in the case of Puerto Rico, the Virgin Islands, and

20Guam, an amount equal to one-half of the total of thesums 21 expended during such quarteras old-age assistance under 22the State plan(including expenditures for insurance pre- 23miums for medieal or any other type of remedialcare or 24the(ost thereof), riot counting so much of any expenditure 25withrespect to any month as exceeds $36 multiplied by the 87

1 tota' number of recipients of oM-ageassistance for such

2month; and (3) in the case of any State, an amountequal

3to one-hall of the tota' of the sumsexpended during such

4quarter as found necessary by theSecretary of Health, Edu-

5cation, and Welfare for the proper andefficient administra-

6tion of the State p'an, inc'uding services which areprovided

7by the staft of the State agency (or of theoca agency

8administering the State plan in the politica'subdivision)

9to applicants for and recipients ofo'd-age assistance to he'p

10them attain self-care."

11 AIDTODEPENDENT CHILDREN

12 SEC. 502. Subsection (a)of section 403 of the Socia'

13Security Act is amended to read as foflows:

14 "(a) Fromthe sums appropriated therefor, the Secre-

15tary of the Treasury shaH pay toeach State which has an

16approvedp'an for aid to dependent children, for each quarter,

1.7 beginning with the quarter commencing October 1, 1958,

18 (1) in the case of any State other than Puerto Rico, theVir-

19gin Is1ands, and Guam, an amount equa1 to the sumof the

20foflowing proportions of the total amounts expendedduring

21such quarter as aid to dependent children under theState

22plan(including expenditurcs for insurance premiums for

23medica'or any other type ofremedial care or the cost

24thereof)—

25 "(A) five-sixths of such expenditures, not counting 88

1 so much of any expenditure with respect to any month

2 as exceeds the product of $18 multiplied by the total

3 number of recipients of aid to dependent children for

4 such month (which total number,'for purposes of this

5 clause and clause (B) and for purposes of clause (2),

6 means(i)the number of individuals with respect to

7 whomaid to dependent children in the form of money

8 payments is paid for such month, plus(ii) the number

9 of other individuals with respect to whom expenditures 10 were made in such month as aid to dependent children 11 in the form of medica' or any other type of remedial

12 care); plus 13 "(B) the Federal percentage of the amount by 14 which such expenditures exceed the maximum which 15 may be counted under clause (A), but not counting so 16 much of any expenditure with respect toany month 17 as exceeds the product of $33 multiplied by the total 18 number of recipients of aid to dependent children for 19 such month; 20and(2)in the case of Puerto Rico, the Virgin Islands, 21 and Guam, an amount equal to one-half of the total of the 22sums expended during such quarter as aid to dependent 23children under the State plan(including expenditures for 24 insurance premiums for medicalor any other typeof 25 remedial care or the cost thereof), not countingso much 89

1 of any expenditure with respect to any month as exceeds

2 $18 multiplied by the total number of recipients of aid to

3 dependent children for such month; and (3)in the case

4of any State, an amount equal to one-half of the total of the

5 sums expended during such quarter asfound necessary by

6 the Secretary of Health, Education, and Welfare for the

7 proper and efficient administration ofthe State plan, in-

8 cluding services which are provided by the staff of the State

9agency (or of the local agencyadministering the State plan

10in the political subdivision)to relatives with whom such

11 children(applying for or receiving such aid)are living,

12in order to help such relatives attain self-support or self-

13 care, or which are provided to maintain andstrengthen

14family life for such children."

15 MD TO TIlEBLIND

1.6 SEC.503. Subsection (a)of section 1003 of the Socia'

17Security Act is amended to read as follows: 18 "(a) From the sums appropriated therefor, the Secre- 19tary of the Treasury shaH pay to each State which has an 20approved plan for aid to the blind, for each quarter, begin- 21ning with the quarter commencing October 1, 1958,(1) 22in the case of any State other than Puerto Rico, the Virgin 23Islands, and Guam, an amount equal to the sum of the 24following proportions of the total amounts expended during 25such quarter as aid to the blind under the State plan(in- 90

1. eluding expenditures for insurance premiums for medical or

2 any other type of remedial care or the cost thereof) —

3 "(A) four-fifths of such expenditures, not counting

4 so much of any expenditure with respect to any month

5 as exceeds the product of $30 multiplied by the total

6 number of recipieifts of aid to the blind for such month

7 (whichtotal number, for purposes of this clause and

8 clause(B)and for purposes of clause(2), means

9 (1)the number of individuals who received aid to the

10 blind in the form of money payments for such month,

11 plus(ii)the iiumber of othcr individuals with respect

12 to whomexpenditures were made in such monthas 13 aid to the blind in the form of medicalor any other

14 type of remedial care); plus 15 "(B) the Federal percentage of the amount by 16 which such expenditures exceed the maximum which 17 may be counted under clause (A), but not counting so 18 much of any expenditure with respect toany month as 19 exceeds the product of $66 multiplied by the totai 20 number of such recipients of aid to the blind for such 21 month; 22and (2) in thecase of Puerto Rico, the Virgin Islands, and

23(Juarn, an amount equal to onc-haif of the totalof the sums 24expended during such quarteras aid to the blind under the 25State plan (including expenditures for insurance premiums 91

1 for medical or any other type of remedial care or the cost

2thereof), not counting so much of any expenditure with

3respect to any month as exceeds $36 multiplied by the total

4number of recipients of aid to the blind for such month; and (3) in the case of any State, an amount equal to one-haif

6 of the total of the sums expended during such quarter as

7found necessary by the Secretary of I-Jealth, Education, and

8Welfare for the proper and efficient administration of the

9State plan, including services which are provided by the staff

10of the State agency (or of the local agency administering the

11State plan in the political subdivision) to applicants for and

12recipients of aid to the blind to help them attain self-support

13or sell-care."

14 AID TO THE PERMANENTLY AND TOTALLY DISABLED

15 SEc. 504. Subsection (a)of section 1403 of the Social

16Security Act is amended to read as follows:

17 "(a) From the sums appropriated therefor, the Secre-

18tary of the Treasury shall pay to eachState which has an

19approved plan for aid to the permanently and totally dis-

20abled, for each quarter, beginning with the quarter com-

21mencing October 1, 1958, (1) in the case of any State other

22than Puerto Rico, the Virgin Islands, and Guam, an amount

23equal to the sum of the following proportions of the total

24amountsexpended during such quarter as aid to the perma- 2 nently and totally disabled under the State plan(inclading 92

1expenditures for insurance premiums for medical or any

2other type of remedial care or the cost thereof) —

3 "(A) four-fifths of such expenditures, not counting

4 so much of any expenditure with respect to any month as

5 exceeds the product of $30 multiplied by thetotal

6 number of recipients of aid to the permanently and

7 totally disabled for such month (which total number,

8 for purposes of this clause and clause (B) and for pur-

9 poses of clause (2), means (i)the number of individ-

10 uals who received aid to the permanently and totally dis-

11 abled in the form of money payments for such month,

12 plus(ii)the number of other individuals with respect

13 to whom expenditures were made in such month as aid

14 to the permanently and totally disabled in the form of

15 medical or any other type of remedial care); plus 16 "(B) the Federal percentage of the amount by 17 which such expenditures exceed the maximum which 18 may be counted under clause(A), but not counting 19 SO much of any expenditure with respect to any month 20 as exceeds the product of $66 multiplied by the total 21 number of such recipients of aid to the permanently 22 and totally disabled for such month; 23and (2) in the case of Puerto Rico, the Virgin Islands, and

24Guam, an amount equal to one-half of the total of thesums 25expended during such quarteras aid to the permanently 93

1 and totally disabled under the State plan(including ex-

2penditures for insurance premiums for medical or any other

3type of remedial care or the cost thereof), not counting

4so much of any expenditure with respect to anymonth as

5exceeds $36 multiplied by the total number of recipients

6of aid to the permanently and totally disabled for such

7month; and (3) in the case of any State, an amount equal to

8one-half of the total of the sums expended during such

9quarter as found necessary by the Secretary of Health,

10Education, and Welfare for the proper and efficient admin-

11istration of the State plan, including services which are

12provided by the staff of the State agency (or of the local

13agency administering the Stateplan in the political sub-

14division)to applicants for and recipients ofaid to the per-

15manently and totally disabled to help them attain self-sup-

16port or self-care."

17 FEDERAL MATChING PERCENTAGE

18 SEC. 505. Subsection (a) of section 1101 of the Social

19Security Act is amended by adding at the end thereof the fol-

20lowing new paragraph:

21 "(8)(A) The 'Federal percentage' for any State

22 (other than Puerto Rico, the Virgin Islands, and Guam)

23 shall be 100 per centum less the State percentage; and

24 the State percentage shall be that percentagewhich

H.R.13549 8 94

1 bears the same ratio to 50 per centum as the square of

2 the per capita income of such State bears to the square

3 of the per capita income of the continental United States

4 (excluding Alaska) ;except that(i)the Federal per-

5 centage shall in no case be less than 50 per centum or

6 more than 70 per centum, and(ii)the Federal per-

7 centage shall be 50 per centum for Alaska and Hawaii.

8 "(B) The Federal percentage for each State (other

9 than Puerto Rico, the Virgin Islands, and Guam) shall

10 be promulgated by the Secretary between July 1 and

11 August 31 of each evennumbered year, on the basis of

12 the average per capita income of each State and of the

13 continental United States(excluding Alaska)for the 14 three most recent calendar years for which satisfactory

15 data are available from the Department of Commerce. 16 Such promulgation shall be conclusive for each of the 17 eight quarters in the period beginning July 1 next suc- 18 ceeding such promulgation: Provided, That the Secre- 19 tary shall promulgate such percentage as soon as possi- 20 ble after the enactment of the Social Security Amend- 21 ments of 1958, which promulgation shall be conclusive 22 for each of the eleven quarters in the period beginning 23 October 1, 1958, and ending with the close of June 30, 24 1961." 95

1 EXTENSION TO GUAM

2 SEc. 506. Section 1101 (a)(1) of the Social Security

3Act is amended by striking out "Puerto Rico and the Virgin

4Islands" and inserting in lieu thereof "Puerto Rico, the Vir-

5gin Islands, and Guam".

6INCREASE IN LIMITATIONS ON PUBLIC ASSISTANCE PAY-

7 MENTS TO PUERTO RICO AND THE VTRGIN ISLANDS

8 SEC. 507. (a) Section 1108 of the Social Security Act is

9amended by striking out "$5,312,500" and "$200,000" and

10inserting in lieu thereof "$8,500,000" and "$300,000", re-

11 spectively, by striking out "and" immediately following the

12semicolon, and by adding immediately before the period at

13the end thereof ";andthe total amount certified by the

14Secretary under such titles for payment to Guam with respect

15to any fiscal year shall not exceed $400,000".

16 (b) The heading of such section is amended to read

17"LIMITATION ON PAYMENTS TO PUERTO RICO, VIRGIN

18 ISLANDS, AND GUAM".

19 MATERNAL AND CHILD WELFARE GRANTS FOR GUAM

20 SEC. 508. Such section 1108 is further amended by

21adding at the end thereof the following new sentence: "Not-

22withstanding the provisions of sections 502 (a)(2), 512'

23 (a)(2), and 522 (a), and until such time as the Congress 24 may by appropriation or other law otherwise provide, the 96

1Secretaryshall,inlieuofthe $60,000, $60,000, and

2$60,000, respectively, specified in such sections, allot such

3smaller amounts to Guam as he may deem appropriate."

4TEMPORARY EXTENSION OF CERTAIN SPECIAL PROVISIONS

5 RELATING TO STATE PLANS FOR AIDTOTHE BLIND

6 SEC. 509. Section 344 (b)of the Social Security Act

7Amendments of 1950 (Public Law 734, Eighty-first Con-

8gress), as amended, is amended by striking out "June 30,

91959" and inserting in lieu thereof "June 30, 1961".

10 SPECIAL PROVISION FOR CERTAIN INDIANS REPEALED

11 SEC. 510. Effective in the case of payments with respect

12to expenditures by States, under plans approved under title

13I, IV, or X of the Socia' Security Act, for quarters beginning 14after September 30, 1958, section 9 of the Act of April 19, 151950, as amended (25 U. S. C. 639), is repealed.

16 TECHNICAL AMENDMENT

17 SEC. 511. Section 2(a)(11)of the Social Security 18Act is amended by inserting before the period at the end

19thereof ",inc'udinga description of the steps taken to assure, 20in the provision of such services, maximum utilization of 21other agencies providing similar or related services".

22 EFFECTIVE DATES 23 SEc. 512. Notwithstanding the provisions of sections 24305 and 345 of the Social Security Amendments of 1956, 25as amended, the amendments made by sections 501, 502, 26503, 504, 505, and 506 shall be effective— 97

1 (1)in the case of money payments, under a State

2 plan approved under titleI, IV, X, or XIV of the

3 Social Security Act, for months after September 1958,

4 and

5 (2)in the case of assistance in the form of medical

6 or any other type of remedia' care, under such a p'an,

7 with respect to expenditures made after September 1958.

SThe amendment made by section 506 shall also become

9 effective, for purposes of title V of the Social Security Act,

10for fiscal years ending after June 30, 1959.The amend-

11ments made by section 507 shall be effective for fiscal years

12ending after June 30, 1958.The amendment made by 13section 508 shall be effective for fisca' years ending after

14June 30, 1959.The amendment made by section 510 shall

15become effective October 1, 1958. 16 TITLE VT—MATERNAL AND CHILD WELFARE

17 CHILD WELFARE SERVICES

18 SEC. 601. Part 3 of title V of the Social Security Act

19is amended to read as follows:

20 "PAJtp3—CmLD-WELFESERVICES

21 "APPROPRIATION

22 "SEC. 521. For the purpose of enabling the United

23States, through the Secretary, to cooperate with State public-

24welfare agencies in establishing, extending, and strengthen-

25ing public-welfare services (hereinafter in this title referred 98

1to as 'child-welfare services') for the protection and care ol

2homeless, dependent, and neglected children, and children

3in danger of becoming delinquent, there is hereby authorized

4to be appropriated for each fiscal year, beginningwith the

5fiscal year ending June 30, 1959, the sum of $17,000,000.

6 "ALLOTMENTS TO STATES

7 "Sec. 522. (a) The sums appropriated for each fiscal

8year under section 521 shall beallotted by the Secretary

9for use by cooperating State public-weliare agencies which

10have plans developed jointly by the State agency and the

11Secretary, as follows: He shall allot to each State such por-

12tion of $60,000 as the amount appropriated under section

13521 for such year bears to the amount authorized to be so

14appropriated; and he shall allot to each State an amount

15which bears the same ratio to the remainder of the sums so

16appropriated for such year as the product of (1) the popula-

17tion of such State under the age of 21 and (2) the allot-

18ment percentage of such State (as determined under section

19524) bears to the sum of the corresponding products of all

20the States.

21 "(b)(1)If the amount allotted to a State under sub- 22section (a) for any fiscal year is less than such State's base

23allotment, it shall be increased to such base allotment, the total 24of the increases thereby required being derived by propor- 25tionately reducing the amount alloted under subsection (a) 99

1to each of the remaining States, but with such adjustments

2as may be necessary to prevent the allotment of any such

3 remaining State under subsection(a) from being thereby

4reduced to less than its base allotment.

5 "(2) For purposes of paragraph (1)the base allot-

6 ment of any State for any fiscal year means the amount

7 which would be allotted to such State for such year under

8the provisions of section 521, as in effect prior to the enact-

9ment of the Social Security Amendments of 1958, as applied

10to an appropriation of $12,000,000.

11 "PAYMENT TO STATES

12 "SEc. 523.(a) From the sums appropriated therefor

13and the allotment available under section 522, the Secretary 14shall from time to time pay to each State with a plan for 15child-welfare services developed as provided in such section 16522 an amount equal to the Federal share (as determined 17under section 524)of the total sum expended under such

18plan (including the cost of administration of the plan)in 19meeting the costs of district, county, or other local child- 20welfare services, in developing State services for the encour- 21agement and assistance of adequate methods of community 22child-welfare organization, in paying the costs of returning 23any runaway child who has not attained the age of eighteen 24to his own community in another State, and of maintaining 25such child until such return (for a period not exceeding fifteen 100

1days), in cases in which such costs cannot be met by the

2parents of such child or by any person, agency, or institution

3legallyresponsible for the support of such child: Provided,

4Thatin developing such services for children the facilities and

5experienceof voluntary agencies shall be utilized in accord-

6ance with child-care programs and arrangements in the States

7and local communities as may be authorized by the State.

8 "(b) The method of computing and paying such amounts

9shall be as follows:

10 "(1) The Secretary shall, prior to the beginning of each

11period for which a payment is to be made, estimate the

12amount to be paid to the State for such period under the

13provisions of subsection (a).

14 "(2) From the allotment available therefor, the Secre-

15tary shall pay the amount so estimated, reduced or increased,

16as the case may be, by any sum (not previously adjusted

17under this section) by which he finds that his estimate of the

18amount to be paid the State for any prior period under this

19section was greater or less than the amount which should

20have been paid thereunder to the State for such prior period.

21 "ALLOTMENT PERCENTAGE AND FEDERAL SHARE

22 "SEo. 524.(a)The 'allotment percentage' for any 23State shall be 100 per centum less the State percentage; 24and the State percentage shall be that percentage which

25bears the same ratio to 50 per centum as the per capita in- 101

1 come of such State bears to the per capitaincome of the con-

2tinentaI United States(excluding Alaska) ;except that

3 (A) the allotment percentage shall in no case be less than

430 per centum or more than 70 per centum, and (B) the

5allotment percentage shall be 50 per centum in the case of

6Alaska and 70 per centum in the case of Puerto Rico, the

7 Virgin Islands, and Guam.

8 "(b)For thefiscal year ending June 30,1960,

9and each year thereafter, the 'Federal share' for any State

10shall be 100 per centum less that percentage which bcars

11the same ratio to 50 per centum as the' per capita income of

12such State bears to the per capita income of the continental

13United States (excluding Alaska), except that(1)in no 14case shall the Federal share be less than 33* per centum 15or more than 66* per centum, and (2) the Federal share 16shall be 50 per centum in the case of Alaska and 66* per 17centum in the case of Puerto Rico, the Virgin Islands, and

18Guam.For the fiscal year ending June 30, 1959, the 19Federal share shall be determined pursuant to the provisions 20of section 521 as in effect prior to the enactment of the 21Social Security Amendments of 1958. 22 "(c) The Federal share and the allotment percentage 23for each State shall be promulgated by the Secretary between 24July 1 and August 31 of each even-numbered year, on the 25basis of the average per capita income of each State and of 102

1 the continental United States(excluding Alaska) for the

2three most recent calendar years for which satisfactory data

3are available from the Department ofOommerce. Such

4promulgation shall be conclusive for each of the two fiscal

5years in the period beginning July 1 next succeeding such

6promulgation: Provided, That the Secretary shall promul-

7gate such Federal.shares and allotment percentages as soon

8as possible after the enactment of the SocialSecurity Amend-

9ments of 1958, which promulgation shall be conclusive until

10July 1, 1959.

11 "REAJjLOTMENT

12 "SEc. 525. The amount of any allotment to a State

13under section 522 for any fiscal year which the State certifies

14to the Secretary will not be required for carrying out the

15State plan developed as provided in such section shall be

16available for reallotment from time to time, on such dates as

17the Secretary may fix, to other States which the Secretary

18determines (1) have need in carrying out their State plans

19so developed for sums in excess of those previously allotted

20to them under that section and (2) will be able to use such

21excess amounts during such fiscal year.Such reallotments

22shall be made on the basis of the State plans so developed,

23after taking into consideration the population under the age

24of twenty-one, and the per capita income of each such

25State as compared with the population under the age of 103

1twenty-one, and the per capita income of all such States

2 with respect to which such. a determination by the Secretary

3has been made. Any amount so reallotted toa State shall 4be deemed part of its allotment under section 522."

5 MATERNAL AND CHILD HEALTH 6 SEC. 602.(a) Section 501 of such Act is amended by 7striking out "for the fiscalyear ending June 30, 1951, the 8sui of $15,000,000, and for each fiscalyear beginning after 9June 30, 1951, the sum of $16,500,000" and inserting in 10lieu thereof "for each fiscalyear beginning after June 30, 111958, the sum of $21,500,000". 12 (b) Section 502 (a)(2)of such Act is amended by

13striking out "for each fiscal year beginning after June30, 141951, the Administrator shall allot $8,250,000as follows: 15 He shall allot to each State $60,000 and shall allotto each 16State such part of the remainder of the $8,250,000" and 17inserting in lieu thereof "for each fiscalyear beginning after

18June 30, 1958, the Secretary shall allot $10,750,000as 19follows: He shall allot to each State $60,000 (even though 20the amount appropriated for suchyear isless than $2 1,-

21500,000), and shall allot each State such part of there- 22mainder of the $10,750,000". .23 (c)Section 502(b)of such Act is amended by 24striking out "the fiscalyear ending June 30, 1951, the 25 sum of $7,500,000, and for each fiscal year beginning after 104

1 June 30, 1951, the sum of $8,250,000" and inserting in

2 lieu thereof "each fiscal year beginning after June 30, 1958,

3the sum of $10,750,000".

4 CRIPPLEDCIIILDREN'S SERVICES

5 SEC. 603. (a)Section 511 of such Act is amended by

6striking out "for the fiscal year ending June 30, 1951, the

7sum of $12,000,000,and for each fiscal year beginning

8after June 30, 1951, the sum of $15,000,000" and inserting

9in lieu thereof "for each fiscal year beginning after June 30,

10 1958, the sum of $20,000,000". ii (b)Section 512 (a)(2)of such Act is amended by

12striking out "for each fiscal year beginning after June 30,

131951, the Administrator shall allot $7,500,000 as follows: 14 He shall allot to each State $60,000,and shall allot the

15remainder of the $7,500,000" and inserting in lieu thereof

16"for each fiscal year beginning after June 30, 1958, the

17Secretary shall allot $10,000,000 as follows: He shall allot

18to each State $60,000 (even though the amount appropri-

19ated for such year is less than $20,000,000) and shall allot

20the remainder of the $10,000,000".

21 (c)Section 512 (b)of such Act is amended by strik-

22ing out "the fiscal yea.r ending June 30, 1951, the sum of

23$6,000,000, and for each fiscal year beginning after June

2430, 1951, the sum of $7,500,000" and inserting in lieu 105

1 thereof "each fiscal year beginning after June 30, 1958,the

2sam of $10,000,000".

3 TITLE VII—MISCELLANEOTJS PROVISIONS

4 FURNISHING OF SERVICES BY DEPARTMENT OF HEALTh,

5 EDUCATION, AND WELFARE

6 SEC. 701. Section 1106 (b)of the Social Security Act

7is amended to read as follows:

8 "(b) Requests for information, disclosure of which is

9authorized by regulations prescribed pursuant to subsection

10 (a)of this section, and requests for services, may, subject

11.to such limitations as may be prescribed by the Secretary to

12avoid undue interference with his functions under this Act,

13be complied with ifthe agency, person, or organization

14making the request agrees to pay for the information or serv-

15ices requested in such amount, if any (not exceeding the cost

16of furnishing the information or services), as may be deter-

17mined by the Secretary.Payments for information or serv-

18ices furnished pursuant to this section shall be made in ad-

19vance or by way of reimbursement, as maybe requested by

20the Secretary, and shall be deposited in the Treasury as a

21special deposit to be used to reimburse the appropriations

22 (including authorizations to make expenditures from the

23Federal Old-Age and Survivors Insurance Trust Fund and

24the Federal Disability Insurance Trust Fund) for the unit 106

1 or units of the Department of Health,Education, and Wel-

2fare which furnished the information or services."

3COVERAGE FOR CERTAIN EMPLOYEES OF TAX-EXEMPT

4 ORGANIZATIONS WHICH PAID TAX

5 SEC. 702.(a)Section 403(a)(1)of the Social

6Security Amendments of 1954 is amended by striking out

7"has failed to file prior to the enactment of the Social Security

8Amendments of 1956" and inserting in lieu thereof "did

9not have in effect, during the entire periodin which the

10individual was so employed,".

11 (b) Section 403(a) (3)oftheSocialSecurity

12Amendments of 1954 is amended by inserting "performed

13during the period in which such organization did not have

14a valid waiver certificate" after"service".

15 (c) Section 403(a) (5) oftheSocialSecurity

16Amendments of 1954 is amended by inserting "without

17knowledge that a waiver certificate was necessary, or" after

18"in good faith and".

19 MEANING OF TERM "SECRETARY"

20 SEC. 703. As used in the provisions of the Social Secu-

21rity Act amended by this Act, the term "Secretary", unless

22the context otherwise requires, means the Secretaryof

23Health, Education, and Welfare. Union Calendar No. 950

8rH CONGRESS 2D SEssIoN [Report No. 2288) A BILL To increase benefits under the Federal Old-Age, Survivors, and Disability Insurance System, to improve the actuarial status of theTrust Fi.mds of such System, and otherwiseim- prove such System; to amendthe public assistance and maternal and child health and welfare provisions of the Social Security Act; and for other purposes.

By Mr. Mius

JULY28,1958 Referredto the Committee on Ways andMeans JULY 28, 1958 Committed to the Committee of the Whole House on the State of the Union and ordered to beprinted

GPO861.630

STANDARD FORM O. 64 SSA-OASI OfficeMemorandum• UNITEDSTATE'S GOVERNMENT.

11i : A:P TO : Admini8trative,Supervl8ory, DATE: July 28, 1958 and TechnicalEmployee8

FROM : VictorChristgau, Director Bureau of Old-Age and Survlvor8 In8urance SUBJECT: Director'sBulletin No. 283 SocialSecurity Bill8 (H.R. l35Ii9 and H.R. 13550) Reported Favorably by Hou8e Ways and Means Committee

Two identicalcomprehensive social, securitybills, H.R. 13511.9 8pon8ored by ChairiDan Wilbur D.MillsandH.R. 13550 sponsoredby rankingminority member Daniel A. Reed of the House Committee on WayB and Means, were introduced today.The bills were reported. favorably by the Committee and. po8sibly will bevoted,onby the House later this week.

These bills result from the recent public hearings onthe socialsecurity programs and deciaiona that weremade by the Ways andMeans Committeein executivesessiona.The blUe include a numberof minor and, technical amendments that have been proposed. by the Department,

Attachedis a brief innary of the provisionsoftheeeidentical billa.You will ofcourse be kept informedoftheir progreaainthe Coiigress.

Victor Chriatgau Attachment P)POSZD CEAItJGES IN TOLD..NIE, SURVIVORS, ANDDISABILITY INSURANCE PROGBAN

Increasesin Benefitsand Earning_s Base

1. Increase benefit amounts for all beneficiaries--thosenow on therolls and. thosewho will come on in thefuture--byabout 7percent,with an increase of at leaat $3inthe amount payable to the retired worker. (slightlysmallerincreases would be received by women workers and wives who have begun to receive their benefits beforeage 65.) Newprimaryinsuranceamounts and family ximums forbothpresentandfuture beneficiarieswill be determined from a benefittableincluded inthelaw.(The benefit formulawill no longerappearin the law.) Therevised primary insurance amounts in the table are stated in whole dollars only (rounded to the nearest dollar). 2.Increase the maximum on total benefits payable to a fini1y from $200to $25I. 3.Benefit increases will be effective for the month after the second month following enactment of the bills for example, they wouldbeeffective for the month of November (wIth checks payable atthebeginningofDecember) ifthebill isenactedin August.

1• Increase,effective in 1959, the maximum amountofannual earnings taxable and creditable toward benefits from $I.,20O to $I,8Oo. Dependents of Disabled Workers Provide benefits for the dependents of disability insurance beneficiaries likethose now provided for the dependents of old-age insurance beneficiaries• Thesebenefits would become payable for the month after the month of enactment of the bill. Other ChAnges in Disabiliy Provisions

1. Eliminate thedisability benefits offset provision effective beginningwithdisability insurancebenefitsand childhood disability benefits for the month ofenactmentof the bill.

2.Modifythe work requirements for both cashdisability benefitsandthe disability freeze soas tomake iteasierfor people whosedisabilities have a gradualonsetto qualify. Underthe bill, aworker wouldnolonger be required to have had 6 quarters of coverage out of the 13calendarquarters before he became disabled. Fully insured status would be added asarequirement for eligibility for the freeze.Thus, the requirements for cashbenefitsandthe -2- freeze would be nde identical:the worker vou]4 have to be fully insured, andtohave 20 quarters of coverage out of the leO calendar quarterebeforehe became diBabled.The changed York requtrementa wouldbeeffective with reBpect to all applications filed after the date of enactment of the bill, end alsowithrespect to thoee applica. tions thith were filed after 1957 nd before the enactment of the bill endonwhich a notice of determination has not been sent to the c1a(Tninta of the date of enactment. Benefitsto newly eligible disabled persons--and increased benefita to old-age ineurance bene- flcia.riea newly eligible to the freeze becauee of the changed 'work requirements--would become payable under the chengd requirements for the month after the month of enactment.

3.ProvIdeforpaying disability insurance benetita (like all otherbenefits now provided) for as many as 12 months before the month in which en application for the benefits is filed. This change would apply to application8 filed after December 1957.

Ii. Postpone for 3years theJune30,1958, deadline for filing fully retroactive di.Babilityfreezeapplications. This change would applyto applications filedafterJune 1958.

Coverage

1. Provide for a limited period of retroactivesocial security coveragefor employee8 of nonprofit organizations which elect coverage.

2. Allow nonprofit organizations which bave employees covered by a State or local retirement 8y8tem to treat these employees separately from those employees who are not members of such a ayatem.

3.Broadenslightly the provisions of exiBting law inder which social security tax returns filed by a nonprofit orgn1zetion before it filed it8 waiver certificate may establish social 8ecurity credits for wages reported on these returns if the wages were paid for Bervicea performedbefore Augu8t 1, 1956.

1i. Make the divided retirement 8ystem provision applicable to Ma88achusetts.

5. Providea further opportunity for social Beouritycoverage for State axd local government workerswho arecovered by a retirement systemand who did not elect social security coverage when the system was originally divided to cover tho8e members whodesiredcoverage; andallowpersons who are eligible for membership in, but are not members of, a State or local retirement system tO be covered under the divided retirement system provi8ion in the same mnner a members. -3- 6.PermIt retroactive coverage for people In the employ of State or bce.]. governments who died or whose employment was terminated after the prooaed State coverage agreement was diapstched to the Federal Government but before it was approved by the Federal Government. 7.Make it eaaier for State and local government employees who are in positiona covered by more than one State or local retirement aystem to get social. security coverage.

8..Permit aocial security covelage for policemen end firemen retirement ayitem membera employed by interstate instrumentalities.

9.ProvIde social. security credit for the earnings a person baa from a pe.rtnereklp during the year of hia death. 10.Provide coverage, under the agricultural coverage provisions, for workers employed in the production of spirits of turpentine and other vorkera engaged in the processing of crude gum. U. oaden the provøione under which $160 monthly wage credits are provided for certain military service to allow auch credits for military eervlce performed ror a foreign country d.uring World War II by American citizens who entered the military aervice of the foreign country before December 9, l911, provided the foreign country was, on September 16, 191U), at war with a nation that became an enemy of the United States during World. War El. Retireient Teat 1.No major changes are made in the retirement teat.The D)Bt substantive of the chqneB de would provide that a person vii]. not lose a benefit under the retirement teat for any month in which he has earned wages of $100 or lesa (rather than $80 or less as under present law).This change does not affect the provision which reVirea that earnings in excess of the annual exempt amount be chsrge to the months of the year in units of $80. 2.PrOVide that where earnings exceed the aaount exempted under the retirement teet the exceas viii be charged to, and will result in suepenaion of benefita for, months beg1nn(n vith the tint of the year.The change eens that where an indiviiual'a or aThaily'.benefits are increaaed during a year, the benefits auepended. byreaaonof earning. vili be the leronee that vere ayable for the early ontha of the year. 3.. Drop the reireient that a perøon who i not entitled to reasive benefit. during a year bécauie he ie vork1n6 and who baa in fict not received any benefiti neverthele.e *1st file an rsport of his earnings under the retiree ttest. Ii.. The retirement test changea would be effective for tab1e years beginning after the date of enactment. ProviBion for Benefits for DependentB 1.Where a person over age 18 is the child of a deceased or retired insured worker and baa been disabled since before age 18,pro- vIde for the payment of benefltB to the child without reçuiring proof. (required under present law) that he has been dependent upon the worker for one-half of his support.The change would make the requirement for the disabled adult child the same a for the child under age 18. 2.Piovide benefitB for the dependent parent of a decea8ed worker even though there is a widow or child of the worker who is, or may become, eligible for benefits.Benefits payable to other survivors ofa worker in the nonth of enactment wifl Dot be decreaBed If a e.rent colneB on the roliB.

3.ProvIde for the paynent of a lump umtothe widow of a deceaaed worker only if she wa living in the same household with him or had paid his burial expenses. Ii.Provide for payment of benefits to a child if tie child was adopted by the widow of a worker within two years after the worker died, if the child had been living in the worker's household, and if the child had not been supported by anyone elae.

5.Permit payment of benefits to the mother of a child if the child had been adopted by her deceased husband even though the mother bad not met the requirement of present law that 8he have been married to tne latter for aa long as a year. 6.Remove the 3-year adoption requirement for the child of a retired. worker. 7.Eliminate the d.uration-of-man'iage requirements for benefits (3 yeara for wife's and huBband's benefits and one year for widow's and wIdower' a benefitB) and the one-half aupport requirement and "currently Insured" status reqzirements for huaband' 8andwidower's benefits If In the month before marriage the individual waa eligible for dependent'B benefita or would have been eligible except for not having attained retirement age.Allow the aged widow to have her benefltB relnBtated only if her aecond huabnd dieB vithin a year end he is not fully insured. 8.Where two secondary beneflciariea over age 18 marry each other (for example, the d.ependent parent of one worker and the widow of another), provld.e for continuing the payment of benefits tO both beneficiaries.Where a childhood disability beneficiary or pereon -5— receivingmother's benefits marries an old-age insurancebeneficiary or a disability insurance beneficiary the benefits payableto the child or mother vii]. not be terminated becauaeof the marriage. 9.Thechanges in dependent'a benefitsare effective for nionthly benefits beginning with the monthafter the bill is enacted based on applications filed after the dateof enactment.The change in "living with" for lump-sumdeathpayments(No.3above)applies to lump sumsbasedon the earnings of workers who d.leafterthe month of enactrent. Ml 8cellaneous

1. Spell outmore clearly andcompletelyin the lawthe definitionof what constitutes fraud under the OASDIprogram.

2. Make provision for collecting and depositingin the aocial security trust runds appropriate chargesfor furziishing to the public services not connected with theprogram (such aaforwarding mail). 3. Removethe requirement thatanattorney; in orderto represent aclaiu3ant for social securitypurposes, must file a certificateof his right to practice Jaw before the courts.

Tax Rate

1. Increase the scheduled rates in the law by 1/4of 1 percent each for employees and employers, and 3/8of1 percent for the self- employed, above the rates now scheduled, andprovidefor the scheduled increasein the rates to take place every 3yearsinstead of every 5years. The resulting schedule would beas follows:

Employers Employees Self-Employed

1959 . 21/2% 2 1/2% 33/4% 1960—62 ...... 3 3 4 1/2 1963-65 .. 31/2 31/2 51/li. 1966—68. . 4 ii. 6 1969and thereafter . 4 1/2 41/2 63/4

PUBLIC ASSISTANCE

Age, Blind, Disabled and Dependent Children

An additional $288millionwould be made available to the States under revised formui.as for the Public Assistanceprograms. All -6-

StateswouldreceiveadditionalFederal fund8. Aaat present, the FederalGovernment would provide 1/5of the first$30 on an average to the aged, blind, anddi.aabledrecipients. States now receive dollar-for-dollarmatching on that part of the payment to one of these rec.pients that exceed8 $30 aiid is less than $60.Theyalso receive one-half of an average of up to $6 for payments made directly to suppliers of medi.cal care.The bill would continue to provide dollar-for-dollar matching on amounts in excess of $30 with a new maximum of $66 on an average basis beyond which Fed.era]. niatch.tng would not be available.The higher average maximum will provide additional Thnd8 to States inR]dng substantial payments while adjustments in this formula would be made for States with lower incomes, giving them both additional fund8. At present, under the aid to dependent children program States receive $114 Federal Thnds out of the first $17.Under the bill they would receive $15 out of the first $18.A new average mR,dmum of $33 per recipientis provided in lieu of present limitsof$32 for the first childand. an adult providing care, $3 each for additional children, and $3 medical careon an average basis. Under the bill, aaounts between $18 and. $33per recipient would be handled in the same way as Inthe other programs. The separate matching of payments to doctors, hospitals aiid other suppliers of medical care would be elimirated with the new maximum of $66 covering both the present maximum of $60 on an indiv1dul payment and the $6 average now provided .for paytnenta for medical care of public assistance recipients.Both this provision and the average limitation on money payments will provide greater flexibility to the States in the operation of their programs, and will also eliminate the special problems existing in some States arising out of existing law. Puerto Rico, Guam, Virgin Islands Federal payments to Puerto Rico and the Virgin Island8 for public assistance payments which have been limited to $5,312,500 and $200,000 respectively are increased to $8,500,000 and $300,000. Guamis included for the first time with a $1400,000maximum authorization. Blind Programs -Missouriand Pennsylvania Special provisions regarding State blind programs in Pennsylvania and Missouri would be extended from June 30, 1959, to June 30, 1961. -7-

MATERNALA1CHILD WELFARE

Theauthorization formaternalandchild hea]tkzwouldbeincreased from$16.5millionto $21.5 million, the authorization for crippled children services from$15millionto$20 million, andthe authorization foz' child welfare services from$12million to $17 million. These increaBea would raise the total authorized for the three prograaafrom $43.5millionto $58.5million.

15730 CONGR]ESSIONAL RECORD —HOUSE July 31

SOCIAl4SECURiTY AMENDMENTS OF 1958 Mr. O'NEILL. Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 653 and ask for its immediate consideration. The Clerk read the resolution, as follows: ResolvecZ, That upon the adoption of this resolution it shall be in order to move that the House resolve tselt into the Committee ot the Whole House on the State ot the Union tor the consideration ot the bill (H. R. 13549> to increase benefits under the Federal Old- Age, Survivors, and Disability Insurance Sys- tem, to improve the actuarial status of the trust funds o such System, and otherwise improve such System; to amend the public assistance and maternal and child health and welfare provisions ot the Social Security Act; and for other purposes, and all points o order against Said bill are hereby waived. 1958 CONGRESSIONAL RECORD— HOUSE 15731 That after general debate, which shall be Authorizations are increased for ma-any month in which he has earned wages confined to the bill, and s1all continue notternal and child health programs fromof $100 or less, rather than $80 or less to exceed 4 hours, to be equally divided and under the present law. controlled by the chairman and ranking$16,500,000 to $21,500,000; for crippled minority member of the Committee on Wayschildren's services from $15 million to A table of tax rate increases Istobe and Means, the bill shall be considered as$20 million, and child welfare servicesfound on page 10. havingbeenreadforamendment. Nofrom $12 million to $17 million. As I said, in view of the adequate time amendment shall be in order to said bill The chairman of the Committee onallowed for debate, I will not undertake except amendments offered by direction 0!Ways and Means, Mr. MILLS, while testi-to explain that which can be better ex- theCommittee on Ways and Means. Amend-fying before the Committee on Rules,plained by' the very well-informed mem- ments offered by direction of the Committee bers of the Ways and Means Committee. on Ways and Means may be offered to anypointed out that this bill will bring about section of the bill at the concluflion of thea substantial improvement in the finan- I now yield to my colleague from Con- general debate, but said amendment8 shallcial basis of the program, the actuarialnecticut. not be subject to amendment. At the con-deficit will be reduced, and the program Mr. SEELY-BROWN. Mr. Speaker, I clusion of the consideration of the bill forwifi be more adequately financed. support the rule, and I expect to support amendment, the Committee shall rise and I urge the adoption of House Resolu-the legislation. report thebillto the House with suchtion 653. Mr. Speaker, I take this opportunity to amendment8 as may have been adopted, and Mr. Speaker, I yIeld 30 minutes to thecommend the committee for including a the previous question shall be considered as provision In the pending bifi which will ordered on the bill and amendments theretogentlemanfromPennsylvania[Mr. to final passage without intervening motion,Scorn. extend coverage for employees of certain except one motion to recommit. nonprofitorganizationswhich under Mr. SCOTI' of Pennsylvania.Mr.present law cannot secure the necessary Mr. O'NEILL.Mr.Speaker, HouseSpeaker, I yield myself such time as Iconcurrence of two-thirds of their em- Resolution 653 makes in order the con-may require. ployees because some of their employees sideration of H. R. 13549, the Social Se- Mr. Speaker, this bifi came out of theare covered by a public retirement sys- curity Amendments of 1958.The reso-Committee on Ways and Means by a votetem and do not desire social-security lution provides for a closed rule, 4 hoursof 24 to 1.It represents the usual, care-coverage. of general debate, and waives points offul, earnest and bipartisan consideration School officials in my district have been order against the bill. given by the Committee on Ways andextremely upset over the fact that the The bill will Increase benefits to ap-Means to an extremely complex matter.nonteachlng members on their rolls are proximately 12 million people now onThis bill commits this Government anddenied coverage in the State Teachers the benefit rolls, and all future bene-the employees and employers and theRetirement Association and also are not ficiaries, about 7 percent, with a mm!-self-employed of this Nation to disburse-permitted to participate in social secu- mum increase of $3 in the benefits pay-ments for the welfare of the people ofrity.This amendment to the law will, able to retired workers who came on thethis country of billions of dollars.Thein my opinion, correct an Inequity and rolls at or after 65 years of age.Forbill will be explained In detail during thewill allow participation In the program retired workers now on the rolls monthly4 hours of debate.Therefore, I wouldof a group not otherwise eligible-for cov- payments would range from $33 to $118like to refer only to 2 or 3 points.First,erage under any retirement system. as compared with $30 to $108.50 underthe committee states t has not been able Mr. SCOTI' ofPennsylvania.Mr. present law.The bill would also raiseto recommend benefits at as high a levelSpeaker, I Support the rule and the leg- the present $200 limitation on familyin its opinion as would be justified if oneislation.I have no further requests for benefits to $254 in the amount of monthlyconsidered sole]y the level for this pro-time, and I therefore yield back the bal- benefits payable to a family on the basistection.The increase of approximatelyance of my time. of an insured worker's earnings record.7 percent provided by the bifi Is actually Mr. O'NEILL.Mr. Speaker, I yield 5 The law would also be changed to pro-somewhat short of the rise in the cost ofminutes to the gentleman from Indiana vide that a person will not lose a benefitliving that has taken place since 1954.[Mr. MADD]. under the retirement test for any monthThe committee states it believes it is Mr. MADDEN. Mr. Speaker, the gen- in which he has earned wages of $100essential that a significant part of thetleman from Massachusetts [Mr. or less, rather than $80 or less as underinitial contributions to the system theyO'NEILL] and the gentleman from Penn- present law. are recommending be used to strengthensylvania [Mr. Scorn] have explained the The work requirements that a disabledthe financing of the system rather thangeneral provisions of the bill. worker must meet would be changed toto improve benefit protection. I want to congratulate the members make it easier for a disabled worker The principal features of the bill willof the Ways and Means Committee for whose disability has a gradual onset tobe found beginning on page 8 of theacting favorably on this bill which will qualify.Changes are also made in thecommittee report. The dollar ceiling onnot only extend needed increases In so- coverage provisions of the program, asthe total of benefits payable to a familycial security payments to millions of well as easing some of the requirementswould be raised from $200 to $254, whichbeneficiaries but the legislation wifi also to qualify for dependents benefits. is equivalent .to twice the maximum re-strengthen the social security system. The tax rates now scheduled in thetirement benefit payable. And the totalApproximately 12 million are now re- law would be increased by one-quarterannual earnings on which benefits couldceiving social security benefits. Seventy- of 1 percent for employees and employersbe computed and on which contributionsfive million additional people who are and three-eighths of 1 percent for thewould be paid would be raised fromnow covered will some day be drawing self-employed. The total annual earn-$4,200 to $4,800 effective January 1, 1959.social security benefits.Under the sys- ings on which contributions would be Further, benefits would be provided fortem this bill gives approximately 7 per- paid, and on which benefits would bethe dependents of disabled workers as iscent across-the-board increase toall computed, would be raised from $4,200now provided for dependents of retiredsocial security beneficiaries and in some to $4,800, effective January 1, 1959. Theworkers. cases which come under the lower wage scheduled increases in the rates would The provision that now requires pay-bracket, the increase will be as high as 10 take place every 3 years instead of everyments under certain otherdisabilitypercent.If this bill is passed by the benefit systems to be offset against social-House and enacted into law, it will be the years. security disability benefits would be re-first increase in social security benefits The bill provides a new formula forpealed, so that a person eligible for asince 1954. Federal participation in public assist-social-security disability benefit and also In addition to the increases, the Ways ance providing additional funds to allfor disability benefit under another sys-and Means Committee is to be com- States and maximum flexibility in meet-tem would receive the full amount of hismended for recommending improve- Ing medical-care needs and other specialsocial-security benefit. ments in the public welfare, maternal, needs.Also, the Federal share would be An important change in the law, as youand child welfare programs.Also the determined in part by the relative fiscalwill see on page 9 of the committee re-strengthening of the financial basis of ability of the State as measured by aver-port, provides that a person will not losethe old-age, survivors, and disability in- age State per capita income. a benefit under the retirement test forsurance programs to make certain that 15732 CONGRESSIONAL RECORD —HOUSE July 31 they are sound.Also old-age, survivors,under the Federal old-age, survivors, anddesigned to protect. New types of pro- and disability insurance benefitsdisability insurance system, to improvetection and classes of benefits have been amounts will be increased. the actuarial status of the trust funds ofadded.All of this has been done with The maximum limitationonthesuch system, and otherwise improve suchscrupulous care for the maintenance of annual amount of earnings that can besystem; to amend the public asistancefinancial and actuarial soundness.As credited toward benefits and taxed forand maternal and child health and wel-theprogramnowstands,regular old-age, survivors, and disability Insur-fare provisions of the Social Securitymonthly benefits are being paid to 12. ance provisions will be increased.TheAct; and for other purposes. million Americans in every town and disability insurance provisions of the The motjon was agreed to. community of every State.The total program will be improved by making Accordingly the House resolved itselfmonthly benefits paid in the fiscal year provisions of benefits for dependents ofInto the Committee of the Whole Housejustclosedamounted to$8billion. disabled workers. on the State of the Union for the con-More than 9 out of every 10 of the Na- Under the provisions of this bill, thesideration of the bill H. R. 13549, withtion's mothers and children can look dollar ceiling on the total of benefitsMr. ELLIOTT in the chair. forward to regular income from the pro- payable to a family would be raised The Clerk read the title of the bill. gram in the event of death of the family from approximately $200 to $250 which By unanimous consent, the first read-earner.The millions of Americans who is equivalent to twice the maximum re-ing of the bill was dispensed with. are now largely or wholly dependent tirement benefit payable.This bill a'so The CHAIRMAN. Under the rule, theupon their regular monthly old-age and provides that the total annual earningsgentleman from Arkansas [Mr. Mats]survivors insurance checks for their liv- on which benefits could be computedwill be recognized for 2 hours and theing include retired people, disabled peo- would be raised from $4,200 to $4,800 ef-gentleman from New York [Mr. REED]ple, widows, and orphaned children. This fective, January 1, 1959.Benefits wouldfor 2 hours. is a tremendous program that we are also be provided for the dependents of The gentleman from Arkansas is rec-talking about today and it has grown disabled workers like those now pro-ognized. rapidly in size and in effectiveness, be- vided for retired workers. Mr. MILLS.Mr. Chairman, I yieldcause the need was there and because

• The provision in the present law re-myself 25 minutes. past Congresses have wisely recognized quiring that payments under certain The pending bill, H. R. 13549, thethat need and were willing to do some- other disability benefits systems be offsetSocial Security Amendments of 1958, isthing about it. against social-security disability benefitstheresultofcareful and concerned Very obviously, Mr. Chairman, a pro- would be repealed so that a person eligi-study by your committee. The Commit-gram of this magnitude and of this im- ble for social-security benefits and alsotee on Ways and Means took no deci-pact on the welfare of the American disability benefits under another systemsion lightly in formulating this bill topeople demands our best thought and ef- would reeceive the full amount of hisimproveoursocial-securitysystem.fort.It must be appraised carefully to social-security benefits. Rather, we were ever conscious that theassure that it is adequate to the times. Benefits would a'so be provided for thecommittee was treating with questionsBecause it is a wage-related benefit sys- dependent parent of a deceased workerof great importance to virtually everytem—that is, its benefits vary according even though there is a widow or childfamily in the Nation.In the processto the previous earnings of the insured of the worker who is or may becomeof developing this bill the committee pro-person—rising leve's of wages and prices eligible for benefits.Under the presentceeded in its usual nonpolitical and bi-require examination of the benefit struc- law a parent can qualify oniy if therepartisan manner as evidenced in thisture and financing at frequent intervals is no such widow or child. Instance by the fact that the bill whichto see whether they are realistic and This bill also makes additional changesthe committee developed is not just thesound. Moreover, our committee knows, in liberalizing payment to other mem-chairman's bill but a committee bill asand has been guided by the knowledge in bers of a family under certain disabilitydemonstrated by the fact that the dis-all its deliberations, that it has a serious conditions.A number of changes aretinguished ranking minority member ofresponsibility to assure the continued fi- also set out in this bill concerning thethe committee, the gentleman from Newnancial soundness of the system so that technical provisions pertaining to betterYork [Mr. REED], joined in the intro-the protection of the American people for management of the social-security pro-duction of the bill. whom the system was designed will be gram. The bill a'so extends the period At this point, Mr. Chairman, I wantwhat we intended. for filing disability freeze applicationsto say a few words about the history of The pending bill takes careful account that are made fully retroactive. and the magnitude of the social-securityof these considerations.It would im- This legislation in general will be aprogram.As Members of the Houseprove the protection of the program, great help to millions ot families andknow, this program as enacted in 1935make its benefits more equitable, facili- • dependents who are at present havingwas limited in many ways.Its cover-tate its administration, and—we think, financial difficulty by reason of the longage was limited to employment in in-most importantly—insure that the sys- and rapid rise in the cost of living anddustry and commerce.It provided verytem is financially sound. the general unemployment throughoutsmail benefits for those who qualified in We conducted some 2 weeks of hear- the country.I firmly believe it will bethe early years and provided more siza-ings, Mr. Chairman, during which time a constructive step in contributing to theble benefits oniy after many years ofwe heard many Members of Congress, economic welfare of the Nation dingcontributions.It included no benefitsthe Secretary of HEW, many representa- this period of recession and unemploy-for the dependents of the retired bene-tives of organizations and groups inter- ment. The Ways and Means Commit-ficiary, no monthly benefits for survivors,ested in the program of social security, as tee heard numerous witnesses and ac-and no benefits for those becoming dis-well as many individual witnesses. tuary experts before deliberating on theabled.As the soundness of the basic Following the conclusion of the hear- drawing up of this 109-page bill.It isidea of contributory social insurance wasings we spent several days in executive constructive legislation and wifi greatlydemonstrated in the operation of thesessions not only considering the recom- contribute to the economic welfare ofprogram and as experience brought outmendations made in the hearings but all sections of our country. itsadministrativefeasibility and thea'so obtaining additional information Mr. O'NEILL.Mr. Speaker, I movestability of its financing arrangements,that we had not obtained during the the previous question. the Congress, after full and careful con-course of the hearings. The previous question was ordered. sideration, has gradually extended its In the beginning I made it quite clear The SPEAKER. The question is onscope.Coverage has been broadened toin announcing the hearings that it might the resolution. practically every type of employmentbe that the committee would not have Tbe resolution was agreed to. and self-employment.The eligibilitysufficient time and opportunity to report A motion to reconsider was laid on theprovisions have been liberalized for thoseto the House a full and complete program table. already near or past age 65 when theof social-security amendments.I did Mr. MILLS. Mr. Speaker, I move thatprogram was enacted.Benefits havethat because I wanted to be eminently the House resolve itself into the Com-been periodically adjusted to changes infair to the public that was interested in mittee of the Whole House on the Statethe economy, and they have been madeimprovements being made this year.I of the Union for the consideration of theeffective as a means of providing securitystated in the notice of the hearings that bifi (H. R. 13549) to increase benefitspromptly to those whom the system isthose subject matters that might be 1.9 58 CONGRESSIONAL RECORD —HOUSE 15733 heard but which could not be acted .uponpurpose to go Into effect and to rise in-curity not involving benefit Increases in this year could be considered at a futureaccordance with the original legisla- 1956.The amendments added by the date and that the hearings would servetion. We were told that had we per-other body then raised the figure someas the basis for further study and consid-mitted those original tax increases to gowhat. Now, we are improving the pro- eration of those points. But In the courseinto effect the combined total payrollgram, therefore, from the point of view of the executive sessions, Mr. Chairman,tax for this purpose today would be 6of financial soundness, and that is the following the recommendations in thepercent tax instead of the present rateprimary reason, Mr. Chairman, that we hearings from the Secretary of HEWof 4½ percent, and that we would not.have this bill before the House today. that we not act thIs year, that we delaybe in the position we are in under ex- We recognized on the benefit side, as our action until we could get a full re-isting law of paying out of the fundindicated by the distinguished gentle- port from the advisory committee on fi-more than we take in for an immediateman from Pennsylvania [Mr. SCoTT] nancing the program—take action someperiod of 7 years. that there had been a cost-of-living in- time next year—we were given such in- There is a difference of opinion, Mr.crease since 1954 of around 8 percent formation that we thought we should notChairman, as to the size that we shouldand that there had been an increase in longer delay reporting to the House apermit this fund toattain, but wewages of 12 percent. The Congress has program that would further strengthenthought that during periods of prosperitymeticulously seen to it that with respect the social-security system. it is incumbent upon those who at someto those over whom we have anything Let me digress a moment here, Mr.future time will be eligible for benefitsto do, many others have been protected Chairman, to explain that under legis-to pay for a greater proportion of theirby action of the Congress this year lation enacted by the Congress in 1956benefits and to see to it that this fundagainst a decrease in their standard of an Advisory Council on Social Securityis not decreased and the burden be placedliving because of these rises in cost of Financing was set up and Is now study-on workers in future generations.It willliving.Now, we could not justify, Mr. ing and preparing recommendations onbe decreased by the very nature of thingsChairman, on the basis of our considera- the financing of the old-age and sur-in periods of extreme depression or down-tion of social security, going any higher vivors insurance and the disability in-turns in economic activity.It is for thatthai the 7 percent increase contained surance program. The council's reportreason that we accumulate reserves inin the bill at this time, even though that Is not due until the end of this year.times of high-level economic activity toamount does not fully compensate for The Committee on Ways and Meanstake care of the situation in periods ofthe increase in the cost of living of 8 looks forward to receiving this reportrecession or depression. percent, because to have gone to 8 per- and expects that the report will be help- The committee felt, in view of this,cent or to have gone to 10 percent at ful in its evaluation of cost-estimatingthat for several reasons the estimatesthis time would not have allowed us some methods, procedures, and policies con-given to us by the actuaries in 1954 andof the additional income to the fund nected with the Investment of the as-in 1956 that the fund was close to beingprovided in the bill to be dedicated to sets of the old-age, survivors and dis-in balance no longer held and that to-the purpose of bringing it nearer into ability insurance trust funds, and theday the fund is .57 percent out of bal-actuarial balance.As I said, that was pnnciples underlying the financing ofance, that whenever we reach a level inthe primary thing that the committee the program. In our committee's opin-perpetuity of actuarial imbalance of thatwas concerned about. ion, however, the degree to which themagnitude it behooves us to bring it near- So, we have devoted a large part of old-age and survivors insurance truster into balance. these tax increases that will face the fund is out of balance over the long When we first enacted this program,American people under the system now range and the excess of outgo over in-Mr. Chairman, it was anticipated it wouldand in the future on a stepped-up basis come during the next 7 years are mat-be completely in balance and there wouldfrom that in existing law to the establish- tersthat demand immediate action.be some on the plus side; but in view ofment of the actuarial soundness, and we We believe that the financial soundnessall I have discussed, the failure on thewere able to provide only a 7 percent in- of the social-security program is too vi-part of the Congress earlier to permit thecrease across the board in the benefits of tally important to the American peopletax rates to rise in accordance with thethose now receiving them and those who for us to delay until another year theoriginal intention, irrespective of the factwill receive them in the future. action that is clearly needed to reducethat from time to time we have increased the present actuarial insuciency. the benefits, we find ourselves now in WAGE BASE Mr. Chairman, we were concerned inthe position where if we do not take Mr. Chairman, on the wage side we the committee with information thataction we can look forward to the timelooked to the situation of what percent- came to us to the effect that if we didwhen we will not take into the fund theage of wages are presently being covered not collect any more money for the sys-amounts of money that will be requiredby the $4,200 wage base.The bill betem and did not permit anyone in addi-to pay the Lenefits that are presentlyfore you increases the amount of earn- tion to those presently drawing benefitscontemplated under existing law. Underingsthatcanbecreditedtoward to be added to the rolls, and only paidthese circumstances, unless something isbenefits and the amount that is taxed benefits to those presently drawing indone, there will be no other recoursefor social security purposes from $4,200 accordance with the provisions of exist-than to dip into the general funds of thea year to $4,800, so as to take into ac- ing law, that the fund, even though itTreasury for those amounts. count the increases in wage levels that is now $22 billion, would lack $65 bil- Think of what that may mean. Therehave taken place since1954. Unless lion of meeting these •present obliga-are only 12 million today who are draw-such adjustments are made from time tions to those now drawing benefits. ing benefits, but there are 75 millionto time as wage levels go up, the social In addition, Mr. Chairman, we wereadditional people who are now coveredsecurityprogramceasestoprovide told that under the provisions of exist-by social security who at some time ormeaningful benefits and effective pro- ing law, despite a scheduled increase inother in the future will be eligible fortection foi workers above the lower wage taxes in 1960 and again in 1965, for a pe-these benefits. brackets. The maximum earnings taxed riod of the next '7 years, including this So, I think in periods such as we nowand credited under the program was inpresent calendar year, we would pay outexperience economically, it behooves uscreased by the Congress in both 1950 of the social security trust fund more into get this program back on a sounderand 1954. In each case, however, the in- each year than we would take into thebasis than it is. We have been told bycrease was not fully proportionate, based fund—to the total of some $4 billionthe actuaries that we can tell you thaton the original wage base of $3,000, to more paid out than taken in in these 7the bill that we present to you can bethe increase that had taken place in years.Up to 1958, Mr. Chairman, asdescribed as actuarily sound today ifwages. lf the degree of protection were all Members know, we have succeededthis program is enacted, even thoughto be comparable to that provided when in-taking-inta the social security tzustheie will- -still be a discrepancy on the -the program began, the maximum earn- fund more each year than we have paidminusside of around one-quarter of 1ings base would now have to be raised out. We were also reminded, Mr. Chair-percent of payroll.Now, that is backto a considerably higher amount than man, of the fact that over the courseto the level that we thought we hadthat called for in the bill.However, we of several years prior to 1950 we hadit when we enacted the increases in 1954felt that it is essential to insure that the not permitted the tax-rate increasesin benefits and when we adopted .thesystem is on an actuarially sound basis that had originally been levied for thisthree changes with respect to social se-.and that the present generation should 15734 CONGRESSIONAL RECORD —HOUSE July 31 pay more adequately for the benefits itbenefit increase will be a real help togenerally burdened by heavy medical ex- will receive rather than to shift thebeneficiaries in meeting their needs. Atpenses, and the wife can seldom seek burden to future generations. the same time we felt it essential thatemployment because she is needed at If there had been a $4,800 wage basewe apply some of the increased incomehome to care for her husband and chil- in 1957, about 56 percent of the menunder the bill to the present deficiencydren. This is a serious gap in the protec- who are regularly employed under thein the system so as to strengthen itstion provided by the program, and your program would have had their earningsfinancial base.Mr. Chairman, withoutcommittee is recommending that it be covered.This is about the same per-the 7 percent increase the maximumclosed by paying benefits to the depend- centage as did have all their earningsunder the bill would be $118.50.Thatents of disabled workers who are eligible covered in 1954 under the $4,200 base$118.50 raised by the same 7 percent thatfor disability benefits.These benefits that was adopted in that year. In 1950,applies to all other benefits brings it towould be paid under the same general when we increased the base from $3,000a total maximum primary benefit ofrules as are now provided in the case of to $3,600, about 64 percent of the men$12'?.But I should point out that thedependents of a retired person. For ex- who were regularly employed in coveredman in the future will not draw the $127ample, when a person entitled to disabil- work had alltheir earnings coveredprimary benefit except where all of hisity insurance benefits has a wife and 1 or under the $3,600 base. The change fromtaxes have been paid on $4,800.Thismore children under 18 or disabled chil- $4,200 to $4,800 will mean that the truemeans that in the future, if we raise thedren in the household, they would get earnings and standards of living of morewage base today that the benefits of thosebenefits as if the worker had reached re- of our regular workers will be reflectedin those upper levels of income will rise,tirement age instead of becoming dis- in the taxes they are paying and in thebut so long as they have some period ofabled. The cost of the proposed change credit they are getting toward benefits.time during which they paid a tax on lessis five one-hundredths of 1 percent of It will also help to assure that the sys-than $4,800 they cannot attain the fullpayroll.This cost would fall upon the tem will continue to provide benefitsmaximum of $127. disability insurance trust fund, which, bearing a reasonable relationship to the Those who come on after the enact-unlike the old-age and survivors insur- individual's earnings.Without it, thement of this program at $4,800 and re-ance trust fund, presently has a sizable benefits would tend more and more to bemain there throughout their workingactuarial surplus.Even with the addi- at a fiat rate since the upward trend inyears at that level would, of course, drawtion of this cost and the other small costs average earnings—which has continuedthe $127. involved in the bill, the fund would still for over a century and a half—would FAMILY MAXIMUM have both a long-range and a short- soon mean that most workers' benefit We have restored the theory we hadrange excess of income over outgo. rights would be based on the same earn-earlier in the program with respect to Your committee believes that in the ings figure of $4,200.We believe thatsurvivorship benefits so that we are pay-light of the successful experience since the increase in wage base is needed anding the family, the widow and the chil-1955 in the administration of the dis- that it will constitute a very significantdren of the man who is deceased, who isability freeze and disability benefits pro- improvement in the protection of thecovered by the program, twice the pri-visions of the social-security program, system. mary benefits as a family maximum. Sothe payment of benefits to dependents Now, Mr. Chairman, in the process ofthe ceiling on family benefits in the billof disability beneficiaries would be not raising the wage base we must remember only a constructive but an entirely pru- that benefits under this program, as dis-is raised from $200 to $254, twice $127.dent step for the Congress to take at tinguished from coverage generally, areThat makes it possible for the widow tothis time. geared to the average earnings general-draw three-fourth of the primary-bene- We are also recommending elimina- ly speaking, during the period from thefit; the first child three-fourth of thetion of the provision under which an time of first coverage of each individualprimary benefit and the next child andindividual's disability insurance bene- under the program until his retirement,additional ones one-half of the primaryfits are offset by the amount of dis- disability, or death.So, if you raise thebenefit up to the maximum. ability payments he receives from cer- wage base to $4,800, you establish a new Certainly those are the types of situa-tain other Federal programs and State level of maximum individual benefits. tions that bear most heavily upon ourworkmen's compensationlaws. Last At this point I will discuss the provi-heart. Those are the situations that weyear the Congress eliminated the off- sions of thebill which will increasewant to give primary attention to in theset for veterans receiving payments from benefits. program of improving social security asthe Veterans' Administration for service- BENEFIT INCREASES wellas with respect to the primaryconnected disabilities.The group still We all know that prices have gone upbenefit. affected by the offset numbers fewer over the last 4 years, and we know that DISABILITY PROVISIONS than 20 percent of the disability insur- as this has happened the purchasing The fourth major area of improvementance beneficiaries.The great majority power of the 12 million social securityhas to do with the disability protectionof these suffer reduction or outright beneficiaries has been cut. For the greatprovided under the program.In 1955,cancellation of their benefits because majority of the beneficiaries this haswhen your committee recommended thethey are receiving veterans' pensions. meant that the protection which we in-payment of cash benefits to disabledThese pensions, besides being limited in tended to provide has fallen short of ourworkers it purposely offered a conserva-amount, are paid only to veterans who goals and that many have had to re-tive bill.These provisions were enactedhave restricted income otherwise.The quest public assistance to take care ofin 1956. In the past 12 months disabilitycommittee deems it unnecessary and un- their needs. The Members of this Houseinsurance benefits have come to play andesirable to deprive a severely disabled know that even in 1954—when benefitsimportant part in the lives of manyveteran ofdisability benefits he has were increased to their present scale—Americans. We believe that the disabil-earned under social security because he they were geared to providing a floor ofity program is established on a firm andis eligible for a modest pension based protection only.It is necessary that wesound basis and that some improvementson his service in the Armed Forces. raise benefit amounts now so that bene-can now be made. Only a very small percentage of the total ficiaries will not be exposed to hardship A major improvement provided by thenumber of persons eligible for disability and to maintain this floor of protection.bill is benefits for the dependents of dis-insurance benefits fall under other sys- Our committee found that the benefitabled workers. The social-security pro-tems to which the offset applies.We side needs to be strengthened. As I havegram since 1940 has provided for therecommend that the offset provision be said, since the last benefit increase waswives and children of retired workers andrepealed. put into effect in 1954, wages have in-for the widows, children, and parents of H. R. 13549 contains another signifi- creased by about 12 percent and pricesdeceased workers.There is frequentlycant improvement in the disability pro- by about 8percent.Our committeegreater need for dependents' benefits invisions.Under existing law, disabled weighed these facts and the present de-the case of the disabled than in the caseworkersare penalized for notfiling ficiency in the system and decided thatof persons retired or deceased. In addi-timely applications for benefits.Appli- we should recommend an increase oftion to the fact that disabled workerscants for all other types of social-security about 7 percent, with a minimum in-areprevented from earningincomebenefits may file their claims as much crease of $3 for the worker who retiredwhich able-bodied workers can earn untilas a year after they become eligible with- at age 65 or later. We believe that thisthey choose to retire, their household isout loss of monthly benefits; yet the dis- 1958 CONGRESSIONAL RECORD —HOUSE 15735 abledperson must file no later thanThis is the provision which, in general,permanently and totally disabled are the month of first eligibility or suffer lossrequiresthewithholdingofbenefitjoint Federal-State activities with the of benefits.A few years' delay in mak-checks when a beneficiary under age 72States carrying detailed responsibility ing application after he becomes too illhas substantial earnings.It has some-for operation and the Federal Govern- to work may result in total loss of eligi-times been urged that there should bement participating financially. bility for him and his family for all bene-no such limitation.The Committee on Originally, the Federal Government fits under the program—old-age and sur-Ways and Means is strongly of the opin-paid one-half of the cost up to a maxi- vivors benefits as well as those for dis-ion that the test of retirement is a neces-mum payment of $30 that could be made ability.There is no reason for greatersary and desirable part of the program.to any Individual. We have progressively strictness in requiring immediate actionTo pay benefits without any restrictionraised both the share which the Federal by the severely impaired individual thanto people who keep on working after re-Government pays and the individual by the generally able-bodied applicantstirement age and have substantial earn-maximum, through amendments begin- for other benefits. At present, due to theings from work would not comport withning in 1946, 1948, 1952, and 1956, with newness of the program, a great manythe basic purpose of the program as athe result that the Federal cost has risen disabled persons do not learn until longsystem of insurance against loss of earn-from about 45 percent to 57 percent of after they have become disabled that dis-ings due to the retirement of workers,the total.The bill before you now pro- abilitybenefitsandthedisabilityand would be very costly.For theseposes to increase Federal funds further "freeze" are available under our social-reasons, the law has always containedat this time.However, and this is quite security program.Your committee rec-a test of retirement to distinguish be-important, the route by which it would ommends, therefore, that disability bene-tween people who are able to have sub-do this is quite different from the kind of fits, like the long-established old-age andstantial earnings after reaching retire-increases that we have made in the past survivors insurance benefits, be payablement age and those who cannot. and which,ifcontinuedindefinitely, retroactively for as many as 12 months Your committee believes that it is verycould jeopardize the joint Federal-State before application is filed, if the appli-important to preserve the basic prin-character of the programs. cant is qualified otherwise. We also rec-ciple that old-age and survivors insur- The cost of the new formulas provided ommend that applications for the dis-ance benefits are paid to replace earn-in the bill will be $288 million assuming ability "freeze" made at any time in theings lost through retirement or death.that the States continue to spend the next 3 years be fully retroactive to theIf the retirement test were eliminatedsame amount they are spending at the time the disability began.There is noor substantially liberalized further in-present time. valid reason for failing to provide thiscreases in social-security taxes would be Every State would receive additional consideration to men and women suffer-necessary.The increased taxes wouldfunds under the new formula.Many of ing from mental or physical impair-not go to help the great majority of thethe higher income States are at this time ments. aged who usually cannot work or can-making payments which go well beyond another improvement recom-not find work.The added cost wouldthe individual maximums which are now Still therefore provide benefits largely for$60.These same States are also making mended concerns workers whose dis-people who already have substantial in-many smaller payments where recipients abilities are of a progressive nature. Atcome from work. We believe it wouldhave other income. The bill provides for present, many disabled workers who havebe inadvisable to further increase thean average maximum under which there suffered from progressive diseases are would be substantial gains for States in unable to qualify for either disabilitysocial-security taxes for this purpose. Be- We believe that certain improvementsthis situation. benefits or the disability "freeze." can be made in the retirement test pro- Suppose a State at the present time cause the disabled workers have beenvisions in the law.The bill includespays to a needy recipient, without other forced by illness to withdraw from em-several minor improvements that we be-resources, $90.The Federal Govern- ployment before the disability could believe should be enacted to increase thement participates only in the first $60 considered severe enough to meet theequity of the test and to improve pub-and the State receives today, $39.For law's definition, they are unable to meetlic understanding and administration.another recipient, with other income, the the present requirement that a personIn addition, we have asked the Depart-payment is $30 of which the Federal Gov- have at least a year and a half of cov-ment of Health, Education, and Wel-ernment pays $24.Under the bill these ered employment in the 3-year periodfare to devote further study to specialtwo payments could be averaged at $60 just before he becomes disabled.Thisproblems of the retirement test area andeach and the Federal Government would requirement was adopted to help assureto make recommendations to the com-participate in the whole total.The Fed- that the benefits would go only to persons eral share would be at least $39 each and who had recently been in the labor mar-mittee next year. MISCELLANEOUS AMENDMENTS might run in certain States as high as ket and who, were it not for disablement, $45 each.Under the present program could be expected to have remained at Your committee has also included inany payments for medical care made di- work. We were convinced, from exam-thebilla number of provisions forrectly to doctors or hospitals would be ination of the question, that the require-changes which, though less importantmatched separately up to an average of ment—which would still remain—thatthan those I have described, would add$6 per recipient.Under the bill these the disabled individual have worked atsignificantlytotheeffectiveness andpayments, along with the money pay- least 5 years out of the 10 years beforeequity of the program. Your committeements, could be averaged up to a maxi- becoming disabled will adequately pro-found, for example, that there are waysmum of $66 for both. tect the program.Elimination of thein which the family protection of the In 1956 we made provision for the present additional requirement of11/2 program, especially the protection forseparate matching of payments for the years of work out of the 3 years just be-children, can be improved at a very smallcost of medical care for public assistance fore disablement will enable a numbercost.Since these provisions are de-recipients.While the 1956 provisions of workers whose impairments have pro-scribed in detail in the committee reporthave been beneficial in spreading med- gressed to a point of great severity, butI will not take the time of the committeeical care in additional States which were who have had to be denied eligibility, toto describe them in detail here. doing little or nothing, they have created qualify.In the committee'sbillthe PUBLIC ASSISTANCE administrative problems in some of the work requirements forthedisability We are also recommending amend-States that are doing most. We passed freeze and for disability benefits wouldments in the public assistance programsa bill last year to help remedy these prob- be made identical. To qualify for either,for the aged, the blind, the disabled, andlems but in the judgment of many of us the worker would be required to be fullythe dependent children.I should likeitdid not do nearly enough.These insured and have at least 5 years of cov-to mention briefly the principal pro-problems are fully taken care of under ered work in the last 10 years before hisvisions of the bill relating to these p•the present bill which makes no distinc- disability began. grams. tion between money payments and ven- RETIREMENT TEST Title V of the bill makes a number ofdor payments, and which permits each One of the provisions of the old-agefundamental changes in the provisionsState to choose for itself how it will spend and survivors insurance system whichfor public assistance. These programs—the amounts provided for assistance re- has been widely discussed, and oftenold-age assistance, aid to dependent chil-cipients.The advantages of the aver- misunderstood, is the retirement test.dren, aid to the blind, and aid to theaging and medical care provisions should 15736 CONGRESSIONAL RECORD —HOUSE July 31 substantially promote the meeting of in-nearly comparable with other grant-in-committee will continue its interest in dividual need and the flexibility and sim-aid programs of services. trying to work something out. plicity of administration in the States Mr. Chairman, in addition to the mat- Mr. DAVIS of Georgia.I thank the that make substantial payments andters which I have discussed above, thegentleman. spend substantial amounts for medicalpending bill also includes certain other Mr. COAD.Mr. Chairman, will the care. provisions which should be mentioned.gentleman yield? Although some of the lowest incomeFederal payments to Puerto Rico and the Mr. MILLS. I yield to the gentleman States in the country will not benefitVirgin Islands for public assistance pay-from Iowa. from the particular provisions I havements which have been limited to $5,- Mr. COAD. Under the provisions of just discussed, they do stand to benefit3 12,500 and $200,000 respectively are in-this bill, then, someone who in 1956 was inother ways materiallyfromthecreasedto$8,500,000and$300,000. included in this program but who upon pending bill.The fiscal capacities ofGuam is included for the first time withthe attainment of the age of 50 was dis- low-income States are limited, the num-a $400,000 maximum authorization. abled, having not qualified with a suffi- ber of needy people is large and even SpecialprovisionsregardingStatecient number of quarters, and who re- with very substantial effort in relationblind programs in Pennsylvania andmained unable to go back to work, would to their resources payments have re-Missouri would be extended from Junehave lost not only any right to the dis- mained low.Medical-care costs are not30, 1959, to June 30, 1961. ability claim but eventually he never sufficiently large to create the problems Mr. DAVIS of Georgia.Mr. Chair4would make good any claim whatever I have been discussing.The bill wouldman, will the gentleman yield? on social security. for the first time relate a part of the Mr. MILLS.I yield to the gentle- Mr. MILLS. He would not meet the Federal payment to the fiscal capacitiesman. 20—40 quarter test possibly and he would of the States as measured by per capita Mr. DAVIS of Georgia.Mr. Chair-not be eligible.The reason we make income.This would not operate to theman, the gentleman from Arkansas [Mr.this change, and I want to be frank with detriment of the higher income StatesMILLs] will recall that I appeared beforethe gentleman, in eliminating 6 out of all of which would receive matching onthe Committee on Ways and Means inthe last 13 quarters requirement, we take a no less generous basis than they dobehalf of my bill H. R. 4196.That was acare of the situation that often arises today but would provide increased fundsbill which would amend title II of the actjust prior to a man's becoming totally for the low-income States in many ofso as to provide that an individual maydisabled.In many instances becoming which payments are pitifully small. qualify for the disability freeze if suchdisabled is a gradual process.There is Under the present formula the Fed-individual has 40 quarters of coveragea deterioration, physical or mental, that eral Government pays four-fifth of theregardless of when such coverage was ob-finally leads up to total disability. We first $30 of the aged, blind, and disabled.tained.As I understand it, that pro-found we were excluding such cases in This would not be changed.The aid-.vision is not included in the bill whichrequiring that the individual be under to-dependent children program in whichis before us today. covered employment for 6 of the last 13 the Federal Government pays $14 out of Mr. MILLS. That provision is not inquarters just prior to the total disabil- the first $17 would be changed to $15the bill. ity. Now we will be able to include peo- out of the first $18. Above these points You remember when we enacted theple under disability who become pro- the Federal Government now matchesprogram in 1956 we said that in order togressively worse but who are able to dollar for dollar.Under the bill noqualifyfor the benefit—thatis,thework some but not all of the time just State would receive less than a Federalfreeze was enacted in 1954, and the bene-prior to being declared totally disabled. dollar for each State dollar within thefits in 1956—it would be necessary forIt is a very humane improvement in the new limits but the lowest income Statespersons to be engaged in covered em-program. might receive up to $7 for each $3 ofployment during 6 quarters of the last Let me say to those who want further State money. The increases under these13 quarters just prior to the time of theimprovement that I think it is well for provisions should put theadditionaldisability. We have stricken that re-us to continue to proceed as we did funds where they are most needed andquirement from the law. We have saidinitially, with a degree of caution about should serve the national interest by re-that as long as this individual is fullythese total programs, because the pri- ducing differences in the size of pay-insured and as long as he has 20 quartersmary thing we must keep in mind is the ments to needy people among States andof the last 40 quarters, that is, he hascontinuance of an ability on the part to help to assure that no needy personworked the last 5 years of a 10-year peri-of this fund to discharge the responsi- will go without the bare necessities ofod before he becomes disabled, we willbilities under law to which we commit it. life. not only freeze his wage record, we willI hope the gentleman agrees with that. MATERNAL AND CHILD WELFARE pay him a benefit at age 50 if he other- Mr. ROGERS of Texas.Mr. Chair- Title VI of the bill includes a numberwise qualifies.So that is a liberaliza-man, will the gentleman yield? of meritorious improvements in the ma-tion. Mr. MILLS. I yield. ternal and child welfare programs.It We could not, however, go to the ex- Mr. ROGERS of Texas.As I under- increases the maximum for maternaltent the gentleman proposed in his billstand the present law, if there is a dis- and child health activities from the pres-to take care of a very meritorious caseabled child above 18 years of age, the ent $16.5 million to $21.5 million.It in-which the gentleman and I have dis-child of an eligible individual, and if creases the maximum for crippled chil-cussed, and for which we both feel therethe eligible individual dies after having dren services from $15 million to $20should be some adjustment made. Webeen sick we will say for a year, bed- million, and the maximum for child wel-could not do it within the time we wereridden and unable to work, that child fare services from $12 million to $17 mil-working and safeguard against the in-above 18 years of age, dependent upon lion.The first two of these maximumsclusion of some other situations that wethat individual but who has not been were established in 1950 when the childfeel should not be included, and imposesupported by that individual because he population was substantiallysmaller.upon the fund a tremendous additionalwas bedridden and could not work, can- The maximum for child welfare servicescost in the process. not be brought in under the present law was increased slightly in 1956.Many Mr. DAVIS ofGeorgia.Does theand receive payment under the social witnesses who came before your com-gentleman from Arkansas feel that nextsecurity fund.Is that right? mittee in public hearings left no doubtyear the committee may be able to take -Mr. MILLS.Under existing law, a as to the need for these increases. this question up again and give somechild disabled prior to 18, drawing a This title of the bill also would makerelief in that situation? benefit under social security, can con- child welfare services available to all Mr. MILLS.In all seriousness, mytinue to draw that benefit after attain- children in need of these services where—friend from Georgia will recognize thating the age of 18 when that child con- everthey may live. between now and next year there is antinues to be disabled.We did that in Allotment andelection.I hope my friend and I are1956. We are further amending the law matching provisions are included for theback here.If we are, I am certain thatin this bill to create a presumption under child welfare services program whichhe will maintain the same diligent in-those circumstances that the child living will not work a hardship on any Stateterest in this matter that he has mani-in the household of the parent, eligible to but which will make the program morefested in this Congress, and that ourdraw social security benefit, is dependent 1958 CONGRESSIONAL RECORD —HOUSE 15737 upon the parent just as is the case of Mr. PERKINS. My point is that thising this actuarially sound. You said in children now under 18. program has only been taking care ofyour remarks that thisisactuarially Mr. ROGERS of Texas.Is that theabout 200,000 people ii'. a year's opera-sound.My question is,first, who are only change being made in regard totion. the actuaries who have told you it was that particular problem? Mr. MILLS. That is because it is aa sound program. Mr. MILLS.I yield to the gentle-very strict program.I have pointed out Mr. MILLS. The actuary for the De- man from Rhode Island [Mr. FORANDI.that we intended it to be a conservativepartmentofHealth,Education, and Mr. FORAND. As I understand, theprogram and I am convinced that it isWelfare, Mr. Robert Myers, a man on change that was made was in the elimi-wise to keep it on a very conservativewhom we have relied for that informa- nation of 6 quarters out of the 13 quar-basis until we have some years of opera-tion.He is as skilled an actuary, in my ters may also affect that situation. tion that we can look to as a better testopinion, as there is in the United States. 'Mr. MILLS.That is true; however,of how it is going to operate and whatI could tell this House it is actuarially here we are talking about the situationit is going to cost. sound. Under this bill the system is about wherein the child is disabled and the Mr. PERKINS. Here is my point.Ione-quarter of 1 percent off. father draws, and the child can drawnotice you recommend certain points of Mr. SCHWENGEL. We are aware of under thesocial-security-benefitpro-study in the report. the pension plans that we have, that gram as a dependent ifitis disabled Mr. MILLS. That is right. are supplementary to this plan; private without proof of dependency as now re- Mr. PERKINS.I feel if there is anyinsurance companies who do business. quired where the child is over 18.Weprogram which needs to be studied, it isIf we applied the same rule to the social amended the law in 1956 to permit thethe way the disability provision is beingsecurity that we force the companies to child in this situation to continue to drawadministered at the present time. adopt, would this then be actuarially beyond 18.I described to the gentleman Mr. MILLS.I do not want at thisa sound program? from Texas the situation wherein in thetime to criticise these people who are Mr. MILLS. The gentleman realizes bill we provide for a presumption ofadministering this program.As thethat this is a social-insurance program, dependency for that child so that theregentleman knows, we gave authority toof course.To make it fully and com- is no question but what the child willmake the original determination withpletely sound we have to provide for a continue even though the father cannotrespect to the question of disability to acombined tax rate of about 9 percent. prove that he makes more than 50 per-State agency. Under existing law we have an 81/2-percent contribution to its support. A State agency must decide that acent rate oftax combmnéd in1915. Mr. ROGERS of Texas.But that isman is disabled and that he is not capa-Under this program you will get to a a rebuttable presumption by the Socialble of engaging in some active, gainful9-percent rate in 1969. Security Administration? occupation. Mr. SCHWENGEL. That is exactly Mr. MILLS.No; under thebillit The CHAIRMAN. The time of thethe point I want to learn about.I would would be a conclusive presumption. gentleman has again expired. be glad to have that information as part Mr. ROGERS of Texas.I thank the • Mr. MILLS.Mr. Chairman, I yieldof the RECORD. gentleman. myself 5 additional minutes. Mr. ANFUSO. Mr. Chairman, will the Mr. PERKINS. Mr. Chairman, will The agency here in Washington maygentleman yield? the gentleman yield? decide that, in spite of the recominenda- Mr. MILLS.I yield. Mr. MILLS.I yield. tion of the State agency with respect to Mr. ANFUSO. Mr. Chairman, I wish Mr. PERKINS. Mr. Chairman, I wishthe man's disability, he is in fact not dis-to congratulate the distinguished chair- first to congratulate the gentleman fromabled.But the Federal agency cannotman ofthe House Ways and Means Arkansas and the members of the Com-say, and we purposely provided that andCommittee for the excellent presenta- mittee on Ways and Means for bringingdid not change it in this instance, whention which he has made and for bring- this important piece of legislation to thea State agency holds a man not to being this legislation out.The gentleman floor. disabled that he is disabled. willrecall that I testified before the ,Mr. MILLS. The gentleman from Mr. PERKINS. But the law is notcommittee. Kentucky is and has always been greatlymandatory. Mr. MILLS.Yes. We appreciated interested in this matter and he again Mr. MILLS.Disability is a questionthegentleman's appearance and the appeared before the committee and weof fact.That is the question, and wehelpful information he gave the commit- appreciate the fact that he gave us thehave left it to the proper State agenciestee.He brought to us many important benefit of his study and recommenda-to make that determination and I hopematters. tions.I would also like to say that heit will stay there. Mr. ANFUSO.I am disturbed about was one of the first to bring the inequi- Mr. PERKINS. Has the gentlemanthis particular feature of the bill which ties of the disability offset provision tolooked into the peak of about 350,000I do not think adequately takes care our attention. applications that were pending underof these men who leave the employment Mr. PERKINS.I would like to ask athe disability obligation, and the thou-field and become retired.By retiring question concerning the disability pro-sands on thousands that have not beenthey make room for others to go into vision.As I view the disability provi-approved? the field, thereby alleviating the unem- sion, when the provision was first en- Mr. MILLS.No; I have not lookedployment situation.I am disturbed by acted in 1956, it was contemplated atInto all of them. We have not had thethe fact that they will receive only 7 that time that the disability fund wouldtime. percent whereas in other instances we Mr. SCHWENGEL. Mr. Chairman,have provided 10. take care of some 400,000 people. will the gentleman yield? Mr. MILLS. That may have been a Mr. MILLS.I yield. Mr. MILLS. The gentleman's point is figure that was used by some, however, Mr. SCHWENGEL. First I want tothat their retirement benefits should be the figures given to us during the coursecommend the gentleman for the fineincreased more than 7 percent.I am of our consideration was 250,000 as Iway in which he is handling this propo-sure every member of the committee recall. sition and explaining it to us today.Iwishes we could do that, but I am sorry Mr. PERKINS. That was the figurewant to commend him also for the veryto have to tell the gentleman that to used by the social security commissionerfine leadership he has taken in givingkeep this on an actuarily sound basis at that time in his testimony? thorough study to this matter in thewe could not reach that conclusion. Mr. MILLS.No; as I recall, the fig-committee.If we adopt this today, this Mr. ANPUSO.I am satisfied that the ure was much less than that. will be the second time benefits havegentleman is going to restudy this sit- Mr. PERKINS. As I recall, that wasbeen increased since I have been a Mem-uation if we are all back here next year. the figure and the President later in hisber of the House. Mr. MILLS. That is what I would message used the figure 380,000. Mr. MILLS. They have not bien in-like to do. Mr. MILLS. I will depend on the gen-creased since 1954, as you know. Mr. ANFUSO. Mr. Chairman, I ask tleman's recollection as to the figures Mr.SCHWENGEL. Iunderstandunanimous consent to extend my re- the President used.I do not recallthat.I want to commend the gentlemanmarks following the completion of Mr. them. also for going into this question of keep-MILLs' statement. 15738 CONGRESSIONAL RECORD —HOUSE July 31 The CHAIRMAN.Is there objectionprocess of being adopted at the time ofthe gentleman is, perhaps, right that to the request of the gentleman froma wage earner's death. there may not be. New York? Mr. MILLS.Is that the bill the gen- Mr. ZABLOCKI. Does that not lend There was no objection. tleman and I discussed on the floor?itself to inequity as far as the recipients Mr. JUDD.Mr. Chairman, will the Mr. JENNINGS.It is. of total-disability compensation are con- gentleman yield? Mr. MILLS. The gentleman will becerned? Mr. MILLS.I yield to the gentlemanpleased to know that we have made a Mr. MILLS.The gentleman means from Minneota. change with respect to the provisionsthat in one State it may be determined Mr. JUDD.I join in complimentingof existing law so that a child who wasa man is totally disabled and in another the gentleman and his committee forin the process of being adopted at theState he is not? bringing this fine overall bill before us.time of the earner's death will not be Mr. ZABLOCKI.Yes. Perhaps the greatest criticism I hear ofdenied benefits under the program, pro- Mr. MILLS. That is a possibiilty, but this whole program is the inability ofvided the child was a member of theI think we have to have some more time those who have retired at 65 to earnworker's household at the time of thefor the operation of this program before more than $1,200 a year and still re-worker's death, if the child was not be-we can reach any conclusion as to how ceive the benefits for which they haveing supported by any other person, andwe are going to fundamentally change it. paid their money. Many of them feelif adoption is subsequently completed by Mr. ZABLOCKI.The committee is they are being cheated. the surviving spouse within 2 years aftergoing to continually study that matter? Mr. MILLS. No; they are not beingthe worker's death.That will take care Mr. MILLS. The committee continues cheated; of the gentleman's situation, I believe,to study all of these matters. Mr. JUDD.I realize that, but manybut it will not go as far as some recom- Mr. ZABLOCKI.I thank the gentle- of them do not and it would be helpfulmended. man and join him in urging that the to have the gentleman's explanation. Mr. BECKWORTH. Mr. Chairman,committee approve the bill. Mr. MILLS. The system was estab-will the gentleman yield? Mr. WHITENER. Mr. Chaitman, will lishedto take careofthe situation Mr. MILLS.I yield. the gentleman yield? wherein they will lose their earning ca- Mr.BECK WORTH. FrequentlyI Mr. MILLS.I yield to the gentleman pacity on retirement, or to provide somehave had occasion to hear from a manfrom North Carolina. degree of security when the breadwinnerwho is not married but who has sup- Mr. WHITENER.Mr. Chairman, I of the family dies.If we should raiseported his sister for a long time.Hewould like to commend the chairman of the $1,200 ceiling of disqualification, ifoften has asked me whether or not thatthe Committee on Ways and Means for we raised that, say, to $2,400, does thesituation has ever been considered byhis lucid explanation of this bill.May gentleman realize that we would have tothe social security authorities. I inquire as to whether there has been increase the 9 percent tax rate to about • Mr. MILLS.Yes, we have looked intoany liberalization of thc definition of 10 percent, and that the cost, in dollars,that carefully.I will advise the gentle-"eligible widow"?I may point out to to the system would be, over the longman in just a moment when I concludethe gentleman the problem I have in term, in the neighborhood of $3 billionmy remarks as to the considerations inmind is where some woman has in good per year?Does the gentleman realizevolved. faith become married to a person who what would be the result if just a limited Mr. ZAI3LOCKI. Mr. Chairman,Ihas a prior undissolved marriage and number of people took advantage of suchwant to commend the gentleman fromsome 30 years later this is ascertained for a proposal? the first time. The gentleman must bear in mind thatLouisiana [Mr. Boccsi, the gentleman Under the present law, the majority of the people who drawfrom Rhode Island [Mr. FORAND], and allthey are deprived of those benefits. Has these benefits are not in any way in-the members of the Ways and Meansthere been any liberalization here? - volved in this limitation.Such a pro-Committee for bringing this very vital Mr.MILLS. We have liberalized the posal, in my opinion, would change thislegislation for consideration at the pres-program with respect to some situations program from a retirement system intoent session of Congress.Personally, Irelating to widow's benefits.We have a straight annuity system wherein oneam very happy thatthe committeenot gone, however, as far as the gentle- could be substantially employed in manychairman, although earlier in the ses-man's situation would carry us. We have instances and still receive benefits. Tosion dubious about the possibility ofnot gone quite that far. do that adds very materially to the costhaving the legislation ready for floor Mr. FORAND. Mr. Chairman, will the of the system without helping the ma-action during this session, has, togethergentleman yield? jority of people with respect to theirwith his hard working committee been Mr. MILLS. I yield to the gentleman benefits, so much so that our committeeable to present this very important leg-from Rhode Island. has consistently turned it down. I thinkislation at this time. Mr. FORAND.The matter about the committee feels strongly that as The committee has carefully preparedwhich the gentleman inquires is basically these taxes are increased in the futureand promptly reported the Social Se-a matter of State law. We have made the benefits should be spread aroundcurity Amendment of 1958. The meas-no change in this situation, which re- among all people and not just for a lim-ure strengthens the Social Security Actlaths to validity of marriages; the fact ited number who have reached retire-and rectifies many of theshortcom-still remains, does it not, that is a con- ment age and who voluntarily continueings—specifically in the disability provi-sideration for the State. That is a mat- to work. sions of the law. ter of State law? Mr. JUDD.I appreciate the gentle- I am particularly pleased with the im- Mr. MILLS. That is true. man's statement; I wanted to know theprovements to the Social Security Law Mr. CEDERBERG. Mr. Chairman, will reasoning of the committee in not in-because they include some of the pro-the gentleman yield? creasing the limitation. Thank you. posals contained in the bills I have in- Mr. MILLS. Mr. MILLS.I will go into it furthertroduced in the 83d and 84th Congresses. I yield to the gentleman In an extension of my remarks. The gentleman from Arkansas did afrom Michigan. Mr. JENNINGS. Mr. Chairman, willsuperb job of explaining the technical Mr. CEDERBERG.I appreciate the the gentleman yield? and principal provisions of the bill.Igentleman's remarks regarding the im- Mr. MILLS.I yield. wish to add my congratulations for a jobprobability and the impracticability of Mr. JENNINGS.I, too, want to com-well done.I have one question, Mr.raising the $1,200 outside earnings limi- Chairman. tation.I wonder if the committee gave mend the gentleman and his committee consideration to the possibility of raising for the hard work they have put in on The various departments of healththe outside earning limitation for a this matter and for bringing this billand welfare of the 48 States determinewidow with dependent children? before us at this time and also for thewhether a person is eligible for total-. Mr. MILLS. very fine manner in which the gentle-disabilitybenefits.Is the gentleman Let me explainthat man has discussed it.I was wondering,satisfied that there is uniformity amongthere is a lot of confusion about that however, if the gentleman would com-the State departments in adjudicatingtype of situation.One member of the ment as to the provisions of H. R. 11754these matters? Rules Committee said that a widow had which would provide for children that Mr. MILLS.I wou'd question thattold him she could not seek outside em- aresubsequently adopted ployment because Ifshe took outside orinthethere is complete uniformity.I thinkemployment the family would lose the 1958 CONGRESSIONAL RECORD —HOUSE 15739 survivorship benefit of $200 that theytitlement to disability insurance benefits.may file a request at any time before 1960 to were receiving. The truth of the matterThe bill applies not only to future ap-have such certificate effective, with respect to is that a widow can accept outside em plicatioñs but also to applications filedthe service of individuals who concurred in the filing of such certificate(initially or ployment and the children can continueafter 1957 and before the date of enact-through the filing of a supplemental list) to draw benefits up to the maximum ofment if the applicant has not been noti-prior to enactment of this subparagraph and $200 under existing law or $254 underfied of the Secretary's decision on or be-who concur in the filing of such new re- this program. forethedateofenactment.Thequest, for the period beginning with the first Mr. CEDERBERG. I recognize thatcommittee amendment limits this retro-day of any calendar quarter preceding the the youngsters can receive benefit butactive provision to cases where the ap-first calendar quarter for which it was effec- the widow, if she works, cannot. plicant is living on the date of enactment.tive and following the last calendar quarter Mr. MILLS.If she is fully employed, Third, -therewill be an amendment onof 1955.Such request shall be med with and is exceeding the earnings ilmita-page 45, line 1, to strike out "subsec-such official and in such form and manner tion, she would not be eligible. as may be prescribed by regulations made tion (d)" and insert "section 223 (a) orunder this chapter.Il a request is filed pur- Mr. CEDERBERG.If the widow issubsection (d) of this section"; and onsuant to this subparagraph—. going to take care of her children, shepage 45, to strike out lines 5 and 6, and "(i) for purposes of computing interest can probably be part-time employed;•insert "section 223 (a) or subsection (d)and for purposes of section 6651 (relating therefore, if she earns over $1,200 sheof this section unless (i) he ceases to beto addition to tax for failure tofiletax loses her rights. -so entitled by reason of his death or (ii)return), the due date for the return and • Mr. MILLS. There are those border-in the case of an individual who waspayment of the tax for any calendar quarter line cases that attract themselves to us.entitled to benefits under section 223resulting from the filing of such request Let me conclude my remarks. On the shall be the last day of the calendar month (a), he is entitled, for the month follow-following the calendar quarter in which the whole, Mr. Chairman, we in the coming such last month, to benefits underrequest is filed; and mittee are convinced that we have re-•subsection (a) of this section." "(ii) the statutory period for the assess- ported a sound bill, a meritorious bill, Thisisa conforming amendment.ment of such tax shall not expire before the a bill that certainly justifies the supportThe bill provides that mother's insur-expiration of 3 years from such due date. of all members of this committee. ance benefits shall not terminate by Mr. Chairman, I cannot close withoutreason of the remarriage of the mother And on page 82, line 23, strike out calling your attention to the fact that into a person entitled to disability insur-"(F)" and insert "(G) ." order to do these things for our peopleance benefits or to child's insurance Underexisting law, nonprofit organi- there is the other side, the side of cost,benefits where the child is over 18 andzations may file certificates certifying involved, and we have in this bill a verydisabled. that they desire to have the insurance tough program of tax increases for pur- The bill terminates the mother's in-system established by titleII of the poses of social security that will go intosurance benefits if the disabled childSocial Security Act extended to service effect in 1959, on January 1, again inrecovers from his disability but fails toperformed by their employees.Under 1960, again in 1963, again in1966, againterminate the mother's insurance bene-section 3121 (k) (1) (B) (ii) of the In- In 1969, until we reach a combined totalfitsif the individual entitled to dis-ternal Revenue Code of 1954, as amended rate on employer and employee of 9 per-ability insurance benefits recovers fromby the bill, a certificate filed after the cent. his disability.The committee amend-enactment of the bill but before 1960 This is a 9-percent program, and we may be retroactive—at the election of ment corrects this error. the organization—to the first day of any thought it advisable to get it to that level Fourth, on page54,line1,after as soon as possible so that the people"State," I will ask to insert: "or an in-calendar quarter beginning on or after would realize actually what this pro- January 1, 1956. strumentality of two or more States." The committee amendment would program costs.Now, compare it with civil Thisisa conforming amendment. service, which is a 20-percent program,The provisions of section 218 of the So-vide the same treatment for organiza- compareitwith railroadretirement,cial Security Act, providing for voluntarytions which filed their certificates before which is a 15-percent program, and youagreements for coverage of State andthe enactment of the bill, but only with will realize the difference in the benefitslocal employees, apply—in general—alsorespect to employees who agree to the paid under the 3 programs.If we wantto instrumentalities of two or moreretroactive coverage. this to pay as much as civil service, itStates.Thecommitteeamendment Seventh, on page 102, llnes 9 and 10, I will be necessary to raise the rate consid- will ask to strike out "until July 1, 1959" conforms section 311 of the bill—relat-and insert "for each of the 3 fiscal years erably in excess of the 9-percent pro-ing to sick-leave pay of State and localin the period ending June 30, 1961." gram. If we want to pay as much as theemployees—to section 218 of the Social Railroad Retirement Act, we will have Under the child-welfare services pro- Security Act by including instrumentali-visionsof thebill,the Secretary of to raise the tax considerably in excessties of two or more States. Health, Education, and Welfare is re- of that which we are proposing. But, we Fifth, on page 82, line 11, I will ask toquired to promulgate the "Federal share" are maintaining a 9-percent rate, gettingstrike out "system" and insert "systemand the "allotment percentage" for each it into effect as soon as possible in orderand (i)are members of such fund orState during the months of July and Au- that it may be fully realized that it is asystem, or (ii) are not members of suchgust in each even-numbered year for 9-percent program and any changesfund or system but are eligible to be-each of the 2 fiscal years beginning after made with respect to the program in thecome members thereof." the promulgation. future will have to be accommodated by This amendment relateé to cases where The bill would require the promulga- further increases in tax, which will bringa nonprofit organization employs indi-tion for the fiscal year ending June 30, the levels in excess of 9 percent at someviduals—for example, teachers—who are time in the future. 1960, and the fiscal year ending June 30, covered by a retirement system estab-1961, to be made before August 31, 1958. Mr. Chairman, I should state herelished by a State and also employs indi-The committee amendment would elimi- that at the proper time I shall offer sev-viduals who are not covered by such anate the requirement that this promul- eral clerical, technical, and conformingsystem.Under the bill, employees whogation be made before August 31, 1958, committee amendments to the pendingare not members but are eligible to bebut would require the Secretary to make bill, and I would like to explain thesemembers are placed in the group notthe promulgation as soon as possible amendments at this point. covered by the State retirement system.after the enactment of the bill. First, on page 10, at the end of lineThe committee amendment would place Eighth, on page 106, after line 23, I 13, there is a clerical amendment. these employees in the group under thewill ask to insert: Second, on page 29, line 23, after "en-State retirement system.This is con- actment", I will ask that the following AMENDMENT PREsERvINGRELATIONsHIPBE- sistent with the provisions of section TWEEN RAILROAD RETIREMENT AND OLD-AGE, language be inserted: "if the applicant218 (d)(6) (D) and (E) of the Social suRvivoRs, AND DISABILITY INsURANCE has not died prior to such date of en-Security Act, as amended by the bill. SEC. 704. Section 1 (q) of the Railroad Re- actment and." Sixth, on page 82, after line 22, I willtirement Act of 1937, as amended, is amended This amendment relates to the effec-ask to insert: by striking out "1957" and inserting in lieu tive date of the amendments made by "(F) An organization which filed a certifi-thereof "1958." section 204 of the bill—insured statuscate under this subsection after 1955 but The effect of this amendment is to pre- for purposes of disability freeze and en-prior to the enactment of this subparagraphserve the relationship which has existed CXV—991 15740 CONGRESSIONAL RECORD —HOUSE July 31 between the Railroad Retirement Actdignified standard of living. They wouldhave, to a great extent, exhausted what and the Social Security Act since 1951.have greater purchasing power and theirlittle savings they might have had, and One of the purposes of the amendment isretirement would open more jobs forhave been forced to exist solely on pen- to insure that beneficiaries under theyounger people.All of this would pro-sions or annuities for which they might Railroad Retirement Act will in no casevide a boon to the economy and wouldhave been eligible, on the benefits they receive less than they would have re-practically wipe out all unemploymenthave been receiving through the Social ceived under the Social Security Act ifin the country. Security Act, or on public welfare. When the worker's railroad service had been While the present bill will be a wel-you realize what the maximum benefits employment under the Social Securitycome help to the millions of retired peo-payable under the Social Security Act Act. ple, it will not serve as a solution to theiramount to, the very fact that they can A similar provision was included in themajor economic needs and problems.exist on such a sum, or even less, is quite Social Security Amendments of1952,Those over 65 who are eligible to retireremarkable. 1954, and 1956. will continue to work simply because During the last Congress, and earlier This amendment will be offered by methey cannot afford to retire on thisthis year I introduced legislation which at the specific request of the Interstatemeager income.A 7-percent increase,would remove the present limitation of and Foreign Commerce Committee. As II am sure; will prove to be a great dis-$1,200 per annum on outside income that have stated, it is the usual type of con-appointment to our senior citizens whocan be earned by those who are recipi- forming amendment on this subject. have given a lifetime of work and serviceents of social security; which would Mr. Chairman, I urge that the Com-to their country in helping to build itsmake full social security benefits payable mittee approve the bill. economy.I believe we should recognizeto men at the age of 60, and to women Mr.- MILLS.Mr. Chairman, Iaskthat contribution in more concrete andat the age of 55; and which would elim- unanimous consent that all Membersmore generous terms. inate the requirement that an individual may extend their remarks in the body Only a few short weeks ago Congressmust have attained the age of 50 before of the RECORD during the period of gen-had extended a 10-percent increase inhe is eligible to receive disability insur- eral debate on this bill. the salaries of all Federal employees andance benefits.Unfortunately, none of The CHAIRMAN.Is there objectionpostal workers.A 10-percent increasethese provisions has been incorporated to the request of the gentleman fromwas also granted in annuities of retiredin this current bill, but there are certain Arkansas? Federal employees to help them cope withother benefits and protections now of- There was no objection. the higher cost of living.Similar in-fered to the many citizens for whom the Mr. ANFUSO. Mr. Chairman, I risecreases were approved to those servingsystem was originally designed. For that In support of the bill, H. R. 13549, toinour militarybranches.In manybill.I am hopeful that further consid- amend the Social Security Act.Myurban areas salary increases are beingeration will be given these provisions only regret is that the increase in bene-given to firemen, policemen, teachers,called for in my bill, possibly during the fits amounting to 7 percent, as recom- next Congress after the Advisory Com- mended in the bill, is far from sufficientand other municipal employees, as well as retired municipal employees.Whymission on Social Security has com- to cover the rise in the cost of livingdiscriminate against those who are de-pleted its study of the social security pro- over the past few years. pendent on social security?The leastgram and has had an opportunity to re- Asweall know there has been nowe could have done for them is givenport to the Congress in 1959. substantial change in the social securitythem a similar 10-percent increase to I have said before, and I shall say it benefits since 1954, but even at thathelp them cope with the high cost ofagain, the welfare of all our citizens, time the increases given to our older citi-living. whether they are young or old, able or zens were relatively small compared to disabled, should be of utmost concern to the needs of the average retired person. I believe that we must take early cog-us all. We should continue our efforts Many of them have no savings and mustnizance of the problems of our agingto improve and liberalize the existing rely for their subsistence entirely on thepopulation, and the sooner it is done thesystem, and to correct any inequities monthly payments they receive from so-better it will be for them and for thewhich might be revealed. cial security. These elderly people havewhole Nation.If we continue to ignore I shall be happy to pledge myself to been victimized by the sharp rise inthis situation, if we do not provide themwork for the continued improvement of prices for food, clothing, rent, medicalwith a decent standard of living, we shallthe social security system. care and other necessities.They arebe committing a grave injustice to the Mr. REED.Mr. Chairman, I yield actually undergoing severe mental andmillions of our people who have everymyself 10 minutes. physical anguish to keep their headsright to expect better treatment and Mr. Chairman, I support and urge the above the water at a time when thegreater security at a time when they canpassage of H. R. 13549, the Social Se- cost of living has reached an all-timeno longer be economically productive. curity Amendments of 1958. This meri- high. What is needed most of all is an over-torious legislation will improve the ade- Our Nation cannot afford to let thosehaul of the social security system to bringquacy of our social security program and who are forced by advanced age to re-it into step with the times and needs ofone of its principal points of merit is tire from the labor force to pay a heavythe people. In other words, we must ap-the fact that it will strengthen the actu- toll In reduced living standards in theirproach this problem both from a humanearial soundness of the old-age and sur- declining years.Higher costs of foodand a realistic point of view. We mustvivors insurance program. have shrunk the dollars which they reamake it possible for our older citizens to The legislation would provide many ceive from their monthly social securitylook forward with greater confidence tochanges in the social security program checks. In the past many of them weresecurity in their declining years.Theaffecting benefit levels, eligibility require- able to supplement their meager incomebill under consideration is a step—thoughments, and administrative features of the with outside earnings, but since the eco-a very small step—in that direction. Forsystem.It represents the combined ef- nomic crisis set in nearly a year agothis reason I am glad t0 support it.Iforts of the membership of the Com- these opportunities for outside earningswould be more happy if the increase weremittee on Ways and Means working in have greatly diminished for the elderlyat least 10 percent or larger. close cooperation with officials of the people. Mr. HOLTZMAN. Mr.Chairman,Department of Health, Education, and Several months ago I introduced amuch has been said here by those of usWelfare.I do not represent that every- bill, H. R. 12568, to reduce the retire-who favor the bill now pending in thething contained in the legislation has ment age for both men and women toHouse of Representatives, to give a muchthe endorsement of the executive branch 62 years and to increase the monthlyneeded increase in benefits to some of ournor do I represent that I wholeheartedly social security payments about 40 per-senior citizens. approve of every change that the bill ment, the minimum going up from $30 In the past I have supported legisla-purports to make.However, I do say to $50 and the maximum from $108.50 totion to liberalize the Social Security Act,with earnest conviction that the bill is $150.This would provide greater secu-and I feel that this legisltation now be-a good product of able and diligent work rity for our elderly citizens and would en-fore us deserves our favorable consid-and merits the support of this distin- courage many in their sixties and seven-eration and attention.With the tre-guished body. ties, who are still working, to retire on amendous increase in the cost of living I will not undertake to describe all reasonable income and yet maintain aover the past years our elder citizensthe changes that are provided in the bill. 1958 CONGRESSIONAL RECORD—HOUSE 15741 The committee report accompanying themuch credit for the development of this Mr. KEAN. Mr. Chairman, in the legislation provides such a descriptionlegislation. first place I want to thank my colleague, and is available for your consideration. In closing I would like to pay specialthe gentleman -from New York[Mr. I would, howeter, like to comment ontribute to one of my Republican col-REED] for the kind words he said about what I regard as some of the principalleagues on the committee, the gentlemanmy work.It is a pleasure to have worked features of the Social Security Amend-from New Jersey [Mr. KEAN], who nextwith him.He has always had the inter- ments of 1958. year will not be serving with us in theest of the older people of the United Benefit levels under the old-age andHouse but will, I am confident, be serv-States at heart in his work in the com- survivors and disability programs woulding with great distinction in the othermittee. be increased by 7 percent with the pro-body.Mr. KEAN has consistently been Mr. MILLS.Mr. Chairman, will the vision that the minimum increase for aa diligent and constructive worker in be-gentleman yield?. primary insured individual would be $3.half of an adequate and a sound social Mr. KEAN.I yield to the gentleman The maximum benefit payable to a f am-security system.To considerations offrom Arkansas. ily would be raised from its present levelbenefit levels and benefit entitlement Mr. Mr. MILLS. May I comment on the of $200 to a level of $254. Benefits wouldKEAN has brought a compassionate in-deep regret I have over the fact that this be payable to dependents of an insuredterest in improvements that would makewill be the gentleman's last time to work individual who was eligible for disabilitythe program more adequately meet thewith the Committee on Ways and Means benefits.Further changes in the bene-needs of our citizens.On the otherin the field of social security.He has fit side of the program would be madehand, realizing that the program couldrendered very fine service in the commit- with respect to dependent parents, lump-only endure if it was actuarially soundtee on all subjects, but particularly has sum death benefits, children's benefits,and properly financed, Mr. KEAN hashe been effective in his work in the com- and other significant changes. brought to the committee's considerationmittee on matters of social security, a These benefit liberalizations are notof social security improvements over thesubject which has been very close to his accomplished without added cost. To de-years a profound understanding of theheart and one he has pursued very dili- fray the added expense of the liberaliza-actuarial aspects of the program and hegently. •tions provided in H. R. 13549, as well ashas stood stanchly and without deviation Mr. KEAN.I thank the gentleman to strengthen the financing of the exist-for a program that was in fact in ac-very much. ing program the legislation before us to-tuarial balance.I am confident that Mr. Over the past few years I have ad- day,wouldmakethreesignificantKEAN will continue to extend his out-dressed the House many times on social changes inthesocialsecuritytaxesstanding talents in behalf of an ade-security legislation. which virtually every American citizenquate social security system as a Member This will be the last who has earned income will be required time I will have the privilege of doing of the other body. so.I became keenly interested in social to pay. These three changes in tax fea- I urge my colleagues in the House tosecurity when, as some of the older mem- tures of the program will provide, first,support the passage of the social securitybers of our committee will remember— the earnings base on income subject toamendments of 1958, H. R. 13549. in the winter of 1946, my first year on the social security tax would be in- Mr. Chairman, one of the worries Ithe committee—we had extended hear- creased to $4,800 from its present level ofhave had over the years is this questionings on what was called then the issues $4,200, effective January 1, 1959; second,of inflation.It is making it very diffi-of social security. the existing 2¼ percent tax rate that iscultto keepthis system actuarially I learned at that time imposed on both employer and employee of the basic principles behind the pro- sound.Constantly now, with our ex-gram.I determined thatthey were would be increased to 2 '/2percentinpenditures and spending, our debt limits,sound. But at the same time I learned 1959, and to 3 percent in 1960—for theand all these steps we are taking, infla-of the many inequities in the program self-employedthecomparableratestion seems to be in the offing.Nobodyas it was then, of the inadequate bene- would be 3% percent and 4'/2 percent;knows under world conditions just what third, the schedule of 4 additional tax fits, and also of the extreme dangers in we are going to face in that connection.a program which has suchpolitical increases projected under present law atWe have a pretty pronounced inflation indynamite. 5-year intervals up through 1975 wouldthis country right at the present time. be accelerated so that the contributionWe are cheapening the purchasing power The enthusiasm which Members of schedule would become fully mature inof the American dollar. Congress always have for increasing 1969, which means that the increase will This social security system will requirebenefits may be shown by the fact that be occurring at intervals of every 3 yearsadjustment very frequently, I fear, butmore bills toward this end have been instead of intervals of every 5 years. I will say for this bill that it is providingintroduced in this session than there are The legislation also revises the publica step to make this system actuariallyMembers of Congress. assistance titles of the Social Securitysound, and that is of vital importance to One thing I determined in 1946, that Act and the maternal and child welfareall of the beneficiaries under the systemwas the essentiality of keeping the sys- title of that act so as to make additionaland it is vitally important to everybodytem on a sound basis; that when benefits Federal funds available to the States forwho holds an insurance policy or has anare increased, taxes must likewise be in- the purpose of strengthening these pro-annuity that he relies on for the future.creased to cover the increased benefits. grams.I am sure that I speak for the Mrs. ROGERS of Massachusetts. I determined that it would be irresponsi- •entire membership of Mr.ble to say to our children and grandchil- the committeeChairman, will the gentleman yield? dren: "We make the promises as to what when I express the hope that the States Mr. REED.I yield. we pay in the future. will act to pass these augmented amounts Mrs. ROGERS of Massachusetts.I It is up to your on to the genuinely needy in our Nation.commend the gentleman on his very finegeneration to worry about the necessary I would call the attention of the Housework on this committee all through thetaxes to pay the benefits." to the fact that in my judgment my col-years, and also commend him and the So while I have supported many in- leagues on the Committee on Ways andchairman ofthe committee on theircreased benefits, all of them have been Means are deserving of your commenda-working so harmoniously together.It isprojected within the framework of a tion for the diligent effort they have puta joy to see Republicans and Democratssound system. forth in developing this legislation. Weworking wholeheartedly for a great end. Since 1946 I have introduced dozens have given careful attention to the mat-I am delighted that millions of veteransof bills to Improve the system, and I be- ter in thorough public hearings and inwill get the entire benefit of this legis-lieve I can say, with some pride, that arduous executive sessions.Included inlation.One payment supplements thethe majority of the suggestions that I this legislation are proposals that manyother just as one type of service supple-made are now law. of the Members of the House who do notments the other.I am very grateful to When we sat down for our executive serve on the committee have sponsored.the gentleman from New York and thesessions on this bill, our able chairman— gentleman from Arkansas. the gentleman from Arkansas, for whom I therefore would like to congratulate Mr. REED.I thank the gentlewomanI have the greatest admiration—made. the chairman of my committee, my dis-from Massachusetts for her remarks. one of the finest statements I have ever tinguished friend, the gentleman from Mr. Chairman, I yield 20 minutes toheard on the necessity of keeping the Arkansas [Mr. MILL5I, and my otherthe gentleman from New Jersey [Mr.system sound.He called attention to committee colleagues who deserve soKEAN). the fact that the present OASI system 15742 CONGRESSIONAL RECORD —HOUSE July 31 was out of balance by fifty-seven one-those receiving low benefitspaid inI have the figures, the total payment hundredths of 1 percent of payroll. very little in taxes—but when they wereforassistance throughout the entire He stated that it was not Lair for theworking the wage scale was much lower,Nation was $1,505 million. Of this, New present generation to be receiving muchthe value of the dollar was much higher,Jersey taxpayers contributed about $63 more in benefits than they were payingand the benefits which they are receiv-million. We got 'back for our assist for; that we should speed up the scheduleing with the present high cost of livingance program in 1957 only $15 million. for increased taxes as fast as is practicalare indeed inadequate. This was bad enough—but it was ap- so that the public as soon as possible Those retiring in the next few yearsproximately one-fourth of what we paid would realize that this is a 9 percentare, of course, benefiting from the pres-out, while under the new formula it system and that if they wished any moreent wage scale; and owing to the factlooks like we may only get one-sixth. benefits they must pay for them in ad-that calculations can be started fromOn the face of it this does not look as ditional taxes. 1951, and they are entitled to a 5-yearthough the provisions in this bill are He called attention to the fact thatdropout, they are right up to date onfair to New Jersey. under present taxes there would be athehighest pay from present wage The Social Security Administration deficit every year until 1965 and pointedscales. states that there is advantage for the out that such a situation was unthink- If I had been the sole judge of whatwealthier States in the fact that the bill able. would have been in the bill,I wouldprovides for much more freedom of ac- As a result of this fine statement, thehave provided for at least a 10 percenttion, and that payments to the States committee without objection voted forincrease for those who retired in pastare averaged rather than having each increased taxes and for speeding, up byyears and are receiving inadequate bene-individual case calculated to see what 6 years the climb to the ultimate maxi-fits, and perhaps a slight modification inis the Federal share.Certainly this is mum tax.There seemed to be una-the increase for those who retire in thea simplified method. nimity in our committee that the systemfuture, thus maintaining the actuarial They give as an illustration: If New must be kept in balance.I was readysoundness of the system. Jersey was paying one beneficiary $30 to gird up my loins and fight for the If in the future itis found that in-and another one $100, under the pres- principles so well enunciated by ourcreases for those retiring then are nec-ent law the Federal share would be $24 chairman. essary, future Congresses can make thefor the first case and $39 for the second However, having takenthissoundchange. case, or a total of $63; while under the step, the committee which had walked I am particularly pleased with the in-new formula the two sums would be up the hill, then walked down again. Wecrease in the maximum family benefitslumped together and we would get $65. had increased taxes sufficiently to makefrom $200 to $254.Perhaps itis be- There is also the advantage for the the system more than sound, but thencause I have 6 children of my own thatState of more flexibility and medical we voted to increase benefits so that theI have never understood why a widowcare will be included in the total amount. system is still out of balance. with 4 or 5 children was not entitledHowever, there have been no figures sup- True, it is now estimated that it willto more benefits for their support thanplied to show what this possible advan- be out of balance by only twenty-fiveone with only 2.This suggestion was intage might amount to in dollars and one-hundredths percent of payroll, in-a bill that I introduce last year, as wascents.The Social Security Administra- stead of fifty-seven one-hundredths per-a proviison for providing benefits fortion acknowledged that under the new cent of payroll.Sure thatisbetter.the dependents of those who have re-formula New Jersey would get "nicked" But it will still be out of balance. tired on disability.Certainlyadis-a little, but say that it was "not very sig- Why could we not have had the cour-abled worker would have more diffi-nificant." age to balance it once and for all, andculty in supporting his minor children New Jersey welfare authorities have set the precedent for future Congressesthan would one who had retired.I amno figures as to how the new program to do likewise.It would then be easyhappy these two provisions are in thewould affect our State, so that we are to say to our constituents: "Yes we arebill. here legislating something which all do going to increase your social security Let us get over to the changes in thenot fully understand.It does not seem taxes, but we can promise you that theassistance program. An additional $287to me that a couple of weeks before ad- system is sound and will remain so. Nowmillion has been provided for the gen-journment is the proper time to make all we can say that it is less unsounderalassistanceprogram.This, ofsuch an important change without giving than it was before." course, will come from all the country'sopportunity for authorities in each State 'Part of the tax rise for many workerstaxpayers.It does seem perhaps thatto study the repercussions which would will be the result of the increase in thewhen we, thetax-writing committeecome from such a significant change as wage base from $4,200 to $4,800.To doprovide heavy additional expendituresis provided in this part of the bill. this seems logical when you consider thefrom the general revenue—we might at Several months ago I introduced a general increase in wages and salariesthe same time say what taxes we arebill to increase the authorization for ma- over the past few years. going to increase for this purpose. ternal and child health, for child wel- In New Jersey, the average industrial However, under a new formula thefare, and for crippled children.I am wage is today above $4,200.But thoseFederal Government will still pay four-particularly happy that a substantial inwho will pay an increased tax owing tofifths of the first $30 paid under thecrease is provided in this bill for each this provision must realize that thoughgeneral assistance program, but the bal-of these valuable programs. The com- ultimately they are having this maxi-ance up to $66 will be paid under amittee did not go as far as I suggested, mum benefit increased from $108.75 tovariable formula amounting to 50 per-but went more than halfway—increas- $127, nearly half the proceeds of thiscent for the so-called richer States anding each of these programs by $5 million. additional tax will not go to paying them,70 percent for the poor States. I understand the committee's position or their families any increased benefits, Now New Jersey pays 4.20 percent ofwas that the figure I suggested might but to increasing the benefits of thoseall Federal taxes.Thus, of this addi-well be justified in the future; but that, with lower wages; for though the in-tionalappropriation, we will pay inas it would take time to expand the pro- crease in the wage base will bring intaxes 287 times 4.20 percent or approxi-gram effectively, it should not be done fifty-five one-hundredths percent of pay-mately $12 million—while under theall at once. rolltheythemselveswillgetonlynew formula we will only get back to The maternal and child health pro- thirty-two one-hundredths percent inhelp New Jersey's aged and disabledgram has been most helpful. Today we additional benefits.Perhaps you might$1,965,000, or one-sixth of what our tax-in New Jersey have in many cases been refer to this as the "social" part of thepayersarecontributing.Foreveryunable to pay the increased hospital social security system. man, woman, and child in New Jerseycosts of remedial and hospital care for I am particularly pleased tc vote tothere will be paid by our New Jerseychildren.An additional appropriation 9upport an increase in benefits for thosetaxpayers $2—whileforevery man,will help. dready on the rolls.It seems to mewoman, and child in New Jersey—our New Jersey will be particularly in- there is every Justification for such anState will get back only about 33 cents.terested in the changes in the child wet- increase.It is true they are not entitled In the past the picture was bad forf are provision. At present the law gives to any more based on the insuranceour New Jersey taxpayers, but not aspriority to aid to rural communities. principles of the system—for most ofbad.In 1957, the last year for whichAnd, though New Jersey is still the Gar- 1958 CONGRESSIONAL RECORD —HOUSE 15743 den State, this is because our rural popu-very able staff of our committee. I wantAMA were to appear before our com- lation are very efficient farmers. But ourto pay tribute to them, to the legislativemittee I tore off the ticker some infor- rural areas are limited and our ruralcounsel and to the men from the Socialmationcoming from San Francisco population is very much smaller than ourSecurity Administration who were sowhere the American Medical Association urban population.Thisbillextendshelpful to us during consideration of thiswas holding its annual meeting, and child welfare to urban areas. One of thebill. while I will not read the entire statement, fields in which the child welfare program In writing this bill we had in mindlet me just refer to this portion: is working well is in its efforts to preventtwo outstanding points, as has been On theexpense side,the organization Juvenile delinquency.Itis importantmentioned before.One was to assureincreased Its public relations budget by one- that tendencies towardthisend bethe soundness of the OASI Trust Fundthird, pushing it to $499,906.It cost more fought at an early age, because it is mostso that we may in the future be able tolast year to run the Washington office of the difficult to do effective work after a AMA, hub of the battle to fight socialized meet the obligations that we say we aremedicine.That operation cost some $249,- child's pattern of behavior has beengoing to meet in paying decent retire-000 to carry out its assignment. shaped.The increase in child welfarement benefits to the aged people.The funds will aid toward this end. other purpose, of course, was the recog- Naturally I became interested and- I. I have received many complaints thatnition of the present need for an im-went a little further because, while I ap- there are not enough funds available forprovement in benefits now being paid.preciated the publicity that the AMA has surgical treatment for crippled children.As I said to you before, this is a step ingiven to my bill and has made it known This has been particularly true for chil-the right direction, buti must say to younationally, I was interested to know how dren with congenital heart disease.Itfrankly that, while I am supporting themuch money they were spending through is a fact that in many hospitals there isbill with some enthusiasm, I also am atheir Washington and other lobbies, and a waiting list of small children, pendingbit disappointed although not disheart-in the office of the Clerk of the House. the availability of funds for such opera-ened.I am disappointed because we doI find that in the last 10 years the AMA tions.This increased authorization fornot go far enough. As all of you know,has spent$3,915,318.64, accordingto crippled children may save many youngI am sure, last year I introduced a bill,their own report. lives. As is so often true with bills that comeH. R. 9467, which would have provided Now, the ticker says that last year, before the House, there are many goodhospitalization, nursing home care forwhich to my mind means 1957, the provisions in this bill but some whichsurgical services for people who were be-Washington office cost $249,000, yet the seem of doubtful merit but I am going tocoming eligible for social security bene-figures ified-with the Clerk of the House vote for it—for the good certainly out-fits.That there is need for such legis-showed for 1957 the amount of $50,939.22. weighs the bad and I urge every Memberlation is not questioned by anyone, butI leave it to you to reconcile these twQ of the House to do so also. apparently we are not ready to takefigures of $50,000 as against $249,000. Mr. Chairman, I hope that as a Mem-the step necessary to meet the situation Now, you know that the AMA has ber of the other body I will still be ablethat now exists. through the years bandied about the to work to continue to improve the so- In this bill we go part of the way toterm "socialized medicine" every time we cial security system and maintain itswhat I have suggested.I suggested anpropose to improve the Social Security soundness in the future; but that, ofincrease in benefits of 10 percent.InAct.So, when the representatives of course, is for the determination of thethe bill before us, we go to a 7-percentthe AMA were before our committee, Dr. sovereign voters of New Jersey.How-Increase in benefits with a minimum ofLarson and Dr. Krusen, I asked them ever, I have great confidence in the judg-$3 for those in the low brackets, whichto define for me what "socialized medi- ment of my colleagues of the Ways andreally amounts to a 10-percent increasecine" meant as the term is used by the Means Committee. I know of no body offor those who are presently only entitledAMA. And, on page 1203 of the tran- men with whom I am happier to leaveto $30 per month.However, I mustscript of the hearings, Dr. Larson replied: the future guidance of what has beenpoint out that there is some overlap- I think it is very difficult to define social- one of my chief interests here for soping between OASI and public assist-ized medicine.I know of nothing in the many years. ance, particularly with respect to manyrecord of our association that would spell Mr. CUNNINGHAM ofIowa.Mr.of the lower bracket OASI beneficiaries.out what the association thinks is socialized Chairman, BOB KEAN and I came to Con-In fact, there are some 600,000 aged whomedicine. gress together in 1939. receive benefits under each program in Yet, that is the label they indiscrim- He has been a leader in social securityorder to have a minimum existence budg-inately apply to my bill.I asked Dr. legislation for many years. et.The extent to which this group willLarson this question:I said that "Dr. For many years he and I served on thehave benefits passed on under this billAllman who was president of the As- consent calendar on which importantIs debatable, and may depend upon thesociation last year labeled my bill so- committee he served for 10 years. Dur-action of the States on the public assist-cialized medicine.I would like to know ing that time he helped save many mil-ance aspects. just what you mean by that term." lions of the taxpayers' money. But let us keep in mind that while we Dr. Larson said that Dr. Allman was Mr. MILLS. Mr. Chairman, I yield 15are doing that-and, sure, we want tospeaking as the president of the Ameri- minutes to the gentleman from Rhodekeep thetrust fund sound—we arecan Medical Association and as an in- Island [Mr. FORANDJ. afraid to increase the tax sufficiently todividual.When I pressed further, Dr. Mr. FORAND. Mr. Chairman, the billmeet the requirements of the 10 percentLarson admitted that what Dr. Allman before us today to amend the Socialadditional benefits which I urged.Yet,had said was, of course, the stand of Security Act is a good bill, it is a stepwe were not reluctant to increase the paythe American Medical Association.So forward, and I sincerely hope it will re-of our Federal employees by 10 percent.I pressed further and asked Dr. Lar- ceive the approval of the House and thatWe realize that the cost of living has goneson if he considered social security to the Senate will act promptly so thatup by 8 percent. We are cognizant of thebe socialized medicine, and his answer the President without delay can sign itfact that the general wage increasewas "Yes."I asked him if the veterans' into law. The provisions of the bill havethroughout the country has been 12 per-medical pogram was socialized medi- been very well explained by our distin-cent, and yet when I suggested consid-cine, and again his answer was yes. And guished and very able chairman, theeration of my bill I ran into terrific Op-when I asked him if Workmen's Com- gentleman from Arkansas [Mr. MaL5J,position—opposition from the presentpensation was socialized medicine again by the gentleman from New York [Mr.administration and opposition from thethe answer was "Yes." REED], and by the gentleman from NewAmerican Medical Association. So, you see, anything we are trying Jersey [Mr. KEANJ.I shall, therefore, The American Medical Association, ofto do to improve the health of people of not go into the details of what the billcourse, has for years been opposed tothis country, to assist totally and per- contains, but suggest that if any Mem-what they call socialized medicine.Youmanently disabled people, what we are ber has any question or is in doubt as towell recall that in the past they assessedtrying to have the Government do to the meaning of any part of the bill thattheir members $25 apiece in order to havemeet discrepancies existing here and he refer to the committee report-Housea fund to fight "socialized medicine," asthere, is being objected to by the Ameri- Report No. 2288—which is an excel-they termed it, but lo and behold, on thecan Medical Association on the ground lent report and well prepared by theday before the representatives of thethat itis socialized medicine, and yet 15744 CONGRESSIONAL RECORD —HOUSE July 31 they cannot even give you a definitionhave already pleaded that the time iscost medical and health plans.I know of the term. too short.But bear in mind that thethat that information is available and Much has been said about people buy-question of taking care of the aged fromat the proper time could be very helpful ing their own health insurance, theira medical point of view is not a newin the study to which the gentleman is own medical and surgicalinsurance,question by a long shot. We have heardlooking forward. theirprepaymentofhospitalization,of. studies repeatedly.Studies are be- Mr. FORAND.I appreciate the gen- and so forth. The fact is that you knowing made by this group and that grouptleman's contribution. and I know that people in the high ageand another group, yet they never seem Mr. Chairman, in concluding my re- brackets,peopleinretirementages,to be able to come up with the answer,marks I want to make it clear that I am have so little income that they cannotor they do not want to.I prefer to bestrongly supporting the bill before us, afford the high premiums of voluntarycharitable and say they cannot. H. R. 13549.It is a good bill, a sound insurance.That is the reason why so I am suggesting to our Committee onbill, and I hope it will be quickly en many of them cannot get needed hos-Ways and Means that early in the nextacted into law. My oniy regret is that pital and surgical service. Many casesCongress, and I hope I am here at thatit did not go as far as I would have liked, have been called to my attention wheretime, we appoint a subcommittee to lookbut itis indeed a step forward, and I peoplebadlyneededanoperation,into this question not only of hospitali-urge the committee to approve it by an needed surgery, but they could not af-zation and nursing care, which we di-overwhelming vote. fordit.The result was they eitherrected the Department to look into, but Mr. REED. Mr. Chairman, I yield 5 postponed it or they gave up the ideaalso the surgical side of the picture, andminutes to the distinguished gentleman of an operation and just kept on suf-that that subcommittee be given the au-from Illinois [Mr. Ivhsowi. fering. thority to appoint its own staff with a Mr. MASON. Mr. Chairman, I was While discussing this situation with adirector, and in addition have the au-the lone "no" vote in the Committee on group of doctors who came to my office,thority to appoint its own group of ad-Ways and Means againstthisbill. I found out that they think this—andvisers, or an advisory council, if youEverybody on the committee was out of I had to agree with them—that thereplease, so that we can work indepen-step but me. At least that is the way it are two groups in this country who getdently of the agencies of Governmentlooked.I feel it is incumbent upon me the best type of medical service avail-and independently of the American Med-to tell you why I voted "no" on that bill. able.Those are the wealthy, who canical Association.If any of these groupsIn the first place, the bill is nothing but afford to pay for it, and the indigents,have any information they think willa stopgap bill. We have set up a Com- who are taken care of in the wards,contribute to a solution of this problem,mission to make a complete report on where the interns look after them andwe ask them to present it to this sub-the financial soundness of the social se- specialists come in to supervise the work.committee so that all the facts can becurity fund, and that Commission will But the great middle class has to lookcorrelated and action can be taken. bring in a report this December telling after itself, and they are in a terrible Taking care of the aged Is a must.us what is the matter with the fund, if position. Someone told me I was 10 years ahead ofanything is the matter.Pending that Mr. Chairman, returning to the in-time with this proposal.I do not carereport, we cannot act intelligently over surance phase, I would like to give youwhether or not I am 10 years ahead ofthe whole situation bearing upon social an example of what is happening undertime, I say this is a must.I am askingsecurity.So we decided for 2 reasons the voluntary insurance we hear sonow publicly the help of all that are in-and 2 reasons only to act now with much about.I hold here a letter fromterested in the plight of the aged to comethis stopgap bill and not wait for a a woman over 65 years of age who wasforward, make studies, and furnish ourcomplete overhaul next year. What are carrying medical insurance. She had tocemmittee with all the information pos-those two reasons?Well, first, and I go to the hospital and she underwentsible so that we can get a solution to thisagree with this reason: We did not surgery. She filed her claim. Her claimdistressing problem in the not too dis-think we should wait until next year to was paid, but she got this letter: tant future. increase the soundness of the program. As you know, the life insurance industry Mr. SANTANGELO.Mr. Chairman,We did not think we could wait until has been established for generations.Rec-will the gentleman yield? next year at least to take one step to- ords have been accumulated for years and Mr. FORAND.I yield to the gentle-ward making the program more sound. statisticaltableshavebeendeveloped.man from New York. And on that I am in full accord with the Based on life insurance tables an extra pre- Mr. SANTANGELO.I commend the mium is charged for extra hazards.There committee.The other reason that we are only a few tables on accident, health andgentleman from Rhode Island on thecould not wait until next year is the hospital insurance because the business ispioneering work he is doing in this fieldfact that this is an election year and, relatively new. to provide for the aged.He knows asnaturally, in an election year we must, In reviewing your recent case we have con-well as everyone else knows that theif we can, sweeten up the voters a little cluded that the premium you are payingtime when an older person requires med-bit.So we did increase the benefits a is not sufficient for the future risk.Thereical attention and care is when he is is not sufficient data available to quote an little bit to sweeten up the voters. We intelligent rate on the increased hazard.about at the time to retire.I hope thealso knew very well from a practical Therefore we are sorry we must exercisecommittee will pursue the study of thestandpoint that we just could not vote our right to decline to renew your policy.gentleman's bill, especially those provi-Increased taxes in social security with- This letter is to advise you that we willsions for the medical care and hospitali-out at least sweetening-upthe benefits not accept any further premium paymentszation of our senior citizens..1 wish toa little bit. So we put the two together— on the above policy without prejudice, oXassociate myself with the remarks whichand that is this bill. course, to any loss beginning prior to thethe gentleman has uttered with respect I have always opposed the social se- expiration of the time for which premiumsto his bill and also to the present bill. have been accepted. Icurity program, but I Insist I am not support this bill H. R. 13549. against the social security objectives.I That is the answer to your voluntary Mr. FORAND. I thank the gentleman.want to give the old people what they Insurance as regards many of these agedI must say that he has been consistentlyare entitled to in security, even a little people. pressing for action on this bill, becausemore generous than what they are get- I could go on and talk at length onhe, too, realizes the importance of it. ting under this bill.So why is it then this.I am not going to because, as the Mr. PELLY. Mr. Chairman, will thethat I voted against this?Because I report shows, we have instructed the De-gentleman yield? have always said that social security partment of Health, Education, and Mr. FORAND.I yield to the gentle-should be on a pay-as-you-go basis: Well are to make a study of the ho$pitalman from Washington. That is, require each generation to take and nursing home care and to report Mr. PELLY.I was very much inter-care of its own people and not push off back to our coimnittee on February 1ested in the remarks of the gentleman.to the next generation and to future of next year their findings.I am satis-1 had the pleasure in the 83d Congress ofgenerations the care of the old people of fied that by that time we will not havesitting on a committee under the chair-today.That is exactly what we are from the Department of Health, Educa-manship of the distinguished gentlemandoing under this program.I have good tion, and Welfare all of the type of in-from New Jersey [Mr. W0LvERT0NJ, whoauthority for making that statement.I formation all of us want, because theymade a very comprehensive study of low-have looked over a Brookings Institute 1958 CONGRESSIONAL RECORD —HOUSE 15745 report, and the Brookings Institute haswhen our general social-security programindividuals, this is a program of aid by a good reputation all over the country.was enacted into law, the Congress hasthe Federal Government to the States This is what the Brookings Institutepassed several amendments to the basicand the localities. says— law which in each instance has bene- It was our general conception when The CHAIRMAN. The time of thefited our old folks.We have seen itswe adopted and embarked upon the old- gentleman has expired. coverage extended until now every homeage and survivors' insurance system, Mr. REED. Mr. Chairman, I yield theis directly or indirectly concerned aboutand, thedisability insurance system, gentleman 5 additional minutes. its application. that this would relieve the responsi- Mr. MASON. I quote from the Brook- Social-security and retirement pay-bility of Federal participation in the ings Institute bearing on the present so-ments going into the channels of tradegeneral public-assistance programs.It cial-security program.This is what itevery month is a great stabilizing factorwas intended that as a result of the in- said: in our national economy. Now and thensurance systems there would be a with- We (the present generation) do the prom-we hear criticism such as "somethingdrawal and a reduction of the cost to Ithing; you (all future generations) do thefor nothing" or "how it will bankrupt thethe Federal Government of these as- paying. country."But, my friends, did you eversistance programs and that eventually stop to think of what would happen tothose programs, to the extent they were That is how the Brookings Institutebusiness, trade, and commerce if, by anynecessary in our society and economy, characterizes this present social securitychance, all social-security and pensionwould be the responsibility of the States setup. checks were immediately discontinued?andthelocalcommunities.In my The Brookings Institute report recom- While I recognize the importance ofjudgment, Mr. Chairman, that is the mends that the present social securitysocial security in all of its forms to ourdirection in which we should be moving, setup be abandoned entirely and a gen-economic life, I have supported old-agebut, unfortunately, in spite of the fact uine pay-as-you-go system be establishedpensions primarily because ofits hu-that our old-age and survivors' insur- In its place.And a little more generousmanitarian aspects.It has made it pos-ance system has been expanded, the than this system is.They also say: sible for our senior citizens to approachbenefits increased, the amount of par- Our generation should care for its ownthe declining years of their lives withoutticipation increased, we find going along and trust future generations to do likewIse.fear of what might become of them orwith that increase still further increases That seems to me to be a sensible,the humiliation of depending upon theirin the amount of Federal responsibility practical and wise conclusion for themfamilies for their very existence.Inand Federal cost in all the public-as- to reach.This bill does make the fundfact, it preserves the pride of our Ameri-sistance programs. a little more sound—actuarially sound,can heritage. Mr. Chairman, at some time a halt as they say—and in that respect it is an I am in thorough accord with themust be called to Federal responsibility improvement upon the present situation.overall objectives of the social-securityin this area and the problem should be But if we did away with the program, asprogram, but there are certain improve-assumed as a proper responsibility of the Brookings Institute recommends, itments I feel should be made.In par-States and local governments.So, Mr. would remove all need for reserve; allticular, I refer to the some 2½ millionChairman, to the extent that this bill need for level premiums; all need forold and destitute citizens who are on old-again puts the Federal Government fur- costly and elaborate bookkeeping sys-age assistance getting an average of lessther into this program, which is basi- tems, such as the present law requires.than $60 a month. In this day of highcally a State and local program, I dis- Once before, 8 or 10 years ago, whenliving costs, it is impossible for any per-approve of that part of this legislation. we had an amendment to the social-se-son to live in minimum comfort and But let me speak to the matter of the curity law under consideration, I tookhealth on such a pittance. changes in this bill with respect to old— the floor and I opposed it, and I said this: The great Ways and Means Committeeage and survivors' insurance and disabil- "The Townsend plan petition has beenhas recognized this situation and in theity insurance.Generally speaking, the at the Speaker's desk for 12 years, and Ibill before us we find a general increasecommittee has done an admirable and have refused to sign it because I was stillof about 7 percent.This is not enougha fine job in the action that it has taken hoping to at least make this systemfor the segment of our aged to meetin this area.There are, of course, two sound, make it a program much bettertheir needs but it will be most helpfulsides to the social security coin and both than the Townsend system.But I hadand will be appreciated.They shouldsides are of equal importance. On one given up hope." That was 8 or 10 yearshave a minimum of $75 a month. side is benefits, of course, the pay-out. ago."I am now going up and sign the I wholeheartedly support this legisla-On the other is the financing or the petition, which I have refused to sign fortion with the hope that further improve-take-in.Thecommittee'sactionin 12 years."And I did it.I also saidments will be in order when the Congressboth of these areas, with respect to then, "In my opinion, after careful con-convenes next January. benefits, the pay-out, and with respect sideration, the Townsend plan is more Mr. REED. Mr. Chairman, I yield 5to the financing, the take-in, is sound equitable, more practical, more just,minutes to the distinguished gentlemanand the action is certainly justified and much easier and cheaper to administerfrom Wisconsin [Mr. BYRNE5I. appropriate. and less costly in the long run."I still Mr. BYRNES ofWisconsin. Mr. No Government program can be static believe it, and because I believe it I votedChairman, it is my intention to speakand this program can be no exception. "no" in committee and I will vote "no"primarily with respect to the old-ageWe, of course, must constantly strive on the floor. and survivors' insurance and the dis-to improve the system, aiming to cor- I yield back the remainder of my time,abilityinsuranceprogramandtherect inequities as they develop, make if there is any. amendments to those systems as pro-necessary changes as those changes are The CHAIRMAN. The time of theposed by this bill, but before doing sodeemed to be wise and possible. gentleman from Illinois [Mr. MAsoN] hasI would like to make a comment on that Mr. Chairman, we have no problem expired. part of this bill which amends title 5,as far as there being a lack of enthu- Mr. MILLS.Mr. Chairman, I yield Sthe public assistance program. siasm for increasing or developing new minutes to the gentleman from Penn- I would like to call the attention ofbenefits; the trouble is, there is an over— sylvania (Mr. GAvIN]. the House to the fact that in the publicenthusiasm, frankly, in this area. Mr. GAVIN. Mr. Chairman, In lookingassistance programs the Federal Gov- The committee had before itin its back over my years of experience in thisernmentistoday spending approxi-discussion of this legislation over 500 great legislative body, I find that mymately $1,800,000,000. The amendmentsbills proposing the liberalization of pres- participation in advancing the cause ofproposed in this bill will increase thatent benefits or adding new benefits and old-age pensions gives me greater satis-expenditure by $287 million a year sonew areas of payment to the old-age and faction than perhaps any other publicthat upon its enactment the cost on thesurvivors' insurance system and the disservice I have been privileged to render.part of the Federal Government forability insurance program. In the history of our social securitypublic assistance programs wil] be in There is no lack of imagination on the and old-age assistance system, it is grati-excess of $2 billion a year. part of Members of Congress or on the fying to note that our senior citizens I mention that fact because in thispart of many people with respect to new have not been forgotten.Since 1935,area we have not a program of aid toareas that we could move into as far as 15746 CONGRESSIONAL RECORD —HOUSE July 31 payments of money are concerned, eithergive equal recognition to the burden of Mr. MILLS.Mr. Chairman, I, too, under this system or any other govern-tax that we impose on these very peopleyield the gentleman 5 minutes. mental system.But, this system seemsfor any benefit that we propose to give Mr. BYRNES of Wisconsin.I thank to attract particular attention.Let methem at some future date.Unless wethe gentlemen. say this, that this bill does improve thekeep our financing on a sound basis we Mr. Chairman, I do want to try to benefit side of the coin, and fortunatelywill jeopardize the whole program. make this point, because to me as I look the committee avoided the pitfalls set by We have a great responsibility here ininto the future and consider the future some of the so-called friends of the sys-the Congress to try and save social se-of my children and your children and tem. curity from its so-called friends, thosethose who are today paying taxes in an- You will note in the committee reportwho get overly enthusiastic about whatticipation of benefits on their retirement an enumeration and a description of var-can be done under the program, but ig-20,25, and 30 years from now, itis ious changes to remove inequities andnore the fact that any action has to beimportant that we act here so as not to toimprove theadministration.Thepaid for and has to be bought by a taxjeopardize the benefits they are depend- basic change made in this area is, ofon the people who are working today.Iing on 20 or 25 years from now. course, the increase in benefits of 7 per-am one who believes that we should enact In addition: Social-security taxes are cent with a $3 minimum increase.Thisadditional social-security benefits withhigh now and they will increase heavily in my judgment, Mr. Chairman, is jus-our eyes wide open. We should take theduring the next 11 years irrespective of tified in order to keep benefits consistentsame approach we take when we buywhat we do with regard to any new with changes in the economy and partic-additional insurance as individuals. benefits.Proposals by "friends," and ularly the increases in the cost of living. When we buy insurance protection, noI put that in quotation marks, "friends," This is about the third or fourth suchmatter for what purpose, we not onlyof social security to increase benefits and increase that has been made since theask our insurance agent what we are get-add new ones will require even higher system was originally adopted.I thinkting, but we also ask him how much wetaxes if enacted. There is no new bene- we must recognize that the system isare going to have to pay for it.Only infit that can be devised that will not going to be changed in the future in thisthis way can we determine if the in-requireadditionaltaxes. Taxes sub- respect as cost of living increases and ascreased protection is worth the price, ifstantially higher than those now sched- changes are made in our economy; thatthe resulting decrease in our spendableuled will kill public support for the pro- this figure is not going to remain static.income is worth the luxury of possiblegram, and that is the fastest way to In fact, I am not so sure but what thefuture benefits.I do not know how weinsure its doom. A danger of such mag- committee and the Congress should givecan be less prudent with a Government'snitude, if real, should arouse the concern consideration to the advisability of asocial-securityprogram.Indeed, be-of all of us and of every American. provisionwhichwould, automaticallycause of its vast scope, the social and In the last analysis, social security is make the basic benefit payments con-economic implications involved and theira program in which those presently sistent with changes in cost of living oreffect upon the lives of so many millionsworking and their employers contribute in general economic conditions; a pro-of our citizens for so long a time in thefor the benefit of those faced with a loss vision in the nature of an escalator clausefuture,I think we should ask moreof income when they are old, widowed, to be financed by a change in the wage orphaned, or disabled. That is the pro- base.Average wages constantly changerather than fewer questions about the as your general economy goes on an up-cost involved in new proposals for in-gram.Contributions in the form of ward trend.In this way we might pos-creased protection. taxes are compulsory, but workers have sibly avoid the problem which has pre- When we, as individuals, buy an in-been willing to contribute not only be- sented itself during the last 3 electionsurance policy, we can always cancel itcause they believe in the humanitarian years; the idea that no Congress canif we find that the burden becomes tooconcept of sharing these risks but be- adjourn before an election without atgreat or if we change our mind about thecause they wish to provide for their own least making some changes in the Socialneed for the benefit.Let it be remem-possible future needs.Their continued Security Act.In my book, if we wantbered, though, that once these benefitswillingness to contribute depends, how- to ruin the Social Security Act, it is toare provided by the Government andever, upon the reasonableness of the start making it a political football to beonce the tax is imposed, neither the bene-contribution or the tax required.The used to try to garner votes in an electionfit nor the tax will ever be subject toIncome a worker can devote to future year.That is the most vicious and de-elimination or reduction except upon thecontingencies is limited by his ability structive step that can be taken to causecollapse of the whole system. When ato meet other, more immediate needs. this whole system to fall in on thosenew cost is incurred and an additionalWhen the cost of social-security protec- very people who are dependent upon ittax imposed, it becomes permanent. tion begins to cut too deeply into daily for a base of security in their old age.I I do not like to cast doubts upon theliving requirements, workers will make am most concerned that we do not letfuture of this program but when I seeunfavorable comparisons with distant that happen; that we do not take action500 bills introduced, and when I notebenefits and immediate costs, and when that will jeopardize the interest of thosethat some of the proposals presented tothe squeeze on workers' incomes bepeople who have paid and are contmuingthe committee to expand this programcomes too great, ominous protests will to pay Into this system and who are de-go so far that even the authors of thebe heard here on Capitol Hill in Wash- pending upon the benefits as a base ofbills admit would require an unconscion-ington.When this happens, and you support in their old age.I would thinkable tax, I am worried.I get concernedcan mark my words, Congress will take that we might, therefore, Mr. Chairman,about the direction in which we couldheed, as it does of any public expres- as I suggest, give consideration to themove if we threw discretion to the winds.sion, because social security, whether we matter of providing, by some built-inI think we are in real danger when welike it or not, is squarely in the middle provision in the act, an automatic in-see the rush to liberalize this programof politics, and I am not speaking of crease in benefits to keep pace with anywithout proper recognition of the bur-partisan politics. pronounced changes, in your generaldens that would be imposed. Working contributors will always out- cost of living. I think the danger that we face cannumber the living beneficiaries of the Mr. Chairman, I support the committeebe outlined very briefly and bluntly.program, those receving benefits.In a action in the benefit increases that areSocial security cannot survive withoutpolitical system where the will of the here proposed. the willing support of workers and em-majority prevails, we can fully expect But, let me speak, if I may, Mr. Chair-ployers whose tax money provides thethat any sustained protest from a dom- man, about the other side of the social-means to pay the monthly benefits.inant voting group will be listened to and security coin, the financing side.It isWhen you get this system to the pointacted upon.Social security, like any peculiar, and I think somewhat unfor-where there is a protest by those who areother law, cannot exist in the face of tunate, that too much of our discussioncurrently paying the taxes, you are incontinuous adverse public opinion. is always on the one side of the coin,trouble. It is important that we understand namely, the benefits.Let it be remem- The CHAIRMAN. The time of thethis, because we have not yet really put bered that for every benefit there is alsogentleman from Wisconsin [Mr. BYRNE5]to the test the willingness of contribu- a tax or a charge to pay for that benefit.has expired. tors to support even the present benefits. This is not a one-way street, and, Mr. REED. Mr. Chairman, I yield theWe simply do not know. And why do therefore, in this discussion we shouldgentleman S additional minutes. we not know? We will not know until 1958 CONGRESSIONAL RECORD —HOUSE 15747 1969 ifthis bill is enacted, and if it is1963 to 1965, he will pay $210.Fromon an individual with a $4,800 income, not, we will not know until 1975 what1965 to 1968, he will pay $240; and inas a result of this legislation an increase their reaction will be, because under the1969, $270.Two hundred and seventynext year in his social-security tax of 27 law itis only then that the taxpayersdollars will be his social-security tax.percent over the tax he is paying today. will feel the full brunt of the socialHis present income tax is $245.If myThe following table shows the amount of security tax burden. In the early yearsmail indicates anything, Mr. Smith andtax and the tax increase imposed on an and still today the taxes are kept rela-also Mr. Jones are contending that theiremployee and on a sell-employed person tively low because the costs are low dur-income taxes to pay for the whole op-in the next 11 years: ing the period of time required for peo-erations of government are too high Annual tax burden under committee bill ple to become eligible for benefits. Buttoday.Yet, let us remember this par- H. R. 13549 now as the program approaches matur-ticular program will impose a tax that [Adjusted gross income, $4,800 or more] ity, costs have begun to surpass income.is in excess of the income tax that many of our peoplearepresentlypaying. Cunm- That is why the committee has had to Increaselativo amend the bill to increase certain taxesHere is a table showing the income tax Aimualover percent and move up the time for payment ofand social-security tax on some typical Fereent amountprevi-hmren.se ous over certain taxes in order to avoid thattaxpayers: tat 1958 situation. Taxpayer with wife and 2 dependents tax If the fund is to remain in a position under H. R. 13549 to pay future benefits, these taxes must Employee: I rise, as they are scheduled to rise under Social securitytax 24(St.200) $94.50 1959 2($4,800) 120(K) $25.50 27 this bill. 1958 1960—fl2 a 144.0(1 24(1) 52 Let us remember that taxes on em- Adjuslid gross income! 1958 1960 1969 11)63—65 168(X) 24.00 7$ income tax 4 192.00 24.00 103 ployees and employers, even under pres- 1969 4 216.00 24.00 129 .ent law, are scheduled to go up to 41/2 2?i per-3 per.4/ tier- Sell—employed . percent on each, on their payrolls and cent ce-nt cent 195S 3tA ($4,200) 141.75 j 1954 3 ($4,800) 180.00 38.25 27 on their wages, and as far as the self- 1J6O—62 43,-i 216.00 36.00 52 Employee: 196a—65 534 252.00 6. 04) 78 employed are concerned, to 6% percent. 36. 04) $3,004) $G5 $67. 511 $90 $l3. liii 19IWr-tj8 6 28S. CX) 103 On the face of it, these may seem to be $4,OIK) 245 UO. 00 120 180. (1 1969 6 324.00 (1. LX) 129 reasonable, particularly compared with $5,000 42%) 94.50 154 216. UI) I Employer matches this tax for each employee on his the rates we talk of when we talk of payroli. some of our income tax rates, which be- 39A per-4½ per-6i per- gin at 20 percent and rise progressively. cint cent cent The tax burdens I have been talking But tax rates and taxes are two dif- about are the burdens thatwillbe ferent things.Tax rates are percent- Sell-employed: essential to pay present benefits.Any $3,00t) 65 $101.25 - $135 $202.50 ages applied against income to produce $4,000 245 135.00 180 270.00 benefit increases will require further intaxes.The size of the tax depends not $5,000 420 I 141.75 216 324.00 creases in the tax burden. only on the percentage rate but on the It can be fairly stated, I believe, that amount of income and how it is defined. It is obvious that the innocent-appear-social security, as it exists today, with Income-tax rates are applied againsting social-securitytaxrates,appliedpresent benefits and present tax sched- taxable income or income after deduc-against gross income, result in substan-ules, represents a substantially increas- tions and afterexemptions.Social-tial taxes. ing burden upon those whose tax con- securitytaxes,however,areapplied In self-employed Smith's case, theytributions support it. against gross income, income withoutwill eventually bç greater than the Fed- When the program fully matures, and deductions, and it requires a compara-eral income taxes he now pays—taxestaxes reach their permanent level, there tively high tax rate applied to taxablewhich Smiths all over the country, if myis a question, as yet unsettled, over the income to equal the tax produced by amail is any indication, say are way toowillingness of the contributors to sup- small percentage rate applied to grosshigh. port from their earnings a program of income.This distinction, I think, be- Employee Jones' social-security taxesthe scope already enacted. comes apparent when we compare thewill not be as high, but it must be remem- Therealdanger,however,isthe social-security taxes that will be paidbered that Jones' employer is contribut-threat posed by the possibility of future just by individuals under the social-ing a like amount to Jones' account.ItCongressional action radically enlarging security tax schedule provided in thiscan be argued that Jones is paying thethe cost. bill.Let us take a Mr. Jones and a Mr.employers' share,too.The employer Because we have put off into the f u- Smith, each earning $4,000.Each hasnaturally considers Jones' tax as part ofture the real burden of taxes to support a wife and two children.Mr. Jones ishis cost of hiring Jones.The part ofthe program, modern demagogs have employed and Mr. Smith has his ownthat cost which goes to the Governmenthad a field day with social security. business.Each of them now pays acannot go to Jones. Under the pressure for increased bene- Federal income tax of $245ayear. Any way they are viewed, the social-fits, Congress, in every election year since What is the situation so far as the newsecurity taxes which will be paid by1950, has enacted amendments to the social-securitytaxscheduleiscon-workers in the future will be heavy taxes.basic law which increase its cost and cerned? This year Jones, the employee, It should be stressed that these taxes,the ultimate burden upon the workers. will pay $90 in social-security taxes.Inunlike income taxes, are not subject toThis could be done, without political 1959, he will pay $100.Between 1960reduction.They are permanent taxes,fear, because the real impact of social- and 1962, the annual tax will be $120.designed to pay the cost of present bene-security taxes will not be felt until some In 1963 to 1965, it will be $140.Fromfits on into the future. We cannot re-far-off day in the hazy future.What 1965 to 1968, it will be $160.In 1969,duce them unless, first, we are willingpolitician can lose votes under a system his social-security tax, just on the basisto take away some of those benefits, orwhich permits more benefits to be doled of benefits proposed in this bill, and notsecofld, we choose to bankrupt the trustout to living voters now—and be paid any of these other benefits that havefund and jeopardize the future securityfor later—by a new generation? been proposed and suggested to the com-of every American who has contributed In recognitionofthisvote-getting mittee, his tax will be $180 a year.Histo the program and is depending on itability of social security, each year sees employer will be required to pay anfor his future protection. the introduction of hundreds of bills in employer's social-security tax equal to My point is, Mr. Chairman, that weCongressliberalizingthepsogram. that of each of his employees. had better be cautious and make sureLiberalize, in this context, has only one Now, let us take Mr. Smith, the self-that this burden is a burden that thosemeaning—bigger andbetterbenefits. employed individual.He is today pay-who will be paying the tax, will be will-Rarely, if ever, do the authors of these ing $135 in social-security taxes.Nexting to pay. bills discuss the increased costs and inyear he will pay $150 under this bill, Let me make just one further compari-creased taxes their bills would require. combinedwiththepresentsystem.son to show the increases that we areThe emphasis is all upon the additional From 1960 to 1962, it will be $180. Fromimposing here. We are going to imposedollars the present beneficiaries would 15748 CONGRESSIONAL RECORD —HOUSE July 31 receive.Thisisthe approach whichhere, a few more there, emphasizing al- Mr. REED. Mr. Chairman, I yield to apparently wins votes.It has been aways the great need for the new benefits,the gentleman from Wisconsin[Mr. singularly successful one. minimizing or ignoring the costs, untilTEwE5I. Typical of these bills is S. 3086, intro-the same effect has been achieved—an Mr. TEWES.Mr. Chairman, during duced during this session of Congress byinflated program requiring taxes at ratesmy tenure in this body I have stad Senator WILLIAM PROXMiRE, of Wiscon-which endanger the future of the wholefrequently that the gentleman from Wis- sin.Preparedincollaborationwithsystem. consin [Mr. BYRNE5I diligentlyserves Arthur Altmeyer, former Social Security How are we to prevent the dissolutionnot only his State and his District, but Administrator, it rolls up in one packageof a governmental program in which mil-the entire Nation. The analysis of this most of the currently popular liberaliz-lions of Americans have placed theirbill which he has given us in the talk ing proposals. trust—and their hard-earned cash? just concluded is another graphic dem- The bill would cost an additional $7,- I do not have any easy answer.I canonstration of why he is held in such 200,000,000 a year.To raise taxes thispoint only to a hard road, requiringhigh esteem by all his colleagues.Un- much would require the greatest Federalstrong discipline on the part of a peoplemoved by purely emotional appeals, un- tax increase ever enacted by Congress inable to see through the blandishmentsafraid of political motivations, the gen- peace time.It would fall only a trifleof those anxious to buy votes with some-tleman from Wisconsin [Mr. BYRNE5I short of the heaviest tax increase votedone else's money. Here is what we mustalways provides a factual realistic ap- by Congress at the height of Worlddo: praisaloftaxlegislation. Congress War II. Recognize that social security is de-sorely needs men who willfearlessly At maturity there would be inflicted onsigned to provide basic insurance, notanalyze and examine pros and cons of Jones and Smith the following com-total security, against the hazards it cov-pending proposals even at personal po- bined Federal tax burdens: ers.Social security is not a completelitical risk to themselves.The gentle- Jones, the employee we referred tosubstitute for other commonsense pre-man's support of this bill and the cogent earlier, would be paying $245 in incomecautions, including individual foresightarguments he has presented are a strong taxes and $220 in social-security taxes,and responsibility.It cannot be—exceptreassurance to many of us less versed in or $465 a year.These two Federal taxesat prohibitive cost through exorbitantthe complexities of revenue legislation. would equal 31 percent of this taxableand self-destroying taxes. Mr. LAIRD.Mr. Chairman, my re- income. Understand that each new or increasedspected friend and colleague the gentle- Smith, the self-employed we referredbenefit requires increased taxes if we areman from Wisconsin [Mr. BYRNE5I has to earlier, would be paying $245 in in-to preserve existing benefits.Social se-today displayed his usual sound judg- come taxes and $330 in social-securitycurity is not free: each dollar paid out inment and keen intellect in presenting and taxes, or $575.His direct Federal taxesbenefits must come from the earnings ofanalyzing this important social security would equal 40 percent of his entirethose who are working. bill.The statement he has just made taxable income. Strive to improve the existing system,clearly shows why he is referred to on If there is any question about the will-aiming to correct inequities as they de-both sides of the aisle as one of the most ingness of American workers to bearvelop, whenever it can be done withoutable and effective Members of Congress. present social-security taxes, there canadding substantially to the cost or to theI am pleased to associate myself with his be no doubt that these confiscatory taxestaxes required to fund the program. remarks. We in Wisconsin are indeed could not be sustained in the face of Most important, refuse to consider newproud of him as the chairman of our dele- outragedpublicopinion.The long-and costly benefits until we are sure wegation. range effect of the passage of this billcan support the program.This most Mr. REED.Mr. Chairman, Iyield "liberalizing" social security would bedifficult job of all requires that we post-such time as she may desire to the gen- the destruction of the program. pone the luxury of new frills until suchtlewomanfromNewJerseyMrs. To the credit of the Senator it musttime as the full impact of present socialDWYERI. be said that he recognized that the in-security taxes is felt.Only then can we Mrs. DWYER. Mr. Chairman, I rise creased benefits would require increasedlegitimatelydeterminewhetherthein support of this legislation. taxes, and the bill provides for a taxAmerican people are willing and able to Mr. Chairman, by almost any stand- increase. pay the price of new benefits; only thenard the legislation we are now consid- Some Members, however, do not evencan we tell whether we can afford theeringisamong the most important new benefits.It is fofly to create themeasures brought before the 85th Con- bother to include in their proposed leg- gress. islation any tax increase. need for even higher taxes in the future I personally prefer to think of it in I want to give credit to one Memberwhen we have no way of knowing, until it actually becomes effective, whether theterms of the number of people who will of the House who appeared before us, be affected by our action. No less than thegentleman fromCalifornia,Mr.tax schedule which becomes permanent in 1969 is supportable. 11,800,000 persons are currently on the ROOSEVELT. He appeared with a com- social-security rolls.And an estimated bination of bills the additional cost of If we do lot follow this course, if we9 out of every 10 American workers will which he admitted would be close to $8proceed blithely to liberalize the programalso some day be drawing benefits under billion. year after year, postponing the day ofthe Federal old-age and survivors' insur- He also conceded, however, that thereckoning, we will make of social secu-ance system. tax to pay for these bills which he hadrity a colossal time bomb which will one In my own District—just 1 county in introduced "would represent a totally un-day explode in our faces, with conse-1 State—about 40,000 people are pres- realistic tax burden for the Americanquences no man can now predict. In thisently receiving social-security benefits. worker: and, of course, for the self -em-bill before us the committee refused to Certainly, then there is no question ployed the cost would be even more pro-let the supergenerous friends of socialof the tremendous significance of social hibitive."He did not, unfortunately, ex-security destroy it with their self-servingsecurity legislation to the people of our press concern for the employers of thebrand of kindness. country. country who would be required to match If we follow the example of the com- That significance is further empha- the workers' unrealistic tax burden. mittee as established by this bill we willsized when one considers that recipients The real danger to the social-securitybe on safe ground. of social-security benefits are severely program, however, does not lie in the One further thought: Let us be care-limited as to the amount of outside in- passage of such bills. Their costs are tooful about what we encourage people tocome they may receive without forfeit- obvious.The heavy tax requirementsthink they can get from this program.ing some or all of their benefits.In are too apparent.No Congress in itsWhen we talk about the benefits let usgeneral, too, the beneficiaries of social right mind would risk the public outcrybe honest and frank with the person wesecurity are advanced in age, or dis- resulting from the tax burdens it wouldare talking to and say, "This is whatabled, or are widows or orphans—none impose immediately. you will get but on the other side this isof whom have the kind of full earning The peril, instead, will come from at-what you will have to pay." capacity to care for themselves ade- tempts to enact its provisions, or others The CHAIRMAN.The time of thequately, without the old-age and dis- like them, piecemeal. The pressure overgentleman from Wisconsin Mr.BYRNE5I, ability insurance benefits which they the years will be to approve one provisionhas again expired. receive. 1958 CONGRESSIONAL RECORD —HOUSE 15749 As the committee pointed out in itstend his remarks at this point in theence much better treatment. The social report, a survey made by the Depart- RECORD. securityprogramshouldberevised. ment of Health, Education, and Welfare The CHAIRMAN.Is there objection?These people should be placed on the showed that for most beneficiaries theirThere was no objection. eligible list to receive direct payments social security benefits constitute the Mr. NEAL. Mr. Chairman, I intend tofrom the social security administration major source of income.For instance,support this bill.Social Security, gen-so they may be able to count on regular 12 percent of the married couples re-erally accepted as an important contri-monthly checks no longersubject to ceiving benefits had no other income,bution to the Athèiicab way Of life, de-periodic— reductionasnow-prevails and 60 percent of couples had less thanmands that the Congress recognize thethrough local management. $1,200 annually of other income.Thenecessity of maintaining the program on Let us hope as the years go by that situation with single retired workers andan actuarially sound financial basis. thissocialsecurity program through widows is even less satisfactory. Failure to provide by legislation anperiodic adjustments may be made to it is clear, then, that for most bene-adequate reserve fund to meet unpre-provide old age assistance with the same ficiaries social security isfulfilling itsdictable drains during periods of unem-regularity and in amounts equal to those basic purpose—that of providing a bareployment could bring undue hardshipwho are fortunate enough to retire with minimum of financial security for thoseupon those whose contributions makesocial security entitlement. who need it most.But for many, thisthisprogrampossible,andthereby Mr. REED. Mr. Chairman, I yield to minimum is bare indeed. weaken public confidence in their Gov-the gentleman from California such time What was considered by Congress toernment. as he may require. be barely adequate in 1954 has subse- The fact that for the first time in Mr. BALDWIN. Mr. Chairman, I rise quently been eaten away by the steadysocial security's history present demandsin support of H. R. 13549. This bill pro- erosion of inflation.The cost of livingexceed the fund's income is clear evi-vides a much-needed increase in social in these last 4 years has advanced bydence that the source of income must besecurity benefits.I believe that we must about 8 percent.But the fixed benefitsreadjusted to take care of annual deficits.recognize the fact that since the social of social security and most other sourcesWith an ever increasing number of bene-security program was originated more of retirement income have, of course,ficiaries the anticipated drain on thethan 20 years ago, the cost of living remained at the 1954 levels. fund cannot be expected to remain inhas increased materially.If the social Congress, I believe, has an obligationbalance unless steps are taken to in-security program is going to have the to make periodic adjustments in thecrease personal contributions. same meaning to its beneficiaries today benefit levels—within the limits possi- This bill, by raising the taxable baseas it was intended to have when it was ble for a contributory insurance plan—and increasing the rates of assessmentoriginated, we must recognize the fact to help compensate for the havoc of in-on both the employee and the employerthat upward adjustments are needed in flation.The present bill would help topromises to restore the reserve fund to anthe rate of benefits. do this by increasing the amount ofactuarially sound basis. I am very pleased that numerous other benefits by an average of about 7 per- The social security program is in factimportant modifications are made in this cent. a compulsory insurance program for thebill to liberalize the Social Security Act In several other ways, too, the billgreater number of people coming underand to correct inequities in the program. makes necessary adjustments and elimi-its provisions.Like any insurance pro-One of these is the section which repeals nates past inequities in the social se-gram it costs the insured a premium.the provision that now requires pay- curity system.But fundamentally, thisTo many the benefits at retirement willments under other disability benefit sys- isacost-of-livingincrease—nothingfall short of the needs to meet pre-re-tems to be offset against social security more. tirement living standards.The frugaldisability benefits. This will make it pos- Congress hasafurtherobligation,employee who foresees this inadequacysible for a person qualified for both types however—that to the 75 million Ameri-should place some of his savings in anof payment to be able to receive both cans who are now contributing to theadditional endowment or annuity pro-types in full.Another of the important social-security program and who havegram with which to supplement his so-changes will provide that a person will an important stake in the future sound-cial security when he reaches retirementnot lose a social security benefit under nessofthe funds from which theirage. the retirement test for any month in benefits will be paid. The disability provisions in this legis-which he has earned $100 or less, rather The committee has moved wisely tolation are timely.There is every reasonthan $80 or less, as under present law. strengthen the financial basis of thewhy physically disabled citizens should I also believe that the increases in the systembyadvancingthedatesonbe included as beneficiaries when theirFederal contributions to the States for whichalready-scheduledcontributiondisabilities prevent them from earningthe public assistance program for the rates will go into effect.This will re-wages from which contributions couldaged, blind, disabled, and aid to depend- flect more accurately the real costs ofbe made and their periods of earningent children, are needed and proper. the program and will enable the fundhave been cut short. to balance income and expenditures. It would seem to me that if the Fed- This is a good bill, and I urge that the The committee has also recommendederal Government continues to assume theHouse approve it. an increase in the maximum limitationrole of bearing the major part of the Mr. REED. Mr. Chairman, I yield 1 on the annual amount of earnings thatcost of old age assistance, provisions forminute to the gentlewoman from Mas- can be credited toward benefits andmore adequately meeting these needssachusetts [Mrs. ROGERS). taxed for old-age and survivors' insur-should be made. Included in this cate- Mrs. ROGERS of Mñsachusetts. Mr. ance purposes from $4,200 to $4,800. Thisgory are those who unfortunately haveChairman, I would like to express my will further strengthen the fund and inbeen denied the opportunity to pay intodeepest regret that the gentleman from the future will assure that benefits arethe social security fund, and who mustNew Jersey [Mr. KEAN]is going to a more realistically related to wage levels.therefore depend upon the mercy of localcoordinate body, the Senate.He has I believe, Mr. Speaker, that the Waysrelief administrators, who for lack ofmade his mark in the House of Repre- and Means Committee has made an im-sufficient State-government funds cansentatives. He is one of the ablest Mem- mensely valuable contributiontotheaward only mere pittances. bers we have had.His contribution to effective administration of a program Many of these people live alone in lesssocial-security legislation has been very that means more in terms of humanthan comfortable quarters and find itremarkable. welfare than virtually any other pro-hard to exist on their small monthly pay- At the same time, as a member of gram so far devised by the Federal Gov-ments. This inequity could be improvedthe Ways and Means Committee, Mr. ernment.This bill, the product of muchif fewer families headed by able bodiedKEAN has taken a leading part in tax care and work, reflects concern for hu-parents were not the recipients of liberallegislation.It was his amendment in man beings and consideration for themonthly payments some times, I regret1947 that increased the exemption for soundness of a financial system on whichto say, awarded on a pure local politicaltaxpayers from $500 to $600.His bill so much future happiness depends. basis.Since the administration of oldeliminated the excise tax on short-run Mr. REED.Mr. Chairman,Iaskage assistance rests entirely in the handscommuter trips. unanimous consent that the gentlemanof local investigators there is little pros- Few in the Congress have as great a from West Virginia [Mr. NEAL] may ex-pect that the deserving aged will experi-knowledge of tax legislation as he. 15750 CONGRESSIONAL RECORD —HOUSE July 31 BOB KEAN was the first Representativeadditional income for the social-securitypurchasing power of the present benefit who introduced a comprehensive bill tofund at this time.This is a highly re-levelsestablished in1954.The pro- increase benefits and broaden social-se-sponsible action of which the entireposed 7 percent raiseisdefinitely in curity coverage. This was a dozen yearsHouse can be proud; such action is atorder and will help the many persons ago.Since then he has continued histhe heart of good legislating.For, asreceiving social security benefits to meet strong interestin increasing benefitsgratifying as it is to vote additional de-their needs, especially those who rely on where possible and many of his billsserved benefits for millions of fellowsuch payments as the only source of to this end have been enacted into law.Americans, we must never lose sight ofincome. Countless widows and children of serv-our responsibility to provide the income Itisvery encouraging to read the icemen are today receiving more bene-for these benefits also.And this is thecommittee's report on the disability in- fits owing to the fine work he did as atime to provide for the added increasesurance provisions of the social security member of the five-man Select Commit-for the social-security fund.Such re-program.As one of those proposing tee on Services Benefits. sponsible action will certainly serve todisability benefits when the amendments I remember many years ago when Iretain—even increase—the confidence ofof 1956 were passed, I heartily concur in had a bill on the floor to provide homesourcitizensintheirsocial-securitythe plan to pay benefits to the depend- for paraplegic veterans.Parliamentarysystem. ents of the disabled and to eliminate the procedure had prevented passage of the That this action was not an easy one"offset" provision written into the 1956 bill—a passage at that session seemedmakes itallthe more commendable.bill.This latter change will allow those hopeless—but BOB KEAN suggested anApproximately 500 bills were introduceddisabled persons meeting the require- amendment to me which cleared theinthe House ofRepresentatives forments to receive both their full social trouble up and the bill became law. amending the social-security program.security benefits and any periodic bene- The underprivileged never had a bet-Many bills would have increased bene-fit to which they may become entitled, ter friend than BOB KEAN. fits all out of proportion to the corre-because of disability, under Federal pro- I admire his persistenteffort in allsponding increase in social-security in-grams or State workmen's compensation lines of endeavor, and will miss himcome. Such legislation would have beensystem.Too, the modification of the greatly. a great disservice to social-security pro-work requirementforeligibilitywill Mr. REED.Mr. Chairman, Iyieldgrams and once again the committee isassist in many deserving cases. such time as he may desire to the gen-'to be commended for disregarding these Among the several provisions of this tleman from New York [Mr. O5TERTAGII.proposals and for producing the excel-bill—all of which are needed—is one of Mr. OSTERTAG.Mr. Chairman, Ilent bill which it has brought here today.particular interest to me. wish to compliment the committee for Mr. Chairman, I am glad to support The committee has included provi- its diligent and thorough work on thisthis bill to improve the social-securitysions to carry out the objectives of a bill highly important social-securitypro-system and I hope that it will receiveI introduced in the House, H. R. 11754, gram and for its decision to report thisthe wholehearted approval of the House.relating to survivor benefits for adopted realistic and necessary bill to the Mem- Mr. MILLS.Mr. Chairman, I yieldchildren.These provisions provide that bers of the House. This bill, H. R. 13549,such time as he may require to the gen-a child who was living as a member of meets the needs of the times in thistleman from Virginia [Mr. JENNINGS].a deceased person's household would be important area.It has become increas- Mr. JENNINGS. Mr. Chairman,Iconsidered the adopted child of the de- ingly evident that a revision of the bene-favor passage of thebillbefore theceased person, if at the time that person fits under the old-age and survivors' in-House today, and I commend the mem-died, the child was not receiving regular surance program is necessary at thisbers of the Ways and Means Committeecontributions toward his support from time.Since we last took action in 1954,for their action in reporting such neededsomeone other than the deceased or his to increase the level of benefits underlegislation. spouse, or from a welfare organization this program, wages have advanced an There is no doubt in my mind thatfurnishingservicesorassistancefor average of 12 percent, prices have risenH. R. 13549, the Social Security Amend-children, and ifthe surviving spouse about 8 percent, but the income of ourments of 1958, will rank among the mostlegally adopts the child within 2 years retired people who depend so heavily onimportant bills considered in the entireafter that person dies. theirsocial-securitybenefits hasre-85th Congress. This change in the Social Security Act, mained the same. Many of our elderly In the past few months we have givenas I pointed out in my statement to the retired citizens are not maintaining theattention to much important legislationcommittee in support of H. R. 11754, standards they deserve because of theirpertaining to the programs and opera-would affect relatively few people, but low retirement incomes, the restrictionstions of the Federal Government, to na-emphasizes the proposition that we must on their earnings and the rising coststional defense, the Nation's economy, in-always strive to eliminate the inequities of living. We have made excellent prog-ternational affairs, and even to outerthat arise under the program. Any im- ressinsocial-security legislation butspace.All of these and many othersperfection in the act is extremely tin- progress demands that we continue ourhave been of interest to my constitu-portantifyou arethe one who is efforts.So the committee is to be com-ents.But I have found as much, oradverselyaffected.Ihavepersonal mended for recommending this increasemore,interestinthesocial-securityknowledge of cases in my district that of 7 percent in social-security benefitsprogram and the need for additionalwould beaffectedbythisproposed and I believe it is a change which all ofamendments such as contained in H. R.change in the act; I am sure there are us can gladly support. 13549. others just as deserving throughout the Though this increase in benefits is de- Hardly a day passes without someoneNation. sirable,I regret that there is not ancontacting me in person, or by mail, on Under existing law, survivor benefits equally desirable provision to raise thesocial-security problems.I hope thatwill only be paid to a child who has been ceiling on the annual earnings of social-many of these inquires can be answeredadopted at the time of the parent's security annuitants.I believe the pres-with the approval of this bill. deathThis has been interpretedto ent $1,200-a-year ceiling on earnings is In addition to the 7 percent increasemean that the adoption must be final unfair and unrealistic.I have intro-in benefits proposed for the 12 millionand that children who are merely in duced legislation during this session topersons now receiving monthly socialthe process of being adopted cannot re- raise the ceiling on earnings to $1,200 asecurity checks, this bill improves theceive a social-security benefit on the year plus the difference between the an-actuarial status of the social securitybasis of the deceased adopting parent's nual benefits received by the annuitanttrust funds and makes a variety of otherwage record.The hardship ofthese and the maximum benefits permitted.improvements.I know that most of mycases is obvious A worker and his wife This would not require an increase incolleagues are familiar with the com-decided to adopt a child; they initiate the payments, but would equalize the totalmittee's report on the provisions of theproper proceedings and the child comes income ceiling for all beneficiaries. Ibill so I will not go into detail.How-to live with them.Before the adoption hope this proposal will also receive theever, there are a few amendments inis final, and this can be a considerable favorable consideration of this body atwhich I am especially interested. length of time in many States, the father a future date. Mr. Chairman, the need for higherdies or is, perhaps, killed in an accident. I wish to express also my admirationbenefits is apparent. The increased costThe mother, naturally, wants to keep the for the committee's action in providingof living has steadily whittled down thechild, but she could be virtually prohibi- 1958 CONGRESSIONAL RECORD —HOUSE 15751 ted from doing so under the Social Se- The reason this bill is before the Housegenerations.This Congress can face up curity Act because she would not beis because of the effect of inflation onto that fact.Other Congresses have not entitled to a survivor's benefit—unlessthe living standards of the social-securityfaced! up to that fact. Other Congresses she is 62 or has children under 18—andbeneficiaries, I think it is most important• have not increased the taxes according nçither would the child.I maintain tothat all of us consider the implicationto schedule in order to make this system put a mother in this position is inhu-of that fact, because this bill in itselfactuarily sound, even predicated, as it mane and against wise social policy. is inflationary and will further the effectswas, on a greater tax being borne by a Section 302 of this legislation will allowof inflation although it seeks to offsetfuture generation.If they had faced up a benefit to be paid in cases such as Ithose effects on this one segment of ourto that fact and had increased these have outlined, if the child is living inpeople. taxes, instead of voting a moratorium, the worker's home at the time of the Mr. NICHOLSON. Mr. Chairman, willwe would not be in as bad a situation as worker's death, is being supported by thethe gentleman yield? we are today.But today this Congress worker, and if the surviving spouse com- Mr. CURTIS of Missouri.I yield tohas an opportunity of driving home the pletes the adoption within 2 years afterthe gentleman from Massachusetts. point that benefits are related to cost, the worker dies.Simple humanity, I Mr. NICHOLSON.Is the programthat we cannot increase benefits unless believe, calls for this revision in the law.paying its way? we are willing to pay for them. Mr; Chairman, there are several other Mr. CURTIS of Missouri. 'Yes, al- There are certain disadvantages in this changes proposed in this bill with whichthough we are?not right now, we are ac-bill.I want to call attention to what I agree—to strengthen the financial basistually paying out.What we have beenI deem to be a basic disadvantage.If of the system, increase the maximumtaking into the fund heretofore had beenit were not for the overriding advantages, earnings base, the extension of the dead-sufficient until quite recently. I would be recommending that we vote line for filing retroactive applications for Mr. NIc3HOLSON. Will the passage ofagainst the bill.The disadvantage is the disability freeze, and the provisionsthis bill make up any deficit? thatthisbill ! isinflationary.If we concerned with public assistance, ma- Mr CURTIS ofMissouri.Itwillanalyze where this tax is coming from, ternal, and child-welfare programs. make it better actuarily under this bill.we will find it will be paid by the con- I have indicated my strong belief thatThe increase of tax that is provided will.sumers of America. It is going to be paid this is one of the most needed and mostmore than offset the benefits to be paidthrough the increased cost of goods and important bills to come before the Con-out, so the system will be more actuarilyservices because the social-security tax gress.I intend to vote for it and I urgesound if this bill becomes law.That isis an employer-employee tax.It is a cost that it be adopted by this body today. one of the basic reasons why I statedof doing business, in effect.Business, of Again, I commend the members of thethat I could wholeheartedly support it.course, is going to pass that tax, that Ways and Means Committee for their The second point I want to emphasizecost, on in an increased price for goods efforts to report a bill that makes neededis that when we talk about the people ofand services.Itis economically and improvements and at the same time isthe United States we are not speaking ofbasically an inflationary measure. consistent with sound financial manage-just those who can vote.Anyone, on a It becomes important to realize that, .ment of the trust funds. moment's reflection must agree thatalthough we may be benefiting a certain Mr. MILLS.Mr.. Chairman, I yieldthere are many people in the United'segment of our population, those who such tUne as he may desire to the gen-States who do not have the franchise.are on social security, through these intleman from Illinois [Mr. GRAY]. People who are not yet 21 do not havecreased benefits, at the same time we are Mr. GRAY. Mr. Chairman, I rise to-the franchise and the people who aretaking away some of the benefit through day in support of this important measuregoing to take over in the ensuing genera-the inflation that is going to ensue as and to commend the distinguished chair-tion must be classified as part of thethe result of the passage of this measure. man of the committee, Mr. MILLs, ofpeople of the United States who do notOn top of that, we are going to be posing Arkansas, and the other members of thehave the franchise at this time. an additional problem to the milliOns— Committee on Ways and Means, for their This legislation, which goes on intoand I repeat the word "millions"—of old diligent efforts in studying the entirethe future and hopes to bring a systempeople who are not on social security social-security matter through extensiveinto fruition, concerns, really, the peo-because they were born too soon. public hearings. I also want to commer. ple of the United States of the present Mr. Chairman, I regret to say that the committee for reporting this measureand the future.So anything we do herethere is a very basic error in our com- to the floor for consideration. should give ample consideration to thatmittee report.On page 2 it is stated: Mr. Chairman, due to the increasedparticular fact and not be done just for Twelve million now rely on monthly checks cost of living, thousands of old-age andthose who presently can vote. from the social-security system as the foun- disabled pensioners have been experienc- The advantages of this bill have beendation of their economic security.For the ing undue hardship due to a limited in-stated, but I want to restate them fromoverwhelming majority of these aged and come.This bill, of course, will not bemy own point of view.The real reasondisabled persons, widows, and orphans, these the complete answer to their nepds, how-why I say that this bill has some advan-benefits are the major source of their sup- ever, it will be of benefit in alleviatingtage is because I believe it will bringport. some financial problems. home to the voting people of this coun- I am certain it is not an intentional Since coming to Congress in Januarytry the fact that we cannot increase themisstatement or maybe itis merely a 1955, I have consistently advocated andbenefits in the social security programmisunderstanding. The point I want to supported liberalization of social-securityunless we pay for them.This is the firstmake is that although a majority of our benefits and it is a real sense of joy fortime, really, that that has been said bycitizens, the older or aged citizens, de- me to speak in behalf of this measurethe Congress of the United States to therivebenefit from thesocial-security today.I hope this bill will pass andvoters. We are saying that if we wantsystem it is not an overwhelming ma- become law as quickly as possible in orderto have these increased benefits to takejority.There are in our population 15 that social-security recipients will becare of the problems that inflation hasmillion people who are over 65 years of able to enjoy more fully the necessitiescaused, we are going to have to increaseage. Of these 5 million, or one-third, do of life. the social security tax in order to pay fornot get benefits under the social-security Mr. REED. Mr. Chairman, I yield 10them.It is particularly important thatsystem.There are 9 million over 70 minutes to the gentleman from Missourithis generation realize this because thisyears of age in our population, 3 /2mil- [Mr. CtTRTI5]. generation is not paying its way as farlion of whom do not derive any benefits, Mr. CURTIS of Missouri. Mr Chair-as social security benefits are concerned.which is about two-fifths of that group. man, I am happy to state that this is This system is predicated on the theory When you get to the people over 75, legislation that I can sincerely support.that the benefits that have been paid inyou find we have 5 million in our popu- I believe that our committee has donethe past and are going to be paid in thelation and 2.5 million, one-half of the a workmanlike job, and a very thoroughnear future to a large extent will bepeople over 75, derive no benefits from job in a very difficult area. The reasonborne by our children and our grand-the social-security system. So, although behind this bill, however, is somethingchildren yet unborn.So, when we goitis the majority, it is not the over- that all of us, I believe, should pay atten-to increasing benefits, let us rememberwhelming majority of these older people tion to. that we also are apt to be taxing futurethat are going to benefit by the increase 15752 CONGRESSIONAL RECORD ---hOUSE July 3.1 1n the benefits of the social-security sys-also primarily the result of inflation.am satisfied that as the farm program tem under this bill.Yet, through theseThe average salaries m the Nation,moves ahead with the rural people com- inflationary forces that will go into effectwages and salaries, the media, have goneing into the system we will see the same under this bill we are going to cause theup, so there is reason for increasing thething happening there that we kave seen cost of living of these people not onbase.But herein lies the danger. Wein the urban areas, a decline in old-age zocial security to be increased.Theirhave built into the social security sys-assistance. difficulties and their problems will betem—and again I think it is a sound Mr. MILLS.Mr. Chairman, will the greater because of this. Now, that is theprinciple—a weighted benefit, so thatgentleman yield to me? balance, and we cannot vote for this billthe amount of tax we pay on the first Mr. CURTIS of Missouri.I yield to and think that we arecoveringall the$1,000 of earnings brings more benefitthe chairman of the committee. people of the United States when we votepercentagewise than the tax we pay on Mr. MILLS.Mr. Chairman, I was for these increased benefits.There arethe next thousand.So the tax thatjust going to say what the gentleman has these underlying economic factors thatwill be paid on the $600 above $4,200 ifjust said, that in the overall there has we must pay attention to, and inflationwe increase this to $4,800 will not bringbeen a decline in the total number of is going to rob the older people of somem the same dollar benefit that the taxpeople on OAA.The dollars for that of their purchasing power; indeed, theon the first $4,200 or on the first $1,000program have risen because of the fact very people to whom we grant these in-would bring.There is built in here athat the States and the Federal Govern- creased benefits are going to have somepossibleseed for the graduated taxment have increase4 the benefits pay- of it taken away because the cost offormula. This is not a theory of relatingable under OAA. living is bound to increase as we increasebenefit to earnings but indeed of spread- Mr. CURTIS of Missouri.I think the these benefits. ing and sharing the wealth.If we werebasic theory of the system is right, that So, in the future, when new plans areto pursue that theory much further weas OASI coverage becomes more com- presented before this Congress to in-could easily wreck the social securityplete then OAA will gradually phase out. crease social-security benefits, we mustsystem; that is, the theory behind the Mr. PELLY.Mr. Chairman, if the remember two things: One, they mustsocial security system we presently have,gentleman will yield further, I am glad be paid for; two, we must look to theirand end up with something that—is noto hear the gentleman say That because inflationary effects and who really willmore than a pension system that mightI think that is one of the great talking pay for the benefits. We must remem-just as well be paid for out of the gen-points for the Social Security system. ber, that inflation itself is a form of tax-eral treasury. Mr. CURTIS of Missouri.Mr. Chair- ation that transfers purchasing power Again I emphasize that I do not be-man, these people not covered at all, I from the pockets of our people to thelieve we have reached that point.Butwas talking about, will eventually no Federal Government.If we are going1 do say that there is this seed sownlonger be with us and so we will not to raise money from our people, I sug-in the system, and we must be veryhave their problem to concern us.But gest the better way to raise it is throughcareful, m my judgment, each time wethey are with us at the present time and some traditional form, one of the classicincrease the ceiling of wages upon whichwe have many millions of people we are forms of taxation, be it income tax, excisetaxes are paid lest we lose our basichurting by this bill not helping, let there system. be no mistake about that. tax, or employer-employee tax, rather Mr. Chairman, my concluding remarks Mr. FORAND. Mr. Chairman, will the than the tax of inflation. The tax of in-are the ones that I started with; thatgentleman yield? flation hits our lowest income groupswith all of the disadvantages that I see Mr. CURTIS of Missouri.I yield to the most, and it is they who bear thein this bill I am satisfied that the over-the gentleman from Rhode Island. basic brunt of inflation. riding advantage is so firm that the bilF Mr. FORAND. The gentleman will re- One other point I would like to bringshould be enacted.First, we are helpingcall the table which was provided us by out at this time.One theory of socialmany, many of our people, the majority security—anditisfundamentally a theSocialSecurityAdministration sound theory in my opinion—is to relateof our people on social security in takingshowed that there are some 12 million benefits to earnings, and the secondcare of the effects of inflation on them,recipients of old-age and survivors in- theory is that social security is a base,and we are pointing out that when wesurance, and that of that number of 12 only a beginning, not intended to be aincrease the benefits we have to increasemillion about 600,000 also have to have complete retirement program.It wastaxes at the same time. supplemental old-age assistance. never intended to be a complete retire- And ifthat one message can be Mr. CURTIS of Missouri.That is ment program of our people.It was in-brought home to our people this Con-right. tended to serve as a base upon whichgress will have accomplished a major Mr. FORAND. Six hundred thousand they could add their own earnings, theirachievement in passing this bill. out of the 12 million had to have both? own pension plans and programs, and Mr. PELLY. Mr. Chairman, will the Mr. CURTIS of Missouri.Yes, be- gentleman yield? cause of the effects of inflation. we must always remember that this is I yield to not intended nor was it ever intended to Mr. CURTIS of Missouri. The CHAIRMAN.The time of the be a complete retirement system.It isthe gentleman. gentleman from Missouri [Mr. CURTIS] Mr. PELLY. We understood that thehas expired. an incentive and it is a base. Now, whenwhole program of social security antici- we move to increase the base upon which Mr. McGREGOR.Mr. Chairman, I the tax is paid, we must bear in mindpated that the number of those who aremake the point of order that a quorum is these two basic theories.I am satis-on welfare would gradually diminish;not present. fied that the increase from $4,200 tobut as I understood the gentleman from The CHAIRMAN. The Chairwill $4,800 does not do violence to eitherWisconsin [Mr. BYRNES], he said thatcount.[After counting.] Ninety-two theory, although we are getting close tothat trend was not being actually real-Members are present, not a quorum. ized; is that a fact? The Clerk will call the roll. the point where further extensions could Mr. CURTIS of Missouri. I think this. do violence. The Clerk called the roll, and the fol- Let me illustrate. One of the theoriesThere are some figures that would indi-lowing Members failed to answer to their relating benefits to earnings requires in-cate that, but I think if you look at itnames: creasing the base as inflation affects thethis way, we would have to disagree with {1o11 No. 148] the gentleman. The social-security sys- Albert IMggs Jones. Mo. average annual wage of our people.Iftem originally was not extended to the Ashley Durham Kearney everyone in this country had reac1iedrural areas and the farmers.In theBaring Eberharter Keating the peak of the ceiling, say $4,200, then Bass, Tenn. Engle Lancjrum city areas where it has been in existence Boggs Feighan Lesinsk$. we would have no cause to relate bene-a longer period of time the old-age assis-Boiling Friedel Loser fits to wages, everyone would get thetance rolls have been declining as social-Bonner Gordon McCarthy same. But if the ceiling was raised we Burdick Gwinn Mclntlre security payments, old-age and surviv- Carnahan Hays. Ark. Marshall would have some wage.benefit flexibility.ors insurance, have been increasing. But Celler HUlings Michel We would still have a system of relatingbecause the farm population has justChristopher Hoffman Moulder benefits to earnings.The reason forcome into the system, you will find a Clark Holifleict Powell this increase from $4,200 to $4,800 upongreat many people in the rural areasColmer Jackson Robeson, Vs. Davis, Tenn. James Sadlak - which a tax is paid is, I might state,still on the old-age assistance rolls.IDies Jenkins St.George 1958 CONGRESSIONAL RECORD —HOUSE 15753 Scherer Smth, Kans. Trimble Ways and Means Committee urging anciaries are forced to seek supplementation Scrlvner mile Tuck from public assistance, thus destroying what Scudder Taylor Willis increase in benefits were representativeour people regard as the main advantage of Shut ord Teague, Ta. not exclusively of older people, but of thesocial Insurance, namely the possibility of Sieminaki Tollefson entire working population of the country.having nothing to do with means test pro- Accordingly the Committee rose; andFor the AFL-CIO, Nelson Cruikshankcedures.For it makes little difference to the Speaker having resumed the chair,appeared on June 26 in support of a 10-one's sense of self respect whether one has to Mr. ELLIOTT,Chairmanof the Committeepercent increase in benefits on behalf ofsubmit to this procedure to obtain the whole of the Whole House on the State of thethose "many aged persons today who areof one's monthly income or to obtain the struggling along on incomes insufficientmissing 8 or 10 percent.To raise benefits Union, reported that that Committee, now, for both abeady retired and future ben- having had under consideration the billto provide the basis for health, comfort,eficiaries, by 10 percent or a little more than H. B,. 13549, nd finding itself without aand happiness." He pointed-out that thethe current cost of living Increase but less quorum, he had directed the roll to beaverage monthly benefits in current pay-than the increase in average earnings would, called, when 366 Membeils responded toment status in April 1958 were as follows:In view of probable trends in prices, make It their names, a quorUm, and he sub-Old age $65.41less necessary to adopt a hurried change in mitted herewith the names of the absen-Wife's or husband's 34. 71 the next, year or two.It would also serve to Widow's orNwidower's 51.40give beneficiaries some share in the rising tees to be spread upon the Journai. Parent's 52. 13 productivity of the Nation. The Committee resumed its sitting. Child's (survivor) 41.24 Mr. HILLINGS. Mr.Chairman,IMother's 49.62 This is,it seems to me, a very fair wish to commend the House Ways andDisability (after deductions) 74. 00 statement of the obligation which this Means Committee for the painstaking Congress has to raise benefits by at least work that involved the writing of this I agree entirely With Mr. Cruikshank10 percent. bill, H. R. 13549, which is a worthy meas that— I am also greatly concerned over the ure and which I support 100 percent. These amounts, compared to monthly ex-fact that the committee bill was content The overall objective of this legisla-penses, are pathetically small. to overlook the opportunity to make hos- tion will benefit not only the recipients I am also thoroughly in accord withpital, surgical and nursing home benefits but our Nation inasmuch as the measurehis statement that— available to people eligible for social se- strengthens our social-security system. Surely the United States in the atomic agecurity, in line with proposals which have Mr. RABATJT. Mr. Chairman, I havecan do better by our aged citizens. been made by Congressman FORAND and watched with great interest the hearings many other Members of Congress, by la- oncurrentsocial-securityproposals Simple arithmetic shows that $65.41bor groups and by forward-looking au- which have been conducted by the Com-a month is just $784.92 a year—and thatthorities in this field throughout the mittee on Ways and Means in recentis not enough. The recent budget pre-country. weeks because I believe this legislationpared by the Health and Welfare Council All evidence shows that only a small Is among the most important measuresof New York City described as a verygroup of people aged 65 and over have awaiting action before this Congress.modest budget for a man and wife, bothany health insurance protection today. The bill as reported undoubtedly repre-over 65, calls for $196 a month, or 20And nearly 6 million of these older peo- sents a great deal of time and effort onpercent more than the $162.80 maximumple are living in families whose total in- the part of the committee, but I regretnow available to a couple in the form ofcomes are under $3,000.Clearly, the to say that it appears to me to be aold-age benefits.The same New Yorkheavy and unpredictable cost of modern "half-loaf" measure in many respects,budget calls for about $135 a month formedical care is one of the greatest haz- rather than the kind of a bill this coun-an elderly widow living alone—or closeards threatening self-sufficiency in old try deserves. to 3 times the average benefit of $51 thatage.And when a serious—and an ex- a widow now receives. Costs in New Yorkpensive—illness strikes, the only alter- The evidence presented to the com-are reasonably typical of those in other mittee showed overwhelmingly the need native, in too many families, is public or for an increase in the amount of bene-large cities. private charity. fits by at least 10 percent, but the bill The committee report also points to The result is that our public assistance as reported pares this amount down toone very significant fact which mustprogram must care for the sick and in- just 7 percent.I recognize that, sinceweigh on the minds of all of us as we con-firm.Public assistance sets relief budg- the bill was reported under a closed rule,sider this very important legislation—ets at minimum levels.In many cases it will be impossible to amend it on thenamely, that social-security benefits con-applicants are forced to exhaust virtu- floor to make a very necessary upwardstitute the major source of income forally all of their savings, or to put a lien adjustment in benefit amounts.But Imost people now on the rolls. The reporton their home to obtain necessary medi- must rise in vigorous protest againstcites figures obtained in a survey in De-cal care.I am convinced that the ma- what appears to be a pennypinchingcember1957 by the Departmentofjority of the American people are not in policy in the decision as to the amountHealth, Education, and Welfare whichaccord with a policy which holds that the of benefit increase to which our oldershowed that, of the married couples onhealth needs of our aged can be met only Americans are entitled. the benefit rolls, 60 percent had less thanby a means test program like this. $1,200 in income in addition to their so- I believe that the type of hospital and The committee's report itself notescial-security benefits. This same surveysurgical benefits outlined in the Forand that, since the last benefit increase wasshowed that only 23 percent of all retiredbill will not only protect our older citi- put into effect in 1954, wages have in-men and 11 percent of retired women arezens against the threat of the high cost creased by about 12 percent and pricesreceiving employer or union pensions to by 8 percent.Simply stated, this means of illness, but that they will also be of that, in the face of steeply rising prices—supplement their social-security benefit.benefit to those institutions which are particularly of those necessities of life,And the median income for aged widows,now supplying medical care.For, as food, and proper medical care—we havein addition to their social-security bene-Prof. Wilbur Cohen, of the University of fits, was just $270 last December, bring-Michigan, pointed out in a recent issue of held to 1954 standards in the amountsing the median total income of aged of our social-security payments.This the American Journal of Nursing: is neither equitable, nor is it sound econ-widow beneficiaries up to the appallingly Hospitals, at the present time, are caught inadequate figure of just $880 per year,in a tight squeeze. On the one hand, they omy.If we can be sure of one thing,including their social-security payment.have long been considered as community we can be certain that an increase in In the face of these facts, a "pinch-nonprofit organizations of a service charac- social-security checks will go indirectlypenny policy" is not only unwise but itter and have, thereby, been endowed with a into the economy.It will be used toisdelusive.For,asDr. Eveline M.special status under the tax laws.But, to purchase the food, the clothing, and the keep their heads above water, they increas- medical care which isso desperatelyBurns, of Columbia University, said wheningly have had to require potential patients needed by men and women trying to liveshe appeared before the committee into be able to pay before being admitted. on a social-security benefit which nowfavor of a 10 percent increase in benefits:They are thus losing some of their charitable Even in 1954, average benefits werbarelyemphasis and become viewed by people in averages around $65 per month for aadequate, together with the resources pos-the community as another service institu- retired individual. sessed by the average beneficiary, to meettion, albeit still not operated for profit.As It is noteworthy, I believe, that the or-minimum living costs.The rising cost ofthey do so, their status in the community is ganizations which appeared before theliving means that more and more benefi-altered by the tendency to demand payment 15754 CONGRESSIONAL RECORD— HOUSE July 31. fromsome source for all service rendered. At last, the Congress has brought forthcurity system out of kilter, would neces- There Is widespread recognition of the diffi-a stopgap measure that will correct some culty ofreceivingsufficient endowments, sitate increasing payroll taxes at least community chest oontributtons, and pay-inequities, pending further comprehen-1% percent, and is a step that should ments from public agencies for the indigentsive reform. not be taken until a complete study is to fully cover the costs of hospital service for 'The social security amendments ofmade. those who do not or cannot pay the full cost.1958 increase monthly benefits to social Now, just as In everything, there is The difficult decisions which hospitals aresecurity recipients 7 percent. The per-some bitter with the sweet in this 1958 faced with is to refuse to admit those whoson now receiving $108.50 will, when thissocial security law.The payroll tax on are not able to pay their full cost, to re-bill becomes law, receive $116 per month. quire someone to pay the fun cost on their the employee and employer is increased behalf, or to spread the cost of those whoThe person receiving $80 a month willone-fourth of 1 percent. cannot pay over those who can or are willingget $86, and so forth, except the person Each worker earning $200 a month to pay. receiving the $30 minimum will get a 10will have an additional1 '/2cents per percent increase,or $33 per month.day deducted from his wages for social Mr. Chairman, I hope the social secu-Incidentally, the committee tried to worksecurity.Each worker earning $400 a rity amendments of 1958 will be liberalit out to where the minimum recipientmonth will have an extra 3 cents per enough—and imaginativeenough—towould get at least a $5 increase butday deducted.Beginning in January bespeak the essential humanitarian spiritfinally settled on $3, pending the com-1959, the old-age and survivors insur- of this country.To this end the billpletion of further study and review. ance payroll-deduction tax will be 2 '/2 should not only be liberalized in the Now, a $3 a month or $6 a month orpercent on employer and employee in- amount of benefitstobepaid, andeven $7.50 a month looks small indeed instead of 234 percent. strengthened by• the addition of healththese times when a dollar buys so little. No one likes bigger deductions.The benefits, but also in several other impor-But there have been many days in thecommittee studied countless ways to tant respects.I believe, for example,past 2 years when I feared that thereavoid it; but finally concluded that the that the amount of annual earningswould be no changes whatsoever in so-payroll tax had to be increased. counted for contribution and benefitcial security benefits.The opposition Civil service employees pay 6 percent purposes should be increased from$4,2ff0has been tremendous from many quar-of their wages into their retirement to $6,000, rather than only to $4,800 asters; and Government expenditures andfund and the Government matches it provided in the committee bill.In thistaxes are at a regrettably high level, es-withanother 6 percent.Railroad way we will not only be placing benefitpecially when Government is wasting soworkers pay 6¼ percent of their wages amounts in closer relationship to wagesmuch on nonsense. into railroad retirement, and the em- at the time of retirement, but we wifi So, in view of the fact that this is aployers match it.Social security cover- also increase collections tQ help financestopgap measure and in view of theage is the lowest of them all, even at the other improvements. complications involved, we cannot be toonew rate of 2 '/2 percent from employee I applaud the action of the commit-critical of the 1958 increases. matched with 2 ',4percentfrom employer. tee in strengthening the disability bene- In addition, this act makes some sub-Incidentally, for the self-employed, the fitS program 'established in the1956stantial changes in disability provisions.rate increases from 3V2 percent to 3% amendments.By making dependentsHenceforth, a man who gradually be-percent in 1959. eligible for benefits, and by liberalizingcomes disabled over a period of 2 or 3 There are those who feel that it is the eligibility requirements, the commit-years will not be denied social securitywrong to increase social security bene- tee took a step in the right direction, butbenefits.Under existing law, a workerfits and deductions at this time, because I look forward to the day when the pres-is required to have been working at leastthe cost of defense is such a burden on ent restriction limits on disability bene-18 of the last 39 months prior to claim-thetaxpayer.Thisisa compelling fits to people aged 50 and over will being disability.This poses an impossibleargument;butthisstruggleagainst eliminated.I believe that workers whosituation for the man who becomes dis-communism may well go on for many are unable to work because of total andabled gradually, thinking he is going toyears. permanent disability, should be entitledget well, but does become in time totally What happens to our retired and dis- to such benefits regardless of age. unable to work.This 1958 act removesabled in the meantime?Surely, any In closing, let me say that I believethe requirement of employment withinworking son or daughter worth his salt our social security system must be asthe 13 quarters prior to disability. should be willing to pay 1 cent or 3 cents dynamic as our economy.During the Further, under this 1958 act, it willper day to help ease the burden of par- past half century this country has dem-now be possible for the disabled workerents and grandparents in these difficult onstrated our marvelous potential for theto receive retroactive disability insur-times of inflation. kind of productive enterprise which, forance payments.For instance, if he is Further, the extra one-fourth of1 the first time in the history of mankind,declared to be disabled in Novemberpercent on wages up to $4,800 a year is promises that those ancient enemies—1958, but has been disabled for monthsnot just to pay for increased benefits. hunger and disease—may be conquered.prior to that time, he could claim and bePart of it goes to make the social-secu- Our social security is a time-tested andpaid for as many as 12 months retroac-rity fund actuarially sound. effective method of meeting this chal-tively0 dating back to December 1, 1957. With this 1958 act, the social-security lenge.Let us keep it that way; This is an improvement, because every.-fund will be sounder than it has ever Mr. BROWN of Missouri.Mr. Chair-body knows how long it takes in somebeen in the past, according to the Chief man, I ask unanimous consent to extendcases to convince the State authoritiesActuary of the Social Security Admin- my remarks at this point in the RECORDof total disability.In the future, theistration. and include extraneous matter. disabled man will not be penalized by So, we have made some good changes The CHAIRMAN.Is there objectionthis redtape. in the social-security law in 1958. But to the request of the gentleman from This 1958 act also makes a slightI am deeply disappointed over what has Missouri? change in what a map or woman cannot been done in the old-age assistance There was no objection. earn after reaching 65 without beingprogram. Mr. BROWN of Missouri.Mr. Chair-denied social security benefits.This law Nothing disturbs me likeallthis man, for 2 years now, there has scarcelyprovides that a person will not lose asnooping and prying that is required of been a day when I was not pleading withbenefit for any month in which he haspeople over 65 before they can qualify

members of our Ways and Means Com-earned wages of $100 or less.At thefor old-age assistance. - mittee to modernize our social securitypresent time, it is $80orless. Thelaw says they must need the as- and old-age assistance programs.No Now, here is another instance wheresistance; but no one has ever spelled one can deny the need for it.Our re-this bill is a stopgap measure.Manyout what need really means.It is one tired and disabled are helplessly caughtpeople feel that the $100 per month inthing in Colorado, another in California, in the spiral of cold war inflation.Liv-permissible earnings should be closerand something else in Missouri. ing costs have increased 8 percent sinceto $200.But the chairman of the Ways As everyone who knows me can testify, 1954, the last time social security bene..and Means Committee stated today thatI have pleaded and pleaded with Mem- fits were changed.And millions of el-such an increase in permissible earn-bers of this Congress to change the old- derly people have lost faith in the future.ings would throw the whole social se-age assistance laws and cut out some of 1958 CONGRESSIONAL RECORD —HOUSE 15755 this expensive investigating and rein- I am glad I pestered the members ofpresent law the excess ischargedto vestigating.It would be cheaper to paythe committee until they took action.months in reverse order beginning with pensions than to go on spending hun-I am glad to have been a part of thethe end of the year. The change means dreds of millions of dollars a year keep-effort that made possible the social se-that where an individual's or a family's ing borderline cases off the list. curity changes of 1958 listed herewith.benefits are increased during a year, the Obviously, the Congress is not pre- OLD-AGES SURVIVORSANDDISAUXLZTYINSURANCE benefits suspended by reason of earn- pared to establish a national law where- PROVISIONS rngs will be the smaller ones that were by a person over 65 would not have to Individuals now on the benefit rollspayable for the early months of the sell her little home or give up her smalland all future beneficiaries would haveyear. life insurance policy in order to receivetheir benefits increased by about 7 per- The law would be changed to provide an old-age assistance check. cent, more at the minimum, over thethat where a person over age 18 is the The Department of Health, Education,levels provided in the present law. Thechild of a deceased or retired insured and Welfare says that qualifying stand-minimum increase in the benefit of aworker and has been disabled since be- ards must be left to the States. worker who retired at or after age 65fore age 18, benefits would, in general. Obviously, the Congress is not pre-would be $3.The average increase forbe paid to the child without requiring pared to increase old-age assistanceworkers now retired would be aboutthe proof required under present law benefits, even though I have shown the $4.75.The increased benefits would bethat he has been dependent upon the Members hundreds of pitiful letters fromeffective for months after the secondorker for his support.The change good people living on the edge of star-month following the month of enact-would make the requirement for the vation with no other income but theirment. - disabled adult child the same as for the monthly welfare check. The Depart- Thedollar ceiling on the total of bene-- child under age 18. ment of Health, Education, and Welfarefitspayable to a family would be raised Benefits would be provided for the de- says it Ia up to the States. from $200 to $254, which is equivalent topendent parent of a deceased worker Well, up to the States or not, thistwice the maximum retirement benefiteven though there is a widow or child Congress must sooner or later face uppayable. of the worker who is or may become to this problem, because the old-age as- The total annual eamings on whicheligible for benefits. Under present law sistance program in its present form isbenefits could be computed—and ona parent can qualify only if there is no wasting millions of dollars on sheer non-which contributions would be paid—such widow or child. sense. would be raised from $420O to $4,800, A lump sum would be paid to the Once a person is declared to be eligibleeffective January 1, 1959. widow of a deceased worker only if she for old-age assistance, why should she Benefits would be provided for the de-was living in the same household with be reinvestigated time and again? Whypendents of disabled workers like thosehim or has paid his burial expenses. cannot a person over 65 live with a rela-now provided for the dependents of re- Benefits would be paid to a child if tive and still be entitled to her old-agetired workers. the child had been living in the worker's assistance?Must she be denied this The provision that now requires pay-household, if the child had not been small measure of financial independ-ments under certain other disabilitysupported by anyone else, and if he was ence in the closing years of her life justbenefit systems to be offset against so-adopted by the widow of a worker within because some Government regulationcial security disability benefits would be2 years after the worker died. says so? repealed, so that a person eligible for a Benefits would be paid to the mother This is a matter that cannot be dis-social security disability benefit and alsoof a child if the child had been adopted missed by buck passing.I guaranteefor disability benefit under another sys-by the mother's deceased husband even that I will keep haunting the Congresstem would receive the full amount of histhough they had not been married for as until substantial improvement is madesocial security benefit. long as a year. in standardizing the public assistance The work requirements that a dis- Benefits would be paid to the adopted program. abled worker must meet to be eligiblechild of a retired worker even though Also, I am pleased to see that the Sec-for cash disability benefits, and to havethe child had not been adopted for as retary of Health, Education, and Welfarehis benefit rights frozen while he is dis-long as 3 years. is to conduct a thorough study of alter-abled, would be changed to make it Where a survivor of a deceased work- nativewaysofprovidinginsuranceeasier for a disabled worker whose dis-er was—or might at retirement age be- against the cost of hospital and nursingability has a gradual onset to qualify.come—eligible for benefits based on the home care for old-age, survivors, andUnder the bill, the worker would noworker's earnings but loses eligibility by disabled.This study is to be completedlonger be required to have had 6 quar-remarriage, the survivor could become by February 1, 1959. ters of coverage out of the 13 calendareligible, immediately or upon attainment Certainly, one of the great fears ofquarters before he became disabled. Heof retirement age, for benefits on her anyone over 65isthat he may bewould be required to be fully insuredsecond husband's earnings record. stricken by an illness that could costand to have 20 quarters of coverage out Where two secondary beneficiaries age $5,000 to $20,000. of the 40 calendar quarters before he18 or over marry each other, for ex- Itis a serious problem that shouldbecame disabled. ample, the dependent parent of one command the Nation's concentrated at- Disability insurance beneflts—like allworker and the widow of another, the tention. other benefits now provided—would bepayment of benefits to both beneficiaries Let us get all the facts out on thepaid for as much as 12 months beforewould be continued.Under present law. table. Let us see how good a job privatethe month in which an application forboth lose benefits.Childhood disability thsurance is doing, and what can be donethe benefits is filed.Present law con-benefits would be continued when the to expedite it.A complete study andtains no provision for retroactive disa-person receivuig them marries a person report by the Secretary of Health, Edu-bility insurance payments. receiving old-age or disability benefits. cation, and Welfare is a first and funda- The June 30. 1958, deadline for flling Changes would be made in the cover- mental step. fully retroactive applications for the dis-age provisions of the program: First, to All in all, the social-security amend-ability freeze would be postponed for 3facilitate coverage of certain State and ments of 1958 are not world shaking, butyears. local government employees who are in they will do some good. Our people over The law would be changed to providepositions covered by a retirement sys- 65 have lagged behind the inflation pa-that a person will not lose a beneflt un-tem; second, to facilltate coverage of rade for too long.In a very, real sense,der the retirement test for any month inemployees of certain nonprofit organiza- they have been the most serious casual-which he has earned wages of $100 ortions; third, to extend. coverage to tur- ties of the cold war. They are caught Inless, rather than $80 or less as under an inflation that they did not cause and pentme workers; fourth, to provide so- present law. - cial-security credits for earnings which could not have foreseen. Whereearnings exceed the amounta person has from a partnership during Social security is a part of the Ameri-aflowed under the retirement test with-the year of his death; and, Ith, to pro- can way of life.It is now sounder thanout loss of benefits, the excess earningsvide that social-security wage credits of it was a year ago. And that isa signalwould be charged to months beginning$160 will be credited for each month of achievement of this Congress. with the first month of the year. Under CIV—992 service performed during World War II 15756 CONGRESSIONAL RECORD—HOUSE July 31 by American citizens in the armed forcesalso be very helpful. Most of the othersocial security is here to stay, that it ofcertaincountrieswhichfoughtchanges are technical and apply just tohas become an important fact of life for against our enemies in that war. limited numbers of cases except for theevery American citizen, and that, as Several changes in technical provi-increaseinpublicassistancegrantssuch, itis imperative that it be kept sions would be made to facilitate adrnin-which will benefit millions of people, andboth aseffective and asactuarially istration of the program. I am glad that was also included in thesound as possible. The tax rates now scheduled in thebill. As to the effectiveness of the program, law would be increased by one-fourth of Just a few days ago I received a letterthere is much I would like to say but it 1 percent each for employees and em-from a good friend of mine, a prominentwould be pure repetition of what others ployers, and three-eighths of 1 percentmember of the medical profession, ex-have said here today.What a good for the self-employed, above the ratespressing strong doubts about the wholething Adam had—when he said some- now scheduled, and the scheduled in-social security program and saying hething he knew nobody had said it before. creases in the rates would take placedid not think the program was actu- However, as simply as possible, let me every 3 years instead of every 5 years.arially sound; or, even more serious, thatsay with all my colleagues that we do The revised schedule would be as fol-he did not think it was in conformancerecognize that inflation, for which this lows: with the American way of life and wasCongress bears a responsibility, has nib- [Percent] a grave threat to the American way ofbled away at the values of this program life. He wrote me: for our elder citizens.For the 12 mil- Em- Em- Self- Our attempts to provide everyone with ab-lion persons, whose social-security bene- ployers ployeesemployed solute security accomplishes little other thanfits constitute the major source of their the weakness of personal initiative and over-support, rising living costs have sapped 1959 24 234 3/burdening of the 'taxpayer.The increased 196O-O 3 3 43/ benefits will never be covered by the so-calledthe purchasing power of those benefits 1983-65 334 334 534 social-security premium but must be coveredto the point where many of them have 1966-58 4 4 6 had to endure the humiliating experi- 1969 and thereafter 43'2 434 6iby general taxation. ence of asking for public assistance in Mr. Chairman, in my reply I stated: order tosurvive.Bearing as we do PUBLIC ASSISTANCE PROVISIONS Frankly, I do not think that social secu-much of the responsibility for this con- The bill provides a new formula forrity has been a threat to the American waydition, we cannot shirk or postpone Federal participation in public assist-or that it has weakened personal initiative.our duty to alleviate such an unintended ance providing additional funds to allI think most of the people who benefit fromresult.These people have no spokes- States and maximum flexibility in meet-it are decent people who would in many cases not have been able to provide for theirman, in the way in which unions speak ing medical care needs and other specialown retirement.You doctors are keepingfor their members, yet we Members of needs. The formula also recognizes theus alive longer and as a result our workingCongress have often heard their indi- limited fiscal capacity of the lower in-force is growing older. But older people arevidual pleas for recognition.If we can come States. finding it difficult to hold on to their jobS,vote pay increases for the postal work- It extends the public assistance pro-and imposSible to find new ones.Withouters and other governmental employees, gram to Guam, increases the Federalsocial security I think we would be in a deplorable situation as a result of this prob-surely we must heed the pleas of our fund limitations for Puerto Rico andlem. elder citizens. the Virgin Islands, and extends for 2 I am confident that the Congress will years a special provision applying to I mentioned in my letter to the doctorso act.But I also ask every Member, blind programs in Missouri and Pennsyl-the bill we passed here in the House awith all the urgency I can command, to vania. few days ago to permit self-employedsee that the necessity for this legisla- MATERNAL AND CHILD WELFARE PROVISIONS taxpayers to set aside a tenth of theirtionisjust another signpost of the Authorizations are increased: for ma-annual income, up to $2,500 a year, inspeed with which we are traveling down ternal and child health from $16.5 mil-a tax-free retirement fund, and I said,the road of inflation, and that we will lion to $21.5 million, for crippled chil-compared to the benefit this would givebe thereby encouraged to redouble our dren's services from $15 million to $20to professional people and businessmen,efforts to act in future Congresses so million, and child welfare services fromand other self-employed people in thethat inflation will be curbed and the $12 million to $17 million. higher brackets, the increases we are pro-cost of living stabilized before it is too In the child welfare services program,viding in thisbillfor social-securitylate.This will require not only courage existing differences in treatment of ur-beneficiaries will be very modest indeed.on the part of the Members of Congress, ban and rural children are eliminated. Mr. ROBISON of New York.Mr.but also a sense of awareness by the Mrs. GRANAHAN. Mr. Chairman, IChairman, I wish to add my own wordspeople we represent of the dangers that am very happy to endorse this bill, asof commendation to the Committee onlie ahead if we are not successful.I be- far as it goes, to increase social securityWays and Means,itsdistinguishedlieve it is our duty to alert those people benefits by about 7 percent and to cor-chairman, and to my beloved colleagueto such dangers. For my part I intend rect a few of the technical deficienciesthe gentleman from New York [Mr.to try to do so. of the present law, particularly the fea-REED], its ranking minority member, for As to the increased cost of the pro- tures relating to the disability program.the considerable and sincere effort togram, to absorb the cost of the increased Of course, this is not a comprehensiveimprove our social-security system rep-benefits and to put the entire social se- reworking of the social security law butresented by this legislation—H. R. 1549.curity structure on a sounder basis, I is more in the nature of a patching job. I do not agree with all the provisionscan see no possible alternative, regret- I hope next year the Committee on Waysof the bill, and would have had a num-table as it may be.This is an insurance and Means can go forward into some ofber of amendments of my own to pre-program, not a giveaway scheme.It the other areas of the social security lawsent which, of course, I cannot now domust be kept that way. which they say in their report they in-under the closed rule that has been I had hoped the committee would take tend to study further. adopted.I am also of the opinion thatfavorable action on a bill that I and some In the meantime I think the commit-it might have been better, before mak-of my colleagues have introduced to raise ing so many sweeping changes, to havethe limit of allowable retirement earn- tee deserves our gratitude for findingawaited the reportofthe• Advisory time in the closing days of this busyCouncil on Social Security Financingings from its present $1,200 maximum.I session to hold hearings and bring for- still think this Is desirable legislation, that is now studying many of theseand would bring a better feeling of use- ward this bill for House action.I knowcomplex matters, since such report isfulness and independence to our elder this legislation will be most helpful to aexpected to be received later this year.citizens without disturbing the labor great many people now finding it ex- Nevertheless, I intend to support themarket. We must remember that all tremely difficult to make ends meet be-bill, primarily because there is no ques-of us like to live long, but no one wants cause of the steadily Increasing cost oftion In my mind, despite earlier seriousto be old and useless.I will continue to living. The change in the earningsdoubts of the wisdom of bringing thework towards further consideration of standard from $80 to $100 a month willFederal Government into this field, thatthis question. 1958 CONGRESSIONAL RECORD —HOUSE 15757 Mr. VAN ZANDT. Mr. Chairman, I Mr. Speaker, the beneficiaries under the rise in support of H. R. 13549, a bill Purchas- social security, railroad retirement and civil Consumeringpower service retirement systems have all paid for which amends the Social Security Act Year price Index of the their benefits and what they receive in the for the purpose of increasing benefits. (1939=100) dollar (1939=$l) form of a retirement annuity are benefits Like many Members of the House of they earned in their own right.Let me add Representatives I have had great con- that these monthly retirement checks repre- 1939 100. 0 $1.00 cern for those of my constituents who 1940 100.8 .99 sent a rigid and fixed monthly Income which are trying to ilve on present social se- 1941 105.9 .94 Congress alone has the power to alter. curity benefits in this day and age. 1942 117.3 .85 It is true that the cost factor must be reck- 1943 124.6 .80 oned with because we are now told that so- In the opening days of this Congress 1944 12fi. 6 .79 1945 129. 5 .77 cial security is paying out more in benefits I sponsored several bills amending the 1946 140.4 .71 than is being received in payroll taxes. Social Security Act and have been in 1947 160.8 .62 The Railroad Retirement Board tells us 1948 173.1 .58 constant touch with the House Ways and 1949 171.4 .58 that the estimated actuarial deficit in the Means Committee urging action in lib- 1950 173.1 .58railroad-retirement fund is $170 million an- eralizing the Social Security Act.Last 1951 186.9 .54 nually. 1952 191.1 .52 Then too, according to the committee re- year and again this year I appeared be- 1953 192.6 .52 port that accompanied the independent of- fore the committee and presented testi- 1954 j93. 3 .52 1955 192.8 .52 fices appropriation bill for1959, the civil mony in support of legislation, the type 1956 195. 6 .51 service retirement and disability fund has of which we are considering here today. 1957 202. 4 .49 been insolvent since June 30, 1953, and the When appearing before the House insolvency has increased from $9.9 billion to Ways and Means Committee, I presented As the chart shows, from 1939 to 1957 the$18065 billion due to the failure of the Gov- factual information for the purpose ofcost of living constantly increased each yearernment to make its contributions. until 1957, when it was 102.4 percent over Mr. Speaker, Itis universally recognized emphasizing the viewpoints of my con-1939. At the same time, the purchasing powerthat the social-security, railroad-retirement, stituents regarding liberallzation of theof the dollar decreased from 100 cents in 1939and civil-service-retirement funds arein Social Security Act.While this bill fallsto 49 cents in 1957.In other words, the costtrouble along with millions of Americans short of carrying out the wishes of myof living doubled while the value of the dollarover the age of 65 who are trying to live on constituents, nevertheless, it is a step inwas cut in half. a meager monthly retirement ch:ck.These the right direction by increasing bene- Mr. Speaker, this increased cost of livingrecipients of earned benefits in the form of fits. when coupled with a 49-cent dollar is work-retirement pensions are forced to live under Ing real hardship on thousands of bene-substandard conditions and many of them On April 1, 1958, I addressed the Houseficiaries of the social security, railroad retire-are barely able to exist. and urged at that time that Congressment, and civil Service retirement systems, At the same time, millions of Americana take positive and immediate action inwho must live on a fixed monthly income asnot covered by any of the three retirement relieving the plightofthe Nation'srepresented by their monthly retirementsystems are forced to exist on public assist- elderly citizens.The statement I madecheck. ance benefits administered by the various at that tithe follows: Mr. Speaker, the following chart revealsStates.These public assistance benefits are factual information as to the average agenotoriously low and in Justice to our aged STATEMENT BY REPRESENTATIVE JAMES E. VAN and average monthly payment received byshould be increased. ZAN1Yr, MEMBER OF CONGRESS, 20tH DISTRIcT beneficiaries of the Social Security Act: As I have already stated, the answer to OP PENNSYLVANIA, oN THE Ftooa or THE the plight of these retired Americans rests ROUSE OF REPRESENTATIVES, APRIL 1, 1958, OW-age ana survivors insurance monthlywith the 85th Congress.At this moment URGING CONGRESS To TAKE POSItiVE AND benefits in /orce, 1957 there are bills pending in Congressional com- IMMEDIATE ACTION IN RELIEVING THE PLIGHT mittees that will liberalize benefits and par- OF THE NATION'S ELDERLY CITIZENS AverageAverage tially improve the financial situation of re- Mr. Speaker, early last month the Federal age payment tired employees under the social security, Council on Aging, organized in 1956 and railroad retirement, and civil-service-retire- meeting for the first time in Washington, Retired worker: ment systems. D. C., declared that the welfare of older Male 72. 9 $70 I think these bills should be reported out citizens is everybody's responsibility. Female 70.9 52 This Sjouses 70.9 34 of the various committees immediately and Federal Council set up by President Eisen- Widows and widowers 72. 1 51 brought to the floor for consideration. hower is serving as a valuable clearinghouse Parents 76.4 52 Every one of these bills is going to add for the coordination of the efforts of Fed- Young mothers 43.1 49 to the cost of social security, railroad retire- eral,State, and local agencies as well as Children 12.0 39 ment and civil service, but at the the same private groups, in programs designed to aid time they will provide much needed relief our elderly citizens. Raving mentioned the Railroad Retire-for millions of Americans who are benefici- The conference stressed the need for a to-ment Act, the following figures disclose thearies of the three retirement systems. tal national effort aimed at smoothing theaverage age and monthly annuity payable As pointed out previously, all of these re- way for transition from active life of work-to beneficiaries under the railroad retire-tirement systems are operating at a deficit. ing and achieving to one of retirement andment system: To finance these deficits and pay the cost of relaxation. Beneficiaries uncle-p the rat Iroaci retirementany increased benefits by this Congress, a The size of the joint effort needed may be system on Dec. 31, 1957 Joiut committee representing both Rouses of appreciated when itis considered that life Congress should be created immediately for expectancy has increased from 48 in 1900 AverageAverage the purpose of finding a solution to the over- to 70 today.It is estimated that by 1970 annuity age all problem of our elderly citizens. there will be more than 20 million persons Mr. Speaker,inconclusion, as I have over 65 as compared with only 3 million in tried to point out, the plight of our older Retirement annuitants $114 71.6 1900 and nearly 15 million today. Spouseannuitunts 4$ 71.0 people isacute.The retirement funds of Mr. Speaker, while the Federal Council Pensioners 84 86.1 socialsecurity,railroadretirementand on Aging is striving to smooth the way for Survivor beneflcarfec - 52 civilservice areinfinancial Retired cmpthyec and spouse fam- straits, and readjustment in the lives of our elderly citi- ilies public assistance benefitsare wholly in- zens, the 85th Congress may well take heed 172 adequate. and make a practical contribution by enact- Therefore, let us stop quibbling and as- ing appropriate legislation to grant relief to In addition, let me call your attention tosume our responsibility to the American the average age and the monthly annuity ofpeople by solving this distressing problem millions of good Americans who are tryingthe beneficiaries under the Civil Service Re- to exist on either public assistance benefitstirement Act: and giving to the older people of the Nation or under the various retirement laws. the reliefto which they are entitledin It is common knowledge that the monthly keeping with the American standardof Average Average living. benefit check received by millions of elderly Class of annuitant monthly age citizens is a mere pittance when measured annuity Mr. Chairman, I commend Chairman by the current cost of living which is in- MILLs and his colleagues on the House creasing monthly. Employee annuitanis: Ways and Means Committee for taking Let me call your attention to the follow- Men $145 fl7. Women 116 (36.9 action toward increasing benefits under ing chart showing the consumer price in- Survivor minuitants: the Social Security Act.It was my hope dex governing the cost of living and the Widows ø 62.7 that benefits would be increased at least purchasing power of the dollar for the period Children 23 12,7 All other 39 69.8 10 percent, but evidently the committee 1939 to 1957. found it impossible to report out a bill 15758 CONGRESSIONAL RECORD —HOUSE July 31 thatwould provide an increase of overservices for those receiving old-age andproper parental influence, fail to demon- 1 percent. survivors insurance benefits and thosestrate appropriate parental devotion, fail It is my earnest hope that when thewho would be eligible for OASI benefitsto make adequate provision for the child's 86th Congress convenes next Januaryif they applied, as was proposed in vari-physical, mental, and social welfare, or that the first order of business of theous bills.I feel that this vitally neededfail in any other particular to meet the House Ways and Means Committee willprotection should be provided those whorequirements of the State adoption laws, be a thorough study of the Social Secu-cannot now obtain or afford private in-the interlocutory decree is vacated and rity Act for the purpose of solving thesurance and cannot meet the expensethe child is remanded to the custody of distressing problem confronting thoseof illness and care.I had hoped thatits natural parents or the child-place- faced with depending solely upon socialthe committee would include provisionsment agency, as the case may be.On security benefits as their source of in-to solve this serious problem. the other hand, if all statutory require- come. I have advocated that full benefitsments are met, the interlocutory decree Mr. ThIMBLE. Mr. Chairman, I amunder the Social Security Act, whenis merged by the court with a final order very happy to support H. R. 13549, whichbased upon the attainment of retirementof adoption.Effective with the date grants an increase to those drawing so-age, should be payable to men at age 60of entry of the final order, the adoptive cial security benefits.It will help inand to women at age 55, and introducedparents stand in loco parentis to the this period of inflation to meet the livinga bill to provide for this change in thechild and assume all legal rights and expensesofthose whoareretired.law.I feel that such a revision wouldobligations incidental to and incumbent While the increase is not as much as welend a helping hand to our aging popu-upon natural parenthood; and the child would desire, it will go a good ways to-lation and would also mean more jobassumes all the legal rights and obli- ward alleviating the pressure of highopportunities for our young people.Ingations of a natural child.The child living costs. my opinion, it would have been wise tobecomes an heir at law, and in most I am happy to join with my colleague,include such a provision in the bill nowStates, the child is required by statute, Mr. Mitts, and his great committee inbefore us, and I am sorry that we areas. soon as he reaches the legal work age, this move. not given the opportunity to consider Itto support a disabled parent, whether Mr. DOLLINGER. Mr. Chairman, Iat this time. natural or adoptive. am gratified to have the opportunity to I also introduced a bill to amend title Mr. Chairman, the rigid eligibility cri- vote for legislation to increase social se-II of the Social Security Act to provideteria and the exacting regulatory pro- curity primary insurance benefits,tothat entitlement toState workmen'svisions of State adoption statutes pre- provide additionalassistance for ourcompensation benefits shall not preventclude the possibility of abuse of the aged, blind, and disabled, and aid to de-an individual from receiving full disabil-Social Security program by greedy adop- pendent children; to increase authoriza-ity insurance benefits—or child's insur-tive parents, and surely the 1-year period tion of Federal funds for maternal andarice benefits based on disability—underis sufficient to resolve the question of child health, crippled children services,such title.I am pleased that the com-good faith. and child welfare services, as well as formittee saw fit to eliminate the disability I submit that it is and should continue other amendments to remove some exist-benefits offset provision of the presentto be the policy of Government to en- ing inequities and to liberalize the act inlaw, so that in the future, disabled work-courage rather than discourage the hu- other respects, as provided in the bill be-ers will be entitled to receive both social—mane act of adoption of dependent chil- fore us. security benefits and benefits payable ondren.The Federal Government recog- The increase of 7 percent in amountaccount of disability under other Federalnizes the social validity of that policy payable to the retired worker, for allprograms or a State workmen's compen-and gives it positive effect in the In- beneficaries, those now on the rolls andsation system.The law now in effectternal Revenue laws under which an those who will benefit in the future, willprovedveryinequitabletodisabledadoptive child is eligible for a depend- be of some help to those millions of ourworkers and should be correctedasent's income tax exemption of $600 in elder citizens who have been sufferingrecommended by the committee. the taxable year in which the final order grave hardships, unable to exist on pres- I concede that the bill before us con-of adoption is entered. ent social security benefits, due to ever-tains many helpful and important pro- I am advised by the Director of the increasing living costs.I urged the Com-visions. However, thereis room forBureau of Old-Age and Survivors Insur- mittee on Ways and Means to increasemuch improvement, and I shall continueance that the passage of this legislation cash monthly benefits by at least 10 per-to work for further liberalization of thewould add no appreciable cost—less than cent,pointing out that nothinglesslaw, as I have indicated. The American0.01 percent of payroll—to the program. would help retired workers to provideworker and those who are now dependentIndeed, very few workers approaching themselves with the barest necessitiesupon social-security benefits for theirthe retirement age of 65 and even fewer of life.However, if 7 percent is the bestexistence, deserve the best that we canworkers already retired will adopt young than can be provided at this time, I haveprovide. dependentchildrenwhowouldbe no choice but to accede to the decision Mr. POFF. Mr.Chairman,I amcovered by this amendment. As a prac- of the committee, although I stronglyhappy to find on page 36 of H. R. 13549tical matter, the amendment would af- feel that 7 percent is inadequate. the language of the bill which I intro-fect primarily orphans or semi-orphans I introduced a bill providing for theduced on April 28, 1958, H. R. 12194,adopted by grandparents or older col- removal ofthelimitation upon theto amend the Social Security Act to au-lateral kindred. amount of outside income which an in-thorize insurance benefits for a depend- Mr. LIBONATI.Mr. Chairman, the dividual may earn while receiving socialent adopted child effective upon theWays and Means Committee is to be com- security benefits.In this day of highentry of the final order of adoption. plimented for its almost unanimous— taxes, high rentals, alltime high food Under current law, such benefits do24 to 1—approval of H. R. 13549 to in- and living costs, it is imperative that thenot accrue until 3 years after the datecrease the benefits under the Federal vast majority of pensioners obtain someof adoption.I am told that the 3-yearold-age,survivors,and disabilityin- kind of work in order to take care of theirperiod was incorporated in the law assurancesystemandtofinancially ordinary needs and their dependents.a precaution against abuse by those whostrengthentheactuarialstabilityof The limitation upon a pensioner's earn-might adopt children for the sole pur-trust funds.The changes made in the ings is a great handicap and unjustlypose of increasing the family's social-publicassistanceand maternal and penalizes him.No major changes aresecurity benefits.In my judgment, thischild health and welfare provisions of made in the retirement test in the billis an unrealistic danger and an unnec-the Social Security Act accelerate State before us, although provisions are slight-essary precaution. operation. ly liberalized.I feel that the limitation Under the adoptionlawsofmost The increases were absolutely neces- should have been entirely removed, andStates, the child is admitted to the homesary in view of the rise in the cost of regret that additional assistance was notof its adoptive parents under an inter-living, together with such incidental in- provided in this regard. locutory court decree which grants con-creases in present costs for the other ne- Another omission in the bill before us,ditional custody for 1 year. During thatcessities of life.It must be also con- which I greatly deplore, is a program ofyear, frequent supervisory visits by con-sidered that wages today are at their health benefits to cover cost of certainstituted State authorities are required.highest level because of the spiraling hospital, nursing home, and surgicalIf the adoptive parents fail to exerciseinfluence upon the high cost of living. 1958 CONGRESSIONAL RECORD —HOUSE 15759 In the previous decades more money wasbut also will revise the benefit structuretional, and in most instances the only, paid into the fund than benefits.Butso as to provide new benefits to manymeans ofbasic economic support.I since 1950, we are in the red for $4 bil-who are not eligible under present law.consider this to be one of the most im- lion.In order to stabilize these deficits As my colleagues all know, I have al-portant changes which is made by the in part the wage base was increasedways strongly supported our social secu-bill.Moreover, this bill will remove the from $4200 to $4800 after 1958.Therity system.I am pleased today to stateso-called dual disability offset provision, increases given by this bill to the old-without reservation that this bill whichand will do away with the anomalous age andsurvivorsinsurancebenefitwe now are considering is a good bill andsituation presently existing under which structure for the 12 million beneficiarieswill be of great benefit to our citizens ina number of our veterans have been pre- approximates 7 percent or about $3 perthis period of rising costs and risingvented from receiving either all of or part month. prices.It comes to the floor after theof their disability-insurance benefits un- The increases of contributions by themost careful and thoughtful considera-der the Social Security Act because they 75 million persons now contributing aretion by the Committee on Ways andmay have been receiving a veterans pen- as follows: Means. sion.In addition, this will be of assist- Each The distinguished chairman of theance to those disabled persons who also i957—59 2/4 Committee on Ways and Means, theare now receiving Workmen's Compen- 1960—64 2% Honorable WILBUR D. MILLs, has alreadysation based upon disability.Further, i965—69 3/4 discussed in considerable detail the prin-Mr. Chairman, there are a large number i970—74 3% cipal provisions of this legislation nowof somewhat minor but extremely im- j975 and after 4¼ before us.In the short time available toportant changes made ineither the SELF-EMPLOYED me I shall not attempt to repeat thosecoverage provisions or in other provi- It may be considered that every yeardetails, but there are a few major pro-sions of this title of the Act which will after 1959 more money will be paid invisions of the bill which I think I shouldpermit benefits to be paid with respect than benefits paid out.The self-em-emphasize. to claimants who heretofore, because of ployed wage base is applicable for taxable First, this bill will provide an across—technical provisions of the law, were un- years ending after 1958.Self-employedthe-board increaseinsocialsecurityable to qualify. contributions are listed as follows: primary insurance benefits of 7 percent, Mr. Chairman, inadditiontothe i957—59 3% with a $3 minimum increase. As Mem-numerousbeneficialandmeritorious i960—64 4% bers know, quite a large number of billschanges in the old-age and survivors i965—69 4Y8 have been introduced in this Congress toinsurance title of the act, this bill also i970—74 5% provide benefit increases, and the Com-makes improvements andsignificant 1975 and after 6%mittee on Ways and Means in the coursechanges in the public-assistance provi- The Increases in benefits are in ac-of its executive consideration of socialsions and in the maternal and child- cordance with the representations andsecurity gave careful thought to thehealth provisions of the Social Security pledges on the part of the United Statesvarious proposals which had been made.Act.Due to the limited time which I Government under the original act; thatUnfortunately, some of these proposalshave, I will not undertake to go into the system insured its avowed purpose,would have cost more money than wasdetail on these aspects of the bill. How- that of carrying out the principle thatconsidered prudent atthis time andever, this bill will make it possible for at the age of retirement every memberwould have necessitated fairly drastic in-many thousands ofour needy aged, of the system would enjoy the ordinarycreases in the social security contribu-blind, and disabled citizens to receive standard comforts of life at an averagetionsstructure.Under thecircuin-additional assistance payments.Also, cost rate and that it was a guaranteedstances of the actuarial status of theadditional money is provided for de- insurance of that state of security. social security trust funds, our Com-pendent children—the fatherless,the The various improvement and liber-mittee concluded it not only wise but inabandoned child, and others. alization of the disability insurance pro-accordance with our tradition of ap- We have increased authorizations for visions of this program insure a trueproaching this matter on a fiscally soundappropriations with respect to crippled interpretation of the true purposes ofbasis to provide the relatively modest in-children, maternal, and child health, the security program. crease included in the bill and to devoteand child welfare.I think this is one The committee deserves the gratitudesuch additional funds as might be ob-of the most meritorious provisions of of the Members of Congress as well astained from the increased contributionthe entire bill. the approbation of the citizenry and therates to strengthening of the trust funds. Finally, Mr. Chairman, this bill con- press.Its forward-looking amendments Second, Mr. Chairman, the billin-tains what I regard as an extremely sig- will eliminate or minimize problems ofcreases the wage base from the presentnificant provision relating to aid to the the future, and the continuing curative$4,200 to $4,800. Several purposes are ac-blind programs in the State of Missouri. legislative increase of rates will result incomplished through this change.In theIn my State, we now have meritorious astrongerfinancialcondition.Thefirst place, this increase adjusts the wageand beneficial dual programs for aid most worthy of the progressive stepsbase so as to provide for a greater per-to those individuals who have been un- taken by the committee was that thecentage of protection of the incomes offortunate enough to lose their eyesight. subject of other benefits enjoyed by theworkers and brings the wage base moreThis bill provides for an additional 2- beneficiary shold be excluded from anyin line with our past actions. In the sec-year extension of section 344 (b) of the consideration as affecting hisor herond place, increase in the wage base willSocial Security Act which will make it benefits earned under the act.Chair-make it possible for persons retiring inpossible for the State of Missouri to man WILBURMILLshaspersonallythe future to receive a higher benefit.continue its efforts, in addition to those earned for himself and members of hisIn the third place, increase in the wageunder the Federal program, to provide courageous committee the plaudits andbase will provide additional funds fromassistance to the blind.I am particu- honored confidence of the electorate aswhich part of the increased benefits maylarly gratified that this provision is in- well as their colleagues in the Congressbe paid and will also aid in the total ef-cluded in the bill for it is of considerable of the United States. fort to strengthen the financial status ofimportance to citizens in my own State Mr. KARSTEN. Mr. Chairman, I risethe old-age and survivors and disabilityof Missouri. to express my strong support of the billtrust funds. Mr. Chairman, I strongly urge that now before the committee, H. R. 13549. Third, Mr. Chairman, this bill providesthe House pass the pending legislation This major social security bill will be ofa number of important changes in theby an overwhelming majority. material and direct benefit to millions ofsubstantive provisionsof the old-age, Mr. MOORE. Mr. Chairman, I would our American citizens.Over 12 millionsurvivors, and disability insurance titlelike to take this opportunity to express individuals are now receiving benefitsof the Social Security Act.Dependentsmy approval and support of H. R. 13549, under the old-age, survivors, and dis-of disabled beneficiaries will, under thisthe bill which is before the House today ability insurance system.This bill willbill, become eligible for benefits.With-to improve and liberalize social security increase these benefit amounts. In addi-out going into detail, the providing ofbenefits. tion,H.R.13549willsubstantiallythese benefits will assist many families During this session I have introduced strengthen and improve not only the fi-whose breadwinner has been struck down4 bills which, if enacted, would have im- nancing of the social security systemby a disabling illness to have an addi-proved the benefits and coverage of the 15760 CONGRESSIONAL RECORD —HOUSE July 31 Social Security Act. The bill before thismanitarian relief of a most desperatehardships caused by the increase in the body today contains several of the salienteconomic situation. cost of living can be alleviated partially. features in the bills which I introduced I know a great deal about this prob- I recognize fully well that the com- and I am happy to give my endorsementlem because I represent a district thatmittee has spent considerable time hear- and approval to these provisions.It ishas experienced and continues to experi-ing testimony which, on the record, regrettable that some inequities still existence an extremely serious unemploy-clearly reflects conclusively that some- in the Social Security Act which will notment problem, with the consequent re-thing should be done for the old and be corrected by this legislation.It is alsosult that a large percentage of the youthneedy people of this country.It is sad unfortunate that the small 7-percent in-in that area have been forced to seekindeed that the administration has not crease in benefits could not be greater toemployment elsewhere, thus leaving be-taken a leading part in bringing about help compensate for the considerablehind the older citizens in a dispropor-an improvement to our system of social increase in the cost of living which hastionate ratio. security.The action of the committee appreciably reduced the standard of liv- My mail for the past several years hasis the culmination of Congressional leading of persons who today must depend onbeen most distressing with respect toership in trying to bring about addition- fixed incomes, annuities or Federal pen-the economic plight which these unfor-albenefits within the framework of sions as their only means of livelihood.tunate people find themselves through,available funds with a small increase in Taken as a whole, however, H. R. 13549as we all know, no fault of their own. contributions from employers and em- is undoubtedly the best possible bill which It is the system that falls behind theployees. the Congress can hope to enact into law'times that has caused these people to I have no doubt but that the commit- this late in the session, because it is pred-suffer unnecessarily and we must betee would have gone further ifit had icated upon the need of the recipients,ever conscious of this continuing prob-had aggressive collaboration from the the ability of the wage earner and em-lem that affects, directly, the welfareexecutive department. The record to me ployers to finance the increased costs in-of our senior citizens. does not reflect any recommendations volved, and places the social security Iwould beless than candid, Mr.by the executive department such as system on a more sound actuarial basis.Speaker, if I did not say that I am notwould bring the retired workers of this During the past year, I have receivedsatisfied with a major provision of thiscountry up to a plane consistent with a great deal of mail pointing out de-social-security bill; namely, the proposeddecent and comfortable living standards. ficiencies in the present act, many ofincrease of 7 percent. I myself appeared before the com- which will be corrected by the bill now I realize, of course, that this figuremittee to plead for adequate increases before the House ofRepresentatives.is one of compromise, but I have advo-and have many times urged that Federal For instance, this bill provides benefitscated for a long time now that, in allfunds apportioned to the different States for the dependents of disabled workersjustice, the increase should be at leastfor general assistance programs be inin the same manner as those now pro-10 percent, if not higher. creased in ratio so that the States could videdforthedependentsofretired We all know that the cost of every-increase the grants to indigents. workers.There isalso provision forthing we must buy has continued, de- Soon the campaign oratory will flood liberalizing the disability requirementsspite the current recession, in an upwardthis land of liberty and bipartisan love and for freezing a worker's benefit rightsspiral. A parodox, but true. Those nowfor the old people will be the rule of the when he is disabled.These provisionsemployed have, for the most part, beenday. These people may be old and some were contained in my bills, H. R. 10844given increases in their salaries andinfirmed but they will call to task those and H. R. 10845, so I am happy they havewages to compensate for the continuingwho have failed to raise their voices in been included in this omnibus bill.Re-rise in the cost of living.But whattheir behalf.This is as it should be tired persons will be able to earn moreabout our older citizens?They, too,because we are their servants here and income without losing benefits, and themust battle this unfortunate series ofnot their masters. billwill repeal a discriminatory pro-developments in our national economy, The plan outlined by the gentleman vision of the present law which now re-and battle it on the basis of a muchfrom Rhode Island proposing that we quires payments under other disabilitytoo meager income. take inventory through an exhaustive benefit systems to be offset against social It is my fervent hope that the Con-investigation of the plight of the needy security benefits.In the future, a per-gress, in its wisdom, will not wait toppeople of this country is indeed a plausi- son qualified for both types of paymentlong before it again takes this mostble approach.I hope that it will be- will be able to collect both pensions invital subject under consideration. Wecome a reality and that the Congress full. must keep pace with the times. with or without leadership from the The enactment of this law will also I strongly urge that in the early partexecutive department will enact legisla- benefit many West Virginia State andof the next session of the Congress thattion when it convenes again to bring city employees because the bill extendswe undertake to reduce the age eligibilityabout a better way of life for the needy coverage to persons who formerly did notand, most importantly, to increase thepeople of this country. Until we do this, elect to come under the system, but whobenefits to a figure that will enable thewe cannot find justification in calling recipients to at least cope with the liv-America the land of "liberty and plenty." now may wish to avail themselves of thising costs, which they are not now ableThe "pursuit of happiness" which per- program.There are also several con-to do, in a large percentage of cases. structive changes in the sections dealing meates the preamble of our Constitu- with dependent children, the aged, blind, Inasmuch asthissystem ofsocialtion is a beautiful phrase but empty in and disabled which will have a salutarysecurity has been established on a soundsignificance unless we shoulder the re- effect upon recipients of these benefits.actuarial basis, it is not to be consideredsponsibility of bringing about a better An additional $288 million will be madein any way as a system of handouts andtomorrow for our needy citizens in this available to the States under reviseddoles.It is in the best tradition of thisgreat country of ours. formulas for the public assistance pro-great country of ours that this be so. Mr. DOYLE. Mr. Chaimman, I wish to grams if this legislation becomes law. In all justice, let us strive to bring thisemphaticallycomplimentthedistin- It is my sincere hope that the Senatemost vital and far-reaching programguished chairman of the Committee on up to date so that we can alleviate theWays and Means, the gentleman from will schedule immediate action on thisdistressing conditions under which many legislation after the House of Represent- Arkansas [Mr. MILLs], and the distin- atives gives its stamp of approval. Like-millions of our fine citizens must live.guished ranking minority member there- wise, I intend to urge the President toI am hopeful that the Congress will doof, the gentleman from New York [Mr. just that during the course of the up-REED]; yes,I compliment them, and sign this bill into law, because this iscoming session, which will get underwayevery member of the Committee on Ways Sound and justifiable legislation, and noin January. and Means who have worked so dili- group deserves any more consideration Mr. MONTOYA. Mr. Chairman, the than does the retired and disabled of our gently and for such a long time to report Nation. bill under consideration today is indeedto us H. R. 13549. This bill today before a step forward on the subject of socialus, is to increase benefits under the Fed- Mr. FLOOD.Mr.Chairman, this issecurity legislation.While it does noteralold-age, survivors and disability an extremely important day for manygo as far as many of us would preferinsurance system, and also to improve millions of our older citizens who havethat it go, it increases benefits to socialthe actuarial conditions and status of the been looking toward this body for hu-security recipients to an extent that thetrust funds designated to protect the 1958 CONGRESSIONAL RECORD -HOUSE 15761 solvency of such fund and system, andworld, which we should ever expect or As an advocate of voluntary retire- which will also otherwise improves andanticipate should, or could, hold a candlement at a lower age, I was pleased when amends the public assistance and ma-to us in the field of individual liberty;the Congress, 2 years ago, allowed women ternal and child health and welfare pro-fiscal responsibility; domestic tranquil-the option of retirement at age 62 at visions of the existing Social Securitylity; civil liberties, internal security, andreduced benefits and extended full bene- Act, as well as submitting to us otherhuman welfare.This billis anotherfits to widows at age 62.This is a step marked improvements. great advance at an appropriate time. in the right direction, which should now I respectfully request that I have the Mr. BRAY. Mr. Chairman, the billbe followed by a liberalization of the high privilege of being known as asso-before us would increase monthly socialretirement age for men.I hope that ciating myself definitely and specifically,security benefits by. 7 percent, with athis objective will be further pursued in in approval of this marked, advanced,minimum raise of $3.Many of us feelthe months to come. and timely step by way of the Socialthat the increase is not adequate to meet I trust that this legislation will be Security Amendments of 1958. the increased needs of those drawingpassed by an overwhelming majority. This whole subjectoftax incometheir retirement benefits, for inflation Mr. DONOHUE. Mr. Chairman, I rise necessary for our national defense andhas continued to eat away at their sav-in support of this bill, H. R. 13549, to security; of income taxes and other taxes,ings and make economic balance diffi-further improve and expand our social- is so highly technical that it is of neces-cult.However, this bill comes beforesecurity system, and to express the hope sity within the personal knowledge ofus on a closedrule, precluding anythat benefits will be increased, by appro- relatively few Members of this great leg-amendments; therefore, it will be im-priate amendment, to at least 10 percent. islative body. Because of the nature ofpossibletoincreaseorchangethis The proposed increaseQf approxi- the subject it could never be otherwise.amount. Certainly the greatest benefitsmately 7 percent provided by the bill is Therefore when a bill like this comeswe can bestow on those living on fixed in-admittedly below the comparative rise in from our distinguished Committee oncomes, whether it be social security orthe cost of living that has occurred since Ways and Means.I am fully aware ofsome other form of retirement income,1954, the last time that the benefits theconscientious, thoroughgoing, ex-is to stop inflation and the severe eco-schedulewas legislativelyadjusted. pertness and diligence with which thatnomic hardship which it brings.WeSince that occasion, there have been committee and itsexpert, thoroughlyhave been far more successful in stop-proportionately substantial increases in trained professional staff have preparedping inflation in the last 5 years thanprices and particularly increases on those same for our consideration. Thereforein the preceding decade, butithasarticles we commonly regard as the ne- also, in the absence of specific evidence tostarted again and itseffects are feltcessitiesoflife—food,clothing,rent, the contrary, a bill from that committeeespecially among our senior citizens. medicines, medical and hospital treat- always has a sort of an abiding presump- When the Ways and Means Commit-ment, and so forth.Since the hardship tion with me in favor of the legislationtee devoted long hours of hearings andimpact of these increases affect the major submitted therefrom. consideration to the subject of social se-portion of our people in the lower income A study of the committee's report, be-curity legislation, many proposals werebrackets, and the retired workers of these ginning on page 8 and extending overputS forth.This bill limits itself pri-brackets, it would appear eminently rea- pages 9 and 10, is clear as crystal evi-marily to the subject of the amounts ofsonable and in harmony with the founda- dence, of the comprehensiveness of thepayments and contributions.It also im-tion principles of our progressive social— committee's timely consideration of theproves the provisions for disability re-security system to adjust benefit allow- subject matter which all of us here aretirement and thedisability freeze ofances accordingly, and thatlogically aware, must be considered and actedearnings records. There are some othermeans a minimum increase of 10 per- upon at the earliest practical hour.Iaspects of this program wihch will per-cent. am happy that this is the case for now,haps be the subject of the committee's I am, indeed, mindful of those who after we vote this bill today, which I amattention in the future. most earnestly and sincerely desire to sure we will by overwhelming approval, For the past 6 years, I have introducedkeep the social-security program actua- the same can promptly go, I assume, tolegislation to lower the retirement agerially sound and I am in full agreement the other body with a hope and a prayerunder social security to age 60.I feelwith that objective.However, I just as that a satisfactory bill will be on thethisisparticularly important in the many arduous occupations where work-sincerely do not feel that any convincing President's desk beforethis Congress evidence has been developed here to show adjourns. ing at advanced age is very difficult, andthat an added 3-percent increase to that The summary of the principal pro-in many cases dangerous. Who can sayproposed in the bill would dangerously visions of the bill, beginning on page 8,when a person becomes physically unfitweaken the financial structure of the as I said, and specifying the 21 pointsto do his job? Many work ably and en-program. contained in the bill, which are thereergetically into their seventies and beyond.Others find a quick ebbing of As one who has consistently supported summarized, is a clear proof that the the improvements in this social-security committee has done its dead level bestpowers after they have passed the half- on this occasion; and, Mr. Chairman,century mark.It is not easy to set oneprogram since becoming a Member of this age as that which is desirable, or evenbody, I am particularly pleased that the that it retains an awareness of the neces-average, for retirement.In many oc-measure before us recommends increases sity of promptly beginning in the 86th in the old-age, survivors, and disability Congress to complete some of the dis-cupations we have allowed optional retirement at an age prior to 65.I wouldinsurance benefits, and that it also pro- cussions and furnish decisions for ourcertainly not suggest that retirement beposes the added provision of granting further consideration, in fields not yetmandatory at age 60 or even at age 65;benefits for the dependents of disabled fully occupied by fully satisfactory legis- workers. In recognition of the necessity lation.The distinguished chairman ofbut workers should have greater freedom the committee, the gentleman from Ar-in selecting that time when they feelfor constant review to expand this Chris- kansas [Mr. Mats], has frankly told usthey must slow down and take thingstian program, I am also glad to note that today such was the case. easier. the committee proposes further improve- There are other advantages to allow-ments in the public assistance, maternal Mr. Chairman, with my emphasis, anding a more flexible retirement policy,and child-welfare provisions. with my concord withall who havewhich should be very evident at this Mr. Speaker, one of the things that spoken with effect that this trust fundtime.As older workers leave their jobsmarks this country as a God-fearing and must be kept entirely solvent and liquid,to enjoy the retirement payments to-God-caring Nation in contrast to the I find it inappropriate for me to takeward which they have contributed, theyslave state of Communist atheism is our longer of your time.This bill can standare replaced by younger workers wholegislative achievements in the fields of entirely on its own merit.It comes at aneed the jobs to raise their families.social and economic justice. In the prop- time of need and a time of forwardThis was one of the motives behind thisaganda battles that are currently being looking in the field of just and properact in the beginning; the need fur thiswaged between ourselves and the Soviets, economic and social welfare benefits.particular effect of social security retire-in which we are, unhappily, too often on Mr. Speaker, our form of government isment varies, but the economic downturnthe losing end, it is imperative for the able to so function, in my humble judg-of recent months makes the mentionretention of our position and our prestige ment, that there is no nation in theof it appropriate at this time. as the leader of the Free World that we - 15762 CONGRESSIONAL RECORD —HOUSE July 31 maintain constant progress in our fun-years ago, are vastly insufficient to meetment compensation system to cope with damental legislative programs for na-today's living costs. the present recession. tional welfare and development. We We know that families headed by a We will not have met these problems have a chance to take a forward stepperson aged 65 or over are, by and large,head on with the enactment of H. R. along this road today by supporting thislow income families.If the family head13549, although, admittedly, what the bill. is still working, his earnings are reducedbill does give us is better than noth The basic objective of our social-secu-because he is normally past his peaking at all. rity systemisto enable our retiredearning period.If he is retired, the re- The related problems of inadequate American workers and the disabled totirement income is low.In 1954, nearlybenefits and lack of provision for heavy retain self-respect and reasonable eco-half the families headed by a personmedical expenses of retired persons have nomic independence in the sunset yearsaged 65 and over had a cash incomebeen attacked in a sound and reasonable of their lives and in time of adversity.below $2,000.Nearly 1 in every 5 fami-manner by the gentleman from Rhode In a constantly changing economy thislies headed by an aged person had lessIsland [Mr. FORAND] in his bill, H. R. objective is impossible of accomplishmentthan $1,000 in income.Older persons9467.His bill would increase benefits if upward adjustments in the laws areliving alone tend to have smaller in-by about 10 percent—a far more realistic not made to keep pace with the increasescomes than thoselivinginfamilies.figure than the 7-percent increase pro- in the cost of the articles and servicesNearly two-thirds of persons aged 65 andvided for in the bill before us.The that are essential to a decent existenceover who lived alone in 1954 had cashForand bill would also provide for insur- in a free and blessed Nation. incomes below $1,000. ance against the costs of hospitalization The chairman and the members of The necessity for increasing retire-and surgical care.If we are to ap- the House Ways and Means Committeement benefits for older folks is obviousproach the problem of old-age security are to becongratulated for their aware-to anyone who has noted the inexorableby amending the Social Security Act ness and acceptance of their responsi-march of the cost of living over the lastpiecemeal every 2 years, then, at least, bility of recommendinglegislative4 years.In 1954, the last time we raisedwe should start now with the Forand changes to the Congress to strengthensocial security benefits, the Consumerproposal.But, instead, the bill before and improve our social-security systemPrice Index stood at 114.8 percent of theus recommends, instead of hospital and in accord with the hard facts of our1947—49 level. Now it is nearly 9 pointsmedical care for the aged, a study of economy. The measure that they haveL:ghei at 123.5 percent and the end isthe problem. How much more home brought before us is a substantially goodnot in sight.The same trend has beenwork do we need on this subject? one and in firm keeping with our tradi-evident in wages and income but the The costs of such services are such tion as a nation that lives under God.older people and other beneficiaries whothat our aged and disabled living on If we cannot all agree on the variousare retired on fixed incomes have notOASI benefits are unable to pay for such amendents ofsincereintenttoim-shared these raises and the prices whichhealth services.According to a publica- prove the bill, let us in good will com-they must pay force them to accept ation of the Labor.Department, Medica' promise our differences and approve thelower and lover standard of living. Care, by Elizabeth A. Sangford, the cost substance without unnecessarily extend- A substantial number of persons inof medical care was 85 percent higher ing this debate. There will be recurringthis country are caught in the squeezein December 1956 than 20 years eariler, opportunities in the future to make fur-play, as you know. In April of this yearwith two-thirds of the rise having oc ther improvements as the needs are11,628,000 people were receiving socialcurred in the last 10 years.Over the demonstrated.Let us do our job todaysecurity benefits including 6,476,900 old20-year period ending in December 1956. as well as we can while we look towardage beneficiaries, 1,903,600 wives or de-hospital-room rates have increased 265 the future in good mind and with goodpendent husbands of retired workers,percent.Moreover, the expenditure per heart. 1,545,800fatherlesschildren,338,000family for medical care has increased. Mr. BLATNIX.Mr. Chairman, it iswidowed mothers of children and 187,-According to the Labor Department pub- time that we take a long and careful500disabledpersons. Theaveragelication referred to above, after adjust. look at the responsibilities of a civilizedbenefit for a retired worker today isment for price increases, the expenditure and productive country for its older peo-about $64 a month while the averageper family for medical care in 1950 was ple. We must think positively on thesesurvivor benefit, as of January 1958, wasnearly two and one-half times as much matters, recognizing that the great in-only $45 per month. The present rangeas in 1934—36, even though family size dustrial changes in this century haveof benefits for retired workers is fromwas smaller. created new and difficult problems for$30 to $108.50. Without further study, we all know the added years of retirement which our that the costs of good medical care have modern public health practices have The bill before us does contain somesteadily increased and are continuing to given to us. urgently needed improvements in thedo so.We know, too, that older people We know that the number of oldersocial security system.And it is cer-generally are likely to be victims of the persons, 65 and over, is approaching 15tainly deserving of our support. Unfor-chronic illnesses.And these illnesses million.Moreover, official projectionstunately, however, it represents anotherstrike at a time when income has been place the number of persons 65 and overexampleofthetoolittle-toolate,severely reduced because these people at 20.7 million in 1975, and the totalpiecemeal approach to the real solutionhave retired from their regular jobs. population at anywhere from 207 millionof the Nation's socialsecurity prob- I know that an argument is made to 228.5 million, depending on the futurelems. The injustices of present law andagainst this proposal on the ground that course of birthrates.The older peoplethe needs created by economic and socialvoluntary coverage of older persons is in our midst may thus be expected tochanges since the original enactmentincreasing and can do the job.This make up a larger proportion of our totalof the Social Security Act in 1935 aremay be true for that small portion of population than other age groups in thenot adequately dealt with in this bill.the older population who can afford to future.It may well increase from the These needs and injustices are, briefly,keep up their payments. But for many present 8.5 percent of all of us to 9 or 10as follows: First, inadequate cash bene-more millions of our senior citizens this percent of the total population in 1975.fits under OASDI; second, inability ofis an impossible task,The reasons why We cannot continue, with patchwork andmany retired persons to provide for un-voluntary plans can never take care of expedient action, to disregard the totalexpected heavy medical expenses; third,this problem adequately, as outlined in needs of so large a proportion of Ameri-the tax on tax, that is, the requirementa recent issue of the Chronic fllness cans. of paying income taxes on dollars de-News Letter, April 1958, as follows: One of the major problems these peo-ducted from ones paycheck for social 1. Much o the existing Insurance protec- ple face today is the decrease in thesecurity, railroad retirement, or civil-tion is provided through employer-employee income they were accustomed to receiveservice retirement; fourth, the inhu-plans which generaily do not reach the during their working years.Social se-mane and degrading treatment of public..people who retired before the installation curity is not paying them enough to liveassistance recipients oI the plan. in some States; 2. Older persons do not accept and rely on, as we have seen.Those savingsfifth, the pitfully low payments underupon health insurance as do younger peo- which they may have accumulated, or anState general-assistance programs; and,ple who look upon it as one o the essential annuity they may have purchased somesixth, the inability of the unemploy-elements of the family budget. A recent 1958 CONGRESSIONALR]CORD —HOUSE 15163 study at Bloomington, Ill., has pointed up * * he no doubt knew whereof he spoke. Thevery real in millions of American homes. the complication of this point, • peace,tranquility, and satisfaction ofRather we must develop a comprehen- 3.Thephysical or mental impairment of many bars them from individual insurancehaving lived a long and fruitful and pro-sive program geared to our long-range and group plans ae not available to them.ductive life must be a trul3' wonderfulneeds and our American idea1sSheer 4.Theincreased incidence and severity ofblessing.But is it a blessing to have tohumanity demands that we deal with sickness due to older age brings alout anlive on practically nothing? To scrimpthe needs of our older folks and correct increased cost of health Insurance that can-along on incomes totally inadequate tothe injustices of the existing system. not be afforded by some, meet the needs and requirements of an The bill before us makes a small step The Forand bill recognizes the needolder person? To enjoy no security. Noin that direction.It is not enough.It for sound, long4erni flnanzing of thepeace. No tranquility. But only gnaw-does not even come close to coping with social-security system. Improved bene-mg anxiety of where, in many cases, thethe problem. I hope, Mr. Chairman, that fits require higher contributions and thisnext meal is coming from or what to donext year we will face up to our respon- achieved through raising the wage basein case of illness.This is what growingsibilities and enact a truly comprehen- from the present figure of $4,200. Theold is coming to be today. Not the moresive, universal Federal social security bill before us raises the base to $4,800.leisurely manner of yesteryear where theand pension program under which the The Forand bill, with its higher benefits,old folks lived on the farm or with theNation's older folks can find true social would thcrease it to $6,000, changing thechildren in the small town. In our new,security. benefit formula, and adding a dropoutmodern complex, urban society the farms Mr. BOLAND. Mr. Chairman, I rise year for every 7 years of coverage. Theare disappearing.The children havein support of this legislation to increase cost of the much needed improvementstroubles of their own just getting alongsocial security benefits by 7 -percent. provided for in the bill would be coveredsolving their own problems. Recipients of social security benefits are by raising the tax on employers and em There seems to be no place for ourall elderly people who are really feeling ployees by 0.5 percent each and by rais-mothers and fathers. Nowhere for themthe pinch of the rising cost of living. mg the tax on the self-employed by 0.75to go. Nothing for them to do. No ade-Letters I have received from my con- percent. quate source of means for them even tostituents tell some pitiful stories of older obtain the necessities of life.When it • By increasing the wage base the For- persons trying to get along on social and bill will bring the system more inwas convenient to take care of our oldsecurity paymentsofunder $100a line with the basic principle of relatingfolks by Jetting them stay on the farmmonth. benefits to earnings during the workingor live out their tlays on the park bench I am pleased to know that the maxi- life.When the original Social Securityin the rural community there was nomum family insurance benefits under Act was put into effect with its wage baseproblem. But that convenience no longerthis legislation is increased from $200 to of $3,000, 97 percent of workers coveredexists and it appears we are actually$254 a month and that payments will be under social security were making $3,000falling back on that inhuman and archaicmade to the dependents of the disabled. or less Now when the wage base is setattitude that is best expressed in theThe bill also contains a more liberal and at $4,200 only 72 percent of coveredpompous phrase: "It's not our responsi-improved program for the 2/2 million workers fall under the $4,200 ceiling. jjbi1fty.They should have provided forpersons receiving aid under public as- other words, 28 percent of all coveredtheir old age while they- were young." sistance, including the aged, the depend- workers are not getting social security But this can no longer be our attitude.ent children, the blind, and the disabled. credit for their earnings in excess ofA man's future is no longer his to deter- Mr. Chairman, I filed a bill, H. R. 5863, $4,200 under present law, mine for himself. Vast, complex outsideto amend title II of the Social Security The effect of the present low wage baseforces often alter the course of a man'sAct so as to remove the limitation upon Is to accentuate the plunge in incomelife and it may well be that through nothe amount of outside income which which a middle income worker expe-fault ofhis own whatsoever he hasmay be received by an individual while riences upon retirement.For example,reached old age and found himself sim-receiving social security benefits.The a person who earns $500 per month onply unable to provide adequately forlimitation has been $1,200 and Will con- the average can receive only $108.50 orhimself without some form of public aid.tinue to be that amount, for this legis- 21.7 percent ofhis average monthly In a nation as rich as ours, the waylation does not affect this limitation. earnings after he retires.May I re-our old folks are cared for is inexcusable.However, the committee did insert a iterate that the increase in the wage baseIt is tragic.Here we are: The richest,provision which will help to carry out from $4,200 to $6,000 is essential to keepmost powerful nation on earth, but wesome of the intent of my bill.Under pace with the economic changes of thecannot provide economic security for ourthis legislation a person earning over last 4 years and to preserve the basicolder citizens. The Scandanavian coun-$1,200 a year income will not have bene- tenets of the social-security program— tries—Denmark, for instance accept theirfit payments reduced after each $80 of that is to reward greater output and toresponsibilities to their older citizens asadditional earnings, but each $100 of permit an individual to approach hisa matter of course. Have we advancedadditional earnings.This $20 increase preretirement standard of living, so far scientifically and technologicallyis desirable.It will be of some assist- In addition to a 10 percent increase inthat we have regressed socially?Canance to those who have had to seek part- benefits and hospital and medical care,we claim to be a world leader when wetime employment after retiring so that other needed improvements in the social-cannot even solve the problems of anthey can eke out an existence in dignity security system are ignored in the billaged and aging population while at thein their old age.I urge my colleagues before us. same time smaller and far less wealthyto unanimously adopt this legislation. The present limitation on earnings ofnations solve this same problem with Mr. METCALF. Mr. Chairman, as a $1,200 is totally unrealistic and should 1eease?I cannot see how we can. cosponsor of many of the needed im- at least doubled if not removed alto- The policy of amending the Social Se-provements in the Social Security Act, I gether. curity Act piecemeal fashion every 2congratulate the members of the com- Women should be allowed to receiveyears will not give the Nation's oldermittee on this major contribution to the full benefits at age 60 rather than penal-citizens the true social and economicfoundation of the economic security of izing them, as they are under presentsecurity they need and so richly deserve.those who have retired and who are cur- law, for electing to take benefits at ageIt is time, Mr. Chairman, for a com-rently contributing to the program. 62. plete and thorough overhaul of the en- The age limitation on disability in-tire system and a recognition of the Although the 7 percent across-the.. surance benefits should be removed andfact that the existing social-security sys-board increase in primary insurance eligibility requirements for such benefitstem is simply incapable of dealing withbenefits is less than I supported before liberalized, the problem of our aged and aging pop-the committee, I see the logic of your These and other improvements are ab-ulation. We cannot solve the problemsposition that a significant part of the solutely essential, Mr. Chairman, if weof today with the patched-up mecha..additional contributions should go to are to adequately cope with the problemsnisms of yesterday. strengthen the financing of the system. confronting us. What is needed is bold, positive action. I know of no contributor to this pro.. "Grow old along with me, the best IsWe cannot continue to merely deliberategram who is unwilling to pay his share yet to be" said the poet Browning. Andand study these problems which are soof the costs; no one interested in raiding 15764 CONGRESSIONAL RECORD —HOUSE July 31 the trust fund which will help pay hisretary of Health, Education, and Wel- Almost 4 years have passed, and not benefits. fare, due by February 1, 1959. one single State has carried out those Individuals now on the benefit rolls As I shall again bring to the attentionrecommendations. and all future beneficiaries would haveof the committee at the first opportu- Among the bills which I supported be- their benefits increased by about 7 per-nity, experience has shown that addi-fore the committee are those to make cent, more at the minimum, over thetional improvements are needed in thebenefits payable to all unemployed in- levels provided in the present law. TheSocial Security Act, among them thosesured individuals for at least 39 weeks. minimum increase in the benefit of ato: The present duration in Montana is 22 worker who retired at or after age 65 Begin disability benefit payments asweeks. would be $3.The average increase forsoon as the disability occurs instead 'of The maximum primary benefit would workers now retired would be about $4.75.at age 50 and redefine "disability" tobe raised to not less than two-thirds of Increased benefits would be effective formean the inability to do the same orthe State's average weekly wage.Sub- months after the second month f 0110w-similar work an individual was doing onject to this maximum, each individual's ing the month of enactment. The dollara regular basis before he was disabled.primary benefit would be not less than 50 ceiling on the total benefits payable to a Provide full, instead of reduced, bene-percent of his weekly wage.This would family would be raised to $254 from $200.fits for all women at age 62; continueraise the maximum benefit in Montana The bill contains major improvementssurvivors insurance benefits to a wid-to $50 a week. Indisability protection, among themowed mother 50 years old when her Mr. CRAMER. Mr. Chairman, I rise those to: youngest child becomes 18, instead ofin support of H. R. 13549, the pending Closeaseriousgap by providingending these payments until she becomesbill,having testifiedfor an increase monthly benefits for dependents of dis-eligible in her own right, and providelarger than the 7 percent increase con- abled workers, at age 50. that a widow's benefit shall be at leasttained in this bill, and for certain other Repeal the provision requiring pay-the amount of her husband's primaryamendments before the Ways and Means ments under certain other disabilitybenefit. Committee. May I frankly say that I benefit systems to be offset against social Rewrite the language dealing withfirmly believe that some adjustments security disability benefits, so that a per-Federal grants for needy children.Theshould be made with the definite pur- son eligible for a social security disa-law now provides help for children whopose in mind of increasing benefits under bility benefit and also for disability ben-have lost parental support or care bythe program to meet the increased cost efits under another system would receivereason of a parent's death, mental orof living today but with an eye on keep- the full amount of his social securityphysical incapacity, or absence from theing the program and the trust fund benefit. home.In a time of recession, this lan-fiscally sound. The proposed bill accom. Relax thepresent recency-of-workguage puts a premium on broken homes.plishes both objectives and I support it test to make it easier for a disabledFor the children of a jobless man, neitheralthough I believe a larger increase worker, whose disability came on grad-mentally nor physically incapacitated,would more closely approximate the in— ually, to qualify for disability benefitscan only receive help under this programcreased cost of living. and to have his benefit rights frozenif their father abandons them.If he This bill provides for an increase in while he is disabled. Under the bill, thestays in the home while looking for work,benefits using a sound actuarial system worker would no longer be required todoing his best to keep his family together,that will not jeopardize either the fiscaa have 6 quarters of coverage out of thethe only source of help is general assist-soundness of the program or the tax 13 calendar quarters before he becameance, to which the Federal Governmentstructure of the Nation. This Congress disabled.He would be required to bedoes not contribute.In the interest ofhas recognized the need, of increases for fully insured and to have 20 quarters ofstrengthening the family, I would eitherretired civil service and military per- coverage out of the 40 calendar quartersinsert the word "unemployment" in thesonnel—of other retirees—has seen the before he became disabled. list of reasons for inability of a parent toneed for increased retirement income Provide for, retroactive disability in-support a child, thereby making himin the many departments of Govern-. surance payments, going back toaseligible for aid to dependent children, orment.In concurrence with these pro- much as 12 months before the month indeletetheexistingreasons,therebygrams and consistent with other retiree which an application is filed. broadening the program to give help toaction, it follows logically that increased Postpone for 3 years the June 30, 1958,needy children, whatever the reasonpayments under the social-security pro- deadline for filing retroactive applica-may be. gram should be worked out and enacted tions for the disability freeze. Increaseunemploymentcompensa-by this Congress. Other significant improvements in-tion benefits and duration. I might point out that such an action clude those to: Twenty years ago, the unemploymentwould be of great importance to the Increase to $4,800 from $4,200 theinsurance program really meant some-State of Florida and particularly the First total annual earnings on which benefitsthing.Most States were paying a maxi-District that I represent. Here we have could be computed, and on which con-mum benefit higher than two-thirds ofmany retirees—who have planned over tributions will be paid. the average weekly wages.All werea period of years their retirement pro- Provide that a person will not lose apaying more than half. gram. Because of the increased cost of benefit under the retirement test for That ratio has declined as benefitliving since their last increase in benefits any month in which he has earned uplevels fell behind rising wages and prices.these retirees are unable to live within to $100, instead of $80 as underpresentToday's maximum among the States isthe program they had every right to con- law. only a little more than half the averagetemplate as adequate and sound and to- Provide additional funds and a newweekly wage. And the average unem-day are, in many cases, in dire straits. formula for Federal participationinployed worker and his family must some-Total social-security benefits were paid public assistance.The additional $288how get along on $33 a week.In Mon-to 295,033 people in Florida as of June 30, million available to the States wouldtana, it is $32.In some States, the most1957, amounting to $15,884,408 annually. come down to an increase of $1,335,000an unemployed worker can get is lessOf this amount 174,249 persons received for Montana, or enough to give eachthan one-third the average wage in hisold-age benefits of $11,260,647. recipient an average increase of $6.24. State. One of the immediate measures to of- Increase authorizations by $15 million, It has been more than 3 years sincefer partial solution that Congress could $5 million each for maternal and childthe administration gave the States analso take would be action on my bill health, crippled children's services, andunemployment insurance do-it-yourselfH. R. 11186, or a similar bill, which would child welfare services. kit.Having, in 1954, engineered the de-amend title II of the Social Security Act While I regret that the committeefeat in the Senate of a proposal whichto increase the outside earnings per- could not also recommend health bene-would have Increased unemploymentmitted under the act from the present fits for those insured under old-age andcompensation benefits by an average ofrestriction of $1,200 to $1,800. There are survivors insurance, I appreciate the call40 percent, Secretary of Labor Mitchelltwo points of justification to this meas- for a study of the problems faced bywrote letters to each governor, suggest-ure which I believe you should consider. the aged in paying for increased hospitaltrig an increase in benefits and an ex-The first is a social one and involves the and nursing home services and look f or-tension of the period for which theysenior citizen who desires and is men- ward to action on the report by the Sec-would be paid. tally and physically able to work and 1958 CONGRESSIONAL RECORD —HOUSE 15765 continue his useful life on a limited basissecond, the dollar ceiling on total bene-Finally, the scheduled increases in rates during these years.Under the presentfits payable to a family is raised to $254;will take place every 3 years instead of act the restricting limitation of $1,200third, benefits are provided for the de-every 5 years, so that in 1959 the rate does not permit practical fulfillment ofpendents of the disabled workers likewill be 21/2 percent, in 1960 the rate will this commendable desire because of thethose now provided for the dependentsbe 3 percent, in 1963, 31/2percent,1966, arbitrary limitation on his earned in-of retired workers; fourth, the provision4 percent, 1969, 41/2percent.In 1969 the come.In this instance we find thatthat now requires payments under cer-combined contribution of employers and Bnother useful and productive persontain other disability benefit systems toemployees will be 9 percent.Taxes on who could make a valuable contributionbe offset against social-security benefitssell-employed will be increased as fol- to our economy is compulsorily deniedis repealed, so that a person eligible forlows: for the year 1959, 3% percent; the right to continue adequate gainfula social-security disability benefit and 1960,41/2percent;1963, 5¼ percent; employment. also for disability benefit under another1966, 6 percent; 1969, 6% percent; The second justification for the pro-system would receive the full amount of Even with these increased taxes, the posal to raise allowable outside earningsof his social-security benefit; fifth, thefund will not be quite in balance al- to $1,800 under my bill is the fact thatrequirement that a worker have 6 quar-though slightly improved. From an es- under the present payment schedule anters of coverage out of the 13 calendartimated actuarial deficit of .57 percent income of $1,200 does not supplement thequarters immediately before he becomesof payroll, the bill will place the program annualsociLl-securityincomesuffi-disabled is eliminated, but he isstillin a position of an estimated actuarial ciently to provide a reasonable standardrequired to be fully insured and to havedeficit of .25 percent. of living for the average person depend-20 quarters of coverage out of the 40 Mr. VANIK.Mr. Chairman, I am ent on these benefits.Actually, the per-calendar quarters before he became dis-pleased to join in support of this long- mitted increase in outside earnings thatabled; sixth, disability-insurance bene-overdue legislation to raise social se- I have proposed is a relatively smallfits can be paid for as much as 12curitybenefits. The 7percentin- amount but every day in the First Dis-months before the month in which ap-crease provided by this bill represents trict of Florida I meet retirees to whomplication for the benfits is filed; seventh,only a modest effort to adjust benefits to just this small amount of difference inthe June 30, 1958, deadline for filingthe skyrocketing rise in the cost of liv- earnings permitted would mean a newfully retroactive applications for the dis-ing.To the 11,800,000 beneficiaries of world of comfortable living.This theyability freeze is postponed for 3 years;social security it will be a welcome im- have earned and, just because of the ex-eighth, a person will not lose a benefitprovement. istence of the social-security programunder the retirement test for any month In every community in America the they should not be denied this right.in which he has earned $100 or less—distribution of social security benefits is They have every right to an adequatethis Is an increase from the $80 figuremaking a substantial contribution to the outside income. under the present law; ninth, where anbusiness economy.Social security dol- I think that it might be worth while toindividual's benefits are increased dur-lars are spent to buy food, housing, note at this point that the conferenceing a year, the benefits which might beutilityservices,and commoditiesof committee of the House and Senate re-suspended by reason of excess of earn-every type.These benefits constitute a moved restrictions written into the in-ings will be the smaller ones that weresubstantial and steady volume of con- crease retirement bill as to outside in-payable for the early months of thesumer spending which in turn provides come and which was passed this year.year;. tenth, a child of a deceased or aemployment for the farmer, the indus- Further, under the Railroad Retirementretired worker who has been disabledtrial worker, and service personnel. Act the Congress realized the equality ofsince before age 18 can obtain benefits It is regrettable that some provisions a person drawing all benefits for whichwithout showing proof of dependency;are not included to assist senior citizens he had paid through deductions or othereleventh, dependent parents may be-on social security in the mounting cost methods. The restriction,which de-come eligible for benefits even thoughof medical care.This problem must be ductedsocial-securitybenefits, wasthere is a widow or child; twelfth, cer-directly met in the next Congress. paying railroad retirement benefits, wastain other technical changes are made It is equally regrettable that this Con- removed in 1954 and today a railroadin the dependency provisions of the bill.gress could not consider a reduction in retiree may draw both of. the benefits— The increased and liberalized benefitsthe retirement age.Every worker in- certainly a just decision where contribu-provided by the bill are not the onlyduced to retirement creates a job oppor- tions have been made—an indicationchanges that have been made.Moretunity for another worker.The addi- that in the sense of Congress there wouldsignificant, is the increased burden oftionofsenior citizenstoretirement not be restrictions on outside earningsthe social-security program upon theeither by reduction in the retirement age from whatever source they may come. taxpayers which comes as a result of theor by inducement provided in higher This billdoes not increase outsiderealization that the social-security fundbenefits could absorb the currently un- earning limitations and I am precludedis out of balance, the recognition thatemployed. The social security program under the rule from offering such anthe future of the program is seriouslycould be effectively adapted to assist in amendment, but I note by the report thatthreatenedif somethingisnot donebringing about the full employment con- the $80 per month earned wages retire-about it, and the compelling necessitydition which the Nation desires. ment test would be raised to $100. for facing the facts.On occasion, the Mr. RElATING. Mr. Chairman, with- Again may I say that I am sure theCongress has made certain changes inin the necessary limits of a sound econ- House realizes the just and urgent needthe social-security program which drewomy, we must constantly attempt to of legislation to amend the Social Secu-heavily on the fund without facing upmake adequate and fair provision for all rity Act as it now exists.I feel that theto the responsibility of increasing thecitizens under the social security sys- great majority of the Members are in-revenue to the fund. On occasion thetem who have worked and contributed to sistent that reasonable increases be madeCongress has postponed the periodic in-our economy, to insure that in the twi- to meet the cost of living today.I re-creases in contributions of employee andlight years of their lives they will have spectfully request that the Congress dur-employer even though it was recognizedthe benefit of a modest income. ing this 85th session act to assist thethat a scheduled increase was necessary. It is clear, unfortunately, that bene- many deserving retirees under the Social Threechangeshavebeenmade,fits under the Social Security Act have Security Act. which are designed to place the fundnot kept pace with the increased cost of Mr. HENDERSON. Mr. Chairman, Imore properly in balance, and each ofliving.That cost continues to rise, al- would like to briefly describe the salientthose three changes can well be regardedthough its rate has been sharply reduced. features of the bill to amend the Socialas an increased tax.The first of theseOne direct result has been a continual Security Act.The bill contains bothchanges is that of requiring a contri-nibbling away at the real values of social benefits and burdens, benefits to the re-bution on the first $4,800 of annualsecurity benefits. cipients and burdens to the taxpayers.earnings rather than $4,200, effective H. H.. 13549 provides one means for The benefits to the recipients are asJanuary 1959.The second is the in-makingavailablerealisticincreases follows: First, individuals now on thecrease of one-fourth of 1 percent eachwhich will bring benefits more in line benefit rolls and all future beneficiariesfor employees and employers and three-with the decreased value of the dollar. will have their benefits increased byeighthof 1 percentforthe self— Actually, the 7 percent benefit raise pro- about 7 percent, with a minimum o$3; employed above the rates now scheduled.vided by this measure is inadequate. A CONGRESSIONAL RECORD— HOUSE July 31 10 percent increase would be made in lineearnings of social security beneficiariesInflationary forces In our overall econo- with higher cost of living.Neverthe-repealed arid, if not repealed, at leastmy. The proposed monthly payment inless, I support H. R. 13549 as at least aincreased. crease will help compensate for basic liv- solid, reasonable step in the right direc- The first social security reform billing costs that are uniformly higher than tion. passed by Congress in 1948 increasedwhen last we adjusted security benefits. It should be carefully noted that thethis $14.99 limitation on earnings to $50. Equally as important is the fact that higher benefits made possible by thisSeveral years later it was raised to $75proper provision is also being made to 2egislation will be more than covered byand then in a later Congress to $1,200raise the contributory taxes and to ex- increased social security taxes, thus per-a year with provision that a beneficiarypand for the employed the wage base 'petuating the program's sound and es-should be deprived of 1 month's socialupon which the taxes are levied.This ential self-financing principle. security for each $80 he earned abovewill tend to keep the long-range pay-as- Mr. Chairman, this is one of a number$1,200. you-go principle intact and the financ- of changes which should be made in the I urged the committee this year whening sound in the old-age and survivors social security statute.But it is an es-it was considering this bill to raise thisinsurance fund.Together, surely these sential one.It is important, in develop-limitation on earnings to $1,500 a yeartwo reasons bespeak to reasonable minds ing arid maintaining a sane and dynamicand to not deprive a person of a monththe justice of liberalizing the social secu- domestic economy, that we remove fromof his pension until he earned $125 aboverity program to a moderate degree. all who work and produce the ever-the $1,500. The committee has left the Mr. BYRD. Mr. Chairman, I am glad present and stifling fear that when theirpresent $1,200 limitation on earnings atto have the opportunity to support the productive days are over they will be-$1,200 and the pensioner can earn $100bill before us today.The increase in come the objects of charity.That is theabove the $1,200 instead of $80 beforebenefits of approximately 7 percent pro- simple beauty of the Social Security Act.he loses a month of his pension. This isvided by this bill is actually a little short It provides a sound means for meetingnot adequate, in my opinion, but is aof the increase in living costs that has directly the important problem of peacestep in the right direction. taken place since 1954 when we last in- of mind for our working citizens.It When I came to Congress 11 years ago,creased the benefits.The legislation, provides an important incentive for per-disabled persons, even when totally dis-however, is a great step forward, and I petuating our system of free enterpriseabled and unemployable, could not drawwish to compliment the Committee on and opportunity. a cent of social security benefits untilWays and Means on the good work that To make this social security system65 years of age.This worked a greatit has done in bringing the bill before work we must see to it that the benefitshardship on tens of thousands of dis-the House in time for action before ad- it provides keep up with the costs andabled citizens and their families.I sawjournment.I am sorry that the com- needs of the beneficiaries.That is whyand talked with many of these disabledmittee has not thought it advisable at Istrongly support H. R. 13549 and hopepersons.I knew the hardship caused bythis time to include a provision to re- it will gain the support of this body. this shortcoming of the law.Severalduce the age of eligibility to 60 years for Mr. MACK of Washington.Mr.years ago this provision was changedmen and women, but I am hopeful that Chairman, I have seen many beneficialso that totally disabled persons coulda later Congress will take this step be- improvements made in the social se-start drawing benefits at age 50 insteadcause I think it is a development that curity law since I first came to Congressof having to wait, often in poverty, un-has to come. 11 years ago in 1947. til 65 years old.This was a great im- I am glad that the bill we are dis- When I first came to Congress 28 mil-provement and ameliorated the hardshipcussing will improve the disability in- lion Americans were under the cover-many disabled persons previously hadsurance program by removing certain age and protection of social security.suffered. provisions that have proved to be un- Today, 73 million are under this law and These are just a few of the many im-necessarilystrict and that have,in entitled to its benefits. provements made in the law since I camemany instances, been unfair.The bill In my time in Congress social securityto Congress 11 years ago.Because ofprovides monthly benefits for the de- protection has been extended to f arm-these and other betterments the social-pendents of disabled workers. The 1956 ers, farm labor, the self-employed, and tosecurity law is much better than it wasamendments to the Social Security Act lawyers and many types of professionalwhen I first came here. provided benefits for insured workers people not formerly covered and pro- All women originally, and for manywho are no longer able to work because tected.I have seen it extended to min-years, were required to be 65 years of ageof an extended total disability but no isters, on a voluntary basis.Also so-before they could start drawing socialprovision was included for the families cial security protection has been ex-security benefits.Through the years Iof such beneficiaries.We are now re- tended to most employees ofStates,have urged, because of what seemed tomoving this inequity. cities,counties,schooldistricts,andme good and sufficient reasons, that the Another worthwhile feature of this other public bodies where the State andage at which women may draw socialmeasure lies in the fact that the offset public employees desired coverage. security should be reduced to 60.It hasprovision of the present law is being In its early years social security bene-been reduced in some cases and undereliminated. At the present time monthfits were only $10 to $85 a month. Nowcertain restrictions, to 62 years of agely social-security benefits payable to dis- a single person may draw benefits of $30for women.I hope the time is not farabled individuals have had to be reduced to $108.50 and a married couple 50 per-distant when women may receive theirby the amount of any periodic benefit cent more than that.These benefitssocial security benefits at age 60. payable on account of disability under further will be increased by 7 percent if Time and experience has and will con-other Federal programs, not including the bill we now are considering becomestinue to reveal inequalities and injusticesveteran's compensation, or under State law. in this, as well as in other laws, and theworkmen's compensation programs.I One of the most unfair provisions inCongress, I am sure, will from time tohave long believed that such a reduc- the social security law of 1947 in effecttime eliminate these by appropriate andtion in benefits was not in keeping with when I came to Congress stated that adesirable amendments. the purposes of the social-security pro- beneficiary would be deprived of his pen- This bill is not perfect. No bill ever is.gram, and I am glad that the committee sion for any calendar month in whichIt does, however, represent an improve-has reached the same conclusion. his earnings from employment exceededment over existing law and, therefore, I Mr. RABAUT. Mr. Chairman, I ask $14.99 in that month. I am among thosehope it will have the unanimous ap-unanimous consent that the gentleman who believe limitations on the earningsproval of the House of Representativesfrom Michigan [Mr. LE5IN5KII may ex- of a pensioner is wrong. When peopletoday and that before adjournment, willtend his remarks at this point in. the work they produce goods and services.be approved by the Senate and then RECORD. These goods and services add to thesigned into law by the President. The CHAIRMAN.Is there objection wealth and prosperity of the Nation.It Mr. HARVEY. Mr. Chairman, forto the request of the gentleman from is economically unsound in my opiniontwo reasons I support the modest generalMichigan? except in times of great unemploymentincrease in social security benefits. There was no objection. to discourage people from working.I As we all know, those millions of Mr. LESINSKI.Mr. Chairman, while was among those who sought to haveAmericans dependent on fixed incomesthe legislation under discussion does this $14.99 limitation on the monthlyhave been most adversely affected by thenot provide for as large an increase 1958 CONGRESSIONAL RECORD —HOUSE 15767 as I believe necessary, I think it is es-about twice what the average retireddisability benefits is most commendable, sential to increase social security bene-worker and his wife are now receivingas is the retroactivity payment provi- fits so the retired folks are better ablefrom social security. sion of H. R. 13549.Other improve. to cope with the increased cost of liv- The foregoing clearly illustrates thements in the retirement test provisions, ing.I should at this time like to re-urgent necessity for increasing social se-dependents' benefits, coverage of certain view the facts which I presented to thecurity benefits at this time. State and local governmental employees, committee during hearings earlier this Mr. RHODES of Pennsylvania.Mr.and other miscellaneous amendments session. Chairman, I want to associate myselfadded by the committee to provide more The present average benefit for a re-with the remarks of the gentleman fromequitable treatment in a number of un tired worker is about $65 a month, forRhode Island [Mr. FORANDI. usual cases are all worthy of our -full a totally disabled person over 50, it is He is to be commended for his fore-support. about $75 a month, and for an agedsight, vision, and his deep concern about Mr. Chairman, the committee is also widow itis only about $50 a month.our aged citizens and their problems.to be commended for its wisdom and These amounts are shockingly low inAs a member of tJ-ie Ways and Meanscourage in recommending amendments times like these and are insufficient toCommittee, his interest and efforts forto guarantee the -actuarial soundness of provide subsistence for most of thesean adequate socialsecurity programthe OAZI trust fund. people.Even the maximum individualhave been a big factor in the progress I strongly favor the liberalizing im- payment of $108.50 is barely adequate inthat has been made in this field. provements provided for the various these days of ever rising prices for food, The aged, the disabled. and our lesspublic assistance programs. The needy, shelter and medical care. fortunate citizens are indebted to Con-aged, disabled, dependent children and The social security benefit structuregressman FORAND for much of the prog-the blind have been most severely hit by has not kept pace with the rising costress that has been made in the socialthe continuing increase in the cost of of living and increased wages.There-security program. The best evidence ofliving, especially for food and, other basicS fore, the relative economic position ofthis is the fact that he has become anecessities of life.The average monthly our retired workers, dependents, andspecialtargetofblindreactionarypublic assistance payment to the 3,770 survivors is steadily deteriorating.Thegroups who have always opposed socialpersons from my District on the rolls in original act in 1935 provided for a rangesecurity and all efforts to Improve it. 1957 was only $43.01.An Increase in of monthly benefits from $10 to $85 to Mr. Chairman, I am pleased to sup-these payments is desperately needed if take effect in 1940.This was not con-port H. R. 13549, the 1958 Social Secu-we are to keep faith with these less sidered luxurious at that time when therity Act Amendments. The action of thefortunate people in our communities. cost of living was only about 59.9 per-Ways and Means Committee in reporting I am pleased that the committee has cent of the 1947—49 level.In the 18this bill for consideration by the Houserecognized the problems of the aged in years since 1940 the cost of living hasis most commendable. meeting the high costs of medical care. gone up more than 100 percent to 122.5 I had hoped that a 10 percent increaseI favor the approach to this problem but the maximum social security bene-in benefits would be approved by the•provided by- the gentleman from Rhode fit has lagged shamefully, having in-committee to help offset the rise in theIsland [Mr. FORANDI In section 106 of creased only about 35 percent. cost of living since the last benefit in-his bill, H. R. 9467.I regret that it was The last increase in social securitS'crease in 1954.In my statement to thenot possible to act on the legislation this benefits was voted in 1954. But betweencommittee I also urged favorable con-session, because I feel that there is ample 1954 and 1957 disposable per capita in-sideration on a number of liberalizingevidence to warrant the inclusion of come went up 12 percent and averageamendments to the present law dealingsuch a pr-ogram in the Social Security weekly wages in manufacturing went upwith a reduction of the retirement age,Act.I trust that the study of this prob- 14.6 percent.As we are all painfullyamendments to the disability section,lem authorized in H. it. 13549 will pro- aware, the Consumer Price Index hasan increase in the outside earnings limi-duce the necessary impetus to obtain risen 6.7 percent from 1954 to date. tation, hospital and surgical insurancehospitalization,surgical, and nursing But those figures do not tell the wholebenefits, elimination of the restrictionhome insurance protection for recipients story.The elements of the cost of liv-on "dual disability" benefits, an increaseofold-age,survivors,anddisability ing for an elderly retired person arein Federal grants for public assistance,benefits. quite different from those of a youngermaternal and child health services, and Mr. Chairman, I urge the passage of person.While the older family mayservices for child welfare and crippledH. R. 13549. spend relatively less than the averagechildren.Mr. Chairman, I note that Mr. WOLVERTON.Mr. Chairman, for homes and home furnishings, theythe committee has included a number ofthe bill before the House today to in- spend substantially more for medicalthese amendments in the bill before uscrease social-security benefits is one with care, and medical costs have risen moretoday. which I am in accord.It will, therefore, rapidly than any other element in the Of course, the bill does not providehave my fullhearted and enthusiastic cost of living.These costs in Novem-nearly all of the improvements which Isupport. ber 1957 were 40 percent above the 1947—feel are necessary to remove inequities I realize that the increased benefits 49 level while the overall Consumer Pricewhich now exist.I feel that the $3provided for in this bill are not as great Index rose 21.6 percent in the same pe-minimum increase should have been atas some of us would have liked to see, riot The impact of this serious in-least $10 in view of the obviously inade-but the increase of 7 percent that it does crease in medical costs can be appreci-quate minimum monthly benefits whichprovide is at least sufficient to meet the ated when we realize that according toare now paid.We -havecome a longmajor increase in the cost of living that a nationwide survey, persons over 65way toward the realization of the goalhas occurred since 1954, when the last incur 57 percent greater medical costsof social insurance as envisioned by Dr.adjustment was made. than does the general population. AndFrancis F. Townsend many years ago. Furthermore, the bill provides a means hospital expenses for the average per-Much more remains to be done to makeof increasing the tax revenue that is son in this age group are 92 percentit possible for our senior citizens to livenecessary to strengthen the social-se- greater than for the population as aout their lives in economic security andcurity fund.This, in itself, is something whole. dignity. most desirable. The fact remains, how- Several years ago a budget was worked Mr. Chairman, H. R. 13549 containsever,that thereisneed for further out for an elderly couple living in De-some meritorious proposals.The in-strengthening of the fund and it will un- troit, Mich.It was not an extravagantcrease from $200 to $254 in the amountdoubtedly receive the attention of the budget in any sense—for example, itof maximum monthly family insurancecommittee charged with the responsi- allowed one-eighth of a pound of butterbenefits is an important step forward,bility of maintaining the stability of the per person per week, 1 work shirt andas is the provision of benefits for de-fund. 11/3 other shirts per year for the hus-pendents of persons receiving disability The bill (H. R. 13549) as presented by band, 1 house dress per year, 1 umbrellainsurance benefits.The elimination ofthe committee provides increased bene- every 20 years, and 85/100 of a handker-the disability benefits offset provision offits under the Federal old-age, survivors, chief per year for his wife.Yet thisthe 1956 law is an important improve-and disability insurance system.It also modest budget in 1955 prices amountedment.The liberalization of the workimproves the actuarial status of the trust to about $200 per month which is justrequirement for eligibility of persons forfunds of such systems, and otherwise 15768 CONGRESSIONAL RECORD —HOUSI July 31 improves such system.It also amends In conclusion, may I again say that Item will be most welcome not only in the public assistance and maternal andam happy to have had a part in this im-my State but throughout the country. child health and welfare provisions ofportant and worthwhile effort that is so I am sure that many Members of this the Social Security Act.This, in thenecessary in promoting the welfare ofbody will agree with me that adjust- main, covers the important provisions ofour people. ments in the public-assistance titles of the bill. A mere statement of the bene- Mrs.PFOST.Mr.Chairman,thethe Social Security Act—commendable fits and improvements intended to beamendments liberalizing the Social Se-as these adjustment are—do not fully adopted is sufficient to justify the fullestcurity Act which are under debate heremeet the problems of our needy, aged, support by the Congress and the ap-today have my wholehearted support. and blind, and of our disabled and de- proval of the President. I know what a difficult task the com-pendent children.The additional $288 In additionto the increased benefitsmittee had to draft a bill which mademillion which would be made available and other improvements provided in thethe most imperative adjustments in theto all States under revised formulas for bill, another forward step is taken thatsocial security system, and still could bepublic-assistance programsisdesper- gives promise of worthwhile legislationconsidered within a reasonable timeately needed.So are the extra pay- to follow after further study.I refer tolimit at this late hour of the session.Iments for suppliers of medical care. that portion of the bill that requires thecommend the committee for the fine jobBut we must do more for these people--- SecretaryofHealth, Education, andthey did. particularly for our senior citizens who Welfare to make a study and report to As we all know, social security hasneed and want help.I was shocked to the House on or before February 1, 1959,become as synonymous with the Amer-learn recently that a nationwide study with reference to a plan or program toican way of life as the 8-hour day andconducted by the University of Califor- provide hospitalization insurance for old-the 2-week annual vacation.Every-nia showed that about one-half of our age, survivors, and disability benefici-one wants the benefits made as liberalcouples and three-fourth of our older aries. as possible—but everyone also wants theindividuals do not have enough to live This is indeed gratifying to me. Thesystem kept on a sound, actuarial basis. on in health and decency.This is a number of bills that have been intro- The committee has given us a billserious indictment of the country which duced inthe 85th Congress on thiswhichliberalizesprimaryinsuranceprides itself on being the richest and subject is an indication of the great in-benefits, and at the same time increasesmost enlightened in the world. terest there is in providing a means ofthe long-range soundness of the system. I hope that next session the Congress helping the beneficiaries under the old-I feel confident that American workerscan give further and much deeper study age, survivors and disability insuranceand American employers will not objectto the increasingly serious problems of programs to meet the cost of hospitaliza-to the small increase of one-fourth ofour senior citizens. tion and nursing home services. 1 percent in contributions which each Mr. Chairman, the rise in the cost of There is abundant evidence of thewill have to pay.It would have beenliving, the recession, and other develop- fact that under existing arrangements,most unwise to raid the Treasury to payments have made advisable a number of insurance against the cost of neededhigher pensions today at the expense ofchanges in the social security system. hospital and nursing home services is outthose who are depending on their pen-The committee has very wisely staked of reach of many, in fact of most oldersions to see them through tomorrow. out a program of adjustments which people. There is undoubtedly a need to I had frankly hoped that a bill pro-can be .givencareful consideratioa at make this protection available to olderviding for a 10 percent across-the-boardthis time, but in so doing had to leave people.The only question that pres-increase in primary benefits would be re-many important changes unconsidered. ently remains unsettled is as to type ofported.I also hoped a larger minimum I plan to vote for this bill because I plan or program that should be adoptedincrease would prove sound.However,feel it has much merit, but I feel strong- to accomplish the purpose.I look for-I accept the committee's stand that aly that other changes should and must ward to action on this subject being7 percent increase is the maximum pos-be made next session in both the OASI taken in the near future.I hope in thesible without heavier contributions.Iand public assistance titles of the Social next Congress. hope that the many Idaho pensionersSecurity Act. I deeply regret that my intention notwho have written me to plead for an Mr. DOOLEY. Mr. Chairman, the to be a candidate for reelection will pre-increase because of skyrocketing livingapproval by the House by an almost vent my being a Member of the nextcosts will also understand. unanimous vote of H. R. 13549, the 1958 Congress and preclude my active partic- I want particularly to commend theSocial Security Act Amendments, is a ipation in developing this and othercommittee for its recommendations thatsource of gratification to the Represent- worthwhile legislation in the interest ofmaximum family insurance benefits beative from New York.The Ways and our people.I confess there has been noincreased from $200 to $254 a month,Means Committee of the House is to be service in the Congress that I have beenand for stepping up creditable annualcommended for reporting this timely privileged to render during my 32 yearsearnings from $4,200 to $4,800.Thesemeasure which will have a salutary effect of membership that I have appreciatedare fine changes. on so many families.The infirm, the and enjoyed so much as that which has I am also happy, with the many im-disabled, and the penurious need sorely related to providing increased hospitalprovements made in the old-age andthe financial assistance this bill will pro- facilities,includingconvalescent andsurvivors and disability insurance pro-vide, if enacted into law. nursing homes, research program ofgrams—although the latter needs fur- It is an established -fact that there has many varieties,includingtheheart,ther refining—and I favor the adjust-been an upward incidence in the cost of mental diseases, cancer, and nervousments made in the Provisions for de-living since the benefit increase of 1954. disease, polio and many others that up -pendents. To those people who have little monetary to the present have seemed to defy the If the changes in the provisions forresourcefulness, any rise in the cost of skill of physicians. dependents become law, a very difficult situation will be ironed out at the Naxnpaliving has painful results.The sorrow- There is much more to be done byState School for Retarded Children.ful letters received from many of my Federal participation inallof theseThis school, which is located in my homeconstituents bear testimony to this fact. worthwhile efforts that are being madecounty, loses much of its revenue be- Many felt that the $3 minimum in- to improve and increase medical knowl-cause some of its disabled adult childrencrease should have been double that edge and thereby promote the welfareare denied benefits upon a parent's deathamount.But the Ways and Means of our people.Itis most gratifying,because that parent, through illness, hadCommittee used good commonsense by however, to observe the increasing in-temporarily discontinued child care pay-doing all it could do, while at the same terest that is being taken by the Federalments to the school.Under this bill,time keeping the social-security fund in Government incooperation with ourpayments for dependents could be madebalance.The bill provides a method of State governments and private institu-without requiring proof that the childincreasing the tax revenue necessary to tions in this great work in behalf ofwas dependent upon the parent for sup-strengthen and maintain actuarially this humanity.I trust that there will be noport. valuable program.The 7 percent in- lessening of effort in all of these com- The many other liberalizing and clari-crease may not be acceptable to all who mendable programs. fying changes in the social security sys-favored an upward revision, but itis 1958 CONGRESSIONAL RECORD —HOUSE 15769 equitable and desirable in the light of all In particular, I would like to call theneedy people who must depend on the the circumstances. attention of the members of this com-Federal-State programs of old age as- Today our system of social security ismittee to that portion of the committeesistance, aid to dependent children, aid an Integral and accepted phase of ourreport which shows that a majority ofto the blind, and aid to the permanently life.Millionsofcitizens know thatpeople on the social-security rolls are de-and totally disabled. My own State of when they reach a certain period theypendent upon these benefits for theirKentucky, for example, would receive an will not have to depend on charity formajor source of income.The Houseincrease in Federal funds of around sustenance, but will enjoy the benefitscommittee report cites evidence accumu-$7,401,000 per year for all of these proof a trust fund to which they, theirlated in a Department of Health, Educa-grams. The estimated increase per re- employers, and their Government havetion, and Welfare survey in December ofcipient would be $4.27 a month in Ken- contributed. 1957 which shows that 30 percent oftucky.The number of people in Ken- Even as the situation now is, there Ismarried couples on the rolls had no per-tucky receiving old age assistance dur- room for improvement.The payments,manent retirement income other thaning the month of May 1958 was 57,492 generous though they are, remain inade-their social-security benefits, and thatand the average payment was $38.64 in quate for the costly demands of every-only one-fifth of the total group hadthat month. day life.A study will have to be madeother income in excess of $1,200. I feel that the committee acted wise- as soon as possible to ascertain what I wish to congratulate the committeely in adopting the need formula for these can be done to provide more adequatefor writing into the bill a provision thatvarious programs.Inasmuch as Ken- payments while at the same time keepingbenefits will be paid to dependents oftucky does not have the wealth possessed the system in balance with adequatedisabled workers on the same basis asby some of our bordering States, such as contributions from future beneficiaries.are now paid to dependents of retiredIllinois, Indiana, Ohio, and Missouri, we It is my belief that the above-men-workers. can benefit immensely from the per cap- tioned measure constitutes a most timely The committee has approved anotheritaincome formula.These increases and beneficial piece of legislation.Itamendment whichisoftremendouswould be accomplished by applying the concerns millions of Americans; it affectsvalue in that the offset provision willequalization formula which pays slight- the very mainstays of our system ofbe repealed providing for the paymently higher amounts, percentagewise, to economy. of the full amount of social-securitylow-income States for amounts of their Mr. MILLS. Mr. Chairman, I yield 5rights to any disabled worker.I intro-average monthly payments which exceed minutes to the gentleman from Ken-duced legislation early in 1957 calling$30. The present Federal share of four- tucky [Mr. PERKIns]. for the repeal of this provision. fifths of the first $30 would be main- Mr. PERKINS. Mr. Chairman, I want The committee has made another im-tained. firstto congratulate the Ways andprovement which has made the social In my considered opinion, the social Means Committee for reporting out a so-securitylawmorerealistic. Thissecurity measure is one of the most im- cial-security bill during the closing daysamendment repeals the so-called dualportant pieces of legislation which we of this session of Congress.I have longrequirement section, the requirement ofhave to consider before adjournment be- been convinced that we must make somea work record for 20 of the last 40 quar-cause it so directly concerns some 12 upward adjustment in the social-secu-ters and 6 of the last 13 quarters. Themillion retired Americans and an addi- rity benefits so they will be more in linesingle requirement of 20 out of the lasttional 5 million welfare recipients, who with present living conditions.I ap-40 quarters will be substituted for theare struggling to live on a small fixed in- peared before the committee some timedual requirements. come out of all proportion to their daily ago and requested at least a 10 percent The committee also provided that, theneeds. We cannot fail to act on their increase for the social-seèurity retirees,June 30, 1958, deadline for filing disa-behalf if we are true to ourselves and and was hopeful that the committee billbility claims will be extended to June 30,truetothehumanitarianprinciples would recommend a 10 percent increase. 1961. which have made this country great. However, I well recognize that we must I wish to congratulate the committee Mr. CHELF. Mr. Chairman, will the go along with the 7 percent increase inon other improvements such as thegentleman yield? order to get a bill.I do trust that wayschange in the earnings limitations pro- Mr. PERKINS.I yield to my col- will be found in the Senate and in con-vision. The earnings limitation, provid-league. ference to increase these benefits to ating for the suspension of benefits for 1 Mr. CHELF.Mr. Chairman, I want least 10 percent. month for each $80 earned in excess ofto congratulate the gentleman on the This greater increase is justified, I am$1,200 per year, has been changed to 1very fine statement he has made.I convinced, by the fact that prices havemonth for each $100 in excess of $1,200should also like to say this, that my risen by 8 percent since the last benefitper year.The limitations on the pay-personal observation has been that the rise went into effect in 1954, as the com-ment of benefits to a disabled child overgentleman from Kentucky [Mr. PERK- mittee's report points out.Then, again,18 years of age have been liberalized byINs] has always been on the floor, and I submit that we are making a decisionremoving the rigid requirement of sup-has always done a magnificent job in today which will set benefit standardsport during the last year of a worker'sfighting for the folks in his district, as not only for the present but possibly forlife. wellasforall ofour elderlyfolks many years in the future.During this I regret that the arbitrary and dis-throughout the country. time, by all the signs, the cost of livingcriminatory requirement of age 50 to be Mr. PERKINS. Mr.Chairman,I will continue to rise.The people oneligible for disability payments was notthank the gentleman. social security have waited 4 years try-removed by the committee bill.It has Mr. Chairman, it is with great pleasure ing to get along on a 1954 benefit stand-always seemed obvious to me that athat I support H. R. 13549, because I feel ard while each step upward of the priceworker under 50, with a growing family,that it is the most outstanding piece of index has had the effect of cutting downis equally in need and has thesamelegislation that has been brought to the on their very meager budget. rights of benefits as the older disabledfloor during this session. Under the present bill providing anworker.Moreover, as I have said re- Mr. REED. Mr. Chairman, Iyield Increase in benefit payments of aboutpeatedly in this Chamber, I would likesuch time as he may desire to the distin- 7 percent, the minimum increase of ato see Congress look into the Social Se-guished gentleman from New Jersey [Mr. $30-a-monthretireewillbe$3percurity Administration's strict interpreta-WOLvERTONI. month, or $33.The maximum increasetion of the definition of total disability. Mr. WOLVERTON. Mr. Chairman, it for those retirees now receiving $108.50I am hopeful that the Ways and Meansit with deep regret that I call to the at- per month will be $9.50 a month, or aCommittee will find time to make its owntention of the House that Marion Fol- total of $118.The maximum amountinvestigation as to the administration ofsom,thedistinguishedSecretaryof payable to a family of a retired or de-the act in this connection. Health, Education, and Welfare, relin- ceased worker will be increased from I particularly wish to congratulate thequishes that office today. $200 to $254 a month. These maximumcommittee for their action in in reasing The retirement of Marion Folsom as amounts are in line with the increase ofthe Federal share of the public assist-Secretary of Health, Education, and Wel- wages subject to tax from $4,200toance payments so that States can in-fare represents another milestone in the $4,800 per year. crease the amounts now being paid tolife of a man who has dedicated himself 15770 CONGRESSIONAL RECORD —HOUSE July 31 toimproving the health and well-being• actuarial status of the trust fund.ISocial Security Act, but what has taken of his fellow men. Long before Mr. Fol-fully realize and I know all Members ofplace is that in some hardship cases peo- som came to Government, he had madeCongress are cognizant of, that in pro-ple who have the misfortune of having significant contributions in the field ofviding increased benefits there is alsoretarded children have had their com- socialinsurance. Thesearewell• the urgent need for maintaining thebined OASI-public assistance benefits known, but not as well known are hisold-age and survivors' insurance systemreduced under the Social Security Act so many productive efforts in the field ofon an actuarially sound basis.In nothat there was no net benefit to the fam- health.He was one of the founders ofother way but through a soundly fi-ily as a result of the 1956 amendments. the Blue Shield plan in Rochester, N. Y.nanced system can we be sure that the The States apparently have been un- This was one of the first communityprogram will endure. willing to absorb a sufficient portion of plans for prepayment of the costs of I must commend the distinguishedthe cost of providing for the needs of surgery. gentleman from Missouri [Mr. CuRTIs Ithese retarded children.Therefore, I Mr. Folsom also was an active partici-on bringing to the attention of thethink there has been forced upon these pant in many voluntary agencies thatMembers of the House the long-for-citizens an additional burden and re- were concerned with hospital and healthgotten people who are reaching theirsponsibility in caring for their children— affairs in Rochester. sunset days of life and who have nota burden that Congress in passing the When he came to Washington, asbeen privileged and never had the op-1956 amendments to the Social Security Under Secretary of the Treasury, he wasportunity conferred on others by theAct should be ameliorated.The States frequently consulted by Secretary Hobby,Congress to be covered under the Old-by reducing the public assistance pay- the first head of the Department ofAge and Survivors' Insurance Act. Wements available with respect to such Health, Education, and Welfare.Hehave these folks.They are with us. handicapped children who were made played a significant behind the scenes These people who have not beeneligible for continued OASI benefits by role in connection with various healthallowed to participate in the programthe 1956 amendments have not given to proposals of the present administration.indirectly have contributed to the socialsuch deserving families the help that He, as much as anyone, was involved insecurity funds through the purchase ofCongress intended they should have.I the development of legislation to estab-everyday needs, which of course aream pleased that the bill pending before lish a health insurance plan for Federalproduced by manufacturers who areus today will make at least a modest inemployees. Unfortunately,nosuchsubject to pay the social-security taxcrease in benefits available in such cases. legislation has been passed, and Federalfortheiremployees.Itisnecessary I do not believe it was the intention employees, unlike those in other organi-that the manufacturers add all costs toof Congress that there would be any ad- zations, do not have the benefits of pay-the final cost of his product and in thisditional hardship put upon these fam- roll deductions for or employer contribu-way the employers' social-security taxilies who are courageouly raising handi- tions to their health insurance plans. for his employees is taken into consid-capped children.However, itis there When Secretary Folsom took office, 3eration.As time goes on the increasedand it is my hope that we will be able to years ago, at the Department of Health,benefits to those eligible under the lawcorrect it further in the near future. Education, and Welfare, he immediatelywill place a greater burden on those Mr. Chairman, I join in urging the plunged into a thorough study of thewho are denied the rights under the1-louse to pass this meritorious bill. various programs of the Department—OASI program. Mr. MILLS.Mr. Chairman, I yield particularly those of the Public Health Of course, many of such people who5 minutes to the gentleman from Penn Service.As a result of exploration ofhave been denied OASI coverage havesylvania [Mr. DENT]. medical research and education needs ofbeen driven to the point of requesting Mr. DENT. Mr. Chairman, I did not the country, he took firm steps to in-that they be provided for through old-intend to take the time to get into the crease the budget for medical research.ageassistanceundertherespectivediscussion on this bill because it appears He reversed a longstanding trend on theState programs.I have introduced leg-it is universally acceptable. However, in part of the executive branch by recom-islation which would make it automaticthe discussions that have taken place, I mending a 26-percent increase in thefor those folks who are in that agehave particularly noticed some arguS National Institutes of Health budget dur-bracket to receive OASI coverage. ments that come up on many occasions ing the first fiscal year in which he was Itistrue this would cost the old-on many pieces of legislation. One par- responsible for the HEW budget.Heage and survivors insurance fund aticular argument appears to be that has constantly worked hard to promotesignificant amount of money. How-there is something laggard about this the expansion of medical research alongever, I would propose that the fundsgeneration—that we do not assume or sound lines, and, under his administra-that are now being appropriated by thethat we will not assume our responsi- tion, great progress has been made. HeCongress to match the State funds un-bilities—that we have no right to create leaves a solid record of achievement inder old-age assistance be diverted toan obligation and place the burden of efforts to find methods for preventionthesocial-security fundinordertothat obligation on oncoming generations. and treatment of many of the diseasesabsorb the greatest portion of this costThis question poses itself to my mind: that continue to plague mankind. Theby the coverage of those who haveTo which generation do I attribute my service he has rendered in behalf of hisreached the age of 70 who have notpart of that obligation? To the genera- fellow man has been distinguished andbeen covered under the old-age and sur-tion in which I was born? To the gen highly worth while. vivors insurance.This proposal woulderation in which I was married and For all these things, we owe Secretarygive retirement security to a deservingbrought forth children and created a Folsom a profound debt, and it is mostgroup of American citizens without sub-greater obligation on the future of this regrettable that our Nation loses his val-jecting them to the humiliation of dem-country and its people? Or to the gen- uable service at this time.I trust that inonstrating poverty and destitution. eration in which I die. Does man divide the years to come Mr. Folsom will enjoy It is my hope that in the near futurehis obligations on the basis of the num happiness and good health in great meas-the Committee on Ways and Means willber of generations through which he ure and abundant opportunity to con-be able to devise some method of bring-passes?Does he have an abiding faith tinue his interest and service in promot-ing about coverage for these folks whoin oncoming generations that they too ing the public welfare. are reaching their sunset days of lifewill be willing to pay for whatever bur Mr. REED. Mr. Chairman, I yield 10and have been deprived of coverage un-dens they find—whether they are in- minutes to the gentleman from Michigander the old-age and survivors insuranceherited or created?Such an argument [Mr. KNOX]. program. seems to me to negate and to take away Mr. KNOX. Mr. Chairman, I com- One other suggestion I would have,from this bill the very aspect that is the mend the Committee on Ways andand I have appeared before the Commit-very soul of this entire legislation, the Means on bringing this meritorious leg-tee on Ways and Means to request con-word "social."The word "social" does islation to the floor of Congress.I par-sideration of it.That is for favorablenot mean it is socialistic, as we under- ticularly commend the committee foraction for those beneficiaries who havestand socialismtoday.Social means recognizing the need for additional ben-retarded children.In the 1956 act Con-common good and common understand- efits to cover the increased cost of liv-gress amended the Social Security Act toing and the common experiences of all ing for those who are now on the retire-provide that retarded children who hadof us together. What does this do so- ment rolls and for strengthening thepassed age 18 would be covered under thecially?What does this do socially in 1958 CONGRESSIONAL RECORD —HOUSE 15771 myparticular State, for instance? Theit started out to be, a hedge against re-A review of the conditions of the bene- payments from social security at thiscession; a guaranty against depression. ficiariesreceiving retirementbenefits moment amount to approximately $600 Mr. Chairman, I sincerely believe thatshows conclusively that in this phase of million a year.Add to that approxi-the American people have shown thatsocial security there is çcompellingneed mately $200 million a year of unemploy-they approve of the principle of socialfor upward revisions. ment compensation payments and ap-insurance and that America's social se- The following breakdown and facts proximately $175 million a year of publiccurity program should not be allowed togive a clear picture of .the situation. assistance and approximately $1 billionlag but should be greatly improved. SOOXAL SECURITY EgrIREMENT XNCOME a year from so-called outside of earned In recent testimony before the House income—fringe benefits which all goesWays and Means Committee,labor • Half of the retired couples receiving into the blood stream of the economy olspokesmen called for improvements insocial-security benefits had a total in- the Commonwealth of Pennsylvania. the unemployment compensation sys-come of $2,190 or more last year—$183 Into every man's district by a rule oftem, in greatly improving old-age retire-a month—and half had less than that thumb measurement, 25,000 persons arement benefits, and in establishing healthamount, a new study indicated today. receiving aid under the so-called benefitprovisions under which hospital andOne-fourth ofthe couples had total plan of social security.Twenty millionsurgical services would be provided formoney income of less than $1,500, and dollars a year are pouring into the Dis-those eligible for old-age and survivorsthe highest fourth received income of trict of every man and woman in thisinsurance benefits. more than $3,250. Congress.I do not know what would In voicing support for an increased The Social Security Administration happen in your District, but I know whatbenefit bill, I reaffirm my longstandingreported these and other preliminary would happen in my District if $20 mU-position of endorsing social-security lawsfindings from anationwide survey of lion were taken out of the daily andwhich will provide more adequate pay-about 5,000 people, a cross section of weekly economic life of my community.ments for old-age benefits, total dis-the 11 million people now receiving old- The buthher, the baker, the candlestick-ability, temporary disablity, and cost ofage and survivors insurance. maker, the Main Street merchant andmedical aid.Present old-age and sur- Not counting OASI benefits, 19 percent the attorney all get benefits from social-vivors insurance benefits are inadequateof the retired couples had outside insecurity payments—if not directly, theyto meet the needs of insured aged per-come of more than $900; 32 percent had benefit indirectly.Each and every onesons and their dependents and of theadditional income of $1,500 or more; and of us must assume our share of the costlurvivors of deceased insured persons. 13 percent had additional income of and our share of the burden no matter To meet the costs of hospitalization,$3,000 or more. This additional income when the debt is created.Is this gener-surgical, and nursing-home costs, theseincluded funds from employment, priation going to say that the contribu-older citizens are forced to apply forvate pensions, dividends and annuities, tions we make in the form of publicpublic assistance.Many hospitals arepublic assistance, and other sources. works and in the form of fortificationsconstantlyconfrontedwithserious Figuring only the independent retire- and permanent improvements in ourfinancial difficulties resulting from un-ment income that could be expected tO land and its institutions are not benefitspaidservices furnishedtothesein-continue through future years, half the that are handed to oncoming genera-dividuals. retired coupres had more and half had tions?Are not these the things that The Forand billfaces up to theseless than $180 for the year besides their oncoming and future generations mustproblems.It would setup anew type ofsocialsecurity benefits.Independent balance against the debts that we leaveprogram designed to provide those per-retirement incomeincludes employer them? One Member saidherethissons who are eligible for OASI benefitsand union pensions, veterans payments, morning that there would be a revoltwith insurance protection against theincome from trust funds and other an- against the taxes that would be assessedcost of hospitalization,subsequentnuities,, rents, interest, and dividends. against the worker because of .the im-skilled nursing-home care, and surgicalThe lowest fourth had no income in ad- mense sum that it would amount to.services. dition to social-security benefits, and the But, I believe, speaking for myself, and While some organizations have as-highest fourth had $920 or more. I am an ordinary and common man asserted that the so-called voluntary ap- Widowed mothers and children getting I know every other man tobe, andproach to our health prob]ems is operat-survivors insurance benefits also were speaking for myself, as I would for him,ing sufficiently well, medical and hospi-covered by the survey.Half of these I say that most of us would rather paytal authorities themselves have shownfamily groups had more and half had 5 percent or a 10 percent tax against ourthe contrary to be true. less than $2,830 income during the survey earnings or our income to buy security There is need to move forward in theyear.Outside their OASI benefits, the and sustenance rather than pay thewhole area of social security legislation.median income of the widowed mothers same tax to buy guns and grief.I doThis need was evident long before thewith children was $1,300. not believe this Nation is ready to revoltcurrentrecession. The Nation has In the face of the foregoing statistics, against a system which hopes to providepaused too long in the march towardthe increased living costs mean greater for them that one goal that each andgreater security for its citizens.Whilehardships to this great number of citi- every man, woman, and child has alwaysgreat economic strides have been madezens who must depend upon Congres- before them, namely, security in theirin the past 20 years, there is a long dis-sional action for any relief in their finan- old age and the banishment of that feartance to go before poverty, want, de-cial status. that no matter what our economic situ-privation, and needless suffering have While millions are unemployed duration may be during the healthy years ofbeen alleviated, and finally eliminateding one of the century's greatest business our lives, none of us can predict whatfrom the land. slumps, inflation continuesto rob the the situation may be at that stage of I am positive that never again will theworker's pay envelope.Recording this, our lives when we reach the point whereAmerican people return to the philoso-the Consumer Price Index edged up none of us knows how we may be ablephy of the soup line and, that instead,slightly in May to 123.6, setting a new to or whether we will be able to earn athey want improvements in social-secu-record. living. rity programs all along the line.Im- What does this mean to the average Mr. Chairman, I congratulate the com-provements in unemployment compen-worker? mittee on doing as good a job as theysation, in old-age pensions, in hospital- The Consumer Price Index is the Gov- could under the circumstances, faced asization for those who have retired, andernment's barometer of inflation, meas- we are with the problems that are nowmore generous public assistance are areasuring monthly changes in the cost of liv- so overwhelming in this country of ours.in which Congress should act. ing due to fluctuations in the prices of I think they could have gone much fur- The vast majority of my constituencygoods and services. ther in another day under different cir-strongly support, improvements in the A figure of 123.6 means that since the cumstances. social-security programs specifically sup-base period of 1947—49 the dollar's pur- I hope and pray I shall be a Memberporting the Forand bill introduced thischasing power has dwindled to the point of this body in a few years to come, ifsession of Congress. The improved bene-where the worker today pays $1.236 for the Lord spares me and ny people let mefits would be financed by a one-half per-something that cost $1 then.This con- come back, so that I may do what littlecent increase in contributions both bytinuing inflation has robbed the con- I can in helping to make this truly whatemployers and employees. sumer of 3.3 cents out of each dollar he GIV—993 15772 CONGRESSIONAL RECORD —HOUSE July 31 spends, as compared with just a year"It used to be called a cost-of-livingto their individual capacities and their ago. index, but we changed its name becausebasic needs.To this end, I appeared Ewan Clague, Commissioner of Pricesit was misunderstood," he went on tobefore the Ways and Means Committee of the United States Department of La-say that a family's cost of living mayon June 19, 1958, to urge, in particular, bor, in a recent4 speech spelled out thebe increased in a number of ways otherthe following improvements in the sys. purpose of the index, how it was arrivedthan an increase in prices. tem: at, and its limitations. A family can decide to raise its stand- First. An increase in the amount of The items making up the 4'market bas-ard of living by purchasing a home in-all monthly benefits of 10 percent to ket" of the Bureau of Labor Statisticsstead of renting, or by shifting from abring them in line with the increase in are a cross section of the goods and serv-lower priced model car to a higher one.the cost of living which has occurred ices purchased by their 44average" family.The Consumer Price Index is not de-since benefit amounts were last increased Although this family may buy as manysigned to measure a rise in the standard in 1954. as 2,000 different products or services,of living. Clague said: Second. Increase the present mini- the sample covers the entire range of Our objective is to measure as carefullymum benefit from $30 to $50 per month family buying. and precisely as possible one factor in theto bring it more in line with the economic In figuring the index, field investiga-cost of living, namely, changes in prices. realities of our time. tors price about 300 different commodi- One wonders what would happen to Third. Increase the wage basefor ties and services.Reports are gatheredthis country's economy if the 11 millionbenefit and tax purposes from the pres- from 46 cities, ranging from a dozen ofcitizens now receivingsocial-securityent $4,200 to $6,000. the largest with over a million popula-payments were suddenly removed from Fourth. Eliminate the age limit for tion each to some small towns with athe protection of this law. total and permanent disability cash ben- population as low as 2,500. You can only guess at the number ofefits, which now makes payment only to Prices reported to the Bureau of Laborunemployed who would be added to thepeople who are age 50 or over. Statistics are carefully verified so thatunemployed rolls if the better than $9 Fifth. Removetheso-calledwork retail price levels are not misrepresented.billion of benefits paid to these 11 mil-clause for persons over retirement age The sample includes over 80 foods, ap-lion citizens was withdrawn from theso that the people who must supplement parel of all kinds, rents, home ownershipmarket places. their meager social-security payments costs, reading and recreation, personal As one who was a young married manwith earnings will not lose benefits. care, and so forth. Some of these itemsin the last great depression I know the Sixth. Lower the retirement age to 60 are commodities; others are services.heartaches and misery that loss of in-for men and to age 55 for women, paying Some are perishable; some are durablecome can produce.I shudder to thinkfull benefits at those ages, thus doing and last for years. The very comprehen-of the catastrophe that would comeaway with the present practice of paying siveness of the index practically insuresabout if we suddenly reverted to the "noactuarially reduced benefits to wives and that many of the price movements with-social legislation" days. women workers who retire at age 62. in it will counterbalance and offset each Mr. Chairman, I am glad to see that • The very persons who were and in other. some cases still are the severest criticsthe committee did recognize the fact Take servicesfirst.Theseincludeof social security legislation are todaythat some benefit increase should be items of personal care, such as haircutsdependent upon the benefits paid to themade because of the steady rise in the and permanents; streetcar fares; recrea-11 million recipients of the $9 billioncost of living.But I submit that this tion items such as movies; doctors' feesannually for staying in business, espe-increase is not nearly large enough to and hospital costs; gas and electricitycially so, the Main Street merchants. make any real improvement in the status rates, and so forth. These services make I believe, however, that in the main,of the almost 12 million Americans who up nearly one-third of the index. of are now dependent upon social-security Let us move to foods next.Thesethevastmajority the Americanbenefits. constitute roughly 30 percent of the in-people have a deep appreciation of the My proposal, to make an across-the- dex,somewhatlessthanone-third.value of this legislation for the welfareboard increase of 10 percent in benefits However, they are as a group the fastestof the entire community. will afford to the great bulk of our senior movers in the index.This is due in Every Member of Congress should givecitizens the same consideration which part to the seasonality of many foodvery serious consideration to a real,this Congress has already given to our products. serious, upward revamping of all of theretired civil-service employees, and to The remainder of the index consists ofphases of our social security laws. our Federal employees. The Ways and commodities other than foods, that is, I, for one, believe, this bill to be veryMeans Committee Report itself points soft goods and durables.Soft goods areinadequate and only a stopgap amend-out that a survey of beneficiaries made such items as clothing, shoes, house fur-ment. The increases are inadequate,by the Department of Health, Education, nishings, household supplies,gasoline,insufficient, and unrealistic in the faceand Welfare in December 1957 showed and so forth.These have a weight ofof the need.The people of this Nationthat for most beneficiaries old-age and somewhat more than 20 percent of thedeserve a more considerate action fromsurvivors insurance benefits constitute total index, and the group as a whole or-Congress and I predict that this subjectthe major source of income, and that 60 dinarily shows the influence of the springwill be a major issue in the next sessionpercent of the married couples on the and fall seasons in apparel prices. of Congress. benefit rolls had less than $1,200 in out- The durable-goods group consists of In the next session I shall continueside income. When we consider that the automobiles—new and used—furniture,my fight for upward revisions in bene-avenge social-security benefit is now household appliances, TV and radios,fit payments, a reduction of the retire-around $65 per month—or $780 a year— and so forth.All of these combinedment agelimit,hospitalizationandit is hard for me to understand how this make up about one-seventh of the wholemedical care, and a more realistic baseCongress can quibble as to the appropri- index, or 14 percent.This group alsofor allowances under the law, in everyate benefit increase at the expense of our has a strong seasonal element, usuallycategory. older men and women.I am firmly con- toward the end of the year when the Iappreciate the toleranceofthevinced, therefore, that the 7 percent com- new models are introduced. House and the consideration given me bymittee figure should be increased to at Clague explained: the chairman of the committee, the gen-least 10 percent. The index is based on average prices intleman fromArkansas, Mr. WILBUR I trust and hope that the committee the areas that are surveyed.It is possibleMILLs. will of its own initiative accomplish that for a careful shopper to keep her own cost Mr. REED. Mr. Chairman, I yield 5purpose here today. of living down by discriminating and shrewdminutes to the gentleman from New Moreover, I am also very much dis- buying. But prices are high because some-York [Mr. FINO]. body is buying, and the Consumer Price In- appointed that the Ways and Means dex is designed to show the prices as they Mr. FINO. Mr. Chairman, I have al-Committeeincreasedtheminimum exist. ways taken the firm position that thebenefit by only $3 to bring it from $30 purpose of our social-security system isto $33 a month. This is a shameful in- Clague cautioned that the index is notto further the social,economic, andcrease which I feel is unfair and in- designed to measure the complete costpsychological well-being of our people inequitable to those millions of people who of living of the wage earner.Stating,such a way that consideration is givenare receiving this minimum amount. 1958 CONGRESSIOKAL RECORD— HOUSE 15773 Accordingto the annual statistics pre- Mr. MILLS. The gentleman from Newprogress that can be made in this session sented by the Social Security Adminis-York called this matter to the atten-of Congress, the bill has my support and tration forlast year,16 percent oftion of the committee in his appearancemy vote. people receiving full benefits, or aboutbefore the committee.The gentleman Indeed, some of its provisions, such 1 in 6, are receiving this minimum bene-'from New York [Mr. REED], was likewiseas those which would affect dependents fit.It is obvious to me that a meagerinterested in the matter and had a billand secondary beneficiaries, have my $3 increase per month is hardly moreon certain phases of it. enthusiastic endorsement. They attest than a token gesture toward helping to While the committee went fully intoto the committee's genuine concern for meet the basic needs of these people.Itthis and made a sincere effort to de-the welfare of some of those whose is shocking that in these times of highvelop what we could consider a satisfac-hardship may present a problem that is living costs and in this country of greattory way of handling tips for the purposeminor in its scope, but that is enormous wealth, we are telling our people theyof taxation, we did not find asolutionfor those relatively few individuals who must live on benefits as little as $33 perof the problem that was satisfactory tomust somehow exist despiteit.Con- month. My proposal of a $50 minimumthe committee. We suggested that thissidering the pressures of time and other payment seems more in line with ourmatter be further studied by the De-vitallegislationthat the Ways and high cost economy. partment ofHealth, Education, andMeans Committee must handle,the Mr. Chairman, further, I was disap-Welfare, and by the Social Security Ad-small voice might well not be heard.It pointed over the fact that the wage base,ministration, as well as the Treasury of-is good to know that it is, and I sin- for tax and benefit purposes, was onlyficials.This is evidenced by language incerely hope that the other body sees fit increased from $4,200 to $4,800, ratherthe report.Those officials are to reportto retain these amendments. than to the $6,000 figure proposed in myback to us at a later date as to some The significant amount of attention bill and in the bills introduced by manymethod of handling this problem sowhich has clearly been given the dis- other Members of this body.By raisingthat these people can get credit underability section of the act is commend- the wage base substantially to $6,000, wesocial security for the amount of com-able, in that it recognizes some of the in- would come much closer to the originalpensation they received in the form ofequities which were built into the ultra- act's intention of a reasonable relationtips. conservative program established by the between retirement income and wages Mr. SANTANGELO. We can con-1956 amendments.Notable among the just prior to retirement. This is an im-clude, therefore, that the omission torevisions in this section and one which is portant way of achieving my goal ofprovide for these service employees doesmost gratifying to me, since it embodies furthering thesocial,economic, andnot indicate an intention on the part ofan important part of my bill, H. R. 9836, psychological well-being of people in re-the committee to disregard them? is that which removes the requirement tirement. Mr. MILLS. No.Just the reverse isthat a beneficiary be currently insured in Mr. Chairman, this bill takes a verytrue, because in our report we mentionorder to qualify for disability payments. tinystepintherightdirection bythe fact that we want a plan developedIn loosening some of the overly strict re- slightlymodifying the present workand submitted to us that will enable usquirements, the committee has taken a clause so that more earnings are al-to do that. meaningful step forward—but itis a lowed in certain very limited circum- Mr. SANTANGELO.I thank the gen-small step. stances. Again I must say that this tinytleman. In all its phases, the bill is unfortu- liberalization is going to make little dif- Mr. FINO. Mr. Chairman, in answernately tentative and conservative. Every- ference in the effect of a provision whichto the gentleman from Arkansas may Iwhere the committee report recognizes is so inequitable that the only way tosay this: I realize and appreciate thethe statistical and human justification remedy the situation is to remove it en-fact that in order to liberalize, humanize,for liberal revision—and falls short of tirely. and improve our social-security systemfully implementing its own conclusions. Finally, I must say that I am verywe must increase the social security tax.It points out that prices have risen 8 much distressed and disappointed overI am sure that the American people willpercent since the last benefit increase the fact that the bill makes no move to-be most willing to pay an increase inin 1954 and wages have increased 12 per- ward lowering the eligibility age for re-this kind of tax because this is one taxcent, yet it provides only a 7-percent tirement. which would establish a right to directincrease inbenefits.Prices certainly Mr. Chairman, I intend to vote for thisfuture benefits to the worker himself andshow no sign of taking a downward turn, bill because itis better than nothing.to his family. In a sense, it is an invest-nor do wages.Both will continue to But I serve notice here and now that Iment which will pay off in the future atrise in theperiod during which the intend to continue my fight to makea time when earnings cease by reason of7-percent increase would be in force, and meaningful improvements in this planretirement.In making such increasedin that period social-security benefi- which is crucial to so many Americanstax payments, the workers of Americaciaries will continue to see the gap widen who look to us in Congress to strengthenbecome, in effect, the "stockholders" inbetween their benefits and the cost of and liberalize our social security system.the social-security system. living, and between their static income Mr. MILLS.Mr. Chairman, I yield Mr. REED. Mr. Chairman, I yield my-and the rising, flexible incomes of their myself 2 minutes. self 1 minute. employed neighbors. Mr. Chairman, I just want to call at- Mr. Chairman, I take this time to con- If the cost of living is to be invoked tention to the fact that we did not in-gratulate the chairman of the Commit-as justification for a benefit increase, clude all of the many laudable provisionstee on Ways and Means for the verysurely reason and justice dictate that if discussed by the gentleman from Newdignified,able,and effective way inwe cannot provide an increase large York in the bill that we present to youwhich he has handled this bill on theenough to get a little ahead of the cost of today because the cost of that programfloor of the House today.Moreover, Iliving spiral, we should at least provide would be an additional 4 or 5 percent ofwish to congratulate all those who haveone large enough to catch up with it. the payroll, so I am informed.Thatspoken on the bill.In my opinion, this The old, the disabled, do not relate would mean a combined rate of taxationhas been one of the best and most en-their benefit checks to the actuarial bal- of either 13 or 14 percent. The commit-lightening debates I have heard in Con-ance of the old-age and survivors insur- tee did not believe that the House wouldgress in many years.I congratulate allance fund when they are trying to stretch want to go that high at this time withof the Members who have participated.that check to cover the basic necessities respect to the overall tax rate. Mr. MILLS. Mr. Chairman, I yield 5of life.They see instead the Federal minutes to the gentleman from Califor-concern for countless other vigorous, Mr. SANTANGELO. Mr. Chairman,hia [Mr. RoosEvELt]. will the gentleman yield? powerful segments of the society and Mr.ROOSEVELT. Mr.Chairman,they feel helpless, as they largely are. Mr. MUJLS.Iyield. the direction of the 1958 amendmentsHow can we expect them to accept as Mr. SANTANGELO. Would the chair-to the Social Security Act is unques-fair a partial remedy, when they see man of the Ways and Means Com-tionably the right direction.Becausea 10-percent pay raise go to Govern- mittee advise me as to what position thethe reforms and liberalizations whichment workers, subsidies for farmers, and committee has taken in the matter ofthe bill would make are desperatelysee our economic aid feed the poor and computing salaries of service employeesneeded, and because as a practical mat-hungry all over the world? The right- who receive tips? ter these reforms are the limit of theness of our action in these other areas 15774 CONGRESSIONAL RECORD —HOUSE July 31 is neither justification nor excuse, nor Some 40 percent of old-age and sur-of magnitude that deserves more than in the finalanalysis is our persistentvivors insurance beneficiaries in Call-the time and attention which the Ways obeisance to that sacred cow of our so-fornia must supplement their, incomeand Means Committee was unavoidably, cialwelfareprograms—thepresentwith old-age-assistance payments. Theirbut regrettably, able to give it.The only financing system. - total income can be no more than theanswer to the question of what to do Sincethe system that we have mustStateold-age-assistanceamount.Inabout areas of the act which were neg- be made to work until a better one canthis group all of their OASI income mustlected in this bill, and the only way to be evolved—as I sincerely hope it willbe deducted from their public-assistancemeet the continuing responsibility which be—I am happy, and even relieved, topayment, leaving for them just the $1.66social-security legislation presents is to know that this bill will put it in actuar-increase allotted to California.Veryestablish a subcommittee of the Ways ial balance.But I am constrained toobjectively, this seems to be a clearlyand Means Committee for the express point out what surely seems to me to beinequitable situation. purpose of taking jurisdiction over all needless conservatism in the bill.Again Many of us watched the fate of Sen-the titles of the Social Security Act. referring to the report, in its explana-ator LoNG's amendment to H. R. 12065 Only today I received a letter from Mr. tion of the wage base increase of $600earlier in this session with a sense ofGeorge McLain, president of the Na- the committee notes first the necessityfrustration and despair.His proposaltional Institute of Social Welfare, urging for maintaining the wage-related char-would have had the Federal Governmentthat a subcommittee or special investi- acter of the system.It then goes oncontinue to pay $24 of the first $30 paidgating committee be authorized to handle to point out the steadily decreasing per-toold-age-assistancerecipients,thensocialsecurity. Mr. McLain'sletter cent of workers who have had their fulltwo-thirds of the amount up to $45, and,states the problem well, and I quote it, wages credited toward benefits.In 1950,finally, half of the amount up to a newas follows: 64 percent had their entire wages cred-ceiling of $70.Had it been enacted, the NATIONAL INSTITUTE OF SOCIAL WELFARE, ited under the $3,600 wage base of thatamendment, in my opinion, would have Washington, D. 0., July 30, 1958. year.In 1954, the figure had droppedaided the States materially, and would MEMBER OF CONGRESS, to 56 percent under the $4,200 base andhave afforded important incentive to House of Representatives, them to take advantage ofavailable Washington, D. C. in 1957 only 43 percent had all their DEAR CONGRESSMAN: Another Congress is wages credited. Federal funds by raising their own pay-about to adjourn. Again the aged and needy, Since the wage base is a plus costments. under the public-assistance section of our item, a certain consistency is indicated. In addition to the significantly moreSocial Security Act, have been handed the Not only are the benefits or moneysliberal formula, Senator LONG'S proposalcrumbs. paid out approached conservatively, butdiffered from the one before us today in For the 23d year the Ways and Means that it did not relate the Federal con-Committee has been too busy to assess the the opportunity to make money is also plight of these citizens.I'm not blaming conservatively out of kilter with the facttribution to per capita income.Whilethem as individuals, for I know the tre- of higher wages, taking up again onlythe committee's objective, to more nearlymendous burden the committee carries. But, 13 percent of the total 21 percent ofstandardize old-age-assistance paymentsthe fact remains that for the 23d year they workers lost since 1950. throughout the country, is a desirablehave been unable to move off Capitol Hill, to I am not nearly as concerned with up-one, I cannot concede that the imposedftnd out how our needy people are being holding a tradition of relating wages tostandardization which the bill providestreated under the public-assistance program. the system, as I am with the practicalisthe best approach, or even really They've heard governors.They've heard consideration that a higher wage basenecessary.I do not believe that there isprofessional social workers.They've heard a single State which would not respondeconomics and statistical experts.They've than the one presented will mean greater heard pressure groups for and against.But, income to the system and thus an oppor-to the incentive factor which is implicitin 23 years, they've never gone into any of tunity to raise benefits, even if slightly.in the Long formula.The effect of thisthe 48 States and asked the old-age pensioner I am sure that the committee has ex-measure, on the other hand, appears"What are your problems?" amined the implications of a higher wagealmost punitive as it affects California. Every Member of Congress must defend the base very carefully.Since I am not anI submit that if the Federal contributioncommittee's action (or lack of it).How do actuarial expert, I would very much ap-is based purely on the potential of Statesthey do it?How do they answer an elderly preciate having the record show theto spend money without considering theperson's plea for humane treatment? How thendo they explain that Congress has plenty of amount of money which would be madeactual performance of a State, time with its committees and subcommittees available by raising the base to $6,000—athose middle- and upper-income Statesto go into the field and look into the plight figure which does not appear to me to bewhich might otherwise work towardof the farmers, small business, big business, an unrealistic one. more liberal State payments would tendveterans, foreign aid recipients, public power Even more important than the amend-to be discouraged from doing so, failingprojects, railroads, airlines, shipping comments to title II of the act—if this isthe incentive of increased Federal con-panies—you name it.Yet, they haven't had tribution. time in 23 years to move out of Washington possible—are the changes that are made The new ceiling is not yet high enoughto hear the story of the old folks. with respect to the public assistanceat $66, particularly when the fact that The ever-increasing population of elderly titles. Here omissions stand out as citizens 60 years and over, now in the 20- clearly as the revisions that are made.medical-care payments are included inmillion bracket, deserves and demands that the figure, rather than considered sepa-Congress should set up a subcommittee, a Mr. Chairman, California has a veryrately. subcommittee to give thorough and continu- particular interest in this section of the Omitted from this bill entirely anding attention to this pressing problem. Thin act. My State has 266,151 old-age as-tragically is any reference to the mannercan be done either through a subcommittee sistance recipients—more than any otherin which the public-assistance titles areunder Ways and Means; or through a special State.Largely an urban group, manyadministered.A major purpose of theinvestigating committee established by Con- gress.There isn't a legitimate reason why are in my district in Los Angeles. TheirHumanitarian and Old-Age Rights Act,a committee of this kind, so urgently needed, problems are close to me, and I appre-which I introduced with more than 60should not be established. ciate those problems. These are the peo-colleagues in both bodies, is to establish Congress is concerned with crime investiga- ple who are most needy, and Californiauniform standards for fair administra-tions, un-American activities investigations, has consistently and progressively recog-tion of public assistance in order to as-racketeer investigations.Well, sir, I say it's nized that fact with average monthlysure that the dignity of each recipienta real crime the way our elderly and needy will be held inviolate.Itis indeed aare being neglected.It's high time we had payments to recipients of $84.12, includ-sad commentary that Congress appearsan investigation. ing medical payments.Advanced as Iwilling to accept its fiscal responsibility, Sincerely, believe California to be, there are fivebut not this less tangible, but nonethe- GEORGE MCLAIN, President. States whose average mpnthly paymentsless meaningful, responsibility. Mr. McLain's letter points basically, I are greater.Yet undei the formula in Mr. Chairman, a number of my com-think, to the lack of attention that has this bill, California stands to gain onlyments have been directed toward aspectsbeen given the human problems involved. a $1.66 monthly increase per recipientof this bill which I have felt were inade-These problems are going to become more in a field that ranges to an increase ofquate,or should be comprehensivelyurgent, not less urgent. $11.41. Only Mississippi, with an in-studied.Surely, it cannot be denied that It is important to note that other coun- crease of 47 cents, is lower. social-security legislation is on an ordertries, particularly the most peaceful and 1958 CONGRESSIONAL 'RECORD —HOUSE 15775 prosperouscountriesofScandinavia,nients are lengthy, I ask unanimous con- The CHAIRMAN. Under the rule, have found the time to adopt seeminglysent that they may be considered asthe Committee rises. more workable and practical solutions.read and printed In the RECORD at this Accordingly the Committee rose; and Certainly, in a democracy which mustpoint. the Speaker having resumed the chair, stand before the world as being Inter- The CHAIRMAN. Is there objectionMr. ELuo, Chairman of the Commit- ested primarily in the welfare of peopleto the request of the gentleman fromtee of the Whole House on the State of as human beings, it is high time that weArkansas? the iJnion, reported that that Commit- took strong steps to meet each and every There was no objection. tee, having had under consideration the one of the frankly acknowledged defi. The committee amendments are asbill (H. R. 13549) to increase benefits ciencies In our present system. follows: under the Federal old-age, survivors, I shall, if reelected to the 86th Con- Committee amendment: Page 10, at theand disability Insurance system, to im- gress, renew my efforts and press withend of line 13, Insert °or." prove the actuarial status of the trust the utmost vigor for proposed legisla- Committee amendment: Page 29, line 23,funds of such system, and otherwise tion to accomplish these purposes. after °enactment" Insert J1 the applicantimprove such system; to amend the We have made some progress thishas not died prior to such date oZ enactmentpublicassistance and maternal and year—small and inadequate though it is.and." - child heaith and welfare provisions of Committeeamendment: Page 45, lIne 1,the Social Security Act; and for other Next year the effort must be renewed andstrike out "subsection (d) ,"andInsert °sec- we must hope that the voters n everytion 223 (a) or subsection (d) of this sec-purposes pursuant to Rouse Resolution walk of life will be vocal In their demandstion," and on page 45, strIke out lInes 5653, he reported the bifi back to the upon those seeking their support In theand 6, and insert °section 223 (a) or sub-House with sundry amendments adopted November elections. section (d)of thiasectionu;niess(I) heby the Committee of the Whole. Mr. MILLS. Mr. Chairman, I yieldteases to be so entitled by reason of tilE The SPEAKER. trnder the rule, the myself 1 minute. death or (ii)in the case of an Indivtdualprevious question is ordered. who was entitled to benefits under section Is a separate vote demanded on any Mr. Chairman, I take this occasion to223 (a), he Is entitled, for the month follow.. again thank the members of the Com-Ing such last month, to benefits under sub-amendment? If not, the Chair will put mittee on Ways and Means and thesection (a) of thIE section." them en gros. many technicians who worked with us Committee amendment: Page 54, line 1, The committee amendments were many hours in the preparation of thisafter State," Insert or an Instrumentalityagreed to. bill.As I said earlier today, the Com-of two or more States." The SPEAKER. The question Is on mittee on Ways and Means proceeded Committee amendment: Page 82, line 11,engrossment and third reading of the with this matter In a bipartisan, non-strike out °system," and Insert °system andbill. (i)are members of such fund or system, political way. And I want to pay a spe-or (ii)are not members of such fund or The bifi was ordered to be engrossed cial tribute, to my very good friend t1esystem but are eligible to become membersand read a third time and was read the gentleman from New York [Mr. REED]tlereof." third time. for joining with me In the introduction Committee amendment: Page 82,after The SPEAKER. The question Is on of this legislation, which is a committeeline 22, insert: the passage of the bifi. bill.I know that the very difficult task • °(F) An organization which filed a cer- that fell upon me as chairman of thetificate under this subsection after 1955 but Mr. MILLS. Mr. Speaker, on that I committee has been made much easierprior to the enactment of this subparagraphask for the yeas and nays. this yea'r because of the very fine coop-may file a request at any time before 1960 The yeas and nays were ordered. to have such certificate effective, with respect The question was taken; and there eration that I have received from theto the service of individuals who concurrectwere—yeas 374, nays 2, not voting 54, as gentleman from New York and all thein the filing of such certificate (initially or members of the Committee on Ways andthrough the filing oZ a supplemental list)follows: Means. prior to enactment oZ this subparagraph and [Roll No. 149] Mr. MORANO. Mr. Chairman, I makewho concur in the filing oZ such new request, YEAS—374 Abbitt Brooks, Tex. Dennison the point of order that a quorum is notfor the period beginning with the first day ofAbernethy Broomeld Dent present. any calendar quarter preceding the first cal-Adair Brown, Ga. Denton endar quarter for which it was effective andAddonizio Brown, Mo. Derounian Mr. MILLS. Will the gentleman with-following the last calendar quarter of 1955.Albert Brown, Ohio Devereux hold that a moment? Such request shall be filed with such official Alien, Calif. Brownson Dingell Mr. MORANO. Yes. and in such form and manner as may beAllen, Ill. Broyhili Dixon Mr. MILLS. prescribed by regulations made under thisAndersen, Budge Dollinger It is my purpose when H. Carl Burleson Donohue we get into the House—and we are al-chapter. If a request is filed pursuant to thisAnderson, Bush Dooley most at that point—to ask for a votesubparagraph— Mont. Byrd Dorn, N. Y. °(i)for purposes of computing interest Andrews Byrne. In. Dorn, S.C. on anal passage of the bill. We are al-and for purposes of section 6851 (relating toAnfuso Byrne, Pa. Dowdy most at the point of rising. addition to tax for failure to file tax re- Arends Byrnes, WIS. Doyle Mr. MORANO. I insist on my point ofturn), the due date for the return and pay- Ashley Canfleld Durham Ashmore Cannon Dwyer order, Mr. Chairman. ment of the tax for any calendar quarter Aspinali Carrigg Edmond8on The CHAIRMAN.The Chairwillresulting from the filing of such requestAuchincloss Cederberg Elliott count.[After counting.]One hundredshall be the last day of the calendar month Avery Celler Engle and twenty-three Members are present,following the calendar quarter in which the Ayres ChamberlainEverett request is filed; and Bailey Chelf Evins a quorum. °(ii) the statutory period for the assess- Baker Chenoweth Fallon Mr. MILLS. Mr. Chairman, there arement of such tax shall not expire before the Baldwin Chiperfield Farbstein Barrett Church Fascell no further requests for time under gen-expiration of 3 years from such due date." Bass, N.H. Clark Fenton eral debate. And on page 82, line 23, strike out °(F)"Bates Clevenger Fino The CHAIRMAN. trnder the rule, theand insert "(G) Baumhart Coad Fisher billis considered as having been read Committee amendment Page 102, lines 9Beamer Coffin Flood and 10, strike out °until July 1, 1959." andBecker Collier Flynt for amendment.No amendments areinsert °for each of the 3 fiscal years in the Beckworth Colmer Fogarty n order to the bill except amendmentsperiod ending June 30, 1981." Belcher Cooley Forand offered by direction of the Committee on Bennett, Fla. Corbett Ford Committee amendment: Page 106, after Bennett, Ivflch.Coudert Forrester Ways and Means.Are there any com-line 23, insert: Bentley Cramer Fountain mittee amendments? Berry Cretella Frazier Mr. MILLS. Mr. Chairman, we have "AMENDMENT p1EsERvING RELATIONsHIP BE- Betta Cunningham,Frelinghuysefl TWEEN RAILROAD RETIREMENT AND OLD-AGE, Blatnik Iowa Fulton eight clerical, technical, and conforming SURVIVORS. AND DISABILITY IN5UBANCE Blitch Cunningham,Garmats amendments, and I ask unanimous con- °SEC. 704. Section 1(q) of the RailroadBoland Nebr. Gary sent that they may be considered en bloc. 1937,as amended,is Bolling Curtin qathings etirement Act of Bolton Curtis, Mass. Gavin The CHAIRMAN. Is there objection toamended by striking out 1957' and insert-Bosch Curtis, Mo. George the requestoIthe gentleman froming in lieu thereof 1958'." Bow Dague Glenn Arkansas? The CHAIRMAN. The question is onBoykin Davis, Ga. Granahan Boyle Dawson, flI. Grant There was no objection. the committee amendments. Bray Dawson, UtahGray Mr. MILLS.Mr. Chairman, In view The committee amendments wereBreeding Delaney Green, Oreg. of the fact that some of these amend-agreed to. Brooks, La. Dellay Green, Pa. 15776 CONGRESSIONAL RECORD —HOUSE July31 Gregory McMtllafl Rodino The Clerk announced the following62—for women, paybig full benefits at Griffin McVey Rogers, Cob. GrIfilthB Macdonald Rogers, Fla. pairs: these ages, thus eimintjng the present Gross Mathrowlcz Rogers, Mass. Mr. Eberharter with Mr. Hillings. reduced benefits for wives and women Gubser Mack, 111. R.ogers, Tex. Mr. Buckley with Mr. James. workers who elect to apply at age 62.An Hagen Mack, Wash. R.ooney Hale Madden Roosevelt Mr-i Marshall with Mr. Keating. additional One-half million women and Haley Magnuson Rutherford Mr. McCarthy with Mr. Scherer. three quarters of a million men could Halleck Mahon Santangelo Mr. Baring with Mr. Sadlak. immediately draw benefits as a result. Harden Mail lard Saund Mr. Hays of Arkansas with Mr. Mclntire. Hardy Martin Saylor Mr. Trimble with Mr. Radwan. Second. Make widows eligible at age Harris Matthew8 Bchenck Mr. Lesinski with Mr. Gwlnn. 50—now 62—primarily so that widowed Harrison, Nebr. May 8chwengel Harrison, Va. Meader Scott, N. C. Mr. Preston with Mr. Hoffman. mothers who have remained in the home Harvey Merrow Scott. Pa. Mr. Landrum with Mr. Jackson. to care for their children can qualify for Haskell Metcalf Scudder Mr. Sieminski with Mr. Krueger. benefits at an earlier age. Hays, Ohio Miner, Calif. Seely-Brown Mr. Boggs with Mr. Taylor. Heaiey Miller, Md. Selden Mr. Carnahan with Mr. Smith of Kansas. Third. Raisethe minimum benefit Hbert Miller, Nebr. Sheehan Mr. Friedel with Mr. Jenkins. from $30 to $50 to help reduce the need Hemphill Miller, N. Y. Shelley for supplementation of social-security Henderson Mills Sheppard Mr. Loser with Mr. Burdick. Herlong Mlnshalt Sikes Mr. Willis with Mr. Michel. benefits through the "needs test" public- Heselton MLtchell Slier Mr. Christopher with Mrs. St. George. assistance programs. Some 3¼ million HesB Montoya Simpson, Ill. Mr. Diggs with Mr. Utt. people will be affected by this change. Hiestand Moore Simpson, Pa. Mr. Alexander with Mr. Talle. Hill Morano 818k Mr. Bonner with Mr. Tollefson. Fourth. Increase present benefits on Hoeven Morgan Smith. Calif. a graduated scale from around 20 percent Holifield Morrison Smith, Miss. The result of the vote was announcedfor people with the lowest amounts to Holland Moss Smith. Va. Holmes Moulder Spence as above recorded. around 10 percent for those receiving the Holt Multer Springer A motioii to reconsider was laid on themaximum benefit. Holtzman Mumma Stagger8 table. Fifth. Add, a program which will pro- Horan Murray Stauffer Hosmer Natcher Steed vide for the costs of hospitalization, sur- Huddleston Neal Sullivan gery, and nursing.home care for the re- Hull Nicholson Taber GENERAL LEAVE TO EXTEND tired worker and his wife, whose total Hyde N!mtz Teague, Cajif. REMARKS Ikard Nix Teague, Tex. family income—including social-security Jarman Norblad Teller Mr.MILLS.Mr.Speaker,Iaskbenefits—is under $2,400 a year. Jennings Norrell Tewes unanimous consent that all Members JenEen O'Brien, Ill. Thomas Sixth. Raise the wage base for tax and JohanEen OBrien, N.Y.Thompson, La. who desire to do so may have 5 legisla-benefit purposes from $4,200 to $6,000 JohnEofl O'Rara, In. Thompson, N. J.tive days in which to extend their re-per year. Jonas O'Uara, Minn. Thompson, Tex.marks in the RECORD on the bill just Jones. Ala. OKonski Thomson, Wyo. Seventh. Liberalize the definition of Judd ONeill Thornberry passed. total and permanent disability and the arsten Osmers Udall The SPEAKER.Is there objection toqualifying periodin present lawso mean Ostertag Ullman the requestofthe gentleman from Kearney Paanian Vanik more people can qualify for benefits earns Patman Van Pelt Arkansas? under this program. 1ee Patterson Van Zandt There was no objection. The adoption of the foregoing provi- elly, N. Y. Pelly Vinson eogh Perkins Vorys sions would provide a more equitable and 1ilburfl Pfost Vursell realistic solution to the problems of those KIlday Philbin Wainwright SOCIAL SECURITY whose livelihood depends upon this law. Kilgore Pilcher Walter Michigan. Mr. King Pillion Watts Mr. BENNETT of irwan Poff Weaver Speaker, I ask unanimous consent to ex- Kitchin Po'k Westland tend my remarks at this point in the SOCIAL SECURITY KuczynskI Porter Wharton RECORD. Knox Price Whitener Mr. ALGER. Mr. Speaker, I am op- Knutson Prouty Whitten The SPEAKER.Is there objection Laf ore Qule Widnall to the request of the gentleman fromposed to the social-security program in Laird Rabaut Wier Michigan? this bill for a simple reason, after study- Lane Rains Wigglesworth ing the bill and report, and listening to Lankord Ray Williams, Miss. There was no objection. Latham Reece, Tenn. Williams, N. Y. Mr. BENNETT of Michigan. Mr.the debate. We are still charging the LeCompte Reed Wilson, Calif. Speaker, I voted for the social securitydeficit of higher payout versus lower Lennon Rees Kans. Wilson. md. tax income to the future, our children, Libonati Reuss Winstead bill which just passed the House.It Llpscomb Rhodes. ArIz. Withrow provides a number of worthwhile im-instead of making this program actuarily McCormack Rhodes, Pa. Wolverton provements over existing law, as well assound, "pay as you go."As the chair- McCulloch Rieftlman Wright man of the Ways and Means Committee McDonough Riley Yates a modest increase in pensions.But I McFall Rivers Young emphasize, Mr. Speaker, that the billstated, even under this bill the program McGovern Roberts Younger fails to rectify many of the serious in-is out of balance by 0.2 of 1 percent of McGregor Robison, N. Y.Zablocki equities and injustices which exist underpayroll, which will amount to billions. McIntosh Robsion, Ky. Zelenko the present law insofar as they affectTrue this reduces the imbalance of NAYS—Z several millions of our citizens who are1954—56 of 0.57 percent. yet this latter Alger Mason eligible for these benefits. figure is quite significant, inasmuch as' The modest increases provided by thisthe actuaries at that time said that the NOT VOflNG—54 bill will do little to alleviate the hard-program was actuarily sound.It is still Alexander Hays, Ark. Powell greatly out of balance. Not only are we Barden Hillings Preston ship and suffering of many whose pen- Baring Hoffman Radwan sions at this moment are hardly enoughpaying out more than taking n under Bass, Tenn. Jackson R.obeson, Va. to keep body and soul together.More-the past and this present bill, but there Boggs James Sadlak are $21 billion of Federal I 0 U's on hand, Bonner Jenkins St. George over, the bill does nothing to liberalize Buckley Jones. Mo. Scherer the disability provisions of the act whichso that the payout now Is out of the Burdick eating crlvner have been so strictly construed that sev-Treasury.In addition, the chairman Carnahan Krueger Shifford estimated the deficit for payment of the Christopher Landrum Sieminskl eral hundred -thousand workers who are DavIs, Tenn. Lesinsk% Smith, KanE. unable to carry on any gainful occupa-present retirees is $65 billion. Since this Dies Loser Tálle tion have been deprived of these bene-deficit accompanies the 12 million pres- Diggs Mccarthy Taylor ent recipients, what will the deficit be Eberharter Mclntire Tollefson fits.I had hoped that the committee Feighan Marshall Trimble would adopt the provisions of my bill,for the 75 million additional individuals Friedel Michel Tuck which had seven principal points as fol-now paying into the social-security pro- Gordon Morris Vtt lows: gram expecting later benefits?Cer- Gwinn Poage Willis First. Reduce the retirement age totainly, present recipients want larger So the bill was passed. 62—now 65—for men and to 60—nowpayments, but is it fiscal soundness to 1958 CONGRESSIONAL RECORD —HOUSE 15777 increase payments under thisbill inviewquestion is, can our people afford the of the heavy deficit? taxes necessary to establish this sound True, compliments can be extended thebasis? Or is this robbing present Peter committee for making an effort to cor-to pay future Paul a bankruptcy proposi- rect a bad situation, and this is a com-tion.So long as I suspect this is the plicated and controversial matter, butcase I must so label it and call it to the the step In the right direction is tooattention of the hard-pressed, expectant little and quite late, In .view of the con-taxpayersIs it possible this program tinued actuary unsouñdnes&Unlike 2will collapse of its own weight? years ago we had hearings and debate Inflation is both the cause and 1?he re- accompanying this, billalthough nosult of this bill.The payments are in.. amendments permitted. creased because of the cost of living in- Another legitimate criticism, it seemscreases of inflation, the depreciated value to me, is the compulsory tax which mayof the dollar.Yet these increased pay- never be returned as payments later.ments will be passed on and be paid by One example, is the loss of payment be-the consumers in the increased cost of cause of other earnings.It is fine togoods and services, and so Inflation re- be humanitarian in being willing to Sharesults. The ones who pay most dearly, of the risk, 'but it Is wrong to be taxedcourse, are thpse who are not on the so- without receiving this money in latercialecuritypayroll:Approximately benefits.This jeopardizes the individ-one-third of those over 65 years of age ual's providing for the future.It is par-are not, thre-flfthsof those over 70, and ticularly faulty when compared to ac-one-half of those over 75. cepted insurance measures under private As I see it, this Is the wrong bill, at enterprise, wherein• the money isre-the wrong time, and so I voted against it. turned.It is difficult to correlate the social security and private insurance programs. I disapprove a'so the increased appro. priation under section V, relating to public assistance, wherein 'the Federal Government allocated .money to programs which are State and, local in character. This amount is now to exceed $2-bluion per year. Necessarily the taxes are being increased in two ways. The base amount to be taxed is raised.froin$4,200to $4,800, and the percentage is to be 1ncrased- reaching 9 percent by 1969. A serious and little recognized danger in the f u- ture, as the taxpayer is caught between social security and income taxes, is simply that future generations may vote out the entire social security program, Ieav Ing recipients high and dry.This program is squarely in the political arena, and discontented taxpayers can weary of the heavy load.After all, we are transfering the burden to them instead of paying it proportionately now. My chief concern Is the realization that this one program as now conceived can bankrupt this Nation. Many agree that it should be on an sound basis actuarily now, long over due, at that.It is thdefensible at this time to increase the payout, election year politics notwithstanding. Our children deserve better of us than this. We should pay our way today as we expect them to pay theirs in their day. This is stopgap legislation, disregard- Ing the advisory committee findings to be received later this year on which it was intended we should base legislation. The administration recognized the earlier intent of Congress to await those end- ings, and we should do no less.Other- wise, we will be right back next year to write more social security legislation. This does not seem like good politics to me either.The people, knowing about this advisory committee, will question this expedient legislation. So this is not to deny the people social security legislation. Simply to put it on a sound, pay-as-we-go basis. The big 16124 CONGRESSIONAL RECORD —HOUSE August 4 for taxes from $4,200to$4,800 to bring it more nearly in line with the increase In wages which has occurred in the past 10 years. Third. Strengthenthe programof benefits for permanently and totally disabled men and women, which was established in the 1956 amendments, by (a) making benefits available not only to the disabled worker aged 50 or over but to his dependents as well, in the same ways that the dependents of a retired worker are not eligible for benefits; (b) removing the eligibility requirement that now denies these benefits to a worker who could not work in covered employment during the last year or two before his impairment became total, so that people with a progressive illness can qualify, and (c) eliminating the provision which now cancels or reduces the amount of the disability benefit by the amount of benefits received under other Federal programs or State workmen's compensation programs. Fourth. Liberalize the retirement test, which cancels benefits on the basis of earnings, so that retired workers can earn $100 or less—now $80 or less—in a month without loss of benefits. The bill further recognizes the special health problems which face retired men and women by requesting the Depart- ment of Health, Education, and Welfare, to conduct a study including the study of a proposal by a number of Members of Congress that the cost of hospital and nursing home care, up to 180 days a year for people otherwise eligible, be covered by social security.The committee expressed its concern over the fact that the costs of needed hospital and nursing home services is out of the reach of many older people and asked that this proposal, as well as a number of other alternatives, receive careful review so Social Security Amendments of 1958 that Congress would be in a better position to decide what legislative measure, CTENSION OF REMARKS if any, should be taken to meet this OF problem. I am very much concerned, Mr. Speak- HON. ELMER J. HOLLAND er, with the situation of our older men OF PENNSYLVANIA and women on social security because I IN THE HOUSE OF REPRESENTATIVES know very well that each upward step in Monday, August 4, 1958 the cost of living during the past 2 years Mr. HOLLAND. Mr. Speaker, perhapshas, in effect, taken nickels and dimes the most important unfinished businessout of their pockets. We must, also, I before this Congress is final action on thebelieve, be especially aware of the fact social security amendments approved bythat social security checks are a major the House.Although the bill did not gosource of income for the majority of our as far as I had hoped it would in increas-older people—checks which now average ing the amount of benefits, and in otherjust $65 per month for a retired worker. respects, I voted for it because I realizeThis fact is attested by a survey last that it was a compromise measure and itDecember, conducted by the Department seems of the utmost urgency to me thatofHealth,Education,andWelfare, some change be made in this regard be-which showed that 60 percent of the fore the Congress adjourns. married couples on the rolls had only Briefly, the bill as reported by the Ways and Means Committee and passed by$1,200 or less of outside income in addi- the House without amendment under ation to their social security. closed rule, would: I am looking forward to final action First. Increase benefit amounts acrossby the Congress, on this measure, now the board by 7 percent to bring them inpending in the Senate, at an early date. line with increases in the cost of livingThe security and well-being of some 12 which have occurred since the last in-million Americans today—and of most crease in 1954. of us tomorrow—depends upon Congres- Second. Raise the wage base, whichsional action to keep our social security serves as a basis for benefit amounts andsystem in line with our economic system.

85TH CONGRESS 2D SESSION

IN THE SENATE OF THE UNITED STATES Auous 1, 1958 Read twice and referred to the Committee on Finance

AN ACT To increase benefits under the Federal Old-Age, Survivors, and Disability Insurance System, to improve the actuarial status of the Trust Funds of such System, and otherwise improve such System; to amend the public assistance and maternal and child health and welfare provisions of the Social Security Act; and for other purposes.

1 Be it enacted by the Senate and House of Represent a-

2tives of the United States of America in Congress assembled,

3That this Act may be cited as the "Social Security Amend-

4ments of 1958". I 2

1TITLE I—INCREASE IN BENEFITS UNDER TITLE 2 II OF THE SOCIAL SECURITY ACT

3 INCREASEINBENEFITAMOUNTS

4 PrimaryInsuranceAmount

5 Sec. 101.(a)Subsection(a)of section 215 of the 6Social Security Act is amended to read as follows:

7 "Primary Insurance Amount 8 "(a) Subject to the conditions specified in subsections 9 (b),(c), and (d)of this section, the primary insurance 10 amount ofan insured individual shall be whichever of the 11following is the largest:

12 "(1) The amount in column IV on the lineon 13 which in column Ill of the following tableappears his 14 average monthly wage (as determined under subsection 15 (b));

16 "(2) The amount in column IV on the lineon 17 which in column II of the following tableappears his 18 primary insurance amount (as determined under sub- 19 section (c) )

20 "(3) The amount in column IV on the lineon 21 which in column I of the following tableappears his 22 primary insurance benefit(as determined under sub- 23 section (d) );or 24 "(4) In the case of an individual whowas entitled 25 to a disability insurance benefit for the month before the 26 month in which he became entitled to old-age insurance S

I benefits or died, the amount in column IV which is equal

2 to his disability insurance benefit.

FOB DIITEBMINING PBI&RY INSURANCE AMOUNT AND MAXIMUM FAMILY BENEFITS

"I II m iv v "(Primary insurance (Primary insurance (Average monthly (Primary Insur- (Maximum benefit under 1939 amount under 1954 wage) anceamount) family Act, as modified) Act) benefits)

"If an Individual's Or his primary Insur-Or his avorage monthly And the mail. primary Insurance ance amount (as deter- wage (as determined The amount re-mum amount of benefit (as determined mined under subsec. under subsec. (b)) is— ferred to n tbebenefits payable under subsec. (d)) Is— (c)) is— preceding para- (as provided In graphs of this sec. 203 (a)) on subsection tbe basis of his But not But not But not sball be— wages and self- At least— more At least— more At least— more employment than— than— than— income shall be—

$10. 00 $30. 00 $54 $33 $53. 00 "$10. 01 10. 48 $30. 10 31. 00 $55 56 34 54. 00 10.49 11.00 31.10 32.00 57 58 35 56.00 11.01 11.48 32.10 33.00 59 60 36 56.00 11. 49 12. 00 33. 10 34. 00 61 61 37 57. 00 12. 01 12. 48 84. 10 36. 00 62 63 38 58. 00 12. 49 18. 00 35. 10 36. 00 64 65 39 59. 00 13. 01 18. 48 36. 10 87. 00 66 67 40 60. 00 13. 49 14. 00 37. 10 38. 00 68 69 41 61. 50 14. 01 14. 48 88. 10 39. 00 70 70 42 63. 00 14. 49 16. 00 39. 10 40. 00 71 72 43 64. 60 15. 01 15. 60 40. 10 41. 00 73 74 44 66. 00 15. 61 16. 20 41. 10 42. 00 76 76 45 67. 50 16. 21 16. 84 42. 10 48. 00 77 78 46 69. 00 16. 85 17. 60 43. 10 44. 00 79 80 47 70. 60 17. 61 18. 40 44. 10 45. 00 81 81 48 72. 00 18. 41 19. 24 46. 10 46. 00 82 83 49 73. 60 19. 25 20. 00 46. 10 47. 00 84 85 50 75. 00 20. 01 20. 64 47. 10 48. 00 86 87 51 76. 60 20. 65 21. 28 48. 10 49. 00 88 89 52 78. 00 21. 29 21. 88 49. 10 60. 00 90 90 63 79. 60 21. 89 22. 28 50. 10 60. 90 91 92 54 81. 00 22. 29 22. 68 51. 00 51. 80 93 94 55 82. 60 22. 69 23. 08 51. 90 52. 80 95 96 56 84. 00 23. 09 23. 44 52. 90 63. 70 97 97 57 85. 50 23. 45 23. 76 53. 80 54. 60 98 99 58 87. 00 23. 77 24.20 54. 70 55. 60 100 101 59 88. 50 24. 21 24. 60 55. 70 56. 50 102 102 60 90. 00 24. 61 25. 00 56. 60 57. 40 103 104 61 91. 60 25. 01 25. 48 57. 50 58. 40 105 106 62 93. 00 26. 49 25. 92 58. 50 59. 30 107 107 63 94.50 25. 93 26. 40 59. 40 60. 20 108 109 64 96. 00 26.41 26. 94 60. 30 61. 20 110 113 65 97. 50 26. 95 27. 46 61. 30 62. 10 114 118 66 99.00 27.47 28. 00 62. 20 63. 00 119 122 67 100. 50 28.01 28. 68 63. 10 64.00 123 127 68 102. 00 28.69 29. 25 64.10 64.90 128 132 69 104. 00 29. 26 29. 68 65. 00 65. 80 133 136 70 107. 60 29.69 30. 36 65. 90 66. 80 137 141 71 111. 20 30.37 30. 92 66. 90 67.70 142 146 72 115. 20 30.93 31.52 67. 80 68. 70 147 151 73 119. 20 31. 53 32. 00 68. 80 69. 60 152 156 74 122. 80 32. 01 32. 60 69. 70 70. 60 156 160 75 126. 40 32. 61 33. 40 70. 60 71. 50 161 165 76 130. 40 33. 41 33. 88 71. 60 72. 40 166 169 77 134. 00 33. 89 34.50 72. 60 78. 30 170 174 78 137. 60 34. 51 35. 20 73. 40 74. 30 175 179 79 141. 60 35. 21 35. 80 74. 40 76. 20 180 183 80 145. 20

35. 81 36. 40 - 75.30 76. 10 184 188 81 148. 80 36. 41 37. 08 76. 20 77. 10 189 193 82 162. 80 87. 09 37. 60 77. 20 78.00 194 197 83 166. 40 37. 61 38.20 78.10 78.90 198 202 S4 160. 00 38.21 39. 12 79. 00 79. 90 208 207 86 164. 00 39. 13 39. 68 8Q 00 80. 80 208 211 8 167. 60 4

"TABLE FOR DETERMINING PRIMARY INSURANCE AMOUNT AND MAXIMUM FAMILY BENEFITS—Continued

"I II III IV V (Primary insurance (Primary insurance (Average monthly (Primary insur- (Maximum benefit under 1U39 amount under 1954 wage) ance amount) family Act, as modified) Act) benets)

"If n individual's Or his primary insur-Or his average monthly And the maxi- prLmary insurance ance amount (as deter- wage. (as determined The amount re-mum amount of benefit (as deternined mined under subsec. under subsec. (b)) Is— ferred to in thebenefits payable under subsec. (dj) is— (c)) is— preceding para- (as provided in graphs of this sec. 203 (a)) on . subsection the basis of his But not Butnot But not shall be— wages and self- At least— more At least— more At least— more employment than— than— than— income shall be—

"$39. 69 $40. 33 S80. 90 $81. 70 $212 $216 $87 $171. 20 40. 4 41. 12 81. 80 82. 70 217 221 88 175. 20 41. 13 41. 76 82. 80 83. 60 222 225 89 178. 80 41. 77 42. 44 83. 70 84. 50 226 230 90 182. 40 42. 45 43. 20 84. 60 85. 50 231 235 91 186. 40 43. 21 43. 76 85. 60 86. 40 236 239 92 190. 00 43. 77 44. 44 86. 50 87. 30 240 244 93 193. 60 44. 45 44. 88 87. 40 88. 30 245 249 94 197. 60 44. 89 45. 60 88. 40 89. 20 250 253 95 201. 20 89. 30 90. 10 254 258 96 204. 80 90. 20 91. 10 259 263 97 20& 80 91. 20 92. 00 264 267 98 212. 40 92. 10 92. 90 268 272 99 216. 00 93. 00 93. 90 273 277 100 220. 00 94. 00 94. 80 278 281 101 223. 60 94. 90 95. 80 282 286 102 227. 20 95. 90 96. 70 287 291 103 231. 20 96. 80 97. 60 292 295 104 234. 80 97. 70 98. 60 296 300 105 238. 40 98. 70 99. 50 301 305 106 242. 40 )9. 60 100. 40 306 309 107 246. 00 100.50 101. 40 310 314 108 249. 60 101. 50 102. 30 315 319 109 253.60 102.40 103.20 320 323 110 254.00 103.30 104.20 324 328 111 254.00 104.30 105. 10 329 333 112 254.00 105.20 106.00 334 337 113 254.00 106. 10 107. 00 338 342 114 254. 00 107. 10 107. 90 343 347 115 254. 00 108.00 108.50 348 351 116 254.00 352 356 117 254.00 357 361 118 254.00 362 365 119 254. 00 366 370 120 254. 00 371 375 121 254. 00 376 379 122 254. 00 380 384 123 254. 00 385 389 124 254.00 390 393 125 254. 00 394 398 126 254. 00 399 400 127 254. 00"

AverageMonthly Wage

2 (b) Section 215 (b)(1) of such Act is amended by

3striking out "An" and inserting in lieu thereof the following:

4"For t.he purposes of. column III of the table appearing h

5subsection (a) of this section, an". 5

1 (2) Such section 215 (b) is further amended by adding

2at the end thereof the following paragraph:

3 "(5) The provisions of this subsection shall be appB

4cable only in the case of an individual with respect to whom

5not less than six of the quarters eapsirIg after1950 are

6quarters of coverage, and—

7 "(A) who becomes entifled to benefits under sec

8 tion 202 (a) or section 223 after the second month fol

9 lowing the month in which the Social Security Amend-

10 ments of 1958 are enacted, or

11 "(B) who dies after such second month without

12 being entitled to benefits under such section 202 (a) or

13 section 223, or 14 "(C) who files an application for a recomputation

15 under section 215(f)(2)(A)after suchsecond

16 month and is(or would, but for the provisions of sec—

17 tion 215 (f)(6), be) entitled t.o have his primary in-

18 surance amount recomputed under suchsection, or

19 "(D) who dies after such second month and whose

20 survivors are (or would, but for the provisions of section

21 215(f)(6), be)entitled to a. recomputation of his

22 primary insurance amount under section 215 (f)(4) ." 6

1 Primary Insurance Amount Under 1954 Act

2 (c) Section 215 (c)of such Act is amended to read

3as follows:

4 "Primary Insurance Amount Under 1954 Act

5 "(c)(1) For the purposes of column II of the table

6appearing in subsection (a)of this section, an individual's

7primary insurance amount shall be computedas provided in,

8and subject to the limitations specified in, (A) this section

9as in effect prior to the enactment of the Social Security

10Amendments of 1958, and (B)the applicable provisions

11of the Social Security Amendments of 1954.

12 "(2) The provisions of this subsection shall be appli-

13cable only in the case of an individual who— 14 "(A) became entitled to benefits under section 202 15 (a) or section 223 prior to the third month following 16 the month in which the Social Security Amendments of

17 1958 were enacted, or 18 "(B) died prior to such third month." 19 Primary Insurance Benefit Undcr 1939 Act 20 (d) Section 215 (d) of such Act is amended to read 21as follows: 22 "Primary Insurance Benefit Under 1939 Act 23 "(d)(1) For the purposes of column I of the table 24appearing in subsection (a)of this section, an individual's 25primary insurance benefit shall he computedas provided in 7

1thistitleas in effect prior to the enactment of the Social

2Security Act Amendments of 1950, except that,— "(A)In the computation of such benefit, such in- 4 dividual's average monthly wage shall (in lieu of being

5 determined under section 209(f)of such title as in

6 effect prior to the enactment of such amendments) be

7 determinedas provided in subsection (b) of this section

8 (but without regard to paragraph (5) thereof), except 9 that his starting date shall be December 31, 1936.

10 "(B) For purposes of such computation, the date

11 he became entitled to old-age insurance benefits shall

12 be deemed to be the date he became entitled to pri-

13 mary insurance benefits. 14 "(C) The 1 per centam addition provided for in 15 •section 209 (e)(2) of this Act as in effect prior to the 16 enactment of the Social Security Act Amendments of

17 1950shall be applicable only with respect to calendar 18 years prior to 1951, except that any wages paid in any 19 year prior to such year any part of which was included

20 in a period of disability shall not be counted.Not'with- 21 standing the preceding sentence, the wages paid in the 22 year in which such period of disability began shfi11 be 23 counted if the counting of such wages would result in a

24 higherprimary insurance amount. 8

1 "(D) The provisions of subsection (e) shall be ap-

2 plicable to such computation.

3 "(2)The provisions of this subsection shall be appli-

4cable only in the case of an individual—

5 "(A)with respect to whom at least one of the

6 quarters elapsing prior to 1951 is a quarter of coverage; "(B) who meets the requirements of any of the

8 subparagraphs of paragraph (5)of subsection (b)of

9 this section; and

10 "(0) who attained age 22 after 1950 and with

11 respect to whom less than six of the quarters elapsing

12 after 1950 are quarters of coverage, or who attained

13 such age before 1951." 14 Minimum Survivors or Dependents Benefit 15 (e) Section 202(m)of the Social Security Act is 16amended by striking out "$30" wherever itoccurs and 17inserthg in lieu thereof "the first figure in colunm IV of 18the table in section 215 (a) ".

19 Maximum Benefits 20 (f)Subsection (a)of section 203 of the Social Secu-

21rity Act is amended to readas follows: 22 "Maximum Benefits 23 "(a) 'Whenever the total of monthly benefits to which

24individuals are entitled under sections 202 and 223 fora 25month on the basis of thewages and self-employment income 9

1 of an insured individual is greater than the amount appearing

2 in column V of the table in section 215(a)on the line

3on which appears in column IV such insuredindividual's

4primary insurance amount, such total of benefits shall be

5reduced to such amount; except that—

6 "(1) when anyofsuchindividualssoentitled

7 would (but for the provisions of section 202 (k)(2)

8 (A) )beentitled to child's insurance benefits on the

9 basis of the wages and self-employment income of one

10 or more other insured individuals, such total ofbenefits

11 shall not be reduced to less than the smaller of:(A)

12 the sum of he maximum amounts of benefits payable on

13 the basis of the wages and self-employment income of

14 all such insured individuals, or (B) the last figure in

15 column V of the table appearing in section 215 (a), or

16 "(2) when any of such individuals was entitled

17 (without the application of section 202(j)(1))to

18 monthly benefits under section 202 or section 223 for

19 the second month following the month in which the

20 Social Security Amendments of 1958 were enacted, and

21 the primary insurance amount of the insured individual

22 on the basis of whose wages and self-employmentincome

23 such monthly benefits are payable is determined under

24 the. provisions of section 215 (a)(2), then such total

25 benefits shall not be reduced to less than the larger of— 10

1 "(A) the amount determined under this sub-

2 section without regard to this paragraph, or

3 "(B) the amount determined under this sub-

4 section as in effect prior to the enactment of the

5 Social Security Amendments of 1958 or the amount

6 determined under section 102(h)of the Social

7 Security Amendments of 1954, as the casemay be,

8 plus the excess of—

9 "(i) the primary insurance amount of such

10 insured individual in column IV of the table n appearingin section 215 (a), over

12 "(ii) his primary inswance amount deter-

13 mined under section 215 (c), or

14 "(3) when any ofsuch individualsisentitled

15 (without the application of section 202(j)(1))to 16 monthly benefits based on the wages and self-employ- 17 ment income of an insured individual with respect to 18 whom a period of disability (as defined in section 216 19 (i))began prior to the third month following the 20 mouth in which the Social Security Amendments of 21 1958 were enaeted and continued uninterruptedly until—

22 "(A) he became entitled to benefits undersee- 23 tion2O2or223,or 24 "(B) he died, which over first occurred,

25 and the primaryinsuranceamount of such insured mdi- 11

1 vidual is determined under the provisions of section 215

2 (a)(1)or (3) and is not less than $68, then such

3 total of benefits shall not be reduced to less than the

4 smaller of—

5 "(C) the last figure in column V of the table

6 appearing in section 215 (a), or

7 "(D) the amount in column V of such table on

8 the same line on which, in column IV, appears his

9 primary insurance amount, plus the excess of—

10 "(i) such primary insurance amount, over

11 "(ii) the smallest amount in column II of

12 the table on the line on which appears such pri-

13 mary insurance amount.

14In any case in which benefits are reduced pursuant to the

15preceding provisions of this subsection, such reduction shall

16be made after any deductions under this section and after

17any deductions under section 222 (b).Whenever a reduc-

18tion is made under this subsection, each benefit, except the

19old-age or disability insurance benefit, shall be proportion-

20ately decreased."

21 Effective Date

22 (g)The amendments made by this section shall be

23applicable in the case of monthly benefits under title II of the

24Social Security Act, for months after the second month fol-

25lowing the month in which this Act is enacted, and in the 12

1case of the lump-sum death payments under such title, with

2respect to deaths occurring after such second month.

3Primary Insurance Amount for Certain Disability Insurance

4 Beneficiaries

5 (h)If an individual was entitled to a disability insur-

6ance benefit under section 223 of the Social Security Act

7for the second month after the month in which this Act is

8eiiacted and became entitled to old-age insurance benefits

9under section 202(a)of such Act, or died, in the third

10month after the month in which this Act is enacted, then,

11for purposes of paragraph (4)of section 215 (a)of the

12Social Security Act, as amended by this Act, the amount in

13(olurnn IV of the table appearing in such section 215 (a) 14for such individual shall be the amount in such column on

15the line on which in column II appears his primary insur-

16aice amount (as determined under subsection(c)of such 17 : ction 15) instead of the amount in column IV equal to

181ii disability insurance benefit.

19 Saving Provision 20 (i) With respect to monthly benefits under title II of 21the Social Security Act payable pursuant to section 202 22 (j)(1)of such Act for any month prior to the third month 23following the month of enactment of this Act, the primary 24insurance amount of the individual on the basis of whose 25wages and self-employment income such monthly benefits are 13

1 payable shall be determined as though this Act had not been

2 enacted; such primary insurance amount shall be such mdi-

3vidual's primary insurance amount for purposes of section

4 215 of such Act for months after the second month follow-

5 ing the month in which this Act is enacted ifitis larger

6 than the primary insurance amount determined under section

7 215 of the Social Security Act as amended by this Act, and

8 shall be rounded to the next higher dollar ifitis not a

9 multiple of a dollar.

10 INCREASE IN EARNINGS BASE FROM $4,200 TO $4,800

11 Definition of Wages

12 SEC. 102.(a)(1) Paragraph (2) of section 209 (a)

13 of the Social Security Act is amended to read as follows:

14 "(2) That part of reniuneration which, after re-

15 muneration (other than remuneration referred to in the

16 succeeding subsections of this section) equal to $4,200

17 with respect to employment has been paid to an in-

18 dividual during any calendar year after 1954 and prior

19 to 1959, is paid to such individual during such calendar

20 year;".

21 (2) Section 209 (a) of such Act is further amended by

22adding at the end thereof the following new paragraph:

23 "(3) That part of remuneration which, after re-

24 muneration (other than remuneration referred to in the

25 succeeding subsections of this section) equal to $4,800 14

1 wIth respect to employment has been paid to an in-

2 dlividual during any calendar year after 1958, is paid

3 to such individual during such calendar year;".

4 Definition of Self-Employment Income

5 (b) Paragraph (1) of section 211(b)of the Social

6Security Act is amended to read as follows:

7 "(1) That part of the net earnings from self-

8 employment which is in excess of—

9 "(A) For any taxable year ending prior to

10 1955,(i)$3,600, minus(ii)the amount of the

11 wages paid to such individual during the taxable

12 year; and

13 "(B) For any taxable year ending after 1954

14 and prior to 1959,(i)$4,200, minus(ii)the 15 amount of the wages paid to such individual during 16 the taxable year; and 17 "(0) For any taxable year ending after 1958, 18 (i)$4,800, minus(ii)the amount of the wages

1 paid to such individual during the taxable year; or". 20 Definitions of Quarter and Quarter of Coverage

21 (c)Olauses(II)and(iii)of section 213(a)(2)

22 (B) of the Social Security Act are amended to readas 23follows:

24 "(ii) if the wages paid to any individual inany 25 calendar year equal $3,600 in the case of a calendar 15

1 year after 1950 and before 1955, or $4,200 in the 2 case of a calendar year after 1954 and before 1959,

3 or $4,800 in the case of a calendar year after 1958,

4 each quarter of such year shall(subject to clause

5 (i) )bea quarter of coverage;

6 "(111)if an individual has self-employment in-

7 come for a taxable year, and if the sum of such

8 income and the wages paid to him during such year

9 equals $3,600 in the case of a taxable year begin-

10 ning after 1950 and ending before 1955, or $4,200

11 in the case of a taxable year ending after 1954

12 and before 1959, or $4,800 in the case of a taxable

13 year ending after 1958, each quarter any part of 14 which falls in such year shall(subject to clause

15 (i) )bea quarter of coverage ;".

16 Average Monthly Wage 17 (d)(1) Paragraph (1)of section 215 (e)of such 18Act is amended to read as follows:

19 "(1) in computing an individual's average monthly

20 wage there shall not be counted the excess over $3,600in 21 the case of any calendar year after 1950 and before 1955, 22 the excess over $4,200 in the case of any caJenclar year 23 after 1954 and before 1959, and the excess over $4,800 24 in the case of any calendsr year after 1958, of (A) the 25 wages paid to him in such year, pius (B) the self-em- 16

1 ployment income credited to such year (as determined

2 under section 212) ;".

3 (2) Section 215 (e) of such Act is further amended by

4striking out "(d) (4)" each place it appears and inserting

5 in lieu thereof "(d) ".

6 TITLE TI—AMENDMENTS RELATING TO DIS-

7 ABILITY FREEZE AND DISABILITY INSTJR-

8 ANCE BENEFITS

9 APPLICATION FOR DISABILITY DETERMINATION

10 SEC. 201. Section 216 (i)(2)of the Social Security

11Act is amended—

12 (1) by striking out "while under a disability," iii

13 the second sentence and inserting in lieu thereof "while

14 under such disability,"; and

15 (2) by striking out "one-year" in clause(ii)of

16 subparagraph (A) and inserting in lieu thereof "eight-

17 teen-month".

18 RETROACTIVE PAYMENT OF DISABILITY INSURANCE

19 BENEFITS 20 SEC. 202. (a) Section 223 (b) of such Act is amended 21by adding at the end thereof the following new sentence: 22"An individual who would have been entitled to a disability 23insurance benefit for any month after June 1957 had he 24filed application therefor prior to the end of such month 1'7

1 shall be entitled to such benefit for such month if he files

2application therefor prior to the end of the twelfth month

3immediately succeeding such month."

4 (b) The first sentence of section 223 (c)(3) of such

5Act (defining the term "waiting period" for purposes of

6applications for disability insurance benefits)is amended to

7read as follows:

8 "(3) The term 'waiting period' means, in the case

9 of any application for disability insurance benefits, the

10 earliest period of six consecutive calendar mOnths—

11 "(A) throughout which the individual who

12 files such application has been under a disability

13 which continues without interruption until such 14 application is filed, and 15 "(B)(i) which begins not earlier than with 16 the first day of the eighteenth month before the 17 month in which such application is ified if such in- 18 dlividual is insured for disability insurance benefits

19 in such eighteenth month, or(II)if he is not so 20 insured in such month, which begins not earlier 21 than with the first day of the first month after such 22 eighteenth month in which he is so insured."

H.R13549 2 18

1RETROACTIVEEFFEOT OF APPLICATIONSFOR DISABILITY

2 DETERMINATION

3 SEC. 203. Paragraph (4)of section 216(i)of such

4Act is amended by striking out "July 1957" md inserting

5iii lieu thereof "July 1960", by striking out "July 1958"

6and inserting in lieu thereof "July 1961", and by striking

7out ",ifsuch individual does not die prior to July 1, 1955,".

8 INSURED STATUS REQtJTREMENTS

9 Disability Freeze

10 SEC. 204. (a) Paragraph (3)of section 216(i)of 1 such Act is amended to read as follows:

12 "(3) The requirements referred to in clauses (A) and

13 (B) of paragraphs (2) and (4) are satisfied by an individual

14with respect to any quarter ordy if—

15 "(A)he would have been a fully insured, in-

16 dividual(as defined in section 214) had he attained

17 retirement age and filed application for benefits under

18 section 202 (a) on the first day of such quarter; and

19 "(B) he had not less than twenty quarters of 20 coverage during the forty-quarter period which ends

21 with such quarter, not counting as part of such forty-

22 quarter period any quarter any part of which was in-

23 cluded in a prior period of disabffity unless suck qu.arter

24 was a quarter of coverage." 19

1 Disability Insurance Benefits

2 (b) Section 223 (c)(1)(A) of such Act is amended

3by striking out "fully and currently insured" and inserting

4in lieu thereof "fully insured".

5BENEFITS FOR TU DEPENDENTS OF DISABILITYINSURANCE

6 BENEFICIARIES

7 Payments from Disability Insurance Trust Fund

8 SEc. 205. (a) The first sentence of section 201 (h) of

9such Act is amended by inserting ",andbenefit payments

10required to be made under subsection (b), (c), or (d)of

11section 202 to individuals entitled to benefits on the basis

12of the wages and self-employment income of an individual

13entitled to disability insurance benefits," after 'section 223". 14 Wife's Insurance Benefits 15 (b)(1) Subsection (b) of section 202 f such Act is 16amended by inerting "or disability" after oldage? where- 17ever it appears therein. 18 (2) So much of paragraph (1)of such subsection as 19follows the colon is amended by striking out "or" the first 20time it appears and inserthig imniediately before the period

21at the end of such paragraph ",orher husband ceases, prior 22to the. month in which he attains retirement age, to be 23entitled to disability insiirane benefits". 20 I Husband's Insurance Benefits

2 (c)(1) Subparagraph (C) of subsection (c)(1) of

3such section 202 is amended to read as follows:

4 "(0) was receiving at least one-half of hissupport,

5 as determined in accordance with regulations prescribed

6 by the Secretary, from such individual—

7 "(i)if she had a period of disability which did

S not end prior to the month in which she became

9 entitled to old-age or disability insurance benefits,

10 at the beginning of such period or at the time she

11 became entitled to such benefits, or 12 "(ii)if she did not have such a period of disa-

13 bility,atthe time she became entitled to such bene-

14 fits,

15 and filed proof of such support withintwoyears after the 16 month in which she filed application with respect to such 17 period of disability or after the month in which she 18 became entitled to such benefits, as the case may be, or, 19 if she did not have such a period, two years after the 20 month in whiciL sl became entitled to such benefits, 21

22 (2) The reiiinder of such, subsection(c)(1)is

23 amended byinserting "or disability"&fter"old-age" wher- 24ever it appears therein.

25 (3) So much of such subsection(c)(1) as follows 1 the colon is further amended by striking out "or" the first

2 time it appears and inserting immediately before the period

3 at the end thereof ",orhis wife ceases, prior to the month:

4in which she becomes entitled to old-age insurance benefits,

5 to be entitled to disability insurance benefits".

6 Child's Insurance Benefits

7 (d) Section 202 (d)(1) of such Act is amended to

8read as follows:

9 "(d)(1) Every child (as defined in section 216(e))

10of an individual entitled to o1dage or disability insurance

11benefits, or of an individual who dies a fully or currently in-

12sured individual after 1939, if such child—

13 "(A) has filed application for child's insurance

14 benefits,

15 "(B) at the time such application was filed wns

16 unmarried and either(i) had not attained the age of

17 eighteen or(ii) was under a disability (as defined in

18 section 223 (c)) which began before he attained the

19 age of eighteen, and

20 "(C) was dependent upon such individual—

21 "(1)if such individual had a period of dis-

22 ability which did not end prior to the month in

23 which he became entitled to old-age ordisability

24 insurance benefits or(if he has died) prior to the

25 month in which be died, at the beginning of uh 22

1 periodoratthothnehebecameentitledtosuch 2 benefits or died, 3 "(ii)ifsachlndividualdidnothayesucha 4 periodandisliving,atthetimesuchapplication 5 waaflled,or 6 "(iii) if such individual did nothave sucha 7 periodandhasdied,agth.timeofsuchdeath, 8slush be entitled to a child's insurance benefit for each month, 9 beginning with the first month after August 1950.in which 10 suchthfldbecomessoentitledtosuchinsuraneebenefltsand 11 ending with the month preceding the first month in which 12 any of the following occurs: such child dies, marries, is 13 adopted (eicept for adoption by a stepparent, grandparent, 14 aunt,orunclesubsequenttothedeathofsuchfuliyorcur. 15 rendy insured individual), attains theage of eighteen and 16is not undera disability (as defined in.seçtion 223(c)) 17 which began before he attained such age, or ceases to bç 18 undevadiaability (as so defined) onorafterthedayon 19 which he attains age eighteen.Entitlement of any child 20 to benefits wider this subsection on the basis of thewages and 21 sell-employment income of an individual entitled to disability 22 innncebendfrsAendwththemonthjthe 23

2 benefits unles such individual is, for the month in whichhe 23

1ceases to be soentitled, entitled to old-age insurance benefits

2or unless he dies in such month."

3 Widower's Insurance Benefits (e) Subparagraph (D) of section 2O2 (f)(1) of such

5Act is amended to read as follows:

6 "(D)(i) was receiving at least one-half of his sup-

7 port, as determined in accordance with regulations pre- 8 scribed by the Secretary, from such individual at the 9 time of her death or, if such individual had a period of 10 disability which did not end prior to the month in which

11. she died, at the time such, period began or at the time 12 of her death, and filed proof of such support within 13 two years after the date of such death, or,, if she had 14 such a period of disability, within two years after the 15 month in which she filed application with respect to 16 such period of disability or two years after the date of 17 such death, as the case may be, or (ii) was receiving at 18 lease one-half of his support, as determinedin accordance 19 with regulations prescribed by the Secretary, from such 20 individual, and sh& was a currently insured individual, 21 at the time she became entitled to old-age or disability 22 insurance benefits or,if such individual had a period 23 of disability which did not end prior to the month in 24 which she became so entitled, at the time such period 24

1 began or at the time she became entitledto such

2 benefits, and filed proof of such support within two

3 years after the month in which she became entitled to

4 such benefits, or, if she had such a period of disability,

5 within two years after the month in which she filed

6 application with respect to such period of disability or

7 two years after the month in which she became entitled

8 to such benefits, as the case may be, and".

9 Mother's Insurance Benefits

10 (f) Section 202 (g)(1)(F) of such Act is amended

11by inserting "or, if such individual had a period of disabffity

12which did not end prior to the month in which he died, at

13the time such period began or at the time of such death"

14after "death".

15 Parent's Insurance Benefits

16 (g)Subparagraph (B)of section 202(h)(1)of

17such Act is amended to read as follows:

18 "(B)(i)was receiving at least one-half of his

19 support from such individual at the time of such mdi-

20 vidual's death or,if such individual had a period of

21 disability which did not end prior to the month in

22 which he died, at the time such period began or at the

23 timeof such death, and (ii)filed proof of such support

24 within two years after the date of such death,or, if such

25 individualhad such a period of disability, within two 25

1 years after the month in which suchindividual filed ap-

2 plication with respect to such period of disability or

3 two years after the date of such death, as the case may

5 Simultaneous Entitlement to Benefits

6 (h) Section 202 (k)of such Act is amended by in-

7serting "or disability" after "old-age" each time it appears

8therein.

9 Adjustment of Benefits of Female Beneficiaries

10 (i)(1) Subparagraph (B) of paragraph (5) of sea-

11tion 202 (q) of such Act is amended to read as follows:

12 "(B) the number equal to the number of months

13 for which the wife's insurance benefit was reduced under

14 such paragraph (2), but for which such benefit was

15 subject to deductions under paragraph (1) or (2)of

16 section 203(b), under section 203(c), or under 17 section 222 (b) ,".

18 (2) Such paragraph is further amended by striking out

19the period at the end of subparagraph (0) and inserting in

20lieu thereof ",and",by striking out "(A), (B), and (0)"

21in the material following subparagraph (0) and inserting

22in lieu thereof "(A), (B), (0), and (D) ",andby adding

23after subparagraph (0) the following new subparagraph: 24 "(D) the number equal to the number of months 25 for which such wife's insurance benefit was reduced un- 26 der such paragraph (2), but in or after which her en-

2 titlement to wile's insurance benefits was terminated be-

3 cause her husband ceases to be under a disability, Imt

4 including in such number of months any month after

5 such termination in which she was entitled to wife's

6 insurance benefits.".

7 (3) Subparagraph (A) of paragraph (6) of such sec-

8tion 202 (q) is amended to read as follows:

9 "(A). the number equal to the number of months

10 for which such benefit was reduced under such para-

11 graph, but for which such benefit was subject to deduc-

12 tions under paragraph (1) or (2) of section 203 (b),

13 under section 2C3 (c), or under section 222 (b), and". 14 (4) Such paragraph is further amended by striking out

15theperiod at the end of subparagraph (0) and inserting in 16lieu thereof ",and",by striking out "(A), (B), and (0)" 17in the material following subparagraph (0) and inserting

18in lieu thereof "(A.), (B), (0), and (P.) ",andby adding 19after subparagraph (0) the following new sub paragraph: 20 "(D) the number equal to the number of months 21 for which such wife's insurance benefitwas reducel 22 under such paragraph, but in or after which her entitle- 23 ment to wife's insurance benefits was terminated, because 24 her husband ceased to be under a disability, not includ- 27

1 ing n such number of months any month after such

2 termination in which she was entitled to wife's insiir-

3 ance benefits.".

4 Deduction Provision

5 (j)Section203 (c) of such Act is amended by insert-

6ing "based on the wages and self-employment income of an

7individualentitledtoold-ageinsurancebenefits"after

8"child's insurance benefit" the first time it appears therein.

9 Circumstances Under Which Deductions Not Requfred

10 (k) Section 203 (h) of such Act is amended to read

11as follows:

12 "Circumstances Under Which Deductions Not Required

13 "(h) In the case of any individual, deductions by reason 14of the provisions of subsection (b), (f), or (g) of this sec- 15tion, or the provisions of section 222 (b), shall, notwith- 16standing such provisions, be made from the benefitsto which 17such individual is entitled only to the extent that such de- 18ductions reduce the total amount which would otherwise be 19paid, on the basis of the same wages and self-employment- 20income, to such individual and the other individuals living

21in the same household." 22 CurrentJy Insured Individual

23 (1)Section 214 (b) of such Act is amended by insert- 24lug "or disability" immediately after "old-age". 28

1 Rounding of Benefits

2 (m) Section 215 (g) of such Act is amended by strik-

3ing out "sections 203 (a) and 224" and inserting in lieu

4thereof "section 203 (a) ".

5Deductions on Account of Refusal To Accept Rehabilitation

6 Services

7 (n) Section 222 (b) of such Act is amended by insert-

8ing after paragraph (2)(added by section 307 (g) of this

9Act) the following new paragraph:

10 "(3) Deductions shall be made from any wife's, hus-

11band's, or child's insurance benefit based on the wages and

12self-employment income of an individual entitled to disability

13insurance benefits to which a wife, husband, or child is

14entitled until the total of such deductions equal such wife's,

15husband's, or child's insurance benefit or benefits under see-

16tion 202 for any month in which the individual, on the basis

17of whose wages and self-employment income such benefit

18was payable, refuses to accept rehabilitation services and 19deductions, on account of such refusal, are imposed under

20paragraph (1)."

21 Suspension of Benefits Based on Disability

22 (0)Section225 of such Act is amended by adding at

23theend thereof the following new sentence: "Whenever the 24benefits of an individual entitled to a disability insurance 25benefit are suspended for any month, the benefits of any 29

1individual entitled thereto under subsection (b), (c), or (d)

2of section 202 on the basis of the wages and zelf-employment

3income of such individual,shall be suspended for such 4 month."

5 REPEAL OF REDUCTION OF BENEFITS BASEDONDISABILITY

6 SEc. 206. Section 224 of such Act is hereby repealed.

7 EFFECTIVEDATES

8 SEc.207.(a) The amendments made by section 201

9shall apply with respect to applications for a disability deter-

10mination under section 216 (i)of the Social Security Act

11ftled after June 1961.The amendments made by sectiin

12202 shall apply with respect to applications for disability

13insurance benefits under section 223 of such Act filed after 14 December 1957.The amendments made by section 203 15shall apply with respect to applications for a disability deter- 16mination under such section 216 (i) ftled after June 195g. 17The amendments made by section 204 shall apply with 18respect to(1) applications for disability insurance benefits 19under such section 223 or for a disability determination under 20such section 216 (i)ftled on or after the date of enactment 21of this Act, and (2)applications for such benefits or for 22such a determination filed after 1957 and priOr to such date of 23enactment if the applicant has not died prior to suh dMe of 24enactment and if notice to the applicant of the Secretary's 25decision with respect thereto has not been given to him on or 30

1priortosuch date, except that (A) no benefits ujider title II

2of the Social Security Act for the month in which this Act is

3enacted or any prior month shall be payable or increased by

4reason of the amendments made by section 204 of this Act,

5and (B) the provisions of section 215 (f)(1) of the Social

6Security Act shall not prevent recomputation of monthly

7benefits under section 202 of such Act (but no such recompu-

8tation shall be regarded as a recomputation for purposes of 9section 215 (f)of such Act).The amendments made by 10section 205 (other than by subsection (k)) shall apply with 11respect to monthly benefits under title II of the Social 12Security Act for months after the month in which this Act

13is enacted, but only if an application for such benefits is ified

14on or after the date of enactment of this Act.The amend- 15ments made by section 206 and by subsection (k) of section 16205 shall apply with respect to monthly benefits under title 17II of the Social Security Act for the month in which this 18Act is enacted and succeeding months. 19 (b) In the case of any husband, widower,or parent 20whowould not be entitled to benefits under section 202 (c), 21 section 202 (f), and section 202 (h), respectively, of the 22Social Security Act except for the enactment of section 205

23ofthis. Act, the requirement in such section 202 (c),see- 3,1

1tion 202 (f), orsection 202 (h), as the case iay be, that

2proof of supporl be filed within a two-year period shall not

3apply if such proof is filed within two years after the month

4in which this Act is enacted.

5 TITLE Ill—PROVISIONS RELATING TO ELIGI-

6 BILITY OF CLAIMANTS FOR SOCIAL SECU-

7 IUTY BENEFITS, AND MISCELLANEOUS PRO-

8 VISIONS

9ELIGIBILITY OF SPOUSE FOR DEPENDENTS OR StTRVTVORS

10 BENEFITS

11 Husband's Insurance Benefits

12 SEc. 301.(a)(1) Section 202(c)of the Social

13Security Act is amended by redesignating paragraph (2) 14as paragraph(3)and adding after paragraph(1)the

15following new paragraph:

16 "(2) The requirement in paragraph (1) that the mdi-

17vidual entitled to old-age or disability insurance benefits be 18a currently insured individuai, and the provisions of sub- 19paragraph (C) of such paragraph, shall not be applicable in 20the case of any husband who—

21 "(A) in the month prior to• the month of his mar-

22 riage to such individual was entitled to, or on application 32 I therefor and attAinment of retirement age in such prior

2 month would have been entitled to, benefits under sub-

3 section (f) or (h) ; or

4 "(B) in the month prior to the month of his mar-

5 riage to such individual had attained age eighteen and

6 wasentitledto, or on application therefor would have

7 been entitled to, benefits under subsection (d) ."

8 (2) Section 216 (f) of such Act is amended to read as

9follows:

10 "(f) The term 'husband' means the husband of an

11individuai, but only if(1) he is the father of her son or

12daughter, (2) he married to her for a period of not

13less than three years immediately preceding the dy ou 14 which his application is filed, or (3) in the month prior to 15the month of his marriage to her (A) he was entitled to, 16or on application therefor and attainment of retirement age 17in such prior month would have been entitled to, benefits 18under subsection (f) or (h) of section 202, or (B) he had 19attained age eighteen and was entitled to, or on application 20therefor would have been entitled to, benefits under subsec- 21 on (d) of such section." 22 Widow's Insurance Benefits

23 (b)(1) Subparagraph (B) of section 202 (e)(3) 24of such Act is amended by striking out "but she is not 25his widow (as defined in section 216 (c))" and inserting 33

1 in lieu thereof "which occurs within one year after such

2 marriage and he did not die a fully insured individual".

3 (2) Section 216 (c) of such Act is amended to read as

4follows:

5 "(c) The term 'widow' (except when used in section

6 202(i) )meansthe surviving wife of an individual, but

7 only if(1) she is the mother of his son or (laughter,(2)

8 she legally adopted his son or daughter while she was married

9to him and while such son or daughter was under the age

10of eighteen,(3)lie legally adopted her son or daughter

11while she was married to him and while such son or daughter

12was under the age of eighteen, (4) she was married to him 13 at the time both of them legally adopted a child under the

14 age of eighteen, (5) she was married to him for a period of

15 not less than one year immediately prior to the day on 16 which he died, or (6) in the month prior to the month of 17 her marriage to him (A) she was entitled to, or on applica- 18 tion therefor and attainment of retirement age in such prior 19month would have been entitiled to, benefits under subsection

20 (e)or(h)of section 202, or (B) she had attained age

21 eighteen and was entitledto,or on application therefor 22would have been entifled to, benefits under subsection (d) 23 of such section."

H.R.13549 3 34

1 Widower's Insurance Benefits

2 (c)(1) Section 202 (f)of such Act is amended by

3redesignating paragraph(2)as paragraph(3)and by 4adding after paragraph (1) the following new paragraph:

5 "(2)The requirement in paragraph(1)that the

6deceased fully insured individual also be a currently insured

7individual, and the provisions of subparagraph (D) of such

8paragraph, shall not be applicable in the case of any mdi-

9vidual who— 10 "(A)in the month prior to the month of his 11 marriage to such individual was entitled to, or on ap- 12 plication therefor and attainment of retirement age in

13 such prior month would have been entitled to, benefits

14 under this subsection or subsection (h) ;or 15 "(B)in the month prior to the month of his mar- 16 riage to such individual had attained age eighteen and 17 was entitled to, or on application therefor would have 18 been entitled to, benefits under subsection (d) ." 19 (2) Section 216 (g)of such Act is amended to read 20as follows: 21 "(g) The term 'widower' (except when used in section 22202(i)) means the surviving husband of an individual, 23but only if (1) he is the father of her son or daughter, (2) 24he legally adopted her son or daughter while he was married 25to her and while such son or daughter was under the age 35

1of eighteen,(3)she legally adopted his son or daughter

2while he was married to her and while such son or daughter

3was under the age of eighteen, (4) he was married to her

4at the time both of them legally adopted a child under the

5age of eighteen, (5) he was married to her for a period of

6not less than one year immediately prior to the day on which

7 she died, or(6)in the month before the month of his

8marriage to her (A) he was entitled to, or on application

9therefor and attainment of retirement age in such prior 10 month would have been entitled to, benefits under subsec-

11tion(f) or (h) of section 202, or (B) he had attained age

12eighteen and was entitledto,or on application therefor

13would have been entitled to, benefits under subsection (d)

14of such section."

15 Definition of Wife

16 (d) Section 216 (b) of such Act is amended by striking

17out "or" at the end of the clause (1), and by inserting before

18the period at the end thereof: ",or(3) in the month prior

19to the month of her marriage to him (A) was entitled to,

20or on application therefor and attainment of retirement age 21in such prior month would have been entitled to, benefits 22under subsection(e)or(h)of section 202, or (B) had 23attained age eighteen and was entitled to, or on application 24therefor would have been entitled to, benefits under subsection 25 (d) of such section". 36

1 Definition of Former Wife Divorced

2 (e)Section 216 (d)of such Act is amended to read

3as follows:

4 "(d) The term 'former wife divorced' means a woman

5 divorced from an individual, but only if (1) she is the mother

6 of his son or daughter,(2) she legally adopted his son or

7 daughter while she was married to him and while such soii

S or daughter was under the age of eighteen, (3) he legally

9adopted her son or daughter while she was married to him

10and while suchsonor daughter was under the age of eighteen,

11 or(4)she was married to him at the time both of them

12legally adopted a child under the age of eighteen."

13 Effective Date

14 (f) The amendments made by this section shall apply i with respect to monthly benefits under section 202 of the 16Social Security Act for months beginning after the date of

17 enactment of this Act, but only if an application for such

18benefits is filed on or after such date.

19ELIGIBILITY OF CHILD FOR DEPENDENTS OR SURVIVORS

20 BENEFITS 21 Definition of Child 22 SEc. 302.(a) Section 216 (e) of such Act is amended 23 to read as follows: 24 "(e) The term 'child' means (1) the child or legally 25adopted child of an individual, and (2)in the case of a 37

1living individuai, a stepchild who has been such stepchild

2for not less than three years immediately preceding the

3day on which application for child's benefits isfiled, and

4 (3)in the case of a deceased individual, a stepchild who

5has been such stepchild for not tess thaii one year ilmTledi—

6ately preceding the day on which such iiidivithial died.For

7purposes of clause(1), a persoii shallliedeenied, as of

8the date of death of an individual, to be the legally adopted

9child of such individual if such person was at the time of

10such individual's death living iii such individual's househo'd

11and was legally adopted by such individual's surviving spouse

12after such individual's death but before the end of two

13years after the day on which such individual died; except

14that this sentercce shall not app'y ifat the time of such

15individual's death such person wasreceivingregular con

16tributions toward his support from sonieone other than such

17individual or his spouse, or fromany public or private wel-

18fare organization whili furnishes services or assistance for

19children."

20 Effective Date

21 (b) The amendment made by this section shall apply

22with respect to monthly benefits under section 202 of the

23Social Security Act for months beginning after the date of 24enactment of this Act, but only if an application for such 25benefits is filed on or after such date. 38 j ELIGIBILITYOF REMAERIED WIDOWS FOR MOThER'S

2 INSURNOE BENEFITS

3 SEC. 303.Section202 (g)ofthe Social Security Act is

4amended by adding at the end thereof the following new

5paragraph:

6 "(3) In the case of any widow or former wife divorced

7of an individual—

8 "(A) who marries another individual, and

9 "(B) whose marriage to the individual referred to

10 ii subparagraph (A) is terminated by his death but she

11 is not his widow as defined in section 216 (c),

12the marriage to the individual referred to in clause(A)

13shall, for the purpose of paragraph (1), be deemed not to 14have occurred. No benefits shall be payable under this sub-

15section by reason of the preceding sentence for any month

16prior to whichever of the following is the latest:(i)the

17month in which the death referred to in subparagraph (B)

18of the preceding sentence occurs,(ii)the twelfth month

19before the month in which such widow or former wife

20divorced files application for purposes of this paragraph,

21or(iii)the month followhig the month in which this para-

22graph is enacted." 39

1 ELIGIBILITY FOR PARENT'S INSURANCE BENEFITS

2 Provisions Relating to Eligibility

3 Sec. 304. (a)(1) So much of section 202 (h)(1) of

4the Social Security Act as precedes subparagraph (A)is

5amended to read as follows:

6 "( 1) Every parent (as defined in this subsection) of an

7individual who died a fully insured individual after 1939,

8ifsuchparent—".

9 (2) The amendment made by this subsection shall apply

10with respect to monthly benefits under section 202 of the ii.Social Security Act for months beginning after the date of

12enactment of this Act, but only if an application for such

13benefits is filed on or after such date. 14 Deaths Before Effective Date

15 (b) WhereH—

16 (1)one or more persons were entitled(without

17 the application of section 202(j)(1)of the Social 18 Security Act) to monthly benefits under section 202 of 19 such Act for the month in which this Act is enacted on 20 the basis of the wages and self-employment income of an 21 individual; and 22 (2) a person is entitled to a parent's insurance 40

1 benefit under section 202(h)of the Social Security

2 Act for any subsequent month on the basis of such wages

3 and self-employment income and such person would

4 not be entitled to such benefit but for the enactment of

5 this section; and

6 (3) the tota.l of the benefits to which all persons are

7 entitledunder section 202 of the Social Security Act on

8 the basis of such wages and self-employment income for

9 such subsequent month are reduced by reason of the ap-

10 plication of section 203 (a) of such Act,

11then the amount of the benefit to which each such person

12referred to in paragraph (1)of this subsection is entitled

13for such subsequent month shall be increased, after the appli- 14cation of such section 203(a), to the amount it would 15have been if no person referred to in paragraph (2) of this 16subsection was entitled to a parent's insurance benefit for

17such subsequent month on the basis of such wages and self-

18employment income. 19Proof of Support in Cases of Deaths Before Effective Date 20 (c) In the case of any parent who would not be entitled 21to parent's benefits under section 202 (h) of the Social Secu- 22rity Act except for the enactment of this section, the reauire- 23ment in such section 202 (h) that proof of support be filed

24withintwoyears of the date of death of the insured individual 25referred to therein shall not apply if such proof is filed within 41

1 the two-year period beginning with the first day of the month

2after the month in which this Act is enacted.

3 ELIGIBILITY FOR LUMP-SUM DEATH PAYMENTS

4 Requirement That Surviving Spouse Be a Member of

5 Deceased's Household

6 SEc. 305.(a)The first sentence of section 202(1)

7of the Social Security Act is aineiided by inserting "in the

8same household" after "iiviiig".

9 Provisions liehiting to Widows and Widowers

10 (b) Section 216(ii)of such Actis amended by

11striking out paragraph (3).

12 Effective Date

13 (c) The arnendmeiits iiiade bythissection shall apply

14in the case of lump—sum det1i J)aymeI1t under uc1i section

15202(i)on the basis of the wages aiid self—employment

16 income of any individual who dies after the iiioiith in which

17this At is enacted.

18 ELTGIBILITY OF DISABLED PERSONS FOH C1-IILD'S INSURANCE

19 BENEFITS

20 Provisions Relating to Dependency

21 SEC. 306.(a.)Sectioii 202 (d)of the Social Security

22Act is amended by striking out "who has not attained the 23 age of eighteen" each place it appears in paragraphs (3),

24 (4), and (5) thereof, and by striking out paragraph (6). 42

1 Effective Date

2 (b) The amendments made by this section shall apply

3with respect to monthly benefits under section 202 of the

4Social Security Act for months beginning after the date of

5enactment of this Act, but only if an application for such

6benefits is filed on or after such date.

7ELIMINATION OF MARRIAGE AS BASIS FOR TERMINATING

8 CERTAIN SURVIVORS BENEFITS

9 Child's Insurance Benefits

10 SEC. 307. (a)Section 202 (d)of the Social Security

11Act is amended by inserting immediately after paragraph

12 (5) thereof the following new paragraph:

13 "(6) In the case of a child who has attained the age of 14eighteen and who marries— 15 "(A)an individual entitled to benefits under sub- 16 section (a), (e),(f),(g), or (h)of this section or 17 under section 223 (a), or 18 "(B) another individual who has attained the age 19 of eighteen and is entitled to benefits under this sub-

2U section, 21such child's entitlement to benefits under this subsection 22shall,notwithstanding the provisions of paragraph (1), not

23beterminated by reason of such marriage; except that, in 24the case of such a marriage to a male individual entitled to 25benefits under section 223 (a)or this subsection, the pre- 43

1ceding provisions of this paragraph shall not apply with

2respect to benefits for months after the last month for which

3such individual is entitled to such benefits under section 223

4 (a) or this subsection uiiless(i) he ceases to be so entitled

5by reason of his death or(ii)in the case of an individual

6who was entitled to benefits under section 223 (a), he is

7entitled, for the month following such last month, to benefits

8under subsection (a.) of this section."

9 Widow's Insurance Benefits

10 (b) Section 202 (e) of such Act is amended by insert-

11ing at the end thereof the following new paragraph:

12 "(4) In the case of a widow who marries—

13 "(A) an individual entitled to benefits under sub-

14 section (f) or (h) of this section, or

15 "(B) an individual who has attained the age of

16 eighteen and is entitled to benefits under subsection (d),

17such widow's entitlement to benefits under this subsection 18shall, notwithstanding the provisions of paragraph (1), not

19be terminated by reason of such marriage; except that, ii

20thecase of such a marriage to an individual entitled to

21benefitsunder subsection (d), the preceding provisions of 22this paragraph shall not apply with respect to benefits for

23monthsafter the last month for which such individual is 24entitled to such benefits under subsection(d)unless he

25ceasesto be so entitled by reason of his death." 44

I Widower'sInsurance Benefits

2 (c) Section 202 (1)of such Act is amended by adding

3 at the end thereof the following new paragraph:

4 "(4) In the case of a widower who marries—

5 "(A) ai individual entitled to benefits under sub-

6 section(e),(g),or(h),or

7 "(B) an individual who has attained the age of

8 eighteen and is entitled to benefits under subsection (d),

9such widower's entitlement to benefits under this subsection

101ia1l, notwithstanding the provisionsof paragraph(1),

11 notbe terminated by reason of such marriage."

12 Mother's Insurance Benefits

13 (d) Section 202 (g) of such Act is amended by adding

14afterparagraph (3)(added by section 303 ofthisAct)

15 thefollowing iiew paragraph: 16 "(4) In the case of a widow or former wife divorced

17whomarries— 18 "(A) an individual entitled to benefits under sub- 19 section(a), (f),or(h),ortinder sectioii 223 (a), or 20 "(B) an individual who has attained the age of 21 eighteen and is entitled to benefits under subsection (d), 22the entitlement of such widow or former wife divorced to

23benefitsunder this subsection shall, notwithstanding the pro-

24visionsof paragraph (1), not be terminated by reason of

25suchmarriage; except that, in the case of such a marriage 45

1to an individual entitled to benefits under section 223 (a) Or

2subsection(d)of this section, the preceding provisions of

3this paragraph shall not apply with respect to benefits for

4months after the last month for which such individual is

5entitled to such benefits under section 223 (a) or subsection

6 (d) of this section unless(i) he ceases to be so entitled by

7reason of his death or(ii)in the case of an individual who

8was entitled to benefits under section 223 (a), he is entitled,

9for the month following such last month, to benefits under

10subsection (a.) of this section."

11 Parent's Insurance Benefits

12 (e)Section 202 (h) of such Act is amended by add-

13ing at the end thereof the following new paragraph:

14 "(4) In the case of a parent who marries—

15 "(A) an individual entitled to benefits under this

16 subsection or subsection (e), (f), or (g), or

17 "(B) an individual who has attained the age of 18 eighteen and isentitled to benefits under subsection

19 (d),

20such parent's entitlement to benefits under this subsection

21shall, notwithstanding the provisions of paragraph (1), not 22be terminated by reason of such marriage; except that, in

23the case of such a marriage to a male individua.l entitled 24to benefits under subsection(d), the preceding provisions 25of this paragraph shall not apply with respect to benefits 46

1for months after the last month for which such individual

2is entitled to such benefits under subsection (d) unless he

3 ceases to be so entitled by reason of his death."

4 Deduction Provisions

5 (f)Subsection(o)ofsection 203 ofsuch Actis

6amended by inserting "(1)" after "(c) ",byredesignating

7subpa.ragraphs(1)and(2)as subparagraphs (A) and

8 (B), respectively, by striking out "paragraph (1)" and

9inserting in lieu thereof "subparagraph (A) ",andby add-

10ing at the end of such subsection the following new para-

11graph:

12 "(2) Deductions shall be made from any child's insur-

13ance benefit to which a child who has attained the age of

14eighteen is entitled or from any mother's insurance benefit

15to which a person is entitled until the total of such deductions

16equals such child's insurance benefit or benefits or mother's

17insurance benefit or benefits under section 202 forany 18 month— 19 "(A) in which such child or person entitled to

20 mother'sinsurancebenefitismarriedtoan mdi- 21 vidual entitled to old-age insurance benefits under sec- 22 tion 202 (a) who is under the age of seventy-two and 23 for which month such individual is charged with any 24 earnings under the provisions of subsection (e)of this 25 section, or 47

1 "(B) in which such child or person entitled to

2 mother's insurance benefitsismarried tothe mdi- 3 vidual referred to in subparagraph (A) andon seven 4 or more different calendar days of which such mdi-

5 vidual engaged in noncovered remunerative activity out-

6 side the United States."

7Deductions on Account of Refusal To Accept Rehabilitation

8 Services 9 (g) Section 222 (b) of such Act is amended by insert-

10ing "(1)" after "(b) ",andby adding at the end thereof 11the following new paragraph: 12 "(2) Deductions shall be made fromany child's in- 13surance benefit to which a child who has attained the age of 14eighteen is entitled or from any mother's insurance benefit 15to which a person is entitled until the total of such deduc- 16tions equals such child's insurance benefitor beufits or 17mother's insurance benefit or benefits under section 202 18for any month in which such childor person entitled to 19mother's insurance benefits is married toan individual who 20is entitled to disability insurance benefits and in which such

21individual refuses to accept rehabilitation services anda 22deduction, on account of such refusal,is imposed under 23paragraph (1).If both this paragraph and paragraph (3) 24are applicable to a child's insurance benefit for any month, 25only an amount equal to such benefit shall be deducted." 48

1 Effective Date

2 (h)(1) Theamendmentsmade by this section (other

3than by subsections(1) and (g)) shall apply with respect

4to monthly benefits under section 202 of the Social Security

5Act for moiths following the month in which this Act is

6enacted; except that in any case ii which benefits were ter-

7minated with the close of the month in which this Act is

8enacted or any prior month and, if the amendments made by

9this section had been in effect for such month, such benefits 10 would not have been terminated, the amendments made by ii.this section shall apply with respect to monthly benefits

12under section 202 of the Social Security Act for months

13beginning after the date of enactment of this Act, but only

14if an application for such benefits is filed after such date.

15 (2) The amendment made by subsection(f)shall ap-

16ply with respect to monthly benefits under section 202 (d)

17of the Social Security Act for months in any taxable year,

18of the individual on the basis of whose wages and self-em-

19ploymeit income such benefits are payable, beginning after

20the month in which this Act is enacted.

21 (3) The amendments made by subsection (g)shall

22apply with respect to monthly benefits under section 202 of

23the Social Security Act for months, occurring after the month

24in which this Act is enacted, in which a deduction is incurred 49

1 under paragraph (1)of section 222 (b) of the Social Se-

2curity Act.

3 AMOUNTWHICH MAY BE FA1NED WITHOUT LOSS OF

4 BENEFITS

5 SEC.308. (a)Section 203(e)(2)of such Act is

6amendedby strikingout"last month" and "preceding

7month" wherever they appear and substituting in lieu thereof

8"first month" and "succeeding month", respectively.

9 (b) Section 203 (e)(3)(A) of such Act is amended

10by striking out "the term 'last month of such taxable year'

11means the latestmonth" and substituting in lieu thereof

12"the term 'first month of such taxable year' means the

13earliest month".

14 (c) Subsections (e)(2)(D) and (e)(3)(B)(ii)

15of section 203 of such Act are each amended by strikilig

16out "$80" and inserting in lieu thereof "$100".

17 (d) Section 203 (g)(1)of such Act is amended to

18read as follows:

19 "(g)(1)(A)If a.n individual isentitled to any

20monthly insurance benefit under section 202 during any

21taxable year in which he has earnings or wages, as com-

22puted pursuant to paragraph(4)of subsection(e), in

23excess of the product of $100 times thenumber of months

H.R.13549 1. 50

1in such year, such individual (or the individual who is in

2receipt of such benefit on his behalf) shall make a report to

3the Secretary of his earnings (or wages) for such taxable

4year.Such report shall be made on or before the fifteenth

5day of the fourth month following the close of such year,

6and shall contain such information and be made in such

7manner as the Secretary may by regulations prescribe.Such

Sreport need not be made for any taxable year (i) beginning

9with or after the month in which such individual attained

10the age of 72, or (II)if benefit payments for all months (in

11such taxable year) in which such individual is under age 72

12have been suspended for all such months of such year under

13the provisions of the first sentence of paragraph (3) of this

14subsection.

15 "(B) If the benefit payments of an individual have 16been suspended for all months in any taxable year under

17the provisions of the first sentence of paragraph (3) of sub- 18section(g), no benefit payment shall be made to such 19individual for any such month in such taxable year after the 20expiration of the period of three years, three months, and

21 fifteen days following the close of such taxable year uiiless 22within such period the individual, or some other person

23entitled to benefits under this title on the basis of thesame 24wages and self-employment income, files with the Secretary 51

1information showing that a benefit for such month is payable

2to such individual."

3 (e) Section 203 (1) of such Act is amended by striking

4out "(g)" and inserting in lieu thereof "(g)(1)(A) ".

5 (f) The amendments made by this section shall be

6applicable with respect to taxable years beghrning after the

7month in which this Act is enacted.

8 REPRESENTATION OF CLAIMANTS BEFORE SECRETARY OF

9 HEALTH, EDUOATION, AND WELFARE

10 SEc. 309. The second sentence of section 206 of the

11Social Security Act is amended by striking out "upon filing

12with the Administrator a certificate of his right to so practice

13from the presiding judge or clerk of any such court".

14 OFFENSES UNDER TITLE II OF THE SOCIAL SECURITY ACT

15 SEC. 310. Section 208 of the Social Security Act is 16 amended to read as follows:

17 "PENALTIES

18 "SEC. 208. Whoever— 19 "(a) for the purpose of causing an increase in any 20 payment au.thorized to be made under this title, qr for 21 the purpose of causing any payment to be made where 22 no payment is authorized under this title, shall make or 23 cause to be made any false statement or representation 52

1 (including any false statement or representation in con-

2 nection with any matter arising under subchapter E of

3 chapter 1, or subchapter A or E of chapter 9 of the

4 Internal Revenue Code of 1939, or chapter 2 or 21 or

5 subtitle F of the Internal Revenue Code of 1954)as to—

6 "(1) whether wages were paid or received for

7 employment (as said terms are defined in this title

8 and the Internal Revenue Code), or the amount of

9 wages or the period during which paid or the person

10 to whom paid; or

11 "(2) whether net earnings from self-employ-

12 ment (as such term is defined in this title and in the 13 Internal Revenue Code) were derived,or as ti 14 the amount of such net earnings or the period dur-

15 big which or the person by whom derived;or

16 "(3) whether a person entitledtobenefits 17 under this title had earnings in or fora particular

18 period(as determined under section 203(e)of 19 this title for purposes of deductions from benefits), 20 or as to the amount thereof; or 21 "(b) makes or causes to be madeany false state- 22 ment or representation of a material fact inany appli- 23 cation for any paymentor for a disability determination 24 under this title; or

25 "(c) at any time makesor causes to be made any 53

1 false statement or representation of a material fact for

2 use in determining rights to paymentunder this title; or

3 "(d) having knowledge of the occurrence of any

4 event affecting (1) his initial or continued right to any

5 payment under this title, or (2) the initial or continued

6 right to any payment of any other individual in whose

7 behalf he has applied for or is receiving such payment,

8 conceals or fails to disclose such event with an intent

9 fraudulently tosecure payment eitherina greater

10 amount than is due or when no payment is authorized;

11 or

12 "(e) having made application to receive payment

13 under this title for the use and benefit of another and

14 having received such a payment, knowingly and willfully

15 converts such a payment, or any part thereof, to a use

16 other than for the use and benefit of such other person;

17shall be guilty of a misdemeanor and upon conviction thereof

18shall be fined not more than $1,000 or imprisoned for not 19 more than one year, or both."

20 SICK-LEAVE PAY OF STATE AND LOCAL EMPLOYEES

21 SEC. 311. (a) Subsection (i) of section 209 of the Social

22Security Act is amended by inserting immediately before

23the semicolon a period and the following: "As used in this

24subsection, the term 'sick pay' includes remuneration for

25service in the employ of a State, or a political subdivision 54

1 (as defined in section 218(b)(2))of a State, or an

2instrumentality of two or more States, paid to an employee

3thereof for a period during which he was absent from work

4because of sickness".

5 (b) The amendment made by subsection (a)shall be 6applicable to remuneration paid after the enactment of this

7 Act, except that, in the case of any coverage group which 8is included under the agreement of a State under section 218

9of the Social Security Act, the amendment made by subsection 10(a) shall also be applicable to remuneration for any member 11of such coverage group with respect to services performed 12after the effective date, specified in such agreement, for such

13coverage group, if such State has paid or agrees, prior to Jan- 14uary 1, 1959, to pay, prior to such date, the amounts which 15 under section 218 (e) would have been payable with respect 16 to remuneration of all members of such coverage group had 17the amendment made by subsection (a) been in effect on and 18after January 1, 1951.Failure by a State to make such 19payments prior to January 1, 1959, shaM be treated the same 20as failure to make payments when due under section 218 (e). 21 EXTENSION OF COVERAGE IN CONNECTION WITH GUM RBSIN 22 PRODUCTS

23 SEC. 312.(a)Section 210(a)(1)of the Social 24Security Act is amended to readas follows: 25 "(1)Service performed by foreign agricultural 55

1 workers (A) under contracts entered into in accord-

2 ance with title V of the Agricultural Act of 1949, as

3 amended, or (B) lawfully admitted to the United States

4 from the Bahamas, Jamaica, and the other British

5 West Indies, or from any other foreign country or

6 possession thereof, on a temporary basis to perform

7 agricultural labor;".

8 (b) The amendment made by subsection (a) shall apply

9with respect to service performed after 1958.

10 EMPLOYMENT FOR NONPROFIT ORGANIZATION

11 Sec. 313. (a) Section 210 (a)(8)(B) of title II of

12the Social Security Act is amended to read as follows:

13 "(B) Service performed in the employ of a reli-

14 gious, charitable, educational, or other organization de-

15 scribed in section 501 (c)(3) of the Internal Revenue

16 Code of 1954, which is exempt from income tax under

17 section 501(a)of such Code, but this subparagraph

18 shall not apply to service performed during the period

19 for which a certificate, filed pursuant to section 3121

20 (k) of the Internal Revenue Code of 1954, is in effect

21 if such service is performed by an employee—-

22 "(i) whose signature appears on the list ified

23 by such organization under such section 3121 (k),

24 "(ii) who became an employee of such orgath- 56

1 zation after the calendar quarter in which the cer-

.2 tificate(other than a certificate referred to in clause

3 (iii) )wasfiled, or 4 "(lii) who, after the calendar quarter in which

5 the certificate was filed with respect to a group

6 described in paragraph(1)(E)of such section

7 3121 (k), became a member of such group,

8 except that this subparagraph shall apply with respect

9 to service performed by an employee as a member of

10 a group described in such paragraph(1)(E) with

11 respect to which no certificate is in effect;".

12 (b) The amendment made by subsection(a)shall

13apply with respect to certificates filed under section 3121

14 (k)(1)of the Internal Revenue Code of 1954 after the

15date of enactment of this Act.

16PARTNER'S TAXABLE YEAR ENDING AS RESULT OF DEATH

17 SEc. 314. (a) Section 211 of the Social Security Act is

18amended by adding at the end thereof the following new

19subsection:

20 "Partner's Taxable Year Ending as Result of Death

21 "(f) In computing a partner's net earnings from self-

22employment for his taxable year which ends as a result of his 23death (but only if such taxable year ends within, and not

24with, the taxable year of the partnership), there shall be in- 57

1eluded so much of the deceased partner's distributive share

2of the partnership's ordinary income or loss for the partner-

3ship taxable year as is not attributable to an interest in the

4partnership during any period beginning on or a.fter the first

S day of the first calendar month following the month in which

6such partner died. For purposes of this subsection—

7 "(1) in determining the portion of the distributive

8 share which is attributable to any period specified in the

9 preceding sentence, the ordinary income or loss of the

10 partnership shall be treated as having been realized or

11 sustained ratably over the partnership taxable year; and

12 "(2)the term 'deceasedpartner'sdistributive

13 share' includes the share of his estate or of any other

14 person succeeding, by reason of his death, to rights with

15 respect to his partnership interest."

16 (b)The amendment made by subsection(a)shall

17apply—

18 (1) with respect to individuals who die after the

19 date of the enactment of this Act, and

20 (2) with respect to any individual who died after

21 1955 and on or before the date of the enactment of this

22 Act, but only if the requirements of section 403 (b) (2)

23 of this Act are met. 58

1 0R4&TmTOuS WAGE CREDITS FOR AMERICAN CITIZENS WHO

2 SERVED IN TUE ARMED FORCES OF ALLIEDCOUNTRIES

3 General Rule

4 SEC. 315. (a) Section 217 of such Act is amended by

5adding at the end thereof the following new subsection:

6 "(h)(1) For the purposes of this 8ection and section

7215 (d), any individual who the Secretary finds—

8 "(A) served during World War II (as defined in

9 subsection(d)(1)) in the active military or naval

10 service of a country which was on September 16, 1940,

11 at war with a country with which the United States

12 was at war during World War II;

13 "(B) entered into such active serviceon or before

14 December 8,1941;

15 "(0) was a citizen of the United States through-

16 out such period of service or lost his United States

17 citizenship solely because of his entrance into such

18 service;

19 "(D) had resided in the United States fora period 20 or periods aggregating four years during the five-year

21 period ending on the day of, andwas domiciled in the

22 United States on the day of, such entrance into such

23 active service; and

24 "(E)(i) was discharged or released from such 59

1 service under conditions other than dishonorable after

2 active service of ninety days or more or by reason of a

3 disabilityor injuryincurredor aggravated in service in 4 line of duty, or

5 "(ii) died while in such service, 6shall be considered a World War II veteran (as defined in 7subsection (d)(2)) and such service shall be considered 8to have been performed in the active military or naval serv-

9ice of the United States.

10 "(2.) In the case of any individual to whom paragraph

11 (1)applies, proof of support required under section 202 12 (h) may be filed by a parent at any time prior to the ex-

13piration of two years after the date of such individual's 14death or the date of the enactment of this subsection, which-

15ever is the later." 16 Reimbursement to Disability Insurance Trust Fund

17 (b)(1) Section 217 (g)(1) of the SocialSecurity 18Act is amended by deleting "Trust Fund" andinserting hi

19lieu thereof "Trust Funds". 20 (2) Section 217 (g)(2). of the Social Security Act is

21 amended by deleting "the Trust Fund" each time itappears 22therein and inserting in lieu thereof "the, Federal Old-Age 23 and Survivors Insurance Trust Fund" the first time and 24"such Trust Fund" the other times. (30

1 Effective Date

2 (c)(1)The amendment made by subsection(a)

3shall apply only with respect to(A) monthly benefits

4under sections 202 and 223 of the Social Security Act fOr

5months after the month in which this Act is enacted, (B)

6lump-sum death payments under such section 202 in the

7case of deaths occurring after the month in which this Act

8is enacted, a.nd (C) periods of disability under section 216

9 (i) in the case of applications for a disability determination

10filed after the month in which this Act is enacted. (2) In the case of any individual—

12 (A) who is a World War II veteran (as defined

13 in section 217 (d)(2)of the Social Security Act)

14 wholly or partly by reason of service described in section

15 217 (h)(1)(A) of such Act; and

16 (B) who (i) became entitled to old-age insurance

17 benefits under section 202 (a)of the Social Security 18 Act or to disability insurance benefits under section 223 19 of such Act prior to the first day of the month follow-

20 ing the month in which this Act is enacted, or(ii) 21 died prior to such first day, and whose widow, former 22 wife divorced, widower, child, or parent is entitled for 23 the month in which this Act is enacted, on the basis of 24 his wages and self-employment income, to a monthly 25 benefit under section 202 of such Act; and 61

1 (0) any part of whose service described in section

2 217 (h)(1)(A) of the Social Security Act was not

3 included in the computation of his primary insurance

4 amount under section 215 of such Act but would have

5 been included in such computation if the amendment

6 made by subsection (a) of this section had been effective

7 prior to the date of such computation,

8the Secretary of Health, Education, and Welfare shall, not-

9withstanding the provisions of section 215 (f)(1)of the

10SocialSecurity Act, recompute the primary insurance

1j.amount of such individual upon the filing of an application,

12after the month in which this Act isenacted, by him

13or(if he has died without filing such an application) by

14any person entitled to monthly benefits under section 202

15of the Socia1 Security Act on the basis of his wages and

16self-employment income. Such recomputation shall be made

17only in the manner provided in title II of the Social Security

18Act as in effect at the time of the last previous computation

19or recomputation of such individual's primary insurance

20amount, and as though application therefor was filed in the

21month in which application for such last previous computa-

22tion or recomputation was filed.No recomputation made

23under this subsection shall be regarded as a recomputation

24under section 215 (f) of the Social Security Act. Any such

25recomputation shall be effective for and after the twelfth 62

1month before the month in which the application is filed, but

2 in no case for the month in which thisActis enacted or

3any prior month.

4POSITIONS COVERED BY STATE AND LOCAL RETIREMENT

5 SYSTEMS

6 Division of Retirement Systems

7 SEC. 316. (a)(1) Section 218 (d)(6) of the Social

8 Security Act is amended to read as follows:

9 "(6)(A) If a retirement system covers positionsof

10employees of the State and positionsof employees of one or

11more political subdivisions of the State,orcovers positions

12 of employees of two or more political subdivisions of the

13State, then, for purposes of the preceding paragraphs of this

14subsection, there shall, ifthe State so desires, be deemed to

15 be a separate retirement system with respect to any one or

16more of the political subdivisions concerned and, where the

17retirement system covers positionsof employees of the

18State, a separate retirement system with respect to the State 19or with respect to the State and any one or more of the

20political subdivisions concerned.

21 "(B) If a retirement system covers positions of em-

22ployees of one or more institutions of higher learning, then, 23for purposes of such preceding paragraphs there shall, if the 24State so desires, be deemed to be a separate retirement sys- 25tem for the employees of each such institution of higher 63

1learning.For the purposes of this subparagraph, the term

2'institutions of higher learning' includes junior colleges and 3teachers colleges.

4 "(C)Forthepurposesofthissubsection,any 5retirement system establ4shed by the State of California., 6Connecticut,Florida, Georgia, Massachusetts, Minnesota, 7 New York, North Dakota, Pennsylvania, Rhode Island, 8Tennessee, Washington, Wisconsin, or the Territory of Ha- 9waii, or any political subdivision of any such Stateor Tern- 10tory, which, on, before, or after the date of enactment of this

11subparagraphisdividedintotwodivisionsorparts, 12one of which is composed of positions of members of such 13system who desire coverage under an agreement under this

14section and the other of which is composed of positionsof

15members of such system who do not desire suchcoverage, 16shall, if the State or Territoryso desires and if it is provided 17that there shall be included in such divisionor part composed 18of members desiring such coverage the positions of individ-

19uals who become members of such system after suchcover-

20age is extended, be deemed to be a separate retirementsys- 21tem with respect to each such divisionor part. 22 "(D) The position ofany individual which is covered by 23any retirement system to which subparagraph (C) is appli-

24cable shall, if such individual is ineligibleto become a mem- 25ber of such system on August 1, 1956,or, if later, the day 64

1he first occupies such position, be deemed to be covered

2by the separate retirement system consisting of the positions

3of members of the division or part who do not desire cover-

4age under the insurance system established under this title.

5 "(E) An individual who is in a position covered by a

6retirement system to which subparagraph (C) is applicable

7and who is not a member of such system but is eligible to

8become a member thereof shall, for purposes of this subsec-

9tion (other than paragraph (8)) be regarded as a member 10of such system; except that, in the case of any retirement 11system a division or part of which is covered under the

12agreement (either in the original agreement or by a modi-

13fication thereof), which coverage is agreed to prior to 1960, 14the preceding provisions of this subparagraph shall apply 15only if the State so requests and any such individual re- 16ferred to in such preceding provisions shall, if the State so 17requests, be treated, after division of the retirement system 18pursuant to such subparagraph (C), the same as individuals 19in positions referred to in subparagraph (F). 20 "(F) In the case of any retirement system divided pur- 21suant to subparagraph (C), the position of any member of 22the division or part composed of positions of members who 23do not desire coverage may be transferred to the separate 24retirement system composed of positions of members who 25desire such coverage if it is so provided in a modification of 65

1such agreement which ismailed, or delivered by other

2means, to the Secretary prior to 1960 or, if later, the expira-

3tion of one year after the date on which such agreement, or

4the modification thereof making the agreement applicable to

5such separate retirement system, as the case may be,is

6agreed to, but only if, prior to such modification or such

7later modification, as th case may be, the individual occu-

•8pying such position ifies with the State a written request

9for such transfer.

10 "(G) For the purposes of this subsection, in the case

11of any retirement system of the State of Florida, Georgia,

12Minnesota, North Dakota, Pennsylvania, Washington, or

13 the Territory of Hawaii which covers positions of employees 14of such State or Territory who are compensated in whole 15or in part from grants made to such State or Territory under 16title III, there shall be deemed to be, if such State or Tern- 17tory so desires, a separate retirement system with respect to 18a.ny of the following: 19 "(i) the positions of such employees; 20 "(ii) the positions of all employees of such State 21 or Territory covered by such retirement system who are 22 employed in the department of such Stateor Territory

23 in which the employees referred to in clause(i)are 24 employed; or

H.R.13549 5 66

1 "(iii) employees of such State or Territory coy-

2 ered by such retirement system who are employed in

3 such department of such State or Territory in positions

4 other than those referred to in clause(i) ."

5 (2) Paragraph (7) of section 218 (d) of such Act is

6amended by striking out "(created under the fourth sentence

7of paragraph (6) )"andinserting in lieu thereof "(created

8under subparagraph (C)of paragraph (8)or the corre-

9sponding provision of prior law) "; and by striking out "the

10fourth and fifth sentences of paragraph (6)" and inserting

11in lieu thereof "subparagraphs (C) and (D) of paragraph

12 (6)".

13 (3) The second sentence of paragraph (2)of section

14218 (k) of such Act is amended by striking out "the pre-

15ceding sentence" and inserting in lieu thereof "the first sen

16tence of this paragraph".The last sentence of such para-

17graph is amended by striking out "the fourth sentence of

18subsection(d)(6)" and inserting in lieu thereof "sub-

19paragraph (C) of subsection (d)(6) ".Suchparagraph 20is further amended by inserting after the first sentence t.he

21following new sentence: "An individual who is in a position 22covered by a retirement system divided pursuant to the

23preceding sentence and who is not a member of such system

24but is eligible to become a member thereof shall, for purposes

25of this subsection, be rega.rded as a member of such system. 67

1 Coverage under the agreement of any such individual shall

2 be provided under the same conditions, to the extent prac-

3ticable, as are applicable in the case of the States to which

4the provisions of subsection(d)(6)(C) apply."

5 Coverage Under Other Retirement Systems (b) Section 218 (d) of such Act is amended by adding

7at the end thereof the following new paragraph:

8 "(8) (A) Notwithstanding paragraph (1), if under the

9provisions of this subsection an agreement is, after December

1031, 1958, made applicable to service performed in positions

11covered by a retirement system, service performed by an

12individual in a position covered by such a system may not be

13excluded from the agreement because such position is also 14covered under another retirement system. 15 "(B) Subparagraph(A)shall not apply to service 16performed by an individual in a position covered under a 17retirement system if such individual, on the day the agree- 18ment is made applicable to service performed in positions coy- 19ered by such retirement system, is not a member of such 20system and is a member of another system. 21 "(C) If an agreement is made applicable, prior to 1959. 22to service in positions covered by any. retirement system, the 23preceding provisions of this paragraph shall be applicable 24in the case of such system if the agreement is modified to so 25provide. 68

1 "(D) Except in the case of agreements with the States

2named in subsection(p) and agreements with interstate

3instrumentalities, nothing in this paragraph shall authorize

4the application of an agreement to service in any policeman's

5or fireman's position."

6 Retroactive Coverage

7 (c)(1)Section 218(f)of such Act is amended

8by inserting "(1)" immediately after "(f) ",byredesignat-

9ing clauses (1), (2), (3), and (4) thereof as clauses (A),

10 (B), (C), and (B), respectively, and by adding at the

11end thereof the following new paragraph:

1.2 "(2) in the case of service performed by members

13of any coverage group—

14 "(A) to which an agreement under this section

15 is made applicable, and

16 "(B) with respect to which the agreement, or

17 modification thereof making the agreement so applicable,

18 specifies an effective date earlier than the date of execu-

19 tionofsuch agreement and such modification,re-

20 spectively,

21theagreement shall,if so requested by the State, be a.p-

22plicable to such services(to the extent the agreement was

23not already applicable) performed before such date of execu-

24tion and after such effective date by any individual as a 25 member of such coverage group if he is such a member on 69

1 a date, specified by the State, which is earlierthan such date

2 of execution, except that in no case may the date so specified

3 be earlier than the date such agreement or such modification,

4as the case may be, is mailed, or delivered by other means,

5to the Secretary."

6 (2) The amendment made by this subsection shall a.p-

7ply in the case of any agreement, or modification of an

8 agreement, under section 218 of the Social Security Act,

9which is executed after the date of enactment of this Act.

10 POLICEMEN AND FIREMEN OF INTERSTATE INSTRU-

11 MENTALITIES

12 SEC. 317. Subsection (k)of section 218 of the Social

13Security Act is amended by adding at the end thereof the

14following new paragraph:

13 "(3) Any agreement with any instrumentality of two

16or more States entered into pursuant tothis Act may,

17notwithstandingthe provisions of subsection (d)(5)(A)

18and the. references, thereto in subsections (d)(1) and (d)

19 (3),applyto service performed by employees of such in-

20strumentality in any. policeman's or fireman's positi&n covered

21by a retirement system, but only. upon compliance, to the

22extent practicable, with.: the requirements of. subsection (I)

23 (3) For the purpose. of the. preceding sentence, a retire-

24ment system which covers positions of policemen or firemen,

25or both, and other positions shall, if the instrumentality con- 70

1 cerned so desires, be deemed to be a separate retirement

2system with respect to the positions of such policemen or

3firemen, or both, as the case may be." 4 TITLE IV—AMENDMENTS TO THE INTERNAL

5 REVENUE CODE OF 1954

6 CHANGESINTAXSChEDULES

7 Self-Employment Income Tax

8 SEC. 401. (a)Section 1401 of the Internal Revenue 9 Code of 1954 (relating to ra.te of tax on self-employment

10income) is amended to read as follows:

11"SEC. 1401. RATE OF TAX.

12 "In addition to other taxes, there shall be imposed for

13each taxable year, on the self-employment income of every

14individual, a tax as follows:

15 "(1) in the case of any taxable year beginning 16 after December 31, 1958, and before January 1, 1960,

17 the tax shall be equal to 3f percent of the amount of 18 the self-employment income for such taxable year; 19 "(2) in the case of any taxable year beginning after 20 December 31, 1959, and before January 1, 1963, the 21 tax shall be equal to 4+ percent of the amount of the 22 self-employment income for such taxable year; 23 "(3) in the case of any taxable year beginning 71 1 after December 31, 1962, and before January 1, 1966, 2 the tax shall be equal to 5+ percent of the amount of 3 the self-employment income for such taxable year; 4 "(4) in the case of any taxable year beginning 5 after December 31, 1965, and before January 1, 1969, 6 the tax shall be equal t.o 6 percent of the amount of 7 the self-employment income for such taxableyear; and 8 "(5) in the, case of any taxable year beginning 9 after December 31, 1968, the tax shall be equal to 10 6* percent of the amount of the self-employment income 11 for such taxable year." 12 Ta.x on Employees 13 (b) Section 3101 of such Code (relating to rate of tax

14on employees under the Federal Insurance Contributions

15Act) is amended to read as follows:

16 "SEC. 3101. RATE OF TAX.

17 "In addition to other taxes, there is hereby imposed

18on the income of every individual a tax equal to the follow-

19ing percentages of the wages (as defined in section 3121

20 (a).)received by him with respect to employment(as

21defined in section 3121 (b) )—

22 "(1) with respect to wages received during the

23 calendar year 1959, the rate shall be 24- percent; 72

1 "(2) with respect to wages received during the

2 calendar years 1960 to 1962, both inclusive, the rate shall he 3 percent;

4 "(3) with respect to wages received during the

5 calendar years 1963 to 1965, both inclusive, the rate

6 shall be 3f percent;

7 "(4) with respect to wages received during the

S calendar years 1966 to 1968, both inclusive, the rate

9 shall be 4 percent; and

10 "(5) with respect to wages received after Decem-

11 ber 31, 1968, the rate shall be 4+ percent."

12 Tax on Employers

13 (c) Section 3111 of such Code (relating to rate of tax 14on employers under the Federal Insurance Contributions

15Act) is amended to read as follows:

16"SEC. 3111. RATE OF TAX.

17 "In addition to other taxes, there is hereby imposedon 18every employer an excise tax, with respect to having mdi-

19vidiials hi his employ, equal to the followingpercentages of

20the wages (as defined in section 3121(a-) )paidby him

21with respect to employment (as defined in section3121 22 (b))—

23 "(1)with respect to wages paid during the calen- 24 dar year 1959, the rate shall be 24-percent; 25 "(2) with respect towages paid during the calen- 73

1 daryears 1960 to 1962, both inclusive, the rate shall he

2 3 percent;

3 "(3) with respect to wages paid during the eale,i-

4 dar years 1963 to 1965, both inclusive, the rate shall be

5 3+ percent;

6 "(4) with respect to wages paid during the calen-

7 dar years 1966 to 1968, both inclusive, the rate shall be

8 4 percent; and

9 "(5) with respect to wages paid after December

10 31,1968, the rate shall be 44- percent."

11 Effective Dates

12 (d)The amendment made by subsection(a)shall

13apply with respect to taxable years beginning after Decem-

14ber 31, 1958.The amendments made by subsections (b)

15and(c) shall apply with respect to remuneration paid after

16December 31, 1958.

17 INCREASEIN TAXBASE

18 Definition of Self-Employment Income

19 Sic. 402. (a)(1) Subparagraph (B) of section 1402

20 (b)(1) of the Internal Beenue Code of 1954 is amended

21to read as follows:

22 "(B) for any taxable year ending after 1954

23 and before1959,(i)$4,200, minus(ii)the 24 amount of the wages paid to such individual during 25 the taxable year; and". 74

1 (2) Paragraph (1) of section 1402 (b) of such Code

2is further amended by adding at the end thereof the following

3newsubparagraph:

4 "(C) for any taxaMe year ending after 1958,

5 (i)$4,800, minus(ii)the amount of the wages

6 paid to such individual during the taxable year; or".

7 Definition of Wages

8 (b) Section 3121 (a)of such Code (relating to the

9 definition of wages)is amended by striking out "$4,200"

10wherever it appears and inserting in lieu thereof "$4,800".

11 Federal Service

12 (c)Section 3122 of such Code (relating to Federal

13service)is amended by striking out "$4,200" wherever it 14appears and inserting in lieu thereof "$4,800".

15 Refunds

16 (d)(1) Paragraph (1)of section 6413 (c)of such 17Code is amended.to read as follows: 18 "(1) IN GENERAL—If by reason of an employee 19 receiving wages from more than one employer during a 20 calendar year after the calendar year 1950 and prior to 21 the calendar year 1955, the wages received by him during 22 such year exceed $3,600, the employee shall be entitled

23 (subject to the provisions of section 31 (b) )toa credit 24 or refund of any amount of tax, with respect to such 25 wages, imposed by section 1400 of the Internal Revenue 75

1 Code of 1939 and deducted from the employee's wages

2 (whetheror not paid to the Secretary or his delegate),

3 which exceeds the tax with respect to the first $3,600

4 of such wages received; or if by reason of an employee

5 receiving wages from more than one employer (A)

6 during any calendar year after the calendar year 1954

7 and prior to the calendar year 1959, the wages received

6 by him during such year exceed $4,200, or (B) during

9 any calendar year after the calendar year 1958, the

10 wages received by him duringsuchyearexceed

11. provisions of section 31 (b) )toa credit or refund of

12 any amount of tax, with respect to such wages,imposed

13 by section 3101 and deducted from the employee's

14 wages (whether or not paid to the Secretary orhis is delegate), which exceeds the tax with respect to the

16 first $4,200 of such wages received in such calendar

17 year after 1954 and before 1959, or which exceeds the

18 tax with respect to the first $4,800 of such wages

19 received in such calendar year after 1958."

20 (2) Subparagraph. (A)of section 6413(c)(2)of

2isuch Code is amended to read as follows:

22 "(A) FEDELL EMPLOYEES.—In the case of

23 remuneration received from the United States or a wholly owned instrumentality thereof during any ca1endr year, each head of a Federal agency or 76

I instrumentality who makes a return pursuant to 2 section 3122 and each agent, designated by the head of a Federal agency or instrumentality, who makes

4 a return pursuant to such section shall, for purposes

5 of this subsection, be deemed a separate employer, 6 and the term 'wages' includes for purposes of this

7 subsection the amount, not to exceed $3,600 for the 8 calendar year 1951, 1952, 1953, or 1954, $4,200 9 for the calendar year 1955, 1956, 1957,or 1958,

10 or $4,800 for any calendar year after 1958, deter-

11 mined by each such head or agentas constituting 12 wages paid to an employee." 13 Effective Date 14 (e) The amendments made by subsections (b) and (c) 15 shall be applicable only with respect to remuneration paid

16 after 1958.

17 PARTNER'S TATABLE YEAR ENDING AS RESULTOF DEATH 18 General Rule 19 SEc. 403.(a) Section 1402 of. the Internal Revenue 20Code of 1954 is amended by adding at the end. thereof the 21 following new subsecfion.:. 22 "(f) PAETNEES XLE YEAR ENDING AS TU 23RESULT OF DEATH.—In. (omputing.a partilr's net earnings 24from self-employment for. his taxableyear which ends as a 25result of .his dath. (but mily Wsuch.taxab1cyear ends witbi, 77

1and not with, the taxable year of the partnersh.ip), there

2shall be included so much of the deceased partner's distribu-

3tive share of the partnership's ordinary income or loss for

4the partnership taxable year as is not attributable to an

5interest in the partnership during any period beginning on

6or after the first day of the first calendar month following

7the month in which such partner died.For purposes of this

8subsection—

9 "(1) in determining the portion of the distributive

10 share which is attributable to any period specified in the

11 preceding sentence, the ordinary income or loss of the

12 pa.rtnership shall be treated as having been realized or

13 sustained ratably over the partnership taxable year; and

14 "(2) theterm'deceasedpartner'sdistributive

15 share' includes the share of his estate or of any other

16 person succeeding, by reason of his death, to rights with

17 respect to his partnership interest."

18 Effective Date

19 (b)(1) Except as provided in paragraph (2), the

20amendment made by subsection(a)shall apply only with

21respect to individuals who die after the date of the enact-

22ment of this Act.

23 (2) In the case of a.n individual who died after 1955 and

24on or before the date of the enactment of this Act, the amend-

25ment made by subsection (a) shall apply only if— 78

1 (A) before January 1, 1960, there is filed a return

2 (or amended return) of the tax imposed by chapter 2

3 of the Internal Revenue Code of 1954 for the taxable

4 yea.r ending as a. result of his death, and

5 (B) in any case where the return is filed solely

6 for the purpose of reporting net earnings from self-em-

7 ployment resulting from the amendment made by sub-

8 section (a), the return is accompanied by the amount

9 of ta.x attributable to such net earnings.

10In any case described in the preceding sentence, no interest

11or penalty shall be assessed or collected on the amountof

12any tax due under chapter 2 of such Codesolely by reason

13of the operation of section 1402 (f) of such Code.

14 SERVICE IN CONNECTION WITH GUM RESIN PRODUCTS 15 SEC. 404. (a) Section 3121 (b)(1)of the Interna' 16Revenue Code of 1954 (relating to definition of employ-

17ment)is amended to read as follows: 18 "(1)service performed by foreign agricultural 19 workers (A) under contracts entered into in accord- 20 ance with title V of the Agricultural Act of 1949, as 21 amended (65 Stat. 119; 7 U. S. C. 1461—1468), or 22 (B) lawfully admitted to the United States from the 23 Bahamas, Jamaica, and the other British West Indies, 24 or from any other foreign country or possession thereof, 25 on a temporary basis to perform agricultural labor;". 79

1 (b)The amendment made by subsection(a)shall

2apply with respect to service performed after 1958.

3 NOI'fl'ROFIT ORGANIZATION'S WAIVERCERTIFICATES

4 Sc. 405. (a) Section 3121 (k)(1)of the Internal

5 Revenue Code of 1954 is amended to read as follows:

6 "(1) WAIVER OF EXEMPTION BY ORGANIZA-

7 TION.—

8 "(A) An organization described in section 501

9 (c)(3) which is exempt from income tax under

10 section501 (a) ma.y file a certificate (in such form

11 andmanner, and with such official, as maybe pre-

12 scribed by regulations made under this chapter)

13 certifyingthat it desires to have the insurance sys-

14 temestablished by title II of the Social Security

15 Actextended to service performed by its employees

16 andthat. at least two-thirds of its employees concur

17 inthe filing of the certificate.Such certificate may

18 be filed only if it is accompanied by a list contain-

19 ingthe signature, address, and social security ac-

20 countnumber(if any)of each employee who

21 concursin the filing of the certificate.Such list

22 maybe amended at a.ny time prior to the expira-

23 tionof the twenty-fourth month following the calen-

24 darquarter in which the certificate is filed by filing

25 withthe prescribed official a supplemental list or 80

1 lists containing the signature, a.ddress, and social

2 security account number (if any) of each additional

3 employee who concurs in the filingofthe certificate. 4 The list and any supplemental list shall be filed in

5 such form and manner as may be prescribed by

6 regulations made under this chapter.

7 "(B) The certificate shall be in effect(for 8 purposes of subsection (b)(8)(B) and for par- 9 poses of section 210 (a)(8)(B)of the Social 10 Security Act) for the period beginning with which- 11 ever of the following may be designated by the

12 organization:

13 "(i) the first day of the calendar quarter 14 in which the certificate is filed, 15 "(ii) the first day of the calendar quarter 16 succeeding such quarter, or 17 "(iii)the first day of any calendar quarter 18 preceding the calendar quarter in which the 19 certificateisfiled,except that,in the case 20 of a certificate filed prior to January 1, 1960, 21 such date may not be earlier than January 1, 22 1956, and in the case of a certificate filed after 23 1959, such date may not be earlier than the 24 first day of the fourth calendar quarter preced- 25 ing the quarter in which such certificate is filed. 81

I "(C) In the case of service performed byan 2 employeewhose name appears on a supplemental

3 listfiledafterthefirstmonth followingthe 4 calendar quarter in which the certificate is filed, the 5 certificate shall be in effect (for purposes of subsec-

6 tion (b)(8)(B) and for purposes of section 210 7 (a)(8) (B) of the Social Security Act) only with 8 respect to service performed by such individual for 9 the period begirniing with the first day of the caleñ- 10 dar quarter in which such supplemental list is ified. 11 "(B) The period for which a certificate flied 12 pursuant to this subsection or the corresponding sub- 13 section of prior law is effective may be terminated

14 by the organization, effective at the end ofa calên-

15 darquarter, upon giving 2 years' advance notice in

16 writing,butonly if, at the time of the receipt of

17 suchnotice, the certificate has been in effect fora 18 period of not less than 8 years.The notice of lr-

19 inination may be revoked by the organization by

20 giving, prior to the close of the calendar quarter

21 specifiedin the notice of termination, a written 22 noticeof such revocation.Notice of termination or

23 revocationthereof shall be filed in, such form aird

H.R.13549 6 82

1 mirnner, and with such official, as may be prescribed

2 by regulations made under this chapter.

8 "(E) If an organization described in subpara-

4 graph (A) employs both individuals who are in

5 positions covered by a pension, annuity, retirement,

6 or imi1arfundor system established by a State or

7 by a political subdivision thereof and individuals

8 who are not in such positions, the organization shall

9 divide its employees into two separate groups. One

10 group shall consist of all employees who arein U positions covered by such a fund or system and (i)

12 aremembers of such fund or system, or(ii)are

13 not members ofsuch fund or system but are 14 eligible to become members thereof; and the other 15 group shall consist of all remaining employees. An 16 organization which has so divided its employees 17 into two groups may fi'e a certificate pursuant to 18 subparagraph (A) with respect to the employees 19 in one of the groups if at least two-thirds of the 20 employees in such group concur in the filing of the

certificate.The organization may also file such a certificate with respect to the employees in the other group if at least two-thirds of the employees in such other group concur in the filing of such

certificate. 83

1 "(F) An organization which fileda certificate

2 under this subsection after 1955 but prior to the

3 enactment of this subparagraph may file a request 4 at any time before 1960 to have such certificate

5 effective, with respect to the service of individuals

6 who concurredinthefilingofsuchcertificate 7 (initially or through the filing ofa supplemental 8 list)prior to enactment of this subparagraph and 9 who concur in the filing of suchnew request, for 10 the period beginning with the first day ofany 11 calendar quarter preceding the first calendar quarter 12 for which it was effective and following the last 13 calendar quarter of 1955.Such request shall be 14 filed with such official and in such form andmanner '15 as may be prescribed by regulations made under 16 this chapter.If a request is filed pursuant to this 17 subparagraph— 18 "(i) for purposes of computing interest 19 arid for purposes of section 6651 (relating to 20 addition to tax for failure to file tax return), 21 the due date for the return and payment. of the 22 tax for any calendar quarter resulting from the 23 filing of such request shall be the last day of the 24 calendar month following the calendar quarter 25 in which the request is filed; and 84

1 "(ii) the statutory period for the assess-

2 ment of such tax shall not expire before the

3 expiration of 3 years from such due date.

4 "(G) If a certificate ified pursuant to this para

5 graph is effective for one or more calendar quarters

6 prior to the quarter in which the certificate is filed,

7 then—

8 "(i) for purposes of computing interest

9 and for purposes of section 6651 (relating to

10 addition to tax for failure to file tax return), the

11 due date for the return and payment of the tax

12 for such prior calendar quarters resulting from

13 the filing of such certificate shall be the last 14 day of the calendar month following the calen- 15 dar quarter in which the certificate is filed; and 16 "(II) the statutory period for the assess- 17 ment of such tax shall not expire before the 18 expiration of 3 years from such due date." 19 (b) Section 3121 (b)(8)(B) of the Internal Reve- 20nue Code of 1954 is amended to read as follows: 21 "(B) service performed in the employ of a

22 religious,charitable, educational, or other organiza-

23 tiondescribed in section 501(c)(3)which is

24 exemptfrom income tax under section 501(a),

25 butthis subparagraph shall not apply to service per- 85

1 formed during the period for which a certificate, filed

2 pursuant to subsection (k)(or the corresponding

3 subsection of prior law), is in effect if such service

4 is performed by an employee—

5 "(i) whose signature appears on the list

6 filed by such organization under subsection (k)

7 (or the corresponding subsection of prior law),

8 "(ii) who became an employee of such

9 organization after the calendar quarter in which

10 the certificate (other than a certificate referred

11 to in clause (iii)) was filed, or

12 "(iii) who, after the calendar quarter in

13 whichthe certificate was ified with respect to a 14 group described in section 3121 (k)(1)(E),

15 became a member of such group, 16 except that this subparagraph shall apply with re- 17 spect to service performed by an employee as a 18 member of a group described in section 3121 (k)

19 (1)(E) with respect to which no certificate is in

20 effect;". 21 (c) The amendments made by subsections (a) and (b)

22shallapply with respect to certificates ified under section 233121 (k)(1) of the Internal Revenue Code of 1954 after 24the date of enactment of this Act. 86

1EXEMPTION OF UNEMPLOYMENT BENEFITS FROM LEVY

2 SEC. 406. Section 6334 (a)of the Internal Revenue

3Code of 1954 (relating to enumeration of property exempt

4from levy)is amended by adding at the end thereof the

5following new paragraph:

6 "(4) UNEMPLOYMENT BENEFITS.—Any amount

7 payable to an individua1 with respect to his unemploy-

S ment (including any portion thereof payable with re-

9 spect to dependents) under an unemployment compensa-

10 tion law of the United States, of any State or Territory,

11 or of the District of Oolumbia or of theOommonwealth

12 of Puerto Rico." 13 TITLE V—AMENDMENTS RELATING TO PUBLIC 14 ASSISTANCE

15 OLD-AGE ASSISTANCE

16 SEc. 501. Subsection(a)of section 3 of the Social 17Security Act is amended to read as follows: 18 "(a) From the sums appropriated therefor, the Secre- 19tary of the Treasury shall pay to each State which has an 20approved plan for old-age assistance, for each quarter, be-

21ginning with the quarter commencing October1,1958, 22 (1 )inthe case of any State other than Puerto Rico, the 23Virgin Islands, and Guam, an amount equai to the sum of the following proportions of the total amounts expended 25during such quarter as old-age assistance under the State 87

1. plan(including expenditures for insurancepremiums for 2medical or any other type of remedialcare or the cost 3thereof)—

4 "(A) four-fifths of such expenditures,not counting 5 50 much of any expenditure with respect to any month 6 as exceeds the product of $30 multiplied by the total 7 number of recipientsof old-age assistancefor such 8 month (which total number, forpurposes of this clause 9 and clause (B) and forpurposes of clause (2), means 10 (i)the number of individuals who received old-age 11 assistance in the form ofmoney payments for such 12 month, plus(ii)the number of other individuals with 13 respect to whom expenditures were made in such month 14 as old-age assistance in. the form of medical or any other

15 type of remedial care); plus 16 "(B) the Federal percentage of theamount by 17 which such expenditures exceed the maximum which 18 may be counted under clause (A), but not counting 19 so much of any expenditure with respect to any month

20 asexceeds the product of $66 multiplied by the total

21 number of such recipients of old-age assistance forsuch 22 month; 23and (2) in the case of Puerto Rico, the Virgin Islands, and 24Guam,an amount equal to one-half of the total of the sums 25expendedduring such quarteras old-age assistance under 88

1the State plan (including expenditures for insurance pre-

2 miumsformedical or any other type of remedial care or

3the cost thereof), not counting so much of any expenditure

4with respect to any month as exceeds $36 multiplied by the

5total number of recipients of old-age assistance for such

6month; and (3) in the case of any State, an amount equal

7to one-half of the total of the sums expended during such

8quarter as found necessary by the Secretary of Health, Edu-

9cation, and Welfare for the proper and efficient administra-

10tion of the State plan, including services which are provided

11by the staff of the State agency (or of the local agency

12administering the State plan in the political subdivision)

13to applicants for and recipients of old-age assistance to help 14them attain self-care."

15 AID TO DEPENDENT CHILDREN

16 Sixj. 502. Subsection (a)of section 403 of the Social 17Security Act is amended to read as follows: 18 "(a) From the sums appropriated therefor, the Secre- 19tary of the Treasury shall pay to each State which has an 20approved plan for aid to dependent children, for each quarter,

21beginningwith the quarter commencing October 1, 1958, 22 (1) in the case of any State other than Puerto Rico, the Vir- 23gin Islands, and Guam, an amount equal to the sum of the 24following proportions of the total amounts expended during 25such quarter as aid to dependent children under the State 89

1plan(including expenditures for insurance premiums for 2medical or any other type of remedial care or the cost

3thereof)—

4 "(A) five-sixths of such expenditures, not counting

5 so much of any expenditure with respect to any month

6 as exceeds the product of $18 multiplied by the total

7 number of recipients of aid to dependent children for

8 such month (which total number, for purposes of this

9 clause and clause (B) and for purposes of clause (2), 10 means(i)the number of individuals with respect to

11 whom aid to dependent children in the form ofmoney 12 payments is paid for such month, plus(II) the number

13 of other individuals with respect to whom expenditures 14 were made in such month as aid to dependent children 15 in the form of medical or any other type of remedial 16 care) ; plus 17 "(B)the Federal percentage of the amount by 18 which such expenditures exceed the maximum which 19 may be counted under clause (A), but not counting so 20 much of any expenditure with respect toany month

21 asexceeds the product of $33 multiplied by the total 22 numberof recipients of aid to dependent children for

23 suchmonth;

24and(2)in the case of Puerto Rico, the Virgin Islands, 25andGuam, an amount equal to one-hall of the total of the 90

1sums expended during such quarter as aid to dependent

2 children under the State plan(including expenditures for

3 insurance premiums for medical or any other typeof

4remedial care or the cost thereof), not counting so much

5 of any expenditure with respect to any month as exceeds

6 $18 multiplied by the total number of recipients of aid to

7 dependent children for such month; and (3)in the case

8of any State, an amount equal to one-half of the total of the

9sums expended during such quarter as found necessary by 10the Secretary of Health, Education, and Welfare for the 11proper and efficient administration of the State plan, in- 12 cluding services which are provided by the staff of the State 13agency (or of the local, agency administering the State plan 14in the political subdivision)to relatives with whom such

15children(applying for or receiving such aid)are living, 16in order to help such relatives attain self-support or self- 17care, or which are provided to maintain and strengthen 18family life for such children."

19 AID TO TRE BLIND 20 SEc. 503. Subsection (a) of section 1003 of the Social 21Security Act is amended to. read as follows: 22 "(a) From the sums appropriated therefor, the Secre- 23taly of the Treasury shall pay to each State which has an 24approved plan for aid to the blind, for each quarter, begin- 25ning with the quarter commencing October 1, 1958,(1) 91

1in the case of any State other than Puerto Rico, the Virgin

2Islands, and Guam, an amount equa.]to the sumofthe

3following proportions of the total amounts expended during

4such quarter as aid to the blind under the State plan(in-

5eluding expenditures for insurance premiums for medical or

6any other type of remedial care or the cost thereof) —

7 "(A) four-fifths of such expenditures, not counting

8 so much of any expenditure with respect to any month

9 as exceeds the product of $30 multiplied by the total 10 number of recipients of aid to the blind for such month

11 (which total number, for purposes of this clause and

12 clause(B) and for purposes of clause(2), means 13 (i)the number of individuals who received aid to the

14 blindin the form of money payments for such month,

15 plus(ii)the number of other individuals with respect

16 to whom expenditures were made in such month as

17 aid to the blind in the form of medical or any other

18 type of remedial care) ; plus

19 "(B) the Federal percentage of the amount by

20 which such expenditures exceed the maximum which

21 may be counted under clause (A), but not counting so 22 much of any expenditure with respect to a.ny month as

23 exceeds the product of $66 multiplied by the total 24 number of such recipients of aid to the blind for such 25 month; 92

1 and (2) in the case of Puerto Rico, the Virgin Islands, and

2Guam, an amount equal to one-half of the total of the sums

3expended during such quarter as aid to the blind under the

4State plan (including expenditures for insurance premiums

5for medical or a.ny other type of remedial care or the cost

6thereof), not counting so much of any expenditure with

7respect to any month as exceeds $36 multiplied by the total

8number of recipients of aid to the blind for such month; and

9 (3) in the case of any State, an amount equal to one-half

10of the total of the sums expended during such quarter as

11found necessary by the Secretary of Health, Education, and

12Welfare for the proper and efficient administration of the

13State plan, including services which are provided by the staff

14of the State agency (or of the local a.gency administering the

15State plan in the political subdivision) to applicants for and

16recipients of aid to the blind to help them attain self-support

17or self-care."

18 AID TO THE PERMANENTLY AND TOTALLY DISABLED

19 SEC. 504. Subsection (a) of section 1403 of the Social

20Security Act is amended to read as follows:

21 "(a)From the sums appropriated therefor, the Secre-

22tary of the Treasury shall pay to each State which has an

23approved plan for aid to the permanently and totally dis-

24abled, for each quarter, beginning with the quarter com-

25mencing October 1, 1958, (1) in the case of any State other 1than Puerto Rico, the Virgin Islands, and Guam, an amount

2 equal to the sum of the following proportions of the total

3 amounts expended during such quarter as aid to the perma-

4nently and totally disabled under the State plan (including

5 expenditures for insurance premiums for medical or any

. othertype of remedial care or the cost thereof) —

7 "(A) four-fifths of such expenditures, not counting

8 so much of any expenditure with respect to any month as

9 exceeds the product of $30 multiplied by the total

10 number of recipients of aid to the permanently and

11 totally disabled for such month (which total number,

12 for purposes of this clause and claus (B) and for pur-

13 poses of clause (2), means (i) the number of individ- 14 uals who received aid to the permanently and totally dis- 15 abled in the form of money payments for such month,

16 plus(ii)the number of other individuals with respect 17 to whom expenditures were made in such month as aid 18 to the permanently and totally disabled in the form of 19 medical or any other type of remedial care) ; plus 20 "(B) the Federal percentage of the amount by 21 which such expenditures exceed the maximum which 22 may be counted under clause(A), but not counting

23 somuch of any expenditure with respect to any month

24 asexceeds the product of $66 multiplied by the total 94

1 number of such recipients of aid to the permanently

2 and totally disabled for such month;

3and (2) in the case of Puerto Rico, the Virgin Islands, and 4 Guam, an amount equal to one-half of the total of the sums

5expended during such quarter as aid to the permanently

6and totally disabled under the State plan(including cx-

7pendlitures for insurance premiums for medical or any other

8type of remedial care or the cost thereof), not counting

9so much of any expenditure with respect to any month as

10exceeds $36 multiplied by the total number of recipients

11of aid to the permanently a.nd totally disabled for such

12month; and (3) in the case of any State, an amount equal to

13one-half of the total of the sums expended during such

14quarter as found necessary by the Secretary of Health, 15Education, and Welfare for the proper and efficient admin- 16istration of the State plan, including services which are 17provided by the staff of the State agency (or of the local 18agency administering the State plan in the political sub- 19division) to applicants for and recipients of aid to the per- 20manently and totally disabled to help them attain self-sup- 21tort or self-care."

22 FEDERAL MATCHING PERCENTAGE 23 SEC. 505. Subsection (a) of section 1101 of the Social 24Security Act is amended by adding at the end thereof the fol- 25lowing new paragraph: 95 1 "(8)(A) The 'Federa.l percentage' forany State 2 (other than Puerto Rico, the VirginIslands,and Guam) 3 shall be 100 per centum less the Statepercentage; and 4 the State percentage shall be thatpercentage which 5 bears the same ratio to 50per centum as the square of 6 the per capita income of such State bearsto the square 7 of the per capita income of the continentalUnited States 8 (excludingAlaska);exceptthat(i)the Federalper- 9 centage shall in no case be less than 50per centum or 10 more than 70 per centum, and(ii)the Federal per- 11 centage shall be 50 per centum for Alaska and Hawaii.

12 "(B) The Federal percentage for each State(other 13 than Puerto Rico, the VirginIslands,and Guam) shall 14 be promulgated by the Secretary betweenJuly 1 and 15 August 31 of each even-numberedyear, on the basis of 16 the average per capita income of each Stateand of the 17 continental United States(excluding Alaska) for the 18 three most recent calendaryears for which satisfactory 19 data are available from the Department of Commerce. 20 Such promulgation shall be conclusive foreach of the 21 eight quarters in the period beginning July1 next suc- 22 ceedingsuch promulgation: Provided, That the Secre- 23 taryshall promulgate such percentageas soon as possible after the enactment of the Social SecurityAmend- 25 ments of 1958, which promulgation shall be conclusive 9E

1 for each of the eleven quarters in the periodbeginning

2 October 1, 1958, and ending with the close of June 30,

3 1961."

4 EXTENSION TO GUAM

5 SEc. 506. Section 1101 (a)(1) of the Social Security

6Act is amended by striking out "Puerto Rico and theVirgin

7Islands" and inserting in lieu thereof "Puerto Rico, the Vir-

8gin Islands, and Guam". 9 INCREASE IN LIMITATIONS ON PUBLIC ASSISTANCE PAY-

10 MENTS TO PUERTO RICO AND THE VLRGIN ISLANDS ii. SEC. 507. (a) Section 1108 of the Social Security Act is

12amended by striking out "$5,312,500" and "$200,000" and

13inserting in lieu thereof "$8,500,000" and "$300,000", re-

14spectively, by striking out "and" immediately following the

15semicolon, and by adding immediately before the period at

16the end thereof ";andthe total amount certified by the

17Secretary under such titles for payment to Guam with respect

18to any fiscal year shall not exceed $400,000".

19 (b) The heading of such section is amended to read

20"LIMITATION ON PAYMENTS TO PUERTO RICO, VIRGIN

21. ISLANDS, AND GUAM".

22 MATERNAL AND CmLD WELFARE GRANTS FOR GUAM

23 SEC. 508. Such section 1108 is further amended by

24adding at the end thereof the following new sentence: "Not- 97

1 withstanding the provisions of sections 502 (a)(2), 51

2 (a)(2), and 522 (a), and until such time as the Congress

3may by appropriation or other law otherwise provide, the

4Secretaryshall,inlieuofthe $60,000, $60,000, and

5$60,000, respectively, specified in such sections, allot such

6smaller amounts to Guam as he may deem appropriate."

7TEMPOBARY EXTENSION OF CERTAIN SPECIAL PROVISIONS

8 REJJATING TO STATE PLANS FOR AID TO THE BLIND

9 SEC. 509. Section344 (b)of the Social Security Act

10Amendments of 1950 (Public Law 734, Eighty-first Con-

11gress), as amended, is amended by striking out "June 30,

12 1959" and inserting in lieu thereof "June 30, 1901".

13 SPECIALPBOVISIOX FOR CEBTAIN INDIANS REPEALED

14 SEC. 510. Effective in the case of payments with respect

15to expenditures by States, under plans approved under title

16 I, IV, orX of the Social Security Act, for quarters beginning

17after September 30, 1958, section 9 of the Act of April 19,

181950, as amended (25 U. 5. 0. 639), is repealed.

19 TECHNICALAMENDMENT

20 SEC. 511. Section 2(a)(11)of the Social Security

21Act is amended by inserting before t.he period at the end

22thereof ",includinga description of the steps taken to assure,

23 inthe provision of such services, maximum utilization of

24other agencies providing similar or related services".

H.IR. 13549 7 98

1 EFFECTIVE DATES

2 SEC. 512. Notwithstanding the provisions of sections 305 an(i 345ofthe Social Security Amendments of 1956,

4as amended, the amendments made by sections 501, 502, 503, 504, 505, and 506 shall be effective—

6 (1)in the case of money payments, under a State

7 planapproved under titleI, IV, X, or XIV of the

8 Social Security Act, for months after September 1958,

9 and

10 (2) in the case of assistance in the form of medical or any other type of remedial care, under such a plan,

12 with respect to expenditures made after September 1958.

13The amendment made by section 506 shall also become

14effective, for purposes of title V of the Social Security Act,

15for fiscal years ending after June 30, 1959.The amend-

16ments made by section 507 shall be effective for fiscal years

17ending after June 30, 1958.The amendment made by

18section 508 shall be effective for fiscal years ending after

19June 30, 1959.The amendment made by section 510 shall

20become effective October 1, 1958. 21 TITLE VT—MATERNAL AND CHILD WELFARE

22 CHILD WELFARE SERVICES

23 SEC. 601. Part 3 of title V of the Social Security Act

24is amended to read as follows: 99

1 "P&ip 3—CHUD-WELFARESERVICES

2 "APPROPRIATION

3 "SEC. 521. For the purpose of enabling the United

4States, through the Secretary, to cooperate with State public-

5welfare agencies in establishing, extending, and strengthen-

6ing public-welfare services (hereinafter in this title referred

7to as 'child-welfare services') for the protection and care of

8homeless, dependent, and neglected children, and children

9in danger of becoming delinquent, there is hereby authorized iotobe appropriated for each fiscal year, beginning with the jjfiscalyear ending June 30, 1959, the sum of $17,000,000.

12 "LOTMENTS TO STATES

13 "SEC. 522. (a) The sums appropriated for each fiscal

14year under section 521 shall be allotted by the Secretary

15for use by cooperating State public-welfare agencies which

16have plans developed jointly by the State agency and the

17Secretary, as follows: lie shall allot to each State suchpor-

18tion of $60,000 as the amount appropriated under section

19521 for such year bears to the amount authorized to beso

20appropriated; and he shall allot to each State an amount

21which bears the same ratio to the remainder of thesums so

22appropriated for such year as the product of (1) the popula-

23tion of such State under the age of 21 and (2)the allot- 24 ment percentage of such State (as determined under section 100

I 524) hears tothe sum of the corresponding products of all

2 the States.

3 "(Ii)(1)If the amount allotted to a State under sub-

4scctioii(a) for any fiscal year is less than such State's base

5allotnient, it shall be increased to such base allotment, the total

6of the increases thereby required being derived by propor-

7tionately reducing the amount alloted under subsection(a)

8to eadi of the remaining States, but with such adjustments

9as may Le necessary to prevent the allotment of any such

10remaining State under subsection(a) from being thereby

11reduced to less than its base allotment.

12 "(2) For purposes of paragraph(1)the base allot-

13ment of any State for any fiscal year means the amount 14which would be allotted to such State for such year under 15the provisions of section 521, as in effect prior to the enact- 16ment of the Social Security Amendments of 1958, as applied 17 to an appropriation of $12,000,000.

18 "PAYMENT TO STATES 19 "SEc. 523.(a) From the sums appropriated therefor 20and the allotment available under section 522, the Secretary 21shall from time to time pay to each State with a plan for 22child-welfare services developed as provided in such section 23522 an amount equal to the Federal share(as determined 24under section 524)of the total sum expended under such 25plan (including the cost of administration of the plan) in 101

I meeting the costs of district, county, or other local child-

2welfareservices, in developing State services for the encoiir-

3agement and assistance of adequate methods of comniwitv

4child-welfare organization, in payiIg the costs of returning

5any runaway child who has not attained the age of eighteen

6to his own community in another State, and of rnaintaining

7such child until such return (for a period not exceeding fifteen

8days), in cases in which such costs cannot be met by tile

9parents of such child or by any person, agency, or institution

10legally responsible for the support of SUChchild: Poiidcd,

11That in developing such services for children the facilities and

12experience of voluntary agencies shall be utilized in accord-

13ance with child-care programs and arrangements in the States 14and local communities as may be authorized by the State.

15 "(b) The method of computing and paying such amounts

16shall be as follows:

17 "(1) The Secretary shall, prior to the beginning of each 18period for which a payment is to be made, estimate the 19amount to be paid to the State for suchperiod under the 20provisions of subsection (a). 21 "(2) From the allotment available therefor, the Secr 22tary shall pay the amount so estimated, reduced or increased. 23as the case may be, by any sum (not previously adjusted 24under this section) by which he finds that his estimate of the

25amountto be paid the State for any prior period under this 102

1section was greater or less than the amount which should

2have been paid thereunder to the State for such prior period.

3 "ALLOTMENT PERCENTAGE AND FEDERAL SHARE

4 "SEC. 524.(a)The 'allotment percentage' for any

5State shall be 100 per centum less the State percentage;

6and the State percentage shall be that percentage which

7bears the same ratio to 50 per centum as the per capita in-

8come of such State bears to the per capita income of the con-

9tinental United States(excluding Alaska) ;except that

10 (A) the allotment percentage shall in no case be less than

1130 per centum or more than 70 per centum, and (B) the

12allotment percentage shall be 50 per centum in the case of

13Alaska and 70 per centuni in the case of Puerto Rico, the

14Virgin Islands, and Guam.

15 "(b)For thefiscal year ending June 30,1960, 16and each year thereafter, the 'Federal share' for any State

17shall be 100 per centum less that percentage which bears 18the same ratio to 50 per centum as the per capita income of

19such State bears to the per capita income of the continental 20United States (excluding Alaska), except that(1)in no 21case shall the Federal share be less than 33* per centum 22or more than 66* per centum, and (2) the Federal share 23shall be 50 per centum in the case of Alaska and 66* per 24centum in the case of Puerto Rico, the Virgin Islands, and

25Guam.For the fiscal year enàing June 30, 1959, the 103 1 Federal share shall be determined pursuant to the provisions 2of section 521 as in effect prior to the enactment of the 3Social Security Amendments of 1958. 4 "(c) The Federal share and the allotment percentage 5for each State shall be promulgated by the Secretary between 6July 1 and August 31 of each even-numberedyear, on the 7basis of the average per capita income of each State and of 8the continental United States(excluding Alaska)for the 9three most recent calendaryears for which satisfactory data 10are available from the Department of Commerce. Such 11promulgation shall be conclusive for each of the two fiscal 12years in the period beginning July 1 next succeeding such 13promulgation: Provided, That the Secretary shall promul- 14' gate such Fedelal shares and allotmentpercentages as soon 15as possible after the enactment of the Social Security Amend- 16ments of 1958, which promulgation shall be conclusive for 17each of the 3 fiscal years in the period ending June 30, 1901.

18 "REALLOTMENT 19 "SEc. 525. The amount of any allotment toa State 20under section 522 for any fiscal year which the State certifies 21to the Secretary will not be required for carrying out the 22State plan developed as provided in such section shall be

23available for reallotment from time to time,on such dates as 24the Secretary may fix, to other States which the Secretary 25determines (1) have need in carrying out their State plans 104

1so developed for sums in excess of thosepreviously allotted

2to them under that section and (2) will be able to use such

3excess amounts during such fiscal year.Such reallotments

4shall be made on the basis of the State plans so developed,

5after taking into consideration the population under the age

6of twenty-one, and the per capita income of each such

7State as compared with the population under the age of

8twenty-one, and the per capita income of all such States

9with respect to which such a determination by the Secretary

10has been made. Any amount so reallotted to a State shall

11be deemed part of its allotment under section 522."

12 MATERNAL AND CHILD HEALTH

13 SEC. 602.(a) Section 501 of such Act isamendedby

14striking out "for the fiscal year ending June 30, 1951, the

15sum of $15,000,000, and for each fiscal year beginning after

16June 30, 1951, the sum of $16,500,000" and inserting in

17lieu thereof "for each fiscal year beginning after June 30,

181958, the sum of $21,500,000".

19 (b) Section 502 (a)(2)of such Act is amended by

20striking out "for each fiscal year beginning after June 30,

211951, the Administrator shall allot S8,250,000 as follows:

22He shall allot to each State $60,000 and shall allot to each

23State such part of the remainder of the $8,250,000" and inserting in lieu thereof "for each fiscal year beginning after

25June 30, 1958, the Secretary shall allot $10,750,000 as 105

1follows: He shall allot to each State $60,000 (even though

2the amount appropriated for such year is less than $2 1,-

3500,000), and shall allot each State such part of the re- 4mainder of the $10,750,000".

5 (c.)Section 502(b)of such Act isamended by

6 striking out "the fiscal year ending June 30, 1951, the

7 sum of $7,500,000, and for each fiscal year beginning after

8June 30, 1951, the sum of $8,250,000" and inserting in

9lieu thereof "each fiscal year beginning after June 30, 1958,

10the sum of $10,750,000".

11 CRIPPLED CIIILDREN'S SERVICES

12 SEc. 603. (a) Section 511 of such Act is amended by

13striking out "for the fiscal year ending June 30, 1951, the 14sum of $12,000,000, and for each fiscal year beginning 15after June 30, 1951, the sum of $15,000,000" and inserting 16in lieu thereof "for each fiscal year beginning after June 30, 17 1958, the sum of $20,000,000". 18 (b) Section 512 (a)(2) of such Act is amended by 19striking out "for each fiscal year beginning after June 30, 201951, the Administrator shall allot $7,500,000 as follows: 21 He shall allot to each State $60,000, and shallallot the 22remainder of the $7,500,000" and inserting in lieu thereof 23"for each fiscal year beginning after June 30, 1958, the 24Secretary shall allot $10,000,000 as follows: He shall allot 25to each State $60,000 (even though the amount appropri-. 106

1ated for such year is less than $20,000,000) and shall allot

2the remainder of the $10,000,000".

3 (c)Section 512 (b)of such Act is amended by strik-

4ingout "the fiscal year ending June 30, 1951, the sumof

5$6,000,000,and for each fiscal year beginning after June

630, 1951, the sum of $7,500,000" and inserting in lieu

7thereof "each fiscal year beginning after June 30, 1958, the

8sum of $10,000,000".

9 TITLE VII—MISCELLANEOTJS PROVISIONS

10FURNISHING OF SERVICES BY DEPARTMENT OF HEALTH,

11 EDUCATION, AND WELFARE

12 SEC. 701.Section 1106 (b)of the Social Security Act

13is amended to read as follows:

14 "(b) Requests for information, disclosure of which is

15authorized by regulations prescril)ed pursuant to subsection

16 (a)of this section, and requests for services, may, subject

17to such limitations as may be prescribed by the Secretary to

18avoid undue interference with his functions under this Act,

19be complied with if the agency, person,or' organizatioi

20making the request agrees to pay for the information or serv-

21ices requested in such amount, if any (not exceeding the cost

22of furnishing the information or services), as may be deter-

23mined by the Secretary.Payments for information or serv-

24ices furnished pursuant to this section shall be made in ad- 107

1 vance or by way of reimbursement, as may be requested by

2 the Secretary, and shall be deposited in the Treasury as a

3special deposit to be used to reimburse the appropriations

4 (including authorizations to make expenditures from the

5Federal Old-Age and Survivors Insuraiice Trust Fund and

6the Federal Disability Insurance Trust Fund) for the unit

7or units of the Department of Health, Education, and Wel-

8fare which furnished the information or services."

9 COVERAGE FOR CERTAIN EMPLOYEES OF TAX-EXMPT

10 ORGANIZATIONS WHICH PAIDTAX

11 SEC. 702.(a)Section 403(a)(1)of the Social

12Security Amendments of 1954 is amended by striking out

13"has failed to file prior to the enactment of the Social Security

14Amendments of 1956" and inserting in lieu thereof "did

15not have in effect., during the entire period in which the

16individual was so employed,".

17 (b) Section 403(a) (3)oftheSocialSecurity

18Amendments of 1954 is amended by inserting "performed

19during the period in which such organization did not have

20a valid waiver certificate" after "service".

21 (c) Section 403(a) (5) oftheSocialSecurity

22Amendments of 1954 is amended by inserting "without

23knowledge that a waiver certificate was necessary, or" after

24"in good faith and". 108

1 MEANINGOFTERM "SECRETARY"

2 SEC. 703. As used in the provisions of the Social Secu-

3rity Act amended by this Act, the term "Secretary", uxiless

4the context otherwise requires, means the Secretaryof

5Health, Education, and Welfare.

6 AMENDMENT PRESERVING RELATIONSHIP BETWEEN RAIL-

7 ROAD RETIREMENT AND OLD-AGE, SURVIVORS, AND

8 DISABILITY INSURANCE

9 SEC. 704. Section 1(q)of the Railroad Retirement

10Act of 1937, as amended, is amended bystrikingout "1957" iiand inserting in lieu thereof "1958". Passed the House of Representatives July 31, 1958. Attest: RALPH R. ROBERTS, Clerk. 85TH CONGRESS 20 SEssioN • • AN ACT To increase benefits under the Federal Old-Age, Survivors, and Disability Insurance System, to improve the actuarial status of the Trust Funds of such System, and otherwise improve such System; to amend the public assistance and maternal and child health and welfare provisions of the Social Security Act; and for other purposes.

AUGUST 1, 1958 Read twice and referred to the Committee on Finance

OPTIONAL rOAM NO. 10 wo-lo' UNITED STATES GOVERNMENT SSA -OASI Memorandum 1:A:P TO : Administrative, Supervisory DATE: August1,1958 and Technical np1oyees

FROM : Victor Cbristgau, Director Bureau of' Old-Age and Survivors Insurance

SUBJECT:Director's Bulletin No. 284 House Passage of Social Security Bill

Yesterdaythe House of Representativespassed H.R. l3549, theSocial SecurityAct Amendments of 1958, a description of which vas sent to you with Director's Bulletin No. 283. The votewas 375to2 in favor of the bill.

During the Housedebate on the bill, Chairman Millsof the Committee on Ways and Means pointed out that to have voted a benefit increase higher thanthe7percentprovided for would have allowednothingfor improvement of the actuarial status of the trust fund. The Cc*nmittee report on the bill (and a nunber of statements during the House debate) stressed the importance of assuring a financially sound system for the millions of people who are currently contributing toward their future benefits. The following excerpt fr the report shows the weight given to financing considerations by the Committee:

"Your committee hasnotbeen able to reccmnend benefits at as high a level as, in our opinion, would be justified if one considered solely the need for this protection. The increase of approximately 7percentprovided by the bill is actually somewhat short of the rise in the cost of living that has taken place since l954. We believe, however, that itis essential thatasiiificant part of the additional contributions to the system that we are recommending be used to strengthen the financing of the system rather thanto improve benefit protection.

"The latest long-range cost estimates prepared by the Chief Actuary of the Social Security Administration show that the old-age and survivors insurance part of the program (as distinct from the disability part) is further out of actuarial. balance than your ccminittee considers it prudent for the program to be. When the last major changes were made in 1956 theestimates prepared at that time showed an expected long- range actuarial deficit for old-age and survivors insurance of two-tenths of 1 percentof payroll on an intermediate cost basis. More recent estimates show that the old-age and survivors insurance part of the program is now expected to be -2-

Administrative,Supervisory and Technical nployees--8/1/58

outofbalanceby fifty-seven one-hundredths of 1 percent of payroll.Yourcaiinitteebelieves thatadeficit of the size indicated by present cost estimates shouldnotbe permittedto continue.

"The disability insurance partof the program, on the other band, showsa definite actuarial surplus. This is not unexpected;your ccinmittee, when itrecended the adoption of disability insurance benefits in 1956, decided thatit wouldbe best to go into the program on a conservative basis. Not only are the contributions Imposed for the purpose of financing the disability side of the program fully adequate to meet outgo, so far as can be determined at this time, but there is some roc*n for Improvements in the protection afforded to disabled workers and their families."

The increase in taxes and the accelerated tax schedule provided by the bill would finance the additional benefitsprovided under the program andwould reduce the deficiency--based on actuarial estimates into perpetuity--in the QASIprogramto about 0.25 percent of payroll. The ChiefActuary has statedthat with a deficiency of this size thesystem can be considered in actuarial balance and In fact the Board of Trustees hadconsideredthe fundtobe in actuarial balance when a similar imbalance was estimated under the present program.Under the bill the disability Insurance trust fund would have a favorable actuarial balance of 0.01 percent of payroll. The Caittee was also concerned with Improving the relation between income and outgo of the OASI trust fund over the next few years: "In addition to the need for action to reduce the insufficiency in the financing of old-age and survivors insurance over the long range, there is need for action to improve the condition of the system overthenext few years.This year, for the first time in the 18 years since benefits were first paid, the ince to the old-age and survivors insurance trust fund is slightly less than the expenditures from the fund.If no changes are made, outgo will continue to exceed income in each year until 1965. Your committee believes thata situation whereoutgo exceeds inccane for 7or8yearsis one that should not be permitted to continue. We believe that public confidence in the system--so necessary if it is to provide real security for the people--may be impaired if the trust fund continues todecline." -3- Administrative,Supervisory and Technical nplorees-_8/l/58

Underthebill, the expected excess of OASIbenefitdisbursements over contribution incomein1959 would be greatly reduced, andinl96O-61 contributionincane would exceed benefit cItsbursements.Contributions to the disability insurance trust fundare expectedto be well. in excess of disbursements.

Thefollowingstatement by the Committee is also siiificant:

"Your ccxuñittee also thinks it 1nortantthat thepresent generation of contributors bear a greater proportion of the truecostof the benefits provided by the 'programthanthey willunder the present schedule of contribution rate8. The level-premium cost of the present program on an intermediate basis is estimated at about 8 l/1i percent of payroll--scnnewbat over 1i percent each if split equally between employers and employees. Under the present tax schedule the contributors will not pay taxes as high as their share of the level-premium cost until 1975. While your committee believes that the taxes required to supportthe program should be imposed on the econcuygradually, under the present schedule the reflection of the true cost of the program in the contribution rate is being too long postponed.

"All of these considerations have led the cittee to recommend thata newschedule of contribution rates be put into effect Lnmiediately."

In recnmending an increase in benefit amounts, the Cctnmittee cited thefinding of the Bureau's1957 beneficiary survey thatformost beneficiaries OASI benefits constitute the major source of income.It concluded that:

"Clearly, since their benefits areèuch animportant part of their incane, the beneficiaries will be in real need if benefit amountsare not adjusted in the lightofrising prices, wages, and levelsof living." You will also be interested ix the Caninittee's reasonsfor recending anincrease in the earnings base: "Provision is made in your ccnnittee's bill for increasing from$1, 200to $1,8OOthemaximum on the annual amount of earnings on which workers pay social-8ecurity taxes andwhich count inthe ccmiputation of their benefits. Your ccinmittee believesthe rise in earnings level8 makes Buch an increase apropriate. If.the earnings base.is not increased, as wages rise,thewage-related character of the systemwillbe weakened Administrative, Supervisory and Technical nployees--8/l/58 and eventually lost.In 1950 about 61i.percentof regularly employedmen wouldhave had all their iages credited toward benefitsunder the $3,600basethat bias adopted in that year. The$li.,200 earnings base adopted in l951i would have covered all thewages of about 56percentof such workers. In 1957 only li.3 percent had all their wages credited; about 56percent would have received full credit under a $li.,800base. An increase to $li.,800would restorethe situation which prevailed in l951i andthus,in ouropinion,wouldbea conservative adjustment to the rise in wages thathas takenplace."

In reconending benefits for dependents of disability insurance beneficiaries, elimination of the offset, retroactive disability benefits, andmodificationsin the work requirements for disability insurance benefits andthe disability freeze, the Committee said:

"Thedisability provisions thatweredecided upon at that time 957werepurposely conservative in order to reduce toa minimum the problems that are inevitable in a nei program of this kind.It was expected that, as experience under these provisions was gained, and as the soundness of the program was confirmed by this experience, necessary improvements would follow.Your conunittee believes that it is now time to take steps in the direction of improving the disability insurance program. In recognition of the favorable e.xperience that hasdevelopednot only underthe cashbenefit provisions but also under the so-called disability freeze provisions that have been in effect since 1955, your cnittee is recQnniending a broadening of the protectionnow provided against the risk of extended, total disability. It is also recozmnend.tng removal of certain provisions that have proved unnecessarily strict and, in sczne situations, have caused inequities."

B.R. 13514.9 now goes to the Senate for consideration.We will, of course, keep you informed of its progress.

Victor Cbristgau

Calendar No.2453 85TH CoNoiuss SENATE REPORT 2d Ses8io'n j No. 2388

SOCIAL SECURITY AMENDMENTS OF 1958

AUGUST 14, 1958.—Ordered to be printed

Mr. BYRD, from the Committee on Finance, submitted the following REPORT (To accompany H. R. 13549]

The Committee on Finance, to whom was referred the bill (H. R. 13549) to increase benefits under the Federal old-age, survivors, and disability insurance system, to improve the actuarial status of the trust funds of such system, and otherwise improve such system; to amend the public assistance and maternal and child health and welfare provisions of the Social Security Act; and for other purposes, having considered the same, report favorably thereon with amendments and recommend that the bill as amended do pass. ORGANIZATION OF THE REPORT The committee approved bill would amend three important parts of the Social Security Act. Old-age, survivors and disability insurance, title II; Public Assistance, titles I, IV, X, and XIV; and Maternal and Child Welfare, title V.Sections I, II, and III of this report are concerned primarily with old-ag, survivors, and disability insurance. Section IV is concerned with public assistance and maternal and child welfare, and section V is a section-by-section analysis of the bill. I. PURPOSE AND SCOPE OF' OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE PROVISIONS The old-age and survivors insurance benefit structure and the contribution schedule by which the benefits are financed have not been revised by the Congress since 1954.Since that date there have been significant increases in wages and prices; also, new cost estimates have shown an increase in the actuarial deficit of the program.In the

1 20006 2 SOCIAL SECURITY AMENDMENTS OF 1958 light of these developments, the committee believes that the Congress. should take prompt action to assure that the program be kept both effective and actuarily sound. Twelve million now rely on monthly checks from the social-security system as the foundation of their economic security.For the overwhelming majority of these aged and disabled persons, widows and orphans, these benefits are the major source of their support.As. prices have risen in recent years the purchasing power of social- security benefits has been cut. Moreover, there are 75 million people who are currently contributing under the social-security program toward the benefits that they and their families will need when they in thcir turn become too oldor too disabled to work or when they die.These 75 million persons, together with their dependents, represent practically all Americans not already in the retired group.The benefit protection toward which these workers are contributiig has been deteriorating in relation to the wages they are now earning.For although wages have gone up, the system has not been adjusted to take this fact into account.In a dynamic economy such as oUrs it is necessary that the social-security system be periodically amended to keepup to date the maximum earnings base which governs how much of each worker's annual earnings is subject to contributions and counted toward his social-security protection, in order to keep benefit amounts generally in line with changing prices, wages, and levels, of living. The latest long-range cost estimates prepared by the Chief Actuary of the Social Security Administration show that the old-age andsurvivors insurance part of the program (as distinct from the disability part) is further out of actuarial balance than it had been expected to be.'When the last major changes were made in 1956 the estimates. prepared at that time showed an expected long-range actuarial deficit for old-age and survivors insurance of two-tenths of1 percent of payroll on an intermediate cost basis.More recent estimates show that the old-age and survivors insurance part of the program isnow expected to be out of balance by fifty-seven one-hundredths of 1 percent of payroll. The disability insurance part of the program, on the other hand,. shows a definite actuarial surplus.This is not unexpected, since the benefits that were provided when disability insurance protectionwas. first made a part of the soèial-security program in 1956 were ut on a conservative basis.Not only are the contributions imposed for the purpose of financing the disability sideof the program fully adequate to meet outgo, so far as can be determined at this time, but there is. some room for improvements in the protection afforded to disabled workers and their families. Your committee believes that there are four major ways in which the old-age survivors and disability insurance programs should be improved.In addition, the committee has approved certain improvements in the public assistance and maternal and child welfare programs which are discussed later in this report. The committee-approved bill would make the following major changes in the OASDI programs: 1. The financial basis of the old-age, survivors, and disability insurance program would be strengthened so as to make certain that. it is sound. SOCIAL SECURiITYAMENDME\'TS OF1958 3 2. Old-age, survivors, and disability insurance benefit amounts would be increased. 3. The maximum limitation on the annual, amount of earnings that can be credited toward benefits and taxed for old-age, survivors, and disability insurance purposes would be increased. 4. The disability insurance provisions of the program would be improved through the provision of benefits for dependents of disabled workers, through the elimination of the provision offsetting certain other disability benefits, and in other ways.

A. STRENGTHENING THE FINANCiAL BASIS OF THE SYSTEM In addition to the need for actioii to reduce the insufficiency in the financing of old-age and survivors insurance over the long range,. there is need for action to improve the condition of the system over the next few years.This year, for the first time in the 18 years since benefits were first paid, the income to the old-age and survivors insurance trust fund is slightly less than the expenditures from the fund.If no changes are made, outgo will continue to exceed income in each year until 1965.A situation where outgo exceeds income for 7 or 8 years is one that should not be permitted to continue,. Public confidence in the system—so necessary ifitisto provide real security for the people—may be impaired if the trust fund continues to decline. These considerations have led the committee to approve the provision of the House bill under which a new schedule of contribution rates would be put into effect immediately.

B. INCREASE IN BENEFIT AMOUNTS The committee believes that adjustments in old-age, survivors, and disability insurance benefit amounts are necessary at this time.Since the last benefit increase wa put into effect in 1954, wages have increased by about 12 percent and prices by 8 percent.The generally higher level of the economy means that a benefit increase is required now if the program is to continue to be effective and if the serious hardships beneficiaries are facing are to be relieved. A survey of beneficiaries made by the Department of Health, Edu- cation,•and Welfare in December 1957 showed that for most beneficiaries old-age and survivors insurance benefits constitute the major source of income.Of the married couples on the benefit rolls, 12 percent had no income other than their benefits, nd 60 percent had less than $1,200 of such other income.If only permanent retirement income is considered, 30 percent of the married couples had no such income other than their old-age and survivors insurance benefits, and only 20 percent had as much as $1,200 of such other income.The situation of single retired workers and of aged widow beneficiaries is less favorable than that of the married couples.Clearly, since their benefits are such an important part of their income, the beneficiaries will be in real need if benefit amounts are not adjusted in the light of rising prices, wages, and levels of living. 4 SOCIAL SECURITYAMENDMENTSOF 1958

C. INCREASE IN TBE MAXIMUM EARNINGS BASE Provision is made in the committee-approved bill, as in the House bill, for increasing from $4,200 to $4,800 the maximum on the annual amount of earnings on which workers pay social-security taxes and which count in the computation of their benefits.The committee believes the rise in earnings levels makes such an increase appropriate. If the earnings base is not increased as wages rise, the wage-related character of the system will be weakened and eventually lost.In 1950 about 64 percent of regularly employed men would have had all their wages credited toward benefits under the $3,600 base that was adopted in that year.The $4,200 earnings base adopted in 1954 would have covered all the wages of about 56 percent of such workers.In 1957 only 43 percent had all their wages credited; about 56 percent would have received full credit under a $4,800 base.An increase to $4,800 would restore the situation which prevailed in 1954 and thus, in our opinion, would be a conservative adjustment to the rise in wages that has taken place.

D. IMPROVEMENTS IN DISABILITY PROTECTION The Soèial Security Amendments of 1956 extended the insurance J)rotectiOn of the social security program to provide monthly benefits for insured workers who are no longer able to work because of an extended total disability.The disability provisions that were decided upon at that time were purposely conservative in order to reduce to a minimum the problems that are inevitable in a new program of this kind.It was expected that, as experience under these provisions was gained, and as the soundness of the program was confirmed by this experience, necessary improvements would follow.In recognition of the favorable experience that has developed not only under the cash benefit provisions but also under the so-called disability freeze provisions that have been in effect since 1955, both the House and the committee-approvedbillsbroaden theprotection now provided against the risk of extended, total disability.They also remove certain provisions that have proved unnecessarily strict and, in some situations, have caused inequities. All of the recommended improvements in the disability provisions of the program can be adequately financed from the contributions already earmarked for the Federal Disability Insurance Trust Fund. (1)Benefits for dependentsof disability ins'urance beneficiaries Both the House and the committee-approved bills provide additional protection for the families of disabled workers.Present law provides monthly benefits for disabled workers who have attained age 50, but no provisions are made for the dependents of these people.This is a serious gap in the protection prov:ded under the program Ac- cordingly, the committee-approved bill, like the House bill, provides for monthly benefits for the dependents of disability insurance beneficiaries.These benefits would parallel those now provided for the dependents of retired workers. (2) Elimination of the disability benefits offset provision Boththe House bill and the committee-approved bill would elimi- iatc the disability benefits offset provision of present law.This SOCIAL SECURiTY AMENDMEtNTS OF1958 5 provisionrequires that the monthly social security benefits payable to disabled workers (and those payable to pe.rsonsdisabledin childhood) be reduced by the amount of any periodic benefit payable on account of disability under other Federal programs (other than veteran's compensation) or a State workmen's compensation system.The application of thisrequirement has produced inequitable effects. The committee believes that disability benefits payable under the national social security system should be looked upon as providing the basic protection against loss of income due to disabling illness, and we have concluded that it is undesirable, and incompatible with the purposes of the program, to reduce these benefits on account of disability benefits that are payable under other programs. (3) Retroactivity for applications for disability benefits and the disability freeze Both the House bill and the committee-approved bill also would make two changes in the disability provisions of the program that are designed to protect the benefit rights of disabled workers.To avoid penalizing disabled workers who do not file timely applications for disability benefits, both bills include a provision under which these benefits, like old-age insurance benefits, may be payable retroactively for as many as 12 months before the month in which the worker applies for them.For a sImilar reason—to assure that disabled workers who are eligible to preserve their benefit status through the present disability freeze provision are not precluded from doing so only because they fail to file timely applications for a disability freeze— the bills provide for a 3-year postponement of the present deadline, June 30, 1958, for filing fully retroactive disability freeze applications. (4)Modificationsin the work requirements for eligibility for disability protection Under present law a disabled worker may fail to qualify for disability insurance benefits or a disability freeze only because he did not work in covered employment during the last year or two before his impairment developed into a total disability.A disabled worker in this unfortunate position is likely to be one who, because he has a progressive illness, is unemployed for quite a few months before his impairment meets the law's requirement of disability for all sib- stantial gainful employment.The committee-approved bill, like the House bill, would alleviate this problem by relaxing the present recency-of-work test.The work requirements for eligibility for disability benefits and for the disability freeze would be made identical— the worker would have to be fully insured and have about 5 years of covered work out of the last 10 years before his disability began. In addition to the four major areas of improvements outlined above, the House bill and the committee-approved bill provide for less important but nevertheless significant changes in the old-age, survivors, and disability insurance program.These changes will clear up certain inequitable situations under present law, will improve family protection, will make it easier for certain groups to obtain coverage under the prorarn, and will facilitate administration of the program. These changes are spelled out in more detail in parts II and III of this report. 6 SOCIAL SECURITY AMENDMENTS OF 1958

J. FINANCIAL BASIS OF PROGRAM The total cost of the benefit proposals included in the committee bill is 0.59 percent of payroll so far as the old-age and survivors insurance part of the program is concerned.The increased revenue to the program that would result from the changes in the tax schedule and in the maximum earnings base would amount to 0.91 percent of payroll.Thus there would be an excess of income over outgo resulting from the proposals in the bill of 0.32 percent of payroll on the level-premium basis.Since under present law itis estimated that the actuarial deficit in the program amounts to 0.57 percent of payroll the net result of the bill would be to place the program in a position where it had an estimated actuarial deficit of 0.25 percent.This very substantial improvement in the financial basis of the program brings the anticipated deficit well within the range that will permit the program to be considered actuarially sound. Not only will the long-range financial picture be improved, but for the short range, too, the program will be more adequately financed. Under present law the OASI trust fund is expected to incur a deficit in every year from now until 1965.Under the committee bill, on the other hand, income will exceed outgo in every year from 1960 on for several decades, and even in 1959 the deficit will be substantially cut. Moreover, the ultimate combined tax rate—9 percent under the committee bill—will be reached in 1969 rather than in 1975, 50 that the time when the true cost of the program becomes apparent in current tax rates will be reached sooner and contributors will pay more nearly what the benefits are worth. II. SUMMARY OF PRINCIPAL PROVISIONS OF THE BILL A. OLDAGE, SURvIVORS, AND DISABILITY INSURANCE PROVISIONS 1. Individuals now on the benefit rolls and all future beneficiaries would have their benefits increased by about 7 percent, more at the minimum, over the levels provided in the present law.The minimum increase in the benefit of a worker who retired at or after age 65 would be $3.The average increase for workers now retired would be about $4.75.The increased benefits would be effective for January 1959; the first checks in the increasecLamounts would go out early in February.(Under the House bill, the increases would be effective for months after the second month following the month of enactment.) 2, The dollar ceiling on the total of benefits payable to a family would be raised from $200 to $254, which isequivalentto twice the maximum retirement benefit payable. 3. The total annual earnings on which benefits could be computed (and on which contributions would be paid) would be raised from $4,200 to $4,800, effective January 1, 1959. 4. Benefits would be provided for the dependents of disabled workers like those now provided for the dependents of retired workers. 5. The provision that now requires payments undcr certain other disability benefit systems to be offset against social security disability benefits would be repealed, so that a person eligible for a social security disability benefit and also for disability benefit under another system would receive the full amount of his social security benefit. SOCEAL SEC'URJITYAMENJYMFNTS OF1958 7

6.The work requirements that a disabled worker must meet to be eligible for cash disability benefits, and to .have his benefit rights frozen while he is disabled, would be changed to make it easier for a disabled worker whose disability has a gradual onset to qualify. Under the bill, the worker would no longer be required to have had 6 quarters -of coverage out of the 13 calendar quarters before he became disabled. (He would be required to be fully insured and to have 20 quarters of coverage out of the 40 calendar quarters before he became disabled.) 7. Disability insurance benefits (like all other benefits now provided) would be paid for as much as 12 months before the month in which an application for the benefits is ified.Present law contains no provision for retroactive disability insurance payments. 8. The June 30, 1958, deadline for ffling fully retroactive applica- •tions for the disability freeze would be postponed for 3 years. 9. The law would be changed to provide that a person whose earnings exceed $1,200 in a year will not lose a benefit under the retirement test for any month in which he has earned wages of $100 or less rather than $80 or less as under present law. 10. Where earnings exceed the amount allowed under the retirement test without loss of benefits, the excess earnings woiñd be -charged to months beginning with the first month of the year. Under present law the excess is charged to months in reverse order beginning with the end of the year. The change means that where an individual's or a family's benefits are increased during a year, the benefits suspended by reason of earnings will be the smaller ones that were payable for the early months of the year. 11. The law would be changed to provide that where a person over ge 18 is the child of a deceased or retired insured worker and has been disabled since before age 18, benefits would, in general, be paid to the child without requiring the proof required under present law 'that he has been dependent upon the worker for his support.The change would make the requirement for the disabled adult child the same as for the child under age 18. 12. Benefits would be provided for the dependent parent of a deceased worker even though there is a widow or child of the worker who is or may become eligible for benefits.Under present law a parent can qualify only if there is no such widow or child. 13. A lump sum would be paid to the widow of a deceased worker only if she was living in the same household with him or has paid his burial expenses. 14. Benefits would be paid to a child if the child had been living in the worker's household, if the child had not been supported by anyone else, and if he was adopted by the widow of the worker within 2 years after the worker died. 15. Benefits would be paid to the mother of a child if the child had been adopted by the mother's deceased husband even though they had not been married for as long as a year. 16. Benefits would be paid to the adopted child of a retired worker even though the child had not been adopted for as long as 3 years. 17. Where a survivor of a deceased worker was (or might at retirement age become) eligible for benefits based on the worker's earnings 8 SOCIAL SECURITYAMENDMENTS OF 1958 but loses eligibility by remarriage, the survivor couldbecomeeligible7 immediately or upon attainment of retirement age, for benefits on her second husband's earnings record. 18. 'Where two secondary beneficiaries age 18 or over marry each other, for example, the dependent parent of one worker and the widow of another, the payment of benefits to both beneficiaries would be continued.Under present law, both lose benefits.Childhood disability benefits would be continued when the person receiving them marries a person receiving old-age or disability benefits. 19. Changes would be made in the coverage provisions of the program: (1) to facilitate coverage of certain State and local government employees who are in positions covered by a retirement system; (2) to permit limited retroactive coverage for employees of certain nonprofit organizations; (3) to extend coverage to certain turpentine workers; (4) to provide social security credits for earnings which a person has from a partnership during the year of his death; and (5) to provide that social security wage credits of $160 will be credited for each month of service performed during World War II by American citizens in the armed forces of certain countries which fought against our enemies in that war. 20. Several changes in technical provisions would be made to facilitate administration of the program. 21. The tax rates now scheduled in the law would be increased by one-fourth of 1 percent each for employees and employers, and three- eighths of 1 percent for the self-employed, above the rates now scheduled, and the scheduled increases in the rates would take place every 3 years instead of every 5 years.The revised schedule would be as follows: [Percenti

Employers EmployeesSelf.employed

1959 24 23. 3*4 19O—62 19f3—65 5 4 4 6 1969 andthereafter 434 44 6%

B. PUBLIC ASSISTANCE PROVISIONS The bill provides a new formula for Federal participation in public assistance providing additional funds to all States and maximum flexibility in meeting medical care needs and other special needs. The formula also recognizes the limited fiscal capacity of the lower income States. It extends the public assistance program to Guam, increases the Federal fund limitations for Puerto Rico and the Virgin Islands, and extends for 2 years a special provision applying to blind programs in Missouri and Pennsylvania. C. MATERNAL AND CHILD WELFARE PROVISIONS Authorizations are increased: for maternal and child health from $16.5 million to $21.5 milhon, for crippled children's services from $15 million to $20 million, and for child welfare services from $12 million to $17 million. SKYC1AL SECURITYAMENDMENTS OF 1958 9 In the child welfare services program existing differences in treatment of urban and rural children are eliminated and appropriate allotment and matching provisions are included. All three programs are extended to Guam. III. DISCUSSION OF OLD-AGE, SURVIVORS, AND DISABILITY PROVISIONS A. INCREASE IN OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE BENEFITS (1) General The committee-approved bill would, like the House bill, raise the level of benefit payments to reflect changes in the economy and to assist in providing more adequate basic protection for beneficiaries. ()Increasein benefit amounts 'flie bill would provide for an increase of about 7 percent over the levels provided in the present law, with a minimum increase of $3 in the benefits payable to a retired worker who came, on the rolls at or after age 65.Proportionate but slightly smaller increases, due to the actuarial reduction, would be received by women workers who elected to retire before age 65. For retired workers now on the benefit rolls, monthly payments would range from $33 to $116, as compared with $30 to $108.50 under present. law.For those coming on the rolls in the future, the range of benefit payments, taking into account the increased earnings base, would be from $33 to $127, although it will be many years before anyone will be able to get the maximum amount. Table A presents illustrative, benefit amounts for various family groups under the bill as compared with present law. (3) Family beneflt The bill would make a change in the. maximum amount of monthly benefits payable to a family on the basis of an insured worker's earnings record.The bill would raise the present $200 per month limitation on family benefits to $254, an amount equal to twice the maximum benefit provided by the bill for a retired worker.The minimum benefit payable where there is only one survivor beneficiary would be increased from $30 to $33. (4)Benefittable to replace formulas and conversion table The bill would provide for a consolidated benefit table to be used in determining benefit amounts both with respect to future beneficiaries and those now on the benefit rolls.This benefit table would replace the formulas and table now in the law.It is believed to constitute. an improvement in the method of determining benefit amounts by making it easier for covered workers and beneficiaries to determine what benefits they are entitled to, and by simplifying the benefit- computation process. In essence, this benefit table is based on the 1954 act benefit formula increased by 7 percent.The table, however, yields slightly higher benefits for very low average wages so as to reflect a minimum increase of $3.Amounts for retired workers have, in general, been rounded to the nearest dollar.

S. Rept. 2388, 85—2——--2 10 SOCIAL SECURITYAMENDMENTS OF 1958

Effectivedate of benefit increase.—Thelouse bifi provided that the increased benefits would be payable for months following the second month after the month of enactment of the bill.If the bifi should be enacted in August, the increased benefits would become payable beginning with November 1958.The committee believes that the increased benefits should not become payable in advance of the time when the increased tax rates that the bill would provide will become effective.The committee-approved bill, therefore, provides for payment of the increased benefits for months beginning with January 1959.

TABLE A—Illustrative monthly benefits payable under present law and H. 1?. 13549

Old-age benefits Survivors' benefits

Worker 1 Man and wife 2Widow, widower, Widow and Average monthly earnings child or parent 2 children

Present Bill Present Bill Present Bill Present Bill law law law law

$50 $30.00 $33 $45.00 $49.50 $30.00 $33.00 $50.20 $53.10 $100 55.00 59 82.50 8850 41.30 44.30 82.60 8860 $150 68.50 73 102.84) 109.50 51.44) 54.80 120.00 120.00 $200 78. 50 84 117. 84) 126. (10 58.90 63. 00 157. 10 161.60 $250 88. 50 95 132.80 142. 50 66. 44) 71. 30 177. 20 190. 10 $300 98. 50 105 147. 84) 157. 50 73. 90 78. 84) 197. 10 210. 20 $350 108.50 116 162.80 174.00 81.44) 8700 200.00 232.00 $400 (3) 127 (3) 19050 (8) 95.30 (3) 254.10

I Workeraged 65 or over at time of retirement, and wife aged 65 or over at the time when she comes on thc rolls. 2Survivorbenefit amounts for a widow and 1 child or for 2 parents would be the same as for a man and wife. 8Notapplicable since maximum average monthly earnings amount possible Is $850.

B.EARNINGSBASE Under the committee's bill the maximum amount of annual covered earnings counted for tax and benefit purposes would be raised from $4,200 to $4,800: effective January 1, 1959.This change gives recognition to the principle that benefit levels should reflect varying levels of individual earnings.The American social-insurance system, in relating benefits to prior earnings, rests on the principle that conditions of individual security and individual incentive require a relationship between benefits and previous standards of living.Unless the earnings base is adjusted as earnings rise, practically all regular full-time workers may in time be earning more than the current base, and their benefits will bear little relationship to their previous living standards. C. BENEFITS FOR DEPENDENTS OF DISABILITY INSURANCE BENEFICIARIES Under present law, benefits are provided for dependents of an insu.red worker who dies or becomes entitled to retirement benefits, but no provision is made for benefits for dependents of an insured worker who becomes entitled to disability insurance benefits. The committee's bill, like the louse bill, would provide for the payment of monthly benefits to the dependents of persons receiving disability insurance benefits.The categories of dependents eligible for these benefits would parallel those eligible for benefits as dependents SOC]IAL SIXYUBLVFYAMENDMEiWPS OF1958 11 ofold-age insurance beneficiaries—namely, wives and dependent husbands who have reached retirement age; ijnmarried dependent children (including sons or daughters disabled in childhood); and wives who have an eligible child in their care. The monthly benefits payable to dependents of disabled workers would be subject to the same conditions as are applicable to the dependents of old-age insurance beneficiaries, except that, in addition, the proposed dependents benefits would be suspended if the disabled worker refused, without good cause, to accept vocational rehabilitation. It is estimated that about 180,000 dependents of workers eligible for disability insurance benefits could become eligible for these monthly benefits beginning with the first month after the month in whicn the bill is enacted. In providing monthly benefits for the dependents of workers en-h titled to disability insurance benefits, the committee has given recognition to the problems confronting families whose breadwinners have been forced to stop work because of total disability.The benefit amount payable to the disabled worker under the present disability insurance provisions does not provide adequate protection for his family.The needs of the family of a disability insurance beneficiary are as great as, or greater than, the needs of the family of an old-age insurance beneficiary.It is reasonable to assume, also, that in a Feat many cases the care which the disabled person requires makes it difficult, if not impossible, for his wife to increase the family income by working.In addition, a person receiving disability insurance benefits frequently has high medical expenses. The provision included in both the House bill aud the committee- approved bill recommended by the committee would close a serious gap in the disability insurance protection now provided under the social security program and can be adequately financed from the funds which will flow from social security taxes already provided and earmarked for the Federal Disability Insurance Trust Fund.

D. OTHER IMPROvEMENTS IN THE DISABILITY PRovISIoNS (1) Elimination of disability benefits offset provision The committee has given further consideration to the disability insurance benefit offset provision, under which the social security disability insurance benefits are reduced by the amount of any periodic benefit payable to an individual on account of disability under certain other Federal programs or under State workmen's compensation laws.This offset provision was included in the law at the time that the provisions for social security disability benefits were enacted to prevent duplication between the new social security disability benefits and other disability payments pending the development of administrative experience under the new program. In the light of experience in the operation of the offset provision, the committee has concluded that it can now be eliminated.Experi- ence with the social security disability provisions indicates that the danger that duplication of disability benefits might produce undesirable resWts is not of sufficient importance to justify reduction of the social security disability benefits.The committee-approved bill, like the House bifi, provides for the elimination of this offset provision. 12 •SøCiM SECURITY AMENDMENTS OF 1958 ()Retroactivepayment of disability insurance benelits Under present law, old-age and survivors insurance benefits may be paid for as many as 12 months before the month in which application isfiled.Disability insurance benefits, however, may not be paid retroactively except in the case of applications for such benefits that were filed before January 1,1958.The Department of Health, Education, and Welfare has advised the committee that a significant proportion of disabled persons applying for disability insurance benefits this year have failed to make timely applications and as a result have lost benefits for 1 or more months.The Department recommended enactment of a provision to meet this problem. In the opinion of the committee, it is reasonable to expect that, in the absence of a provision under which applications for disability insurance benefits may have a retroactive effect, loss of disability insurance benefits due to delays in claiming them will be a continuing problem.The committee approved bill, like the House bill, therefoFe would provide that applicants for disability insurance benefits be allowed the same 12-month period in which to file application without incurring loss of benefits as is allowed applicants for old-age and survivors insurance benefits under present law. (3) Modification of work requirement foreligibility fordisability protection Under present law, to qualify for disability insurance benefits a disabled worker must meet three requirements insofar as his work under the old-age, survivors, and disability insurance program is concerned.He must be fully insured; he must be currently insured, which means that lie must have at least 6 quarters of coverage (about 1% years of work) in the period of 13 calendar quarters ending with the quarter in which he became disabled; and he must have a total of 20 quarters of coverage (about 5 years of work) out of the 40 calendar quarters ending with the quarter in which he became disabled.At present the work requirements for a disability freeze differ from those for monthly disability insurance benefits in that fully insured status is not required for the freeze. A substantial number of persons who have worked regularly and for long periods in employment or self-employment covered under the old-age, survivors, and disability program are not able to meet the work requirements for disability protection.The committee's bill, like the House bill, would delete the provisions of present law which require that a worker be currently insured in order to be eligible for disability benefits or for the disability freeze and would make the work requirements for disability-insurance benefits and the disability freeze alike by adding hilly insured status as a requirement for eligibility for the disability freeze. It is estimated that a result of the changed work requirements about 35,000 persons who cannot qualify for disability-insurance benefits under present law could, upon filing applications, become immediately eligible for benefits, and that, in addition, about 15,000 persons could qualify immediately for a disability freeze. Under a program which provides protection against loss of earnings on account of disability, it is reasonable and desirable that there be reliable means of limiting such protection to those persons who have had sufficiently long and sufficiently recent covered employment to SOCLA.L SECURiITY AMENDMDNTSOF1958 13 indicate that they probably have been dependent upon their earnings. It was to meet this purpose that the disability work requirements were designed, and, in most cases, the present work requirements produce results in accordance with this purpose.Experience under the program has indicated that the currently insured status requirement has operated to deny disability protection in some cases in which there is no doubt that a worker's earnings have been cut off as a result of disability.A large number of disabled workers fail to meet the currently insured status requirement even though they have worked for substantial periods in covered employment or self-employment and have normally been dependent upon their earnings.In many instances, these are persons whose work was interrupted by a progressive illness and who at the onset of this impairment met the work requirements for disability protection.It is not uncommon that an impairment which is not severe enough to meet the definition of disability in the law causes a worker to be absent from work for extended periods.The result is that by the time the impairment becomes serious, enough to meet the definition of disability, the worker has lost his currently insured status. The committee's bill, like, the House bill, would provide for the elimination of the currently insuieci eligibility requireineiit for disability protection. Beginning in July 1961, it will be possible for a worker who has qualified for the disability freeze under the present provisions to fail to qualify for either disability insurance benefits at age 50 or old-age insurance benefits at age 65 because lie may not be fully insured. There will be instances, too, where dependents or survivors benefits will not be payable even though the worker had been allowed a disability freeze.The addition of the fully insured status requirement for the disability freeze will remove the anomalous situation wherein a period of disability may be established for a worker who cannot later qualify for benefits, whose dependents cannot qualify if he lives to retirement age, or whose survivors may not qualify if he dies. The requirement of 20 quarters of coverage out of the 40 calendar quarters ending with the quarter of disablement, together withthe fully insured status requirement, should provide reasonable and adequate assurance that the protection afforded by the disability provisions will be keyed to loss of earnings on account of disability. (4)Extensionof theperiodfor filing disability freeze applications that arefully retroactive Under the disability freeze provision of present law, an individual's social security earnings record can be frozen during a period of extended total disability so that his inability to work during such period of disability will not result in a reduction in, or loss of, his old-age survivors, and disability insurance entitlement.Under present law, applications for the disability insurance freeze that were filed before July 1, 1958, were fully retroactive—to the actual beginning date of the individual's disability in most instances—thus enabling applicants to preserve their rights under the program even though they had been disabled for a number of years.In the case of applications for the freeze that are filed after June 30, 1958, however, an applicant's period of disability cannot be determined to have begun more than 1 year before the date his application is filed.As a consequence, persons 14 SoCIALSECURITYAMENDMENTS OF 1958 with longstanding disabilities whose applications are filed after dune 30, 1958, are likely to be ineligible for the disability freeze and thus are exposed to loss of all protection under the program. The committee's bill, like the House bill, would postpone through June 30, 1961, the June 30, 1958, deadline for filing applications for the disability freeze that are fully retroactive.As a result of this change, it is estimated that about 30,000 additional disabled workers could, upon filing application, become immediately eligible for disability insurance benefits; and an additional 10,000 could become immediately eligible for a disability freeze. Both bills would also provide that in the case of applications for the freeze that are filed after June 30, 1961, an applicant's period of disability cannot be determined to have begun more than 18 months before application is filed.

E. IMPROVEMENT OF THE RETIREMENT TEST The committee-approved bill, like the House bill, would make several minor modifications of the retirement test to improve public understanding and administration of the test. (1) Change from $80 to $100 amount of wages used in determining whether benefits must be withheld for a month Under present law, when beneficiaries earn more than $1,200 in a year, benefits may be withheld for months in which wages excçed $80. This provision is very difficult for beneficiaries to understand because it does not seem to be consistent with the $1,200 exempt amount, which is often intrrpreted as meaning $100 per month.Increasing the $80 figure to S100 would facilitate administration by improving public understanding and a.et'eptance of the test.It would also eliminate hardships to beneficiaries who lose benefits because they misunderstand the present test. (2) Change the order in which excess earnings are allocated to the months of the year Under the present law, any earnings in excess of the $1,200 annual exempt amount are divided into units of $80 and the units are charged to months beginning with the last month of the taxable year and then to the remaining months of the year, working backward, for the purpose of determining which monthly benefit checks must be withheld under the retirement test.The committee-approved bill, like the House bill, reverses the order of charging excess earnings to months so that the $80 units are charged to months starting with the first month of the taxable year and working forward.This provision will alleviate the problems relating to the present order of charging excess earnings.In many cases the wife of a beneficiary attains the qualifying age and comes on the rolls during a year in which the husband is on the rolls for the entire year.If, in such cases, the husband has excess earnings, the wife may lose some or even all of her bellefit payments because the excess earnings are allocated starting with the last month of the year.Also, where benefits are recomputed or otherwise increased during the year the present method of allocating excess earnings operates to the disadvantage of beneficiaries. SOICJIAL SECUIJTY AMFANDMEFSOP 1958 15 (3) Filing of annual report Present law requires all beneficiaries under age 72 to make a report of earnings if they earn over the exempt amount.The committee- approved bill would modify this requirement so that a beneficiary who receives no benefits for the year because he has already notified the Bureau of Old-Age and Survivors Insurance that he expected to earn over the exempt amount would not have to file another report at the end of the year. F. DEPENDENTS' BENEFITS (1) Dependency of a disabled child Under present law, a disabled child who is 18 or over at the time he applies for child's insurance benefits is required to show that he is receiving at least one-half of his support from his parent, or that he was receiving at least one-half of his support from the parent at the time the parent died.On the other hand, a child who is under 18 when he applies for benefits is generally assumed to have been dependent on his father (and on his mother if she has had a significant amount of recent work).Under the committee bill, disabled children who are 18 or over- would be deemed dependent on their parents just as younger children are. (2) Payment of parent's benefits where a widow or child survives The existence of a widow or child actually or potentially entitled to monthly benefits now prevents the payment of monthly benefits to the dependent parent of a deceased worker.This bar operates even if the potentially entitled wife or child never becomes entitled to benefits.The situation has been aggravated by the fact that the 1957 amendments made possible the payment of benefits to a widow who was not living with her husband at the time of his death, so that the existence of a widow who was not living with the worker now prevents payment of benefits to a parent who was living with and dependent on the worker at the time of his death.The committee- approved bill would remove this restriction. (3) Benefits for an adopted child after the worker's death An adoptable child living as a member of a worker's family and supported by him is, from th point of view of the purposes of the social security program, just as much in need of replacement of the support the child had received from the worker as is the worker's own child.If after the worker's death the surviving spouse adopts the child; the child should, for purposes of receiving child's insurance benefits, be treated as an adopted child of the deceased worker. The committee-approved bill provides for payment of benefits to a child in such cases if at the time of the worker's death the child was a member of the wOrker's household, if the child was not being supported by any other person, and if the worker's spouse adopts the child within 2 years after the worker dies. (4) Removal of 3-year requirement for a child adopted by a retired worker Present law requires that the adopted child of a retired worker must have been adopted for at least 3 years before becoming eligible for child's insurance benefits.This provision was intended to provide protection against abuses through adoptions undertaken to secure 16 SOCIALSECURITY AMENDMENTS OF 1958 rights to benefits.Adoptions are subject to approval by the courts of the various States, and it does not seem that benefits should be denied to all adopted children in order to prevent a rare case of abuse. The committee-approved bill would make benefits payable to an adopted child immediately after adoption. (5) Elimination of duration of marriage requirement where a child has been adopted by the deceased worker In order to eliminate an anomalous situation where a child cait qualify for benefits but his mother who is caring for him cannot, the committee-approved bill,like the House bill, would provide that where a child of a surviving spouse had been adopted by the deceased worker, the surviving spouse can qualify for mother's widow's, or widower's benefits even if married to the deceased worker for less titan a year. (6) Elimination of duration of marriage requirements where a potential secondary beneficiary marries Under present law, the bcnefit rights of a dependent or secondary beneficiary are terminated ifthe dependent marries and yet the dependent cannot qualify for benefits on the new spouse's earnings record until the marriage has lasted for some time.Where, for example, the dependent has reached retirement age and marries an old-age beneficiary, the dependent cannot qualify for benefits on the basis of the new spouse's earnings until after 3 years, or until after 1 year if the new spouse should die.The committee believes that when a person who has rights to a dependent's benefit marries and the rights to the previous benefit are terminated, there should be no delay in permitting the person to qualify as a dependent of the new spouse for a benefit based on the new spouse's earnings record.The committee-approvedbill,likethe House billwould remove, the duration-of-marriage requirements for husband's,wife's widow's, and widower's benefits if at the time of the marriage the person was or could have become entitled to a depeiidnt's benefit. (7) Provision that marriage will not terminate benefits in certain situations When a secondary beneficiary marries, such person's benefit is terminated under present law.If he marries a person who is or who will become entitled to an old-age insurance benefit, he may qualify for a new benefit based on the earnings of the new spouse.But if the new spouse is also receiving a secondary benefit, the benefits of both are terminated and ordinarily neither beneficiary can become entitled to any new benefits.The committee-approved bill, like the House bill, would eliminate the hardship in these cases by providing that marriage would not terminate a benefit wherc a person receiving mother's, widow's, widower's, parent's, or childhood disability benefits marries a person receiving any of these benefits or where a person receiving mother's or childhood disability benefits marries a person entitled to old-age or disability insurance benefits. (8) Reinstatement of rights to mother's insurance benefits The committee's bill would reinstate rights to mother's insurance benefits which were terminated by remarriage if the new husband dies before the marriage has lasted long enough for the wife to qualify for mother's benefits on his earnings. SOCDAL S UBTY AMEtDMErS OF 1958 17

G. COVERAGE (1) Employment fornonprofitorganization Under present law when two-thirds of the employees ofa religious, charitable, or other nonprofit organization desire coverage under the OASDI program and the organization ifies a certificate waiving its tax-exempt status, coverage may be effective on the first day of the calendar quarter in wbich the certificate is ified, or the first day of the succeeding calendar quarter.Because of a number of circumstaiices, some nonprofit organizations find it difficult tD ifie the certificate promptly.Since present law makes no allowance for reasonable delays in ffling waiver certificates, and since coveragecan be effective no earlier than the quarter in which a certificate is ified, employees of these organizations are deprived of coverage for a period of time. The committee's bill, like the House bill, makes provisir4 fora reasonable period of retroactive coverage.Both bills include a provision under which organizations ffling certificates after the enactment date of the bifi and prior to 1960 could choose to be covered as of the beginning of 1956.Organizations that ified certificates after 1955 but before enactment could similarly choose to be covered retroactively for as far back as the begiiming of 1956, provided they file a request for such coverage prior to 1960.In addition to these temporary provisions for coverage retroactive to the beginning of 1956, the bills include a permanent provision under which coverage could be retroactive for 1 year before the certificate is ified. Coverage would also be made possible for employees of certain non profit organizations which under present law cannotsecure the necessary concurrence of two-thirds of their employees because some of their employees are covered by a public retirement system and do not desire social-security coverage.For social-security coverage purposes, the employees of a nonprofit organization who are members of such a retirement system will be treated as a group separate from the employees who are not members. ()Retroactivecoverage forcertainemployeesof State and local governments Under the present provisions of the Social Security Act, employment occurring before the execution of a State-Federal coverage agreement may, within limits specified in the law and at the option of the State, can be credited under old-age, survivors, and disability insurance. This retroactive coverage is available only for individuals whoare still employees on the date the agreement providing coverage is approved by the Secretary of Health, Education, and Welfare.Both the committee-approved bifi and the House bill would permit States to provide retroactive coverage, within the general time limits applying to State and local employment, for individuals who are employees on any date specified by a State which is (1) not earlier than the date the State submits its agreement or modification to the Secretary of Health, Education, and Welfare and (2) not later than the date the agreement is executed by the Secretary.If an individual is in the employ of the State or local government on the date specified by the State he would be covered for whatever retroactive period is provided for thegroup of which he is a member, even though his employment is terminated before the agreement is executed.

S. Rept. 2388, 85—2--———a 18 SOCIALSECURITY AMENDMENTS OF 1958 This provision would help to prevent hardships which can occur under present law in cases where an individual leaves the employ of a State or locality—because of death, a change of jobs, retirement, or for some other reason—during the period when a coverage agreement between the State and the Secretary of Health, Education, and Welfare is in the process of being negotiated or executed.At present, due to the time that may elapse during this period of negotiation, employees who had reason to expect they would get social-security coverage but whose employment is terminated before the agreement is executed lose the coverage that would otherwise have been provided.In some such situations, because of this loss of coverage, the employee has been unable to qualify for old-age insurance benefits when he retired.In other instances, the employee has died_and his family has not been able to qualify for survivors benefits. (3) Addition of Masswh'usetts and Vermont to the States which may provide coverage through division of retirement systems The Social Security Amendments of 1956 included a provision permitting eight States (Florida, Georgia, New York, North Dakota, Pennsylvania, Tennessee, Washington, and Wisconsin) and the Terri- tory of Hawaii to divide their retirement systems into two parts so as to obtain old-age, survivors, and disability insurance coverage, under the States' coverage agreements with the Department of Health, Education, and Welfare, for only those States and local government employees who desire such coverage, provided all future entrants into the retirement system are covered under old-age, survivors, and disability insurance.In 1957this provision was extended to four additional States (California, Connecticut, Minne- sota, and Rhode Island) and to all interstate instrumentalities. Your committee's bill would extend this provision to Massachusetts and Vermont, which have expressly requested such extension. (4)Facilitatingcoverage under the provisions for division of State and local government retirement systems The bill would make two changes which would facilitate coverage of certain retirement system members under the provision permitting specified States to extend coverage to only those members who desire such coverage, provided all persons who later become members are covered.Under one of the changes, those persons not originally choos- ing coverage would have an additional opportunity to elect such coverage.The other change would provide for the coverage under this provision of persons who have an option to join a State or local retirement system but have not exercised that option. Under present law, when a State or local government retirement system is divided to provide social-security coverage for those members who want coverage, the members who fail to choose coverage do not get a second chance to obtain it.Your committee believes that there is a need for legislation which would allow individuals not initially in the group desiring coverage to have a limited additional period of time to consider, or reconsider, whether they wish to come under old-age, survivors, and disability insurance.Problems have arisen in some instances because individuals who would have expressed a desire for coverage if they had an opportunity to do so did not have this opportunity for various reasons, such as absence from s'ociAi jjyA ENDME'I'S OF 1958 19 work because of illness.In other cases, persons who indicated that they did not desire social-security coverage later changed their minds. Your committee's bill would afford an additional opportunity for obtaining social-security coverage to individuals whowere included in the group of persons not desiring coverage.Under the bill,a State would be permitted to modify its coverage agreement with the Department of Health, Education, and Welfare atany time before 1960, or, if later, within 1 year after coverage is approved for the group in question, to transfer these people to the group desiring poverage.Such a transfer would be made only in the case of mcli- viduals who ified a request with the State before the date of approval by the Secretary of the modification proposing the transfer. Under present law, only persons who are actually members ofa State or local government retirement systemmay obtain coverage under the provision permitting specified States to providecoverage for only the members who want coverage.The committee's bill, like the House bill, would provide for the coverage under this provision of individuals who have an option to join the Stateor local system but who have not joined.Under both bills, when coverage is provided under the divided retirement system procedure bymeans of a coverag& action that is approved after 1959, the State would be required to treat individuals having an option to join the State or local system in the same manner as members of the system.Thus, the State would be re9uired to give these persons the same opportunity to obtain social- security coverage as is given to members, and all persons who later become eligible to join the State or local system wou'd automatically be covered under social security, just as new membersare covered. The coverage under the divided-retirement-system provision of persons who have not exercised their option to join a system would be at the discretion of the State in the case of coverage actions that are completed before 1960.In the case of coverage actions which have already been completed, such persons could be covered under the provision of the bill which would afford individuals a second chance to join the group of persons desiring social-security coverage. (5) Facilitate spcial security coverage of persons in positions undermore than one retirement system Under present law, State and local government employees in positions under retirement systems may be covered under old-age, survivors, and disability insurance only upon a favorable referendum vote by the members, or under the provisions which permit specified States to cover only those members of a system who desire coverage, provided all future members are covered. A person in a position covered under more than one State or local retirement system cannot be brought under social security unless all of the State and local retirement systems under which his position is covered take action to come under social security.Even if this action is taken, there are some circumstances under which he cannot be brought under social security.Moreover; a person who is a member of one State and local retirement system and, though not a member, has the option of joining another such system cannot be brought under social security in the absence of action by both systems. As a result of the present restriction, it is often difficult for persons in positions covered by more than one State or local retirement 20 SOCIAL SECURITYAMENDMENTS O 1958 system to gain old-age, survivors, and disability insurance protection even when a retirement system group of which they are members comes under the program.The committee's bill, like the House bill, would permit these people to come under social security with a retirement-system coverage group without regard to what action,if any, the other retirement system that covers their positions takes on social security coverage.However, this provision would not apply to individuals who, on the date the State's coverage agreement is made app)i•. cable to a retirement system, are not actually members of such system (though their positions are covered by the system) and are members of anottier system; nor would the provision apply to persons in policemen's and firemen's positions in States where persons in such positions cannot be covered.The proposed change would be optional for the States with respect to retirement systems covered before 1959; beginning in 1959, States would be required to apply the changed procedure when they extend coverage to retirement system groups. (6) Turpentine workers The committee bill, like the House bill, would extend coverage to workers engaged in the production of turpentine and gum naval stores who are employed by the original producerof the crude gum. These workers would be covered under the present provisions applicable to other agricultural workers. Many of the people in this group are employed only temporarily orseasonally in the production of turpentine and gum naval stores so that they are likely to have already earned credits under the social security program in other work. Even those workers covered for the first time will, after a relatively short period of regular covered work, acquire survivors protection for their families, and after a somewhat longer period of covered work will acquire retirement and disability protection under the program. (7) Coverage of partnership earnings in the year of partner's death As a result of a change made. in the Internal Revenue Code of 1954, a member of a partnership cannot getsocial security credit for his earnings from the partnership in the year of his death.The committee bill, like the House bill, provides that a deceased partner's distributive share of partnership income shall be included for social security purposes in computing his net earnings fromself-employment for the year of his death.The distributive share of a partner who dies after the date of enactment of the bill would be, for social security purposes, mandatorily included in his net earnings from self-employment.The distributive share of a partner who died after 1955 and on or before the date of enactment may be so included upon the filing of an amended social security tax return.Although this amendment affects only a small number of people, it corrects an inequity in present law.The amendment will enable some farm operators, lawyers, and others who were brought under the program under the 1954and 1956 amendments to acquire an insured status which they would otherwise be unable to attain.In the future the amendment will, in some cases, provide needed social security credits for persons who die while members of a partnership. SOCIIAL SE4CTJ1IIITYAMENDMEtNTS OF1968 21 (8) Social security credits for certain American citizens who served n the armed forces of allied co'untries Under present law, to assure that veterans who served in the Armed Forces of the United States have approximately thesame status under old-age, survivors, and disability insurance as they might have had if military service had not interfered with tIeir employment, wage credits of $160 are provided for each month of their active service in the Armed Forces of the United States during World War II and the post-World War II period.Both the committee-approved bill and the House bill would make comparable provision for American citizens who served in the armed forces of countries which fought with the United States against our enemies during the World War II period from September 16, 1940, to July 24, 1947, inclusive. Before the United States entered World War II a number of Ameri- cans joined the armed forces of countries traditionally friendly with the United States.These citizens either left employment covered by social security to enter service abroad or probably would have worked in covered employment had they not entered military service.The committee is concerned that they may have a gap in their social security coverage because of service with our allies during the time of war. Both the committee bill and the House bill provide safeguards to assure that the military service wage credits will be given only to persons who could reasonably have been expected to be in covered employment had they not been in service.The wage credits would be provided only for American citizens who entered into service in the armed forces of a foreign country before the United States entered World War II, provided the foreign country was, on September 16, 1940, at war with a country which became an enemy of the United States during World War IL

H. MISCELLANEOTJS PRovIsIoNs (1) Change in eligibility requirement for the lump-sum death payment Under present law, to qualify for the lump-sum death payment a spouse must have been "living with" the worker.The "living with" requirement is met if the spouse was living in. the husehold with the worker or receiving contributions from him, or if the worker was under a court order to contribute to the spouse's support.The committee-approved bill, like the House bill, would change the requirement to one that the spouse must have been living in the same household with the worker.Since the purpose of the lump-sum death payment is to help with the expenses incidental to the death of the worker, it is appropriate for the payment to be made only to the spouse who was actually living in the same household with the worker smce it can be assumed that she will take responsibility for those expenses.The widow who meets the requirement because her husband was contributing to her support, or because he was under court order to do so, cannot be presumed to have assumed the expenses incident to her husband's death.The spouse who was not living in the same household with the worker may receive the lump-sum death payment if she actually did pay the worker's burial expenses. 22 SOCIALSECURITY AMENDMENTS OF 1958 ()Authorizationto charge for certain serices provided by the Bureau of O1d-Ape and Survivors Insurance The law now authorizes the Bureau of Old-Age and Survivors Insurance to charge for furnishing informition, but not for services, for purposes not directly related to the administration of the old-age and survivors insurance program. The committee-approved bill, like the House bill, would provide an authorization for the Bureau to charge for services such as forwarding letters to account numbers holders for health research purposes, which are unrelated to the program and therefore could not properly be provided at the expense of the trust funds, and provides for the charges to be deposited in the trust funds. (3) Description of offenses that constitute fraud The present provision in the law prescribing penalties for fraudu- lent actions does not take into account the major amendments adopted in 1954 and 1956, such as the amendments relating to disability and the application of the earnings test to noncovere-I work. The committee-approved bill, like the House bill, would rnke the penalty provision applicable in connection with willful failure to disclose information, as well as with respect to positive actions, in connection with uncovered as well as covered earnings, and in connection with suspensions, terminations, and misuse of benefits, and disability determinations, as well as applications for benefits. (4)Removerequirement in the law that attorney representing claimant before the Secretary file with the Secretary a certificate of his right to practice before a court Under present law only a qualified attorney may represent claimants.The attorney must fle with the Secretary a certificate, from the presiding judge or clerk of a court before which he is admitted to practice, of his right to practice before that court.Inasmuch as a person who misrepresents himself as an attorney is subject to penalties outside the provisions of the Social Security Act, this provision should be eliminated.The committee-approved bill, like the House bill, provides statutory authority, for the Secretary no longer to require the filing of a certificate by an attorney and would conform to longstanding administrative practice in other fields.

I. INCREASES IN CONTRIBUTION RATES The committee-approved bill, like the House bill, increases the scheduled contribution rates on earnings paid by employers and employees by one-fourth percent above the rates now scheduled, with a corresponding increase for the self-employed, and provides that the future increases in the tax rate shall take place at 3-year, rather than 5-year intervals.The new schedule would be as follows:

Rate for em-Rate for self Years ployee and employed employer

Percent Percent 1959 23 38% 1960—62inclusive 3 4V 19r3—65nclustve 3 5 1966—68inctusive 4 6 1969 and later 4 6 SOCIIAL sEcuflirrY A EDMENTS OF1958 23

J. ACTUARIAL COST ESTIMATES FOR THE OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE SYSTEM (1) Financing policy The Congress has always carefully considered the cost aspects of the old-age, survivors, and disability insurance system when amendments to the program have been made.In connection with the 1950 amendments, the Congress was of the belief that the program should be completely self-sipporting from contributions of covered individuals and employers.Accordingly, in that legislation, the provision permitting appropriations to the system from general revenues of the Treasury was repealed.This policy has been continued in subsequent amendments.Thus, the Congress has always very strongly believed that the tax schedule in the law should make the system self-supporting as nearly as can be foreseen and therefore actuarially sound. The concept of actuarial soundness as it applies to the old-age, survivors, and disability insurance system differs considerably from this concept as applicable to private insurance although thereare certain points of similarity—especially as concerns private pension plans.Thus, the concept of "unfunded accrued liability" does not by any means have the same significance for a social insurance system as it does for a plan established under private insurance principles.In a private insurance program, the insurance company or other administer- irig institution must have sufficient funds on hand so that if operations are terminated, the plan will be in a position to pay off all the accrued liabilities.This, however, is not a necessary basis for a national compulsory social insurance system.It can reasonably be presumed that under Government auspices such a system will continue indefinitely into the future.The test of financial soundness then i not a question of sufficient funds on hand to pay off all accrued liabilities. Rather the test is whether the expected future income from tax contributions and from interest on invested assets will be sufficient to meet anticipated expenditures for benefits and administrative costs. Thus, it is quite proper to count both on receiving contributions from new entrants to the system in the future and on paying benefits to this group.These additional assets and liabilities must be considered to deteirnine whether the system is estimated to be in actuarial balance. Accordingly, it may be said that the old-age, survivors, and disability insurance program is actuarially sound if it is in actuarial balance by reason of the fact that future income from contributions and from interest earnings on the accumulated trust funds willover the long run support the disbursements for benefits and administrativeexpenses.Obviously,futureexperience may beexpected to vary from the actuarial cost estimates made now.Nonetheless, the intent that the system be self-supporting (or actuarially sound) can be expressed in law by utilizing a contribution schedule that, according to the intermediate-cost estimate, results in the system being in balance or substantially close thereto. The actuarial balance under the 1952 act 1wasestimated, at the time of enactment, to be virtually the same as in the estimates made at the time the 1950 act was enacted.(See table 1.)This was the case because of the rise in earnings levels in the 3 years preceding the enactment of the 1952 amendments being taken into consideration in the estimates for those amendments and this virtually offset the I The term '1952 act" (and similar terms) is used in this section to designate the system as It existed after the enactment of the amendments of that year. 24 SOCIAL SECURITY AMENDMENTS OF 1958 increased cost due to the benefit liberalizations made. New cost estimates made 2 years after the enactment of the 1952 amendments indicated that the level-premium cost (i. e., the average long-range cost, based on discounting at interest, relative to payroll) of the benefit disbursements and administrative expenses were somewhat more than 0.5 percent of payroll higher than the level-premium equivalent of the scheduled taxes (including allowance for interest on the existing trust fund). The 1954 amendments contained an adjusted contribution schedule that met not only the increased cost of the benefit changes in the bill, but also reduced somewhat the aforementioned lack of actuarial balance. Accordingly, it mny be said that under the 1954 act, the increase in the contribution schedule met all the additional cost of the benefit changes proposed and at the same time reduced substantially the "actuarial insufficiency" which the then current estimates had indicated in regard to the financing of the 1952 act. The estimates for the 1954 act were revised in 1956 to take into account the rise in the earnings level that had occurred since 1951—52, which period had been used as the basis for the estimates made in 1954.' Taking this factor into account reduced the lack of actuarial balance under the 1954 act to the point where, for all practical purposes, it was nonexistent; accordingly, the system was in approximate actuarial ba]ance.The benefit changes made by the 1956 amendments were fully financed by the increased contribution income provided so that the actuarial balance of the system was unaffected, and the program thus remained actuarially sound. New cost estimates have been made for the old-age, survivors, and disability insurance program taking into account recent experience and modified assumptions as to anticipated future trends.In the past 2. years, there has been a very considerable number of retire- ments from among the groups newly covered by the 1954 and 1956 amendments so that benefit expenditures have run appreciably higher than had been previously estimated.Moreover, the analyzed experience for the recent years of operation indicate that retirement rates have risen or, in other words, that the average retirement age has dropped significant]y.This may be due in large part to the liberalizations of the retirement test made in recent years, under which aged persons are better able to effect a smoother transition from full employment to full retirement.These new cost estimates indicate that the program as it is under the provisions of the 1956 act is out of actuarial balance by over 0.4 percent of payroll. The committee believes that not only should any liberalizations in benefit provisions be fully financed by appropriate changes in the tax schedulc or through other methods,- but also that the actuarial status of the system should be improved in similar manner so that the actuarial insufficiency is reduced to the point where it is virtually eliminated, namely below one-fourth of 1 percent of payroll, as has been the case generally ii the previous legislation. (2) Basic a.ssumptions for cost estimates Estimates of the future cost of the old-age, survivors, and disability insurance program are affected by many factors that are difficult to determine.Accordingly, the assumptions usedintheactuarial cost estimates may differ widely and yet be reasonable.Benefit CDAJJ SECUR1TY AM1NDM'1'S OF 1958 25 payments may be expected to increase continuously for at least the next 50 to 70 years because of factors such as the aging of the population of the country and the slow but steady growth of the benefit roll that is inherent in any retirement program, public or private, which has been in operation for a relatively short period. The cost estimates for the bill as reported by your committee are the same as those for the House-approved bill since no changes that are significant from an actuarial cost standpointhave been made.These estimates are given on a range basis so as to indicate the plausible variation in future costs depending upon the actual trend developing for the various cost factors.Both the low- and high-cost estimates are based on high economic assumptions, intended to represent close o full employment, with average annual earnings at about the level prevailing in 1956.In addition to the presentation of the cost estimates on a range basis, intermediate estimates developed directly from the low- and high-cost estimates (by averaging them) are shown so as to indicate the basis for the financing provisions. In general, the costs are shown as a percentage of covered payroll. This is the best measure of the financial cost of the program.Dollar figures taken alone are misleading.For example, a higher earnings level will increase not only the outgo but also, and to a greater extent, the income of the system.The result is that the cost relative to payroll will decrease. The cost estimates have been prepared on the basis of the same general assumptions and methodology as those contained in the Eighteenth Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Dis- ability Insurance Trust Fund (H. Doc. No. 401, 85th Cong.). It should be especially mentioned that the assumptions used in connection with the di8ability benefits are essentially the same as those used in the original cost estimates for these benefits when they were first incorporated in the law in 1956 (but with certain minor modifications of methodology that result in the cost being shown somewhat lower than originally estimated).The actual experience to date under the very strict definition of "disability" in the law has been significantly lower in cost than the intermediate-cost assumptions would indicate.Nevertheless, until somewhat more experience is available and can be analyzed, it is believed that these cost bases for the monthly disability benefits should be maintained.Disability incidence and termination rates can vary widely—much more so than mortality rates, which are a basic factor, in the retirement and survivor benefit cost calculations. The cost estimates are extended beyond the year 2000 since the aged population itself cannot mature by then. The reason for this is that the number of births in the 1930's was very low as compared with subsequent experience. As a result, there will be a dip in the relative proportion of the aged from 1995 to about 2010, which would tend to yield low benefit costs for that period.Accordingly, the year 2000 is by no means a typical ultimate year. An important measure of long-range cost is the level-premium contribution rate required to support the system into perpetuity, based on discounting at interest.It is assumed that benefit payments and taxable payrolls remain level after the year 2050.If such a level 5. Rept. 2388, 85—2—-——4 26 SOCIAL SECuRITYAMENDMENTS OF 1958 rate were adopted, relatively large accumulations in the trust fund would result, and in consequence there would be sizable ev 'ntual income from interest.Even though such a method of financing is not followed, this concept may nevertheless be used as a convenient measure of long-range costs.This is a valuable cost concept, especially in comparing various possible alternative plans and provisions, since it takes into account the heavy deferred benefit costs. The estimates are based on level-earnings assumptions.This, however, does not mean that covered payrolls are assumed to be the same each year; rather, they rise steadily as the population at the working ages is estimated to increase.Thus, the total taxable payroll under the bill is estimated at about $210 billion in 1960 and is estimated to increase to about $240 billion in 1970, $275 billion in 1980, $365 billion in the year 2000, and then to almost $500 billion eventually.If in the future the earnings level should be considerably above that which now prevails, and if the benefits for those on the roll are at some time adjusted upward so that the annual costs relative to payroll will remain the same as now estimated for the present act, then the increased dollar outgo resulting will offset the increased dollar income.This is an important reason for considering costs relative to payroll rather than m dollars. The cost estimates have not taken into account the possibility of a rise in earnings levels, although such a rise has characterized the past history of this country.If such an assumption were used in the cost estimates, along with the unlikely assumption that the benefits, nevertheless, would not be changed, the cost relative to payroll would, of course, be lower.If benefits are adjusted to keep pace with risin earnings trends, the year-by-year costs as a percentage of payro would be unaffected.In such case, however, this would not be true as to the level-premium cost—which would be higher, since under such circumstances, the relative importance of the interest receipts of the trust funds would gradually diminish with the passage of time. If earnings do consistently rise, thorough consideration will need to be given to the financing basis of the system because then the interest receipts of the trust funds will not meet as large a proportion of the benefit costs as would be anticipated if the earnings level had not risen. An important element affecting old-age, survivors, and disability insurance costs arose through amendments made to the Railroad Retirement Act in 1951.These provide for a combination of railroad retirement compensation and social secuiity covered earnings in determining benefits for those with less than 10 years of railroad service (and also for all survivor cases). Financial interchange provisions are established so that the old-age and survivors insurance trust fund and the disability insurance trust fund are to be placed in the same financial position in which they would have been if there never had been a separate railroad retirement program.It is estimated that, over the long range, the net effect of these provisions will be a relatively small gain to the old-age, survivors, and disability insurance system since the reimbursements from the railroad retirement system will be somewhat larger then the net additional benefits paid on the basis of railroad earnings. SYCTiAL SECIJRLITY AMiNDMENTS OF 1958 27 (3) Results of intermediate-cost estimates The intermediate-cost estimates are developed from the low-cost and high-cost estimates by averaging them (using the dollar estimates and developing therefrom the corresponding estimates relative to payroll).The intermediate-cost estimate does not represent the most probable estimate, since it is impossible to develop any such figures. Rather, it has been set down as a convenient and readily available single set of figures to use for comparative purposes. The Congress, in enacting the 1950 amendments and subsequent legislation, was of the belief that the old-age, survivors, and disability insurance program should be on a completely self-supporting basis or, in other words, actuarially sound.Therefore, a single estimate is necessary in the development of a tax schedule intended to make the system self-supporting.Any specific schedule will necessarily be somewhat different from what will actually be required to obtain exact balance between contributions and benefits.This procedure, however, does make the intention specific, even though in actual practice future changes in the tax schedule might be necessary.Likewise, exact self-support cannot be obtained from a specific set of integral or rounded fractional tax rates increasing in orderly intervals, but rather this principle of self-support should be aimed at as closely as possible. The contribution schedules contained in the 1956 act and in the bifi are as follows (in each case, one-fourth percent of the employer rate and of the employee rate, and three-eighths percent of the self- employed rate is used for monthly disability benefits):

Employee rate BeIfemployed rate (same for employer) Calendar year

1956 act Bifi 1956 act Bifi

Percent Percent Perce,U Percent 1958 23 23 3% 3% 1959 23 2½ 3% 38/4 1960to1962 2% 3 43 4½ 1963to1964 2% 3 43 63 196 33 3½ 4 65 1966 to 1968 33 4 4 6 1969 33 4½ 4 6 1970 to 1974 38% 4 53 6$4 1975 and after 43 4½ 6% 6

Under the bill, benefits would be computed from a table set forth in the law.At first glance. it would appear that an entirely new principle had been adopted. from that prevailing in the previous laws which specified a definite benefit formula and minimum and maximum benefit provisions.Actually, however, this tableis based on a definite formula and minimum and maximum benefit provisions, which are built into the table so that there is no change in the basic principle that has prevailed over the years.Certain approximations, however, have been made because of the necessary grouping involved in constructing a benefit table that, for facility of administration, is in terms of primary benefits rounded to the nearest dol]ar. The benefit formula for the primary insurance amount under the 1954 act was 55 percent of the first $110 of average monthly 28 SOCIALSECURITY AMNDMENTS OF1958 wage,plus 20 percent of the next 24O of such wage.The bill, by increasing benefits by 7 percent and by raising the maximum earnings base to $4,800, thus changed this formula to 58.85 percent of the first $110 of average mcnthly wage plus 21.40 percent of the next $290 of such wage (except that in some cases for average monthly wages of under $85, a slightly higher amount is payable so as to fi in with the increased minimum benefit).The minimum primary insurance amount (and the minimum benefit for a survivor family consisting of only 1 beneficiary) of $30 a month established under the 1954 act is increased to $33 by the bill. The 1954 act also established certain maximum family benefits, namely, the lesser of $200 or 80 percent of the average monthly wage, but with the exception that the latter maximum could no decrease the total family benefit below the larger of $50 or 13 times the primary insurance amount. Under the bili, the family maximum benefit provision has been changed so that itis the lesser of $254 (which is twice the maxirnirn possible primary insurance amount, namely, that for an avcrage monthly wage of $400) or 80 percent of average wage (as before), but with the exception that the latter maximum cannot reduce the total family benefit below the larger of 1 times the primary insurance amount (as before) or the primary insurance amount plus $20 (having the effect of setLing this exception not lower than $53).In actual applicatioxi, the 80 percent maximum will generally yield somewhat more than the mathematical result of thking 80 percent of the individual's average wage since the benefit table provides for maximum family benefits on the basis of 80 percent of the upper end of the range of average wages that produce the rounded primary insurance amount. As the bill would actually work out, the maximum family benefit would be as shown below for variois average monthly wages and primary insurance amounts:

Primary . Average monthly wage insurance Maximumfamily benefit amount

$67 or under $33-$40 Primary insurance amount plus $20. $67to$127 40-681timesprimaryinsuranceamount. $127 to $319 68—109 80 percent of average wage. $320 to $400 110—127 $254.

NOTE.—As shown above, in 2 instances, either of 2 methods of determining the maximum family benefit can be used (of course, yielding the same result) Table 1 shows that the bill would reduce the lack of actuarial balance of the old-age and survivors insurance system from 0.57 percent of payroll to 0.25 percent of payroll, or about the same level as was the case for the 1956 amendments at the time they were enacted.At the same time, the disability insurance system would have an actuarial surplus of 0.01 percent of payroll under the bill, as compared with 0.15 percent under the provisions of the 1956 act. The effect of the bill on the combined old-age, survivors, and disability insurance system would be to reduce the actuarial deficit from 0.42 percent of payroll to 0.24 percent, which is well within the margin of variation possible in actuarial cost estimates, and which is about the same as has generally prevailed in the past when the system has been in substantial actuarial balance.If the cost estimates had been based SOCDAL SCURIITYAMNDMETS OF1958 29 oncurrent earnings levels (instead of those for 1956), the lack of actuarial balance would have been shown as somewhat less than 0.24 percent of payroll. Table .2 traces through the change in the actuarial balance of the system from its situation under the 1956 act (acc6rdmg to the latest estimate) to that under the bill, according to the major changes proposed. It should be emphasized that in 1950 and in subsequent amendments the Congress did not recommend that the system be financed by a high, level tax rate in the future, but rather recommended an increasing schedule, which, of necessity, ultimately rises higher than the level-premium rate.Nonetheless, this graded tax schedule will produce a considerable excess of income over outgo for many years so that sizable trust funds will develop, although not as large as would arise under a level-premium tax rate.This fund will be invested in Government securities (just as is also the case for the trust funds of the civil-service retirement, railroad retirement, national service life insurance, and United States Government life-insurance systems).The resulting interest income will help to meet part of the higher benefit costs of the future. The revised contribution schedule in the bill has a twofold effect on the financing of the system.First, there is a uniform one-half of 1 percent increase in the combined employer-employee rate for all future years beginning with 1959.Second, the subsequent increases in the contribution rate, which are scheduled at 5-year intervals in present law, are advanced to 3-year intervals.As shown in table 2, the first of these changes quite naturally has the effect of producing additional income equivalent to 0.50 percent of payroll on a level- premium basis.' The other change in the tax schedule, namely accelerating the interval between increases has the levehpremium effect of increasing income to the system by 0.19 percent of payroll. Another change that would be made by the bill also has the effect of increasing the income to the system, namely, raising the maximum taxable and creditable earnings base from $4,200 to $4,800 a year. This change has the effect of increasing income by a gross amount equivalent to 0.55 percent of payroll on a level-premium basis, but this is partially offset by the additional benefits that will be paid on the higher earnings credited (namely, 0.32 percent of payroll on a level-premium basis).Accordingly,theneteffectisequivalent additional income of 0.23 percent of payroll on a level-premium basis. The level-premium cost of the old-age and survivors insurance benefits (without considering administrative expenses and the effect of interest earnings on the existing trust fund) under the 1956 act, according to the latest intermediate-cost estimate, is about 8.0 percent of payroll, while the corresponding figure for the bill is 8.4 percent. Similarly, the corresponding figures for the disability benefits are 0.35 percent for the 1956 act and 0.49 percent for the bill. To summarize the changes in the actuarial balance of the system, from the provisions of the 1956 act to the provisions as they would be under the bill, the increased revenue to the program that would result from the changes in the tax schedule and from the net effect of the increase of the maximum earnings base would amount to 0.91 percent of payroll on a level-premium basis insofar as the old-age and survivors insurance part of the progra.m is concerned.Correspondingly, the 30 SOCIAL SECTJWfl AMRNDMENTS OF1958 total cost of the old-age and survivors insurance benefit changçs in the bill would amount to 0.59 percent of payroll.Thus, there would be an excess of long-range income over outgo resulting from the provisions of the bifi of 0.32 percent of payroll on a level-premium basis. Since under the 1956 act it is estimated that the actuarial deficit in the program is 0.57 percent of payroll, the net result of the bill would be to place the program in a position where it has an estimated actuarial deficit of 0.25 percent of payroll.This very substantial improvement in the financial basis of the program brings the anticipated deficit well within the range that will permit the program to be considered actuarially sound. Table 3 presents the benefit costs under the bill for each of the various types of benefits. The level-premium contribution rates equivalent to the graded schedules in the 1956 act and in the bill may be computed in the same manner as level-premium benefit costs.These are shown in table 1for income and disbursements after 1957 (except for the original estimate for the 1956 act, which figures are based on operations after 1955).The figures for the net actuarial balance are also shown in table 1. Old-age and survivors insurance benefit disbursements for the calendar year 1958 would be increased by less than $1 mfflion by the bill, while there would, of course, be no additional income to the fund during the year.In calendar year 1959, such benefit disbursements under the bill would total about $9.4 billion, or an increase of about $650 million over present law.At the same time, contribution income for old-age and survivors insurance for 1959would amount to about $8.6 billion under the bill, or $1.1 billion more than under present law.Thus, the excess of benefit outgo over contribution income would be reduced from $1.4 billion under present law to $750 million under the bill.The decreases in the old-age and survivors insurance trust fund would not be as large as. the figures just given because the interest receipts would exceed outgo for administrative expenses and transfers to the railroad retirement accounts. In 1960, old-age and survivors inurance benefit disbursements under the bill would, according to the intermediate cost estimate, be $10.0 billion, or an increase of $700 million over the present law.At the same time, contribution income for old-age and survivors insurance for 1960 would be $10.6 billion under the bill, or $1.5billion more than under present law.Accordingly, in 1960, there would be an excess of contribution income over benefit outgo of about $600mi]lion under the bifi, whereas under present law there would be a deficit of about $300 million.Under the bill, the excess of contribution income would be about $500 million in 1961, about $50 millionin 1962, and about $1.5 billion a year in 1963 and in 1964.On the other hand, under present law, during each year of the period 1961—64, there would be deficits of contribution income as compared with benefit outgo ranging up to as much as Si billion. As to the disability insurance system, if the bill were to become law in August 1958, benefit disbursements for the calendar year 1958 would be increased by about $18 million, while there would, of course, be no additional income to the trust fund during the year.In calendar year 1959, such benefit disbursements under the bill would total about $430 million, or an increase of about $200 million over SOC11AJ SFACUIb1TY AMFJNDMEtNTS OF 1958. 31 presentlaw.At the same time, contribution income for disability insurance for 1959 would amount to about $980 million, or only a small increase over present law (solely because of raising the taxable earnings base, since there is no change made in the amount of contributions assignable to this program).Nonetheless, in 1959 there would be an excess of contribution income over benefit outgo of about $500 million.Similarly, in 1960 and the years immediately following, contribution income would be well in excess of benefit outgo—by as much as $300 million in 1965 and, of course, somewhat larger amounts in the earlier years. Table 4 gives the estimated operation of the old-age and survivors insurance trust fund under the bill for the long-range future, based on the intermediate-cost estimate.It will, of course, be recognized that the figures for the next two or three decades are the most reliable (under the assumption of level-earnings trends in the future) since the populations concerned—both covered workers and beneficiaries— are already born.As the estimates proceed further into the future, there is, of course, much more uncertainty—if for no reason other than the relative difficulty in predicting future birth trends, but itis desirable and necessary nonetheless to consider these long-range possibilities under a social-insurance piogram that is intended to operate in perpetuity. In every year after 1959, for almost the next 30 years, contribution income is estimated to exceed old-age and survivors insurance benefit disbursements. Even after the benefit outgo curve rises ahead of the contribution income curve in 1985, the trust fund will nonetheless continue to increase because of the effect of interest earnings (which more than meet the administrative expense disbursements and any financial interchanges with the railroad retirement program).As a result, this trust fund is estimated to grow steadily, reaching $50 billion in 1970, $99 billion in 1980, and $163 billion at the end of this century.In the very far distant future; namely, in about the year 2030, the trust fund is estimated to reach a maximum of about $295 billion, and then decrease slowly.Nevertheless, even 90 years from now, this estimate would show a trust fund of about $200 billion. The fact that the trust fund would not become exhausted until somewhat more than a century hence, indicates that the proposed tax schedule is not quite self-supporting although it is, for all practical purposes, sufficiently dose so that the system may be said to be actuarially sound.This general situation was also true for the 1950 act and for subsequent amendments, according to the estimates made when they were being considered.

• On the other hand, the disability insurance trust fund rows steadily.(See table 5.)In 1970, it is shown as being $5.7 billion, while in 1980 and 2000, the corresponding figures are $6.8 billion and $13.2 billion, respectively.There is an excess of contribution income over benefit disbursements for every year up to about 1975, and even thereafter the trust fund continues to grow because of its interest earnings.In fact, this trust fund is never shown Lo decline in any future year, which is to be expected since the level-premium cost of the disability benefits according to the intermediate-cost estimate is slightly lower than the level-premium income of one-half of 1 percent of payroll. 32 SoCIALSECURITYAMENbMENThOF1958 (4) Results of cost estimates on range basis As indicated previously in connection with table 1, the excess of (1) the level-premium contribution rate equivalent to the graded schedule in the law over (2) the level-premium cost of benefit payments and administrative expenses (after appropriate adjustment for the effect of interest earnings on the existing trust fund) is used to indicate the actuarial balance 9f the system,.A negative figure indicates the lack of actuarial balance; a positive figure indicates more than sufficient fin ancirig (according to the estimate).The following table shows these figures for the bill according to• the low-cost, high- cost, and intermediate-cost estimates for the old-age and survivors insurance program and for the disability insurance program. (computed as of the beginning of 1958): [Percenti

Item Low-cost High-costIntermediate- cost

Old-age and survivors Insurance

Contributions 8.05 7.98 8.02 Benefit cost' 7.29 9.42 8,27 Netdifference .76 —1.44 —.25

Disability Insurance

Contributions 0.50 050 0.50 Benefitcost' .33 .67 .49 Net difference .17 —.17 .01

I Includingadjustments (a) to reflect the lower contribution rate for the self-employed as compared with the combined employer-employee rate, (b) for the interest earnings on the existing trust fund, and (c) for administrative expense costs. Table 6 shows the estimated operations of the old-age and survivoS insurance trust fund for the low-cost and high-cost estimates, while table 7 gives corresponding figures for the disability insurance trust fund.Under the low-cost estimate, the old-age and survivors insurance trust fund builds up quite rapidly and in the year 2000 is shown as being about $280 billion and is then growing at a rate of about $14 billion a year.Likewise, the disability insurance trust fund grows steadily under the low-cost estimate, reaching about $45 billion in the year 2000, at which time its annual rate of growth is about $2 billion.For both trust funds, after 1959, benefit disbursements do not exceed contribution income in any year in the foreseeable future. On the other hand, under the high-cost estimate, the old-age and survivors insurance trust fund builds up to a maximum of about $85 billion in about 25 years, but decreases thereafter until it is exhausted in the year 2010.Under this estimate, benefit disbursements from the old-age and survivors insurance trust fund are smaller than contribution income during all years before 1980, except 1959 and 1962 (in the latter year a relatively small deficit would be shown). As to the disability insurance trust fund, in the early years of operation, contribution income materially exceeds outgo, and this is so until 1965.Accordingly, the disability insurance trust fund, as SOC11AL SECUELITY AMENDMENTS OF U) 58 33 shownby this estimate, would be about $3 billion in 1965 and would then slowly decrease until being exhausted in 1976. These results are consistent and reasonable, since the system on an intermediate-cost estimate basis is intended to be approximately self-. supporting, as indicated previously.Accordingly, a low-cost estimate should show that the system is more than self-supporting, whereas a high-cost estimate should show that a deficiency would arise later on. In actual practice, under the philosophy in the 1950 and subsequent acts, as set forth in the committee reports therefor, the tax schedule would be adjusted in future years so that neither of the developments of the trust funds shown in tables 6 and 7 would ever eventuate. Thus, if experience followed the low-cost estimate, and if the benefit provisions were not changed, the contribution rates would probably be adjusted downward—or perhaps would not be increased in future years according to schedule.On the other hand, if the experience followed the, high-cost estimate, the contribution rates would have to be raised above those scheduled.At any rate, the high-cost estimate does indicate, that under the tax schedule adopted, there would be ample funds to meet benefit disbursements for several decades, even under relatively high-cost experience. Table 8 shows tbe estimated costs of the old-age and survivors benefits and of monthly disability benefits under the bill as a percent-. age of payroll through. the year 2050 and also the level-premium cost of the 2 programs for the low-cost, high-cost, and intermediate-cost estimates (as was previously shown in tables 1 and 3 for the intermediate-cost estimate). (5) Summary of actuarial cost estimates The old-age, survivors, and disability insurance system, as modified by the bill, has a benefit cost that is very closely in balance withcon- tribution income.This also was the case for the 1950 act and subse— quent amendments at the time they were enacted.In fact, the system as modified by the bill is significantly closer to actuarial balance, according to the intermediate-cost estimate, than is the present law. The systm as modified by the bill, and the system as it was modified by the previous amendments, has been shown to be not quite self- supporting under the intermediate-cost estimate.There is very close to an exact balance, especially considering that a range of error is necessarily present in the long-range actuarial cost; estimates and that rounded tax rates are used in actual practice.Accordingly, the old- age, survivors, and dfsabiity insurance program, as it would be amended by this bill,is actuarially sound.In fact, the actuarial status of the program is very much improved over that of present law since the cost of the liberalized benefits is more than met by the increased contributions that are scheduled (with such rise going fully into effect almost immediately upon the inauguration of the new benefit provisions). The disability insurance portion of the program—established under the 196 act—when considered separately, shows a small favorable actuarial balance because the contribution rate allocated is slightly in excess of the cost for the disability benefits, based on the nter— mediate-cost estimate.Considering the variability of cost estimates for disability benefits, this small actuarial excess is not significant.

$.Rept. 2388, 85—2—----5 34 SOCIAL SECURITYAMENDME:NTh OF 1958

TABLE 1.—Actuarial balance of old-age, survivors, and disability inRurance program under various acts for variou8 e8timate8 on an inJermediate-co8t bais [Peroent]

Level-premium equIvalent 3

Dateof . Legislation estimate Benefit Contrkbu.Actuarial co8ts' tions balance'

Old-age, 5urvivors, and disability Insuranoe I

1950 act 1950 6.05 . 95 —0.10 192act 1952 .85 5.75 —.10 192 act 19M 6.62 6.05 —51 1954 act 1954 7.50 7.12 —.38 lOS4act 1956 7.45 7.29 —16 1956 act 1956 7.85 7.72 —.13 1956 act 1958 8.25 7.83 —.42 1958 bill (Rouse) 1958 8.76 8.52 —.24

Old-age and survivors InsuranoeI

1956 act 1956 7.43 7.23 —0.20 1956 act 1058 7.90 7.33 —.57 958 bill (louse) 1058 8.27 8.02 —.26

Disabilityinsuranoe' i9s6act 1956 0.42 0.49 +0.01 956 act 1958 .35 .50 +.15 158 bill (louse) 1958 .49 .50 +.01

I Thedisability insurance program was inaugurated In the 1956 act so that all figures for previous legislation are for the old-age and survivors Insurance program only. 2Expressedas a percentage of taxable payroll. Including adjustments (a) to reflect the lower contribution rate for the self-employed as compared with the combIned employer-employee rate, (b) for the Interest earnings on the existing trust fund, and (c) for administrative expense costs. 'A negative figure Indicates the extent of lack of actuarial balance. A positive figure Indicates more than sufficient financing, according to the particular estimate. -

TABLE2.—Changes in estinated level-premium cost of benefit payments as percentage of taxable payroll, by type of change, intermediate-cost estimate at 3 percent interest, 1956 act and bill

Old-age and Disability Item survivors insuranoe insurance

Percent Percent - Present lack ofbalanoe (—) or surplus (+) —0.57 +0.15 Increase of ½-percent in tax schednle +. 50 Acceleration of tax schedule (3-year rises) +. 19 Increased income from higher earnings base +. 52 +.03 Additional benefit cost from higher earnings base —.30 —.02 Increase of benefit level by7 percent (or $3, if more) —.57 —.03 Supplementary benefits for disability beneficiaries —.06 ElimInation of disability benefit offset provision —.03 Modification of Insured status requirements —.03 Liberalizing retirement test —.01 PayIng parent's benefits In all cases —.01 Lack of balance (—) or surplus (+) under bill —.25 4-.01 SOC1AL SECURLITYAMII1(DMETSOF 1958 35

TABLE3.—Estimated level-premium cost of benefa payments, admini8trative expenses, and interest earnings on existing trust fund under bill as percentage of taxable payroll,' by type of benefit, intermediate-cost estimate at 3 percent interest

Old.age and Disability Item survivors Insurance Insurance

Percent Perceni Primary, benefits 5.92 0.43 Wife's benefits .57 .03 Widow's benefits 1.23 (') Parent's benefits .02 (2) Child's benefits .43 .03 Mother's benefits .11 Lump-sum death payments .12 (2 Total benefits 840 .49 Administrative expenses .09 .01 Iiterost on elstIng trust fund —.22 —.01 Net total level-premium cost 8.27 .49

I includingadjustment to reflect the lower contrihution rate for the self-employed as compared with the combined employer-employee rate. 'This type of benefit not payable under this program. IThisitem Is taken as an offset to the benefit and admInistrative expense costs. TABLE 4.—Progress of old-age and survivors insurance trust fund under bill, high- employment assumptions, intermediate-cost estimate at 3 percent interest [In millionsi

Railroad Contribu- Benefit Admlnis-retirementinterest onBalance In Calendar year tions payments trative financial fund 2 fund 8 expenses interchange I

Actualdata

1951 $3,367 $1,885 $81 $417 $15,540 1952 3, 819 2, 194 88 305 17,442 1953 3,945 3,006 88 414 18,707 1954 5,163 3,670 92 468 20,576 1955 5,713 4,068 119 461 21,663 1956 6, 172 5, 715 132 531 22,519 1957 6, 82 7,347 '162 557 22,393

Estimated data

1958 $7,297 $8,318 $156 —$124 $565 $21,656 1959 8, 632 9,400 161 —219 570 21,079 1900 10,621 10,027 166 —196 593 21,9O 1961 11,1O 10,618 169 —195 637 22,666 1962 11,256 11,207 172 —199 675 23,019 1963 13, 124 11,678 175 —156 708 24,843 1964 13,652 12,016 178 —156 765 2(,9O9 1965 13,830 12,333 181 —160 824 28,891 1970 19,404 15,030 201 —70 1,410 50,480 1975 20,880 17, 766 222 —59 2,190 76, 606 1980 22,301 20,874 246 12 2,862 98,880 2000 29,695 29,672 332 1 4,773 163,813 2020 36,124 40,716 426 192 8,398 285,941

'A positive figure Indicates payment to the trust fund from the railroad retirement account, and a negative figure Indicates the reverse. At 3 percent, except 2.6 percent In 1958, 2.7 percent In 1959, 2.8 percetit In 1960, and 2.9 percent In 1061. Not Inc'uding amounts In the railroad retirement account to the credit of the old-age and survivors insurance trust Jund in miflons of riollars, these amounted to $377 for 1953, $284 for 1954, $163 for 1955, $60 tor 1956, and nothIng for 1957 and thereafter. 4Thisfigure is artincially high because reimhursements from the disability Insurance trust fund, called for by the law, had not been made In calendar year 1957.These amounted to about $14 million. 36 SOCIAL SECURITYAMEDMENTSOF1958 TABLE 5.—Progress of disability insurance trust fund nnder bill, high-employmen€ assumptions, intermediate—co.t estimate at 3 percent interest [in mijlionsj

Railroad Contribu- Benet Adminis-retirementInterest onBalance In Calendar year tions payments trative financial fund2 fund expenses Inter- change

Actual data

1957 $702 $57 $3 $7 $649

Estimated data

1958 $914 $263 $19 $25 $1. 30& 1959 980 431 21 $10 42 1,887 1960 991 492 23 —20 59 2,402 1961 1,004 555 23 —23 76 2,881 1962 1,018 613 24 —26 02 3,327 1963 1,032 675 24 —28 104 3,737 1964 1,046 736 25 —31 116 4,107 1965 1,0!59 796 25 —34 126 4,437 1970 1,141 1,052 27 —34 165 5,686 1975 1,227 1,249 80 —31 187 6,392 1980 1,311 1,380 80 —22 201 6,844 2000 1, 745 1, 649 40 —2 383 13, 194 2020 2,125 2,330 51 1 521 17,764

I A positive figure indicates payment to the trust fund from the railroad retirement account, and a negative ure Indicates the reverse. 2 At 3 percent, except 2B percent in 1958, 2.7 percent in 1959, 2.8 peT cent-In 1960, and 29 percent in 1961. 3 This figure is artificially low because reimbursements to the old-age and survivors Insurance trust fund, called for by the law, had not beei made In calendar year 1957.Thcse amounted to about $4 million.

TABLE6,—Estitr&ated progress of old-age and survivors insurance trus€ fund under bill, high-employment assumptions, low-cost and high-cost estimates at 3 percent interest unmillionsi

Railroad Contribu- Benefit Adm1ns.retirementInterest onBalance In Calendar year tions payments trative financial fund fund expenses -Inter- change I

Low-costestimate

1965 $13,866 $12,055 $167 —$145 $287 $31,205 1970 19,458 14,663 186 —49 1,546 55,376 1975 21,072 17. 217 206 —32 2,446 85,781 1980 22,773 19,965 228 39 3,334 115,772 2000 32,137 26,835 310 218 8,082 280,066

High-cost estimate

1965 $13,794 $12, 609 $195 —$176 $762 $26, 576 1970 19,351 15,398 216 —91 1,274 45,584 1975 20,68 18,315 239 —85 1,934 67,480 1980 21.829 21,782 263 —14 2,391 81,988 2U00 27, 253 32,511 354 167 1, 465 '47, 559

I A positive (igure injicates payment to the trust fund from the railroad retirement account, and a negative figure in.IiCates the- reverse. 2 At 3 percent, except 2.6 percent In 1958,2.7 percent in 1959,2.8 percent In 1960, and 2.9 percent In 196L 'Fund exhausted In 2010. SOCIIAL SECURITY AMEINDMDNTS OF1958 37

TABLE7.—Estimated progress of disability insurance trust fund under bill, high- employment assumptions, low-cost and high-cost estimates at 3 percent interest [In millions]

Railroad Contribu- Benefit Adminis-retirementInterest onBalance In Calendar year tions payments trative financial fund 2 fund

expenses inter- • change I

Low-cost estimate

1965 $1,063 $535 $22 —$32 $164 $5876 1970 1, 144 699 23 —32 259 9,099 1975.---—-. 1,239 834 25 —29 360 12,527 1980 1,339 930 27 —20 474 16,449 2000 1,889 1,110 36 1,310 45,372

High-cost estimate

1965 $1,056 $1,059 $28 —$35 $88 $2,998 1970 1,138 1,407 30 —35 71 2,272 1975.--- 1,216 1,666 83 —83 15 258 (8) lOSO 1,283 1,828 35 —24 (S) 2000 1,602 2,189 44 —4 (8) (3)

'A positive figure indicates payment to the trust fund from the railroad retirement account, and a negative figure IndIcates the reverse. 'At 3 percent, except 2.6 percent In 1958, 2.7 percent in 1959, 2.8 percent In 1960, and 2.9 percent in 1961. $ Fund exhausted In 1976. TABLE 8.—Estimated cost of benefits of old-age, survivors, and disability insurance system as percent of payroll 1, under bill (In percent)

Calendar year Low-cost High-costIntermediate- estimate estimate cost estimatet

Old-age and survivors insurance benefits

1970 6.47 6.84 6.66 1980 7.46 8.49 7.90 iooo 7.83 9.91 882 2000 7.06 10.06 8.44 2Q25 7.96 13.24 10.15 2050 1008 15.0) 1202 Level-premium cost $ 7. 29 9.42 8. 27

Disabilityinsurancebenefits

1970 0.32 0.63 0.48 1980 .36 .72 .53 iooo .30 .64 .46 ?4)OO .30 .68 .47 2Q25 .37 .81 .55 2050 .43 .87 .60 Level-premium cost .33 .67 .49

I Taking into account lower contribution rate for the self-employed, as compared with combined em ployer-employee rate. I Based on the average of the dollar costs under the low-cost and high-cost estimates. Level-premium cnntribution rate, at 3-percent interest rate, for benefits after 1957, taking into account interest on the Dec. 31, 1957trust fund future administrative expenses, and the lower contribution rates payable by the seU-empioyed. 38 sociALSEcTJIUTY 1958. IV. DISCUSSION OF PUBLIC ASSISTANCEAND MATER- NAL AND CHILD WELFARE PROVISIONS

A. PuILIc ASSISTANCE PRoVISIONS (1)General Thebill would amend those provisions of the SocialSecurity Act relating to old-age assistance (title I), aidto dependent chfldren (title IV), aid to the blind (title X), and aidto the permanently and totally disabled (title XIV), soas to: (1) Change the formula determining the Federalshare of assistance payments to provide an average maximumon State expenditures for assistance in which therecan be Federal sharing, including assistance in the form-of medicalcare and as money payments, and make a portion of the Federal contribution related to the per capita income of the States; (2) Extend the benefits of the four titlesto Guam, with a dollar limitation on the total Federal grant; (3) Increase the dollar limitationon the total Federal grant to Puerto Rico and the Virgin Islands; (4) Extend for an additional 2years the special matching provisions for certain State aid-to-blind programs. (2) Explanation of committee amendmentsto public assistance pro- Vi$Wfl8 In view of testimony by the Secretary of Health, Education, and Welfare that the administration is strongly opposed to increases in the Federal share of public assistance payments,a number of changes in the House bill have been made to minimize these objections: (1) The maximum on matchable payments has been reduced from $66 to $65 for the aged, blind, and disabled, and from $33 to $30 for recipients of aid to dependent children.This is estimated to effect a saving of $39 million annually, reducing the annual cost of the provisions from $288 million to $249 million. (2) The effective date has been deferred from October 1, 1958, to January 1, 1959, reducing the cost in fiscal 1959 to about $12 million. The committee also provided for an Advisory Council on Public Assistance to study the proper Federal role an matching formulas. for these programs, similar to the existing Council on Social Se- curity Financing which would report its findings and recommendations by Janriary 1, 1960. The provisions of the House bill that would have repealed section 9 of the act of April 19, 1050, amended, relating to additional Fed- eral sharing under titles I, IV, and X in assistance provided to Navaho and Hopi Indians has been eliminated. (3) Federal matching formula 'Under the old-ace assistance, aid to the permanently and totally dinbled, aid to the blind, nd aid to dependent children titles of the Social Security Act, the Federal Goveriiment participites in State expenditiire mnde to needy individiiils in the form of money pay- mnts, and in behalf of an individual in the form of medical ar or other forms of remedial care reconized under State law.The law provides a maximum on State expenditures jn which the Federal Gov- SOCflAL SECUrffTY. AM DMENTI'S OF 19.58 39 ernmentcan participate, separately stated for money payments to the individuil for assistance and medical care on his behalf.For money payments made to the individual the present maximum, in old-age assistance, aid to the blind, and aid to the permanently and totally disabled is $60 a month; for aid to dependent children, the present maximum is $32 a month for the first dependent child in the home, $23 for each additional child in the home, and $32 a month for the relative caring for the dependent child or children.For medical care costs paid in behalf of a needy person to vendors of medical care (doctors, hospital, etc.), the Federal Government participates in expenditures up to a total determined by multiplying $6 a month times the number of adults receiving assistance in a particular State, and $3 a month by the number of children receiving assistance.The Fed- eral share of the payments made which are within the maximums described above, is for old-age assistance, aid to the blind, and aid to the permanently and totally disabled, four-fifths of the first $30 of the average assistance payment, and one-half of the remainder up to a maximum of $60, and in the aid to dependent children, fourteen- seventeenths of the first $17 of the average assistance payment made under the prograr7nd one-half of the remainder up to the maximum of $32 or $23.For mediei care, the Federal share of payments made within the maximums of $6 and $3 is one-half, or $3 and $1.50. Under the committee's bill, the method of determining the Federal share of State expenditures would be changed in two respects: (1) The maximums on the payment made to the recipient and on the vendor expenditures made in his behalf in the form of medical or remedial care in which the Federal Government will participate would be combined into one maximum andon the basis of the average payment to all recipients in a State which maximum is applicable to the entire assistance expenditure, in- chiding both money payments to the needy recipients and medical care in their behalf. For old-age assistance, aid to the blind, and aid to the permanently and totally disabled, this maximum would be $65 a month.In aid to dependent children, the maximum would b9 $30 a month for each individual receiving assistance. (2) The Federal share would be determined in part by the relative fiscal ability of the State as measured by average State per capita income. The Federal share of assistance expenditures for the aged, blind, and disabled would be four-fifths of the first $30 of theaverage monthly assistance expenditure (as at present). For needy dependent children, the Federal share would be changed from fourteen-seventeenths of the first $17 of the average monthly assistance expenditures for individuals receiving aid to five-sixths of the first $18 of such expenditures. Federal participation in the assistance expenditures made above these maximums but within the overall limits determined by multiplying by $65 the number of persons receiving old-age assistance, aid to the blind, and aid to the permanently and totally disabled each month; and by $30 the number of persons receiving aid to dependent children each month would be increased above the present 50—50 matching for the lower income States.Federal participation in such payments would be 50 percent for States whose per capita incomewas equal to 40 SOCIALSECURITY AMENDME;NTS OF 1958 or above the average per capita income for theUnited States, and would range upward to 70 percent for States whose per capita income is below the national average. The bill directs that the Secretary of the Department of Health, Education, and Welfare, between July 1 and August 31 of each even numbered year, shall promulgate the Federal percentaoe for each State on the basis of average per capita income of each 'tate and of the continental United States, for the three most recent calendar years for which satisfactory data are avail- aMe from the Department of Commerce. Such promu'gation shall be used in determining the Federal share of State assistance expenditures for the succeeding 2 years.Special provision is made in the bill for the Secretary to promulgate a percentage as soon as possible after the enactment of this act, which shall be used for the 11 quarters in the period beginning October 1, 1958, through June 30, 1961. The change to an average maximum holds many advantages for the States in simplification of administrative procedures by eliminating some detailed recordkeeping and by enabling the Statc's,with Federal participation, to meet more adequately the unusua' needs of individuals. This is difficu't to do under the present law, inasmuch as the Federal maximums are stated in terms of payments to an individual.The combining of the Federa' maximum on assistance paid as money payments to the individual and medical care in his beha'f also is advantageous.This change will enable a State to decide to what extent it wishes to pay for medical care received by the needy through the method of making a payment in his behalf to the vendor of the medical care or giving him money so that he can purchase his ownmedica' care, without being influenced by consideration of Federa' financial sharing. The bill will make it c'ear that the Federal Government will be able to participate financially in State expenditures for medica' care in those instances in which the recipient was eligiMe at the time the medica' care was authorized, but who subsequenUy became ineligible for such reasons as death prior to the payment of the bifl. Under the bill, each State would receive additional Federa' funds which wou'd enaMe the States to increase the payments to individuals receiving aid as needed or to give assistance to additiona' needy people. The revised formu'a in the bill for determining the Federal share of assistance will be of particular assistance to States with 'imited fisca' resources and will enable these States to make more nearly adequate assistance payments. This will he'p to more nearly balance the eve of assistance made available to needy people in the various parts of the country. SOCIAL SFJCTjRry AMNDME:NTS OF1958 41 E3timated increase' in Federal funds by States under proposal in committee bill

All programs combined All programs combined State '(In orderof per state (in order of per capita Income, 1954—6) Total Monthly capita income, 1954-66) Total Monthly annual increase annual increase Increase per Fe- ircrCaSO per recipient clpeint

Thousands Thou8and8 United States totaL $249,512 $3.94 Minnesota 5,305 $5.33 Kan8as 2,259 3.32 12 hIghest States 40, 593 1.98 Florida 8,548 &14 27 middle States 106, 801 4.47 Arizona 2,988 5.96 l2lowestStates 102,118 5.40 Iowa 6,333 7.68 Texas 14, 117 3. 46 Delaware 306 3.05 Nebraska 2,192 6.05 Connecticut 1,091 2.52 Maine 2,015 5.40 Nevada 205 284 VirgInia 3,229 4.52 New Jersey 1,281 1.94 Utah 1, 299 4.87 DlstrictofColunibia 957 4.22 Verniont 1,050 7.96 California 4,331 .76 idaho 1,624 9.10 New York 8,207 1.85 Oklahoma 21,480 10.29 flithols 5,526 2.15 New Mexico 3,902 7.72 Michigan 6,519 360 LouIsiana 23,536 7.85 Massachusetts 3,027 1.81 Geo?gia 20,706 9.43 Ohio 7,412 3.35 South Dakota 2,610 10.28 Maryland 1,731 3. 2 North Dakon 1,650 7.74 Washington 2,718 2.40 WestVirgmia 8,558 7.06 Rhode Island 1,136 3.75 Temlessee 10,333 6.32 Pennsylvania 6,908 2.99 Kentucky 7,401 4.27 Indiana 2,947 z.48 North Carolina 7,127 3.80 Oregon 1,349 3.19 Alabama 6,690 2.36 Wyoming 199 2.03 South Carolina 2,967 3.09 Montana 1,125 5.26 Arkansas 9,668 8.65 Missouri 5,582 2.11 MissIssippi 874 .47 Colorado 2,692 2.72 Alaska 217 2.77 Wisconsin 4,718 5.51 Hawaii 387 2.37 New Hampshire 532 4.44

I AssumingStates continue to spend as much per recipient per month from State and local funds as under present formula. Based on estimates by the States of recipients and expenditures for fiscal year 1959. (4)Approvalof certain State plans for aid to the blin4 Thebillprovides for an additional 2-year extension of section 344 (b)of the Social Security Act, relating to aid to the blind programs in Pennsylvania and Missouri. (5) Techniec2 amendment The Social Security Amendments of 1956 emphasized the importance of helping recipients attain self-care and required that State plans provide a description of the servicestheStates agencies make available to recipients of public assistance.The language requiring this description was omitted from the amendments to title I in 1956. This technical amendment is added. (6) Guam, Puerto Rico, and the Virgin Island8 The bill would amend the definition of "State" in the generai provisions. (title XI) so as to include Guam and thus extend the old- age assistance, aid to dependent children, aid to the blind, and aid to the permanently and totally disabled programs to that island possession.Federal sharing in expenditures for public assistance in Guam would be on a 50—50 basis, the same as now in effect for Puerto Rico and the Virgin Islands. The limitation of the total amount of Fed- eral grants. for public assistance in Guam would be $400,000. There aremanypoints of comparability between Guam and the Virgin Islands, and Puerto Rico, both of which jurisdictions have public- assistance programs with Federal participation.Such programs as 42 SOCIALSECURITY MENDMFTS OF1958 publicheaTtb,. vocational educational, vocational rehabilitation, and employment services have already been extended to Guam. The bill also increases the dollar amount of the authorization for both Puerto Rico and the Virgin Islands.Both of these territories have made very substantial fiscal effort to support their programs. The present formula for the Federal financing of public assistance for Puerto Rico and the Virgin Islands provides relatively less Fed- eral funds than the formula in effect for other jurisdictions. In order to enable these territories to have more adequate financing of their public-assistance programs within the limits of the special formula applicable to them the bill increases the authorization for Puerto Rico from $5,312,500to$8,500,000 and for the Virgin Islands from $200,000 to $300,000. The bill continues the 50 percent matching for Puerto Rico and the Virgin Islands. For the aged, blind, and disabled, the former maximum of $30 on money payments and $6 on medical care vendor payments are combined into an average maximum of $35.For aid to dependent children, the former maximums of $18 and $12 per recipient plus the $6 and $3 vendor payment medical care maximums are combined into a single average of $18. The new formulas are extended to Guam. B. MATERNAL AND CTIILD WELFAnEPRovIsIoNs Your committee's bill would— (1) Raise the ceilings on the amounts authorized for annual appropriations for maternal and child health services, crippled children's services, and child welfare services under tiUe V of the Social Security Act; and (2) Improve the child we]fare provisions of the l)resent law by removing inequities which now exist in extending these services as betweeii children in urban areas and children in rural areas, and by liberalizing certain other provisions which have caused problems. Testimony established the need for expanding these three programs. In order to make possible in the immediate future more assistaice to the States in extending and improving these important services for children, the bill provides an increase of $5 million in the amounts authorized for annual appropriation for each of these programs as follows:

CurrentAu- Recoin- thorizatlon mended

Maternal and childhealthservices ,. $16,500, 000 $21, 500,000 Crippledchildrensservices 15,000,000 20,000,000 Childwelfareservices 12,000,000 l7000,OOO

Thepresent law also limits the use of child welfare services funds to predominantly rural areas and other areas of special need.Three out of five children in the Nation now live in urban areas.Many families have shifted in the last decade from farms and small towns to cities where services have not expanded to meet their needs.In the light of these developments, the present law would be amended so as to make child welfare services generally available not only in rural S'OCIIAL SECURITY MEiNDME(NTS OF1958 43 areas but also in urban areas and to give equal consideration to children m urban areas as to children in rural areas. The bill also includes a new formula for the allotment of these fund& whereby the allotment will be related directly to the total child opulation under 21 and inversely to the per capita income of the- State.In order to assure that present services to children in rural areas are not reduced because of this change, the bill also includes a. provision for a base allotment. The bill provides that if the amount allotted under the new formula is less than the State's base allotment the amount shall be increased to the base allotment and the necessary adjustment made by reducing the allotments of other States.The base allotment is the amount which would have been allotted to the State for the particular year in which the appropriation is made, under the provisions of section 521 of the law in effect prior to the enactment of the 1958 amendments as applied to an appropriation of $12 million (the amount currently authorized and which has been appropriated for the fiscal year ending June 30, 1959). The formula used for computing this base allotment would be, therefore, the same as in the present law, using rural child population statistics which subsequently become available and represent the current statistics for the year in which the appropriation is made. The bill also makes several other improvements in the child welfare provisions of the law. One of these would establish a new provision authorizing reallotment of these funds, thereby enabling full utilization of funds appropriated for child welfare services. Another provision liberalizes the present provisions concerning the use of these funds for the return of runaway children. The age limit of children who may be returned through these funds would be raised from 16 to 18 and the States would be authorized to use these funds for maintenance of runaway children, for a period not exceeding 15 days, pending their return. A matching provision has been added in order that the financial provisions for these grants are in the futurB consistent with those of other Federal grant programs. The need for additional super grades in Social Security Administra- tiôn and for increa8e in salary of Commi.sioner For many years this committee has worked with officials and technical staff of the Social Security Administration in connection with the analysis legislation and the development of proposals for such legislation.The committee has been impressed with the high caliber and outstanding ability of the staff and with their diligence and devotion to the task which the committee has assigned to them. The committee is quite concerned over the fact the Social Security Administration, with over 23,000 employees, has one of the lowest incidences of supergrades of any comparable Federal agency.For example, the Bureau of Old-Age and Survivors Insurance with over 22,000 employees has only 3 supergrades.There are many agencies in the Government with only a fraction of this number of employees with more supergrades.The committee is aware that the Social Security Administration has grown rapidly and that this, together with numerical limitation provided by law, is the basic reason for its small number of supergrade positions.The committee wishes to call this to the attention of the executive branch as well as the appropriate congressional committees. 44 sOCIALSECURITYAMNDMENTS OF 1958 V. SECTION-BY-SECTION ANALYSIS The first section of the bill contains a short title, the Social Security Amendments of 1958.The remainder of the bill is divided into seven titles as follows: Title I—Increase in benefits under title II of the Social Security Act. Title TI—Amendments relating to disability freeze and disability insurance benefits. Title 111—Provisions relating to eligibility of claimants for social security benefits, and miscellaneous provisions. Title IV—Amendments to the Internal Revenue Code of 1954. Title V—Amendments relating to public assistance. Title VT—Maternal and child welfare. Title Vu—Miscellaneous provisions. TITLE I—INCREASE IN BENEFITS UNDER TITLE II OF THE SOCIAL SECURITY AT SEC. 101. INCREASE IN BENEFIT AMOUNTS Section 101 of the bill contains provisions for effectuating the benefit increases that the bill would provide, including provisions for determining the new primary insurance amounts for both present and future beneficiaries through a benefit table and provisions to adjust minimum benefits for a sole survivor and maximum benefit amounts for families to the higher rates. Primary in8urance amount Subsection(a)of section 215 of the Social Security Act, as amended by section 101 (a) of the bill, sets forth a table to effectuate the benefit increases provided by the bill for people who are on the benefit rolls before January 1, 1959, and to determine the benefit amounts of people who will come on the benefit rolls after December 31, 1958.The new primary insurance amounts, shown in column IV of the table, are stated in whole dollars only.(The primary insurance amount is the amount payable to the retired or disabled worker and the amount on which all other benefits are based.)The amounts in the table were computed by increasing the primary insurance amounts of present law by 7 percent and rounding the resulting amounts to the nearest whole dollar (with some minor adjustments to provide a smooth progression of dollar values), with a minimum increase of $3. The primary insurance amounts that would be provided by the table range from a minimum of $33 for people whose average monthly wage is $54 or less to a maximum of $127 for people whowill have the new maximum average monthly wage of $400 that will become possible in the future with the $4,800 annual earnings base that the bill would provide. The primary insurance amounts of retired workers who are now on the benefit rolls at the $30 minimumwould be raised to $33. Retired workers who are now at the maximum primary insurance amount of $108.50 would be raised to $116. The amended section 215 (a) also provides the method for computing primary insurance amounts through the use of the table. SOCIiAJj SE1JRITY AM DMENTS OF 1958 45 Thesubsection provides that a person's primary insurance amount shall be the largest amount for which he can qualify under condli- tions set forth in the following subsections of the new section 215: (1) Section 215 (b), which provides for computation of an average monthly wage based on earnings after 1950 only, with up to 5 years of lowest earnings excluded.This is the way in which benefits will be computed for most future beneficiaries,if this method is used, the worker's primary insurance amount is the amount in column IV of the table on the same line on which his average monthly wage appears in column III. (2) Section 215 (c), which provides for determination of a primary insurance amount under the provisions of present hw. The new primary insurance amount of a person for whom this method is used is the amount in column IV of the table on the same line on which his present-law primary insurance amount appears in column II.Basically, this is the method that will be used for people who are already on the benefit rolls, or who die, before January 1, 1959. (3) Section 215 (d), which provides for determination of a primary insurance benefit under the rules generally applicable before the Social Security Act Amendments of 1950, with an average monthly wage computed over the period beginning with 1937 after dropping out up to 5 years of lowest earnings.Generally this method will be used for future beneficiaries who have not had significant earnings after 1950.If this method is used, the worker's primary insurance amount is the amount in column IV of the table oi the same line on whieh appears his primary insurance benefit in column I of the table. Under paragraph (4) of the new section 215 (a), a person who was entitled to a disability insurance benefit in the month before the month in which he became entitled to an old-age insurance benefit would have a primary insurance amount equal to the amount of his disablitv insurance benefit if that was larger than any other amount for which he could qualify.(See sec. 101 (h) of the bill, discussed below, for transitional conversion from disability benefit to primary insurance amount.) Average monthly wage Section 101 (b) of the bill amends seotion 215 (b) of the Social Security Act (relating t.o the computation of the average monthly wage) to make that section applicable solely to benefits determined under column III of the table.It further provides that the amended section 215 (b) could be used to determine the average monthly wage only of people with at least 6 quarters of coverage after 1950 who, after December 1958, either (1) become entitled to old-age insurance benefits or disability insurance benefits, or (2) die without becoming entitled to such benefits, or (3) file an application for a "work" recomputation under section 215 (f) (2) (A) of the Social Security Act and meet the conditions for such a recomputation as specified in such section 215 (f) (2) (A), or (4) die and in the month of death meet the conditions for such a "work" recomputation as specified in section 215 (f) (2) (A), or (5) file an application for a recomputation, urder section 102 (f) (2) (B) of the Social Security Amendments of 1954, to drop up to 5 years of low earnings, and qualify for such a "dropout" —46 SOCLLSECURITY AMFDMENPSOF 1958 recomputation under such section 102 (f)(2) (B).The provision described in (5) does not appear in the House bill.It is a technical ehange required because of the changes made in section 101 (c), mentioned below. Primaryinsuraweamountunder1954 act Section101 (c) of the bill amends section 215 (c) of the Social Security Aottoprovide that peol?le who became entitled to old-age or disability insurance benefits prior to the effective date of the bill, or who died prior to that effective date, would have their primary insurance amount computed under the provisions of the present law; this primary insurance amount would appear in column II of the table and would be converted to the new amount on the same line in column IV of the table.Section 101 (c) of the committee-approved bill differs slightly from that in the House bill as a result of certain technical and clarifying changes. Primaryinsurancebenefit under 1939 azt Seotion101 (d) of the bill amends section 215 (d) of the Social Security Act, which relates to provisions for computing primary insurance benefits under the general provisions of the law as in effect prior to the Social Security Act Amendments of 1950.An mdividual who had his benefit computed by this method would have his primary insurance benefit, shown in column I of the table, converted -to the primary insurance amount on the same line in column IV of the tab1. The primary insurance benefit is used in present law to determine primary insurance amounts mainly in those cases where the worker's earnings in years before 1951 were more substantial than his earnings after 1950, and it would be so used under the bill.The primary insurance benefit computation would be applicable to people who have at least one quarter of coverage before 1951, provided that they meet the conditions which permit the computation of an individual's average monthly wage under the proposed section 215 (b) (except the requirement of 6 quarters of coverage after 1950).As under present law, this method of computation would not be available to people who attained age 22 after 1950 and had at least 6 quarters of coverage after 1950. Minimum sur''ivors or dependents benefits Section 101 (e) of the bill amends section 202 (m) of the Social Security Act to raise from $30 to $33 (the first figure in column IV of the taMe in the new sec. 215 (a) of the Social Security Act) the minimum benefit payable to a sole survivor beneficiary. Maxinwmbenefits Section 101 (f) of the bill amends section 203 (a) of the Social Security Act (relating to the total amount of benefits payable to a family on the basis of a single earnings record) to provide that the total of the benefits payable on the basis of a single earnings re- ord may not exceed the amount appearing in column V of the benefit table (provided in sec. 101 of the bill) on the line On which, ih cdl- umn IV of the table, the primary insurance anOunt appears.The amended subsection also makes the limitation applicable to the total of the benefits payable on the earnings of disability insurance benefits. OML S&JU.BffTY AMDM'rOF1958 47

Under presentlaw,family benefits totaling $50 or lessarenot subject to any maximum limitation.If the family benefits total more than $50, they are limited to the largest of the following: $50; 1I4 times the worker's primary insurance amount; and 80 percent of his average monthly wage.In no event can the total be more than $200.For the purposes of the table, the $50 minimum of present law was increased to $53 and the.$200 maximum was increased to$24. The maximum family benefit amounts between $60 and $254 were established as the greater of (a) 11/2 times the primary insurance amount, and (b) 80 percent of the upper average-monthly-wage amount in each bracket. The only exceptions to this method are at the very lowest levels, where the maximum amounts are set at $1 intervals from the $53 minimum to $60 in order to effect a smooth progression of maximum family benefit amounts. In the House bill the maximum limitation on family benefits at primary insurance amounts from $69 to $109 ws set at 80 percent of the average of the upper and lower average-monthly-wage amounts in the applicable line in column IV of the table. Under the House bill, the maximum amount of family benefits payable in futurecases where the worker's average monthly wage is above the midpoint of the range would have been smaller than that family could have received under the present law.The committee approved bill avoids this anomalous result by applying the 80-percent-of-average-monthlywage lim1tation, at the levels where it applies, to the largest figure in column IV on each line. Pa.rgraph (1) of the amended section 203 (a) continues in the benefit table the effect of the provisions of present law for reducing family benefits in cases where (but for the provisions ofsec. 202 (k) (2) (a) of the act, which limits the benefit payments ofa child entitled to more than one benefit to the amount payab]e on theearnings record yielding the largest amount) thild would be entitled to benefits on the basis of the wages and self-employment income of more than one insured individual.In that case, the maximum amount of benefits payable to the family would be the sum of the maximum amounts payable on the earnings records of all the insured individua]s on whose earnings records family members could be entitled to benefits. In no event, though, could the total family benefits exceed the largest amount of maximum family benefit payable ($254). Paragraph (2) of the amended subsection providesa saving clause to assure an increase in family benefits for people alreadyon the benefit rolls when the bill. becomes effective.In the absence of such a provision, some families now on the benefit rolls could receive little or no increase in beiiefits because their benefits are already at or near the maimum payable to the family as provided in the benefit table. The maximum family benefit in such cases would be the larger of (a) the maximum amount permitted under column V of the table, and (b) the maximum amount permitted under present law plus the mcrease made bysection 101 (a) of the bill in the primary insurance amount of the insured individual on whose wages and. self -employ ment income sueh family 1xnefits are basecL Paragraph (3) of the amended subsection makes special provision relating to family benefits based on the earnings record ofan mdi- 48 SC1AL . SECURITY AMFNDMNPS OFi vidual for whom a period of disability was established if:the perkd began before the effective date.of the bill and continued beyond.that date until he. became entitled to disability insurance benefits or old- age insurance benefits or until he died. The purpose of this prov1sion is to assure that the family of such a person, regardless of when the family goes on the benefit rolls, will receive an increase in benefits as a result of the enactment of this bill.The family of a disabled person will be. in approximately the same position, with regard to maximum family benefits payable, as the family already receiving benefits based on the earnings of a worker who died or became entitled as of the time the period of disability began. This provision is needed for this purpose only at levels of primary insurance amount at which maximum family benefits are in effect limited to 80 percent of the worker's average monthly wage—$68 or over in column IV of the benefit table—and its application is limited to those levels of primary insurance amount. In no case could the provision raise the total of benefits payable to a family to more than the overall family maximum ($2!S4). Whenever a reduction in family benefits is made under this subsection, each benefit, except the old-age insurance benefit and the disability insurance benefit, would be proportionately decreased. In any case in which benefits were reduced pursuant to the provisions of this subsection, the reduction would be made after any other deductions under section 203 of the Social Security Act (such as deduetions on account of earnings) and any deductions under section 222(b)of that act (relating to refusnl of a disability insurance beneficiary to accept rehabilitation services). Effective date Section 101 (g) o the bill provides that the amendments made by section 101 shall be effective for monthly b'nefits beginning with Jan- uary 1959, and for lump-sum death payments wher' 'leath occurs after December 31, 1958. Traviiffonal covi'er.cion from disability insurance benefit to primary ivAurance amottnt Section 101 (h) of the bill is a special transitional provisidn wbich will apply to an individual who was entit.1d to a disability insurance benefit for December 1958 and who died or became entitled to old-age insurance benefits in January 1959.Under the generaJ rule in section 215 (a) (4), as set out in section 101 (a) of the bill, an individual entitled to a disability insurance benefit in the month bfôr he dies o becomes entitled to old-age insurance benefits will have as hisprimary insurance amount (for retirement or survivor benefits) the amount in column IV of the table that is equal to his disability insu.r- ance benefit, if that is the largest amount to which he could become entitled.In the situation outlined above, the individual's disability insurance benefit, since it was derived from a primary insurance amount detrmined under the present law, does not have any direct tie in with column IV of the table, which contains the new beneht amol4nts, Thus, the general rule cannot b applied to th1s individual.Instead, section 101 (h) of the bill provides that his primary jnsurance amount shall SOCLL SECIJBTrY AMENDME OF1958 49 be the amount in column IV of the tableon the same line on which in column II appears his present primary insurance amount.(This primary insurance amount in col. II is equal to his disability insurance benefit under present law.) Saving provision Section 101 (i) of the bill is a saving clause which wouldprevent benefits from being reduced because certain provisions ofpresent law are not applicable to benefits for months after the effectivedate. Where benefits are payable retroactively for months before the effective date, based on a computatiOn or recomputation of benefits for which application is filed after that date, the primary insurance amount on which the benefits for these months are based will becom- puted under the provisions of present law.If the amount so computed is larger than the amount as computed under section 215as amended by the bill, this larger amount will be the individual's primary insurance amount for months after the effective date.If such primary insurance amount is nota multiple of a dollar, it will be rounded to the next higher dollar. SECTION 102.—INCREASE IN WAGE BASE FROM $4,200 TO $4,gOO Definition of wages Section 102 (a) of the bill amends paragraph (2) of section 20 (a) of the Social Security Act (relating to the definition of "wages") to make the new $4,800 earnings base applicable to wages after 1958. Definition of self -eimployment income Section 102 (.b) of the bill amends paragraph (1) of section 211 (b) of the Social Security Act (relating to the definition of "self- employment income") to make the new $4,800 earnings base applicable for taxable years ending after 1958. Quarter andquarterof co'verage Section 102 (c) of the bill amends clauses (ii) and (iii) of section 213 (a) (2) (B) of the Social Security Act (relating to the definition of "quarter of coverage") to provide that, for calendaryears after 1958, an individual shall be credited with a quarter ofcoverage for each quarter of the year if his wages for that year equal $4,800 (rather than $4,200 as in present law). He would also be credited with a quarter of coverage for each quarter of a taxableyear ending after 1958 in which the sum of his wages and self-employment income equal $4,800 (rather than $4,200). Average monthly wage Subsection 102 (d) of the bill amends section 215 (e) of the Social Security Act (relating to the amomit of annual earnings thatcan be counted in computing an individual's average monthly wage)so as to increase from $4,200 to- $4,800 the maximum amount of annual earnings that may be counted in the computation of old-age,survivors, and disability insurance benefits, effective for calendaryears after 1958, and to conform a reference to subsection 215 (d)to the changes made in that subsection by the bill. 50 SOCIAL SECURITY AMENDMENTS OF1958 TITLE Il—AMENDMENTS RELATING TO DISABILITY FREEZE AND DISABILITY INSURANCE BENEFITS SECTION 201. APPLICATION FOR DISABILITY DETERMINATION Section 201 of the bill amends section 216 (i)(2) of the Social Security Act, which defines the term "period of disability," to effect a clarifying change.The amendment makes it clear that the disabled person must file an application while under the disability with respect to which he seeks to secure a 'disability freeze." Section 201 further amends section 216 (i) (2) of the act to provide that a period of disability may begin as early as the first day of the 18-month period which ends with the day before the day on which an individual files application for a disability determination. Section 216 (i) (2) of the Social Security Act now provides that a period of disability may begin no earlier than the first day of the 1-year period which ends with the day before the day on which the individual files application. This amendment is (under sec. 207 of the bill) effective with respect to applications for disability determinations filed after June 1961.Applications for a disability determination filed on or before June 30, 1961, are governed by section 216 (i) (4) of the Social Security Act, amended by section 203 of the bill. SECTION 202. RETROACTIVE PAYMENT OF DISABILITY INSURANCE BENEFITS Section 202 (a) of the bill amends section 223 (b) of the Social Security Act to provide that an individual who would have been entitled to a disability insurance benefit for any month after June 1957 had he filed application therefor prior to the end of such month shall be entitled to such benefit for such month if he files application therefor prior to the end of the 12th month immediately succeeding such month. Under the existing law, applications filed prior to Jan- uary 1958 were effective as far back as July 1, 1957, if the applicant was eligible.No benefits are now payable for months ending prior to the filing of an application where the application is filed after 1957. Section 202 (b) of the bill amends section 223 (c) (3) of the Social Security Act, which defines the term "waiting period" for purposes of disability-insurtnce benefits, to provide that a waiting period may begin as early as the 1st day of the 18th month before the month in which an application for disability-insurance beiefits is filed.The amendment complements the amendment in subsection (a).Section 223 (c) (3) of the act now provides that a waiting period may begin no earlier than the 1st day of the 6th month before the month in which an application is filed. SECTION 203. RETROACTIVE EFFECT OF APPLICATIONS FOR DISABILITY DETERMINATION Section 20 of the bill amends paragraph (4) of section 216 (i) of the Social Security Act to extend for 3 years (through June 30, 1961) the time within which disabled workers can file applications on the basis of which the beginning of a period of disability would be established as early as the actual onset of disablement (provided )OCJiA1 SFACURffTY AMEINDMEiN'I'S OF 1958 51 theother requirements of the law are met).It also eliminates a provision of this paragraph (requiring the applicant to be alive on July 1, 1955) which by virtue of the effective date applicable to this section would no longer be necessary. SECTION 204. INSURED STATUS REQUIREMENTS Period of diabiZity Section 204 (a) of the bill amends section 216 (i) (3) of the Social Security Act m two respects.It would remove the requirement that, in order for a period of disability to begin with respect to any quarter, an individual have 6 quarters of coverage during the 13- quarter period ending with such quarter.The second amendment would add a new requirement that an individual be fully insured. This new requirement will be satisfied with respect to any quarter if the individual would have been fully insured in such quarter had he attained retirement age and filed application for old-age insurance benefits on the first day of such quarter.Substantially the same requirement is already contained in section 223 (relating to disability-insurance benefits).This amendment is the same as that in the House bill except that a provision has been added to provide that a person for whom a period of disability could begin prior to 1951 need not be fully insured in order to meet the requirements for the freeze. Disability insurance benefits Section 204 (b) amends section 223 (c)(1) (A) of the act to remove the requirement that, in order to be insured for disability- insurance benefits in any month, an individual must be currently insured (as defined in sec. 214 of the act).This is in effect the same as the first amendment described above for the disability freeze. SECTION 205. BENEFITS FOR THE DEPENDENTS OF DISABILITY INSURANCE BENEFICIARIES AND ELIM- INATION OF THE OFFSET PROVISIONS Payn'ient8 froim disability insurance trust fund Section 205 (a) of the bill amends section 201 (h) of the Social Security Act to provide that the payment of monthly benefits of individuals entitled thereto on the basis of the wages and self-employment income of any individual entitled to disability-insurance benefits shall be made from the Federal disability insurance trust fund. Wife's insurance benefits Paragraph (1) of sectioti 205 of the bill amends section 202 (b) of the act to provide that the wife of an individual entitled to disability- insurance benefits shall be entitled to wife's insurance benefits if she otherwise meets the existing requirements applicable to the wife of an individual entitled to old-age insurance benefits. Paragraph (2) of subsection (b) amends paragraph (1) of section 202 (b) of the act to provide that the entitlement of a wife of a disability-insurance beneficiary shall terminate if her husband's entitlement to disability-insurance benefits ceases before he has attained retirement age. 52 JOCIAL SECURIITY AMFNDMNTh OF 1958 Husband's in8urance benefit8 Paragraph (1) of section 205 (c) of the bill amends section 202 (c)(1) (C) of the act.Underthis section of present law, a husband of an individual entitled to old-age insurance benefits, in order to be entitled to husband's insurance benefits2 must have been receiving at least one-half of his support from such individual at the time she became entitled to such benefits.Under the amendment, the husband of an individual entitled to old-age insurance benefits or disability- msurance benefits will meet this support requirement in case such individual had a period of disability which did not end prior to her entitlement to such benefits, if he was receiving at least one-half of his support from such individual either at the beginning of her period of disability or at the time she became entitled to such benefits. Proof of such support must be filed within 2 years after the month in which she filed application with respect to such period of disability or 2 years after she became entitled to such benefits, depending on whether the support was claimed as of the beginning of the period of disability or the time she became entitled to old-age or disability- insurance benefits. Paragraph (2) of section 205 (c) further amends section 202 (c) of the act to provide that the husband of a currently insured individual entitled to disability-insurance benefits shall be entitled to husband's insurance benefits if he otherwise meets the reqñirements applicable tG the husband of an individual entitled to old-age insurance benefits. Paragraph (3) of section 205 (c) amends section 202 (c) (1) of the act to provide that a husband's entitlement to husband's insurance benefits based on his wife's entitlement to disability-insurance benefits shall terminate in the event she ceases, before she becomes entitled to old-age insurance benefits, to be entitled to disability-insurance benefits. Child's in8urance benefits Section 205 (d) of the bill amends section 202 (d) (1) of the act to provide monthly benefits for the child of a disability insurance beneficiary.The amendment also adds, as a time at which the dependency of a child on an individual is determined in certain cases, the beginning of a period of disability.If the parent has had a period of disability which did not end before he became entitled tG old-age or disability insurance benefits or died, the dependency of the child may be determined as of the beginning of such period, at the time the parent became entitled to such benefits, or at the time of his death.Under the revised section 202 (d) (1) of the act, the benefits payable to the child of a disability insurance beneficiary would terminate if this parent's entitlement to disability benefits ceases before the parent attains retirement age or dies.The other bases for terminating the child's insurance benefits in existing law (e. g., death, attainment of age 18 when not under a disability, etc.) would also apply. Widower's in8urance benefit8 Section 205 (e) of the bill amends section 202 (f) (1) (D) of the ac.Underthis section of present law, in order to be entitled to widower's insurance benefits, the widower of an individual who died a fully and currently insured individual must have been receivmg SOCJiAJ SECU.RffTY AMENDMETS OF 1958 53 one-halfof his support from such individual at the time of her death or at the time she became entitled to old-age insurance benefits. Under this amendment, if the woman worker had a period of disability which did not end before her death or before she became entitled to old-age or disability insurance benefits, the support requirement would be met if the widower was receiving at least one-half of his support from her at the time her period of disability began, or at the time of her death, r at the time she became entitled to old-age or disability insurance benefits.Proof of support must be filled within 2 years after the month in which she filed application with respect to her period of disability, or 2 years after the date of her entitlement or death, depending on the time as of which the support is claimed. Mother's in.gurance beneflt8 Section 205 (f) of the bill amends section 202 (g) (1) (F) of the act to provide that, in the case of a former wife divorced, the require- inent that she be receiving at least one half of her support from her deceased former husband may be met, if he had a period of disability which did not end prior to his death, either at the time such period began or at the time of his death. Parent'8 in.gurance benefit8

• Section 205 (g) of the bill amends section 202 (h) (1) (B) of the act to provide that the requirement that a parent be. receiving at least one-half of his support from the deceased individual may be met, if such individual had a period of disability which did not end prior to his death, either at the time such period began or at the time of the individual's death. Proof of such support must be filed within 2years after such period began or two years after-the date of such death, depending on the time' as of which the support is claimed. $imultaneous entitlement to benefits Section 205 (h) of the bill amends section 202 (k) of the Act to make it applicable in the case of receipt by an individual of both disability insurance benefits and other benefits.The amended section would provide that whenever an individual is entitled to more than one monthly benefit (other than an old-age or disability insurance benefit) he shall be entitled to only the largest of such monthly benefits.If the individual is entitled to a disability insurance benefit for any month and to any other monthly insurance benefit for such month, such other benefit, after any reduction under section 202 (q) (relating to actuarial reduction of benefits in the case of certain female beneficiaries) and any reduction under section 203 (a) (relatingto maximum benefits), shall be reduced, but not below zero, byan amount equal to the disability insurance benefit. Adjustment of benefit8 of female beneficiary Section 205 (i) of the bill amends section 202 (q) of the act (relating to actuarial reduction of benefits of female beneficiaries whore- ceive wife's or old-age insurance benefits prior to age 65).This sec- .tion now provides for redetermination of the amount of these benefits when the beneficiary becomes 65 to eliminate future reductionson account of months before 65 when her benefits were subject to reductions. The amendment would also provide for eliminating futurere- ductions on account of the months for which shewas no longer en- 54 SOCIAL SECURITYENDMENTS OF 1958 titled to her benefits because her husband's disability ended or for which her benefits were suspended because of his refusal, without good cause, to accept available vocational rehabilitation. Deduction provision Section 205 (j)ofthe bill amends section 203 (c) of the act to make it clear that it applies only to benefits based on the record of an old- age insurance beneficiary. This section of the law provides for deductions from dependents benefits on account of earnings of the old-age insurance beneficiary. Circum.stances under which deductions not required Section 205 (k) of the bill amends section 203 (h) f the act, which deals with cases in which deductions, which would otherwise be made from the benefits of a member of a household, are not made because the total of the benefits to all members of thehousehold would remain the same. The amendment takes account of the repeal of section 224 (by sec. 206 of the bill) which relates to reduction of benefits based on disability in cases in which benefits under certain other programs are payable to the same beneficiary on account of disability. Currently insured individual Section 205 (1) of the bill amends section 214 (b) of the act to include, in the definition of "currently insured individual," an individual entitled to disability insurance benefits who has not less than 6 quarters of coverage during the 13-quarter period ending with the quarter in which he most recently became entitled to disability insurance benefits. Any quarter any part of which was included in a period of disability would not be counted as a part of the 13-quarter period unless such quarter was a quarter of coverage.This definition now relates only to cases of individuals who die or have become entitled to old- age insurance benefits. Rounding of benefits Section 205 (m) of the bill amends section 215 (g) of the act, which relates to the rounding of benefit amounts (to multiples of $0.10) to take account of the repeal of section 224 (relating to the reduction of benefits based on disability). Deduction on account of refvsal to accept rehabilitation sei'vices Section 205 (ii) of the bill amends section 222 (b) of the act to provide that deductions shall be made from the benefits of a wife, husband, or child, entitled on the basis of the earnings record of a worker entitled to disability insurance benefits, for any month in which the disabled worker refuses, without good cause, to accept rehabilitation services and he suffers deductions from his benefits on account of the refusal. Suspe'n$ion of benefits based on disability Section 205 (o) of the bill amends section 225 of the act to provide that whenever the benefits of a disability insurance beneficiary are suspended for any month, penidrng a determination as to whether or not his disability has ceased, the benefits to which his dependents are entitled on the basis of his earnings record shall also be suspended for such month. SOCML SECURIITY AM1NDMENTS OF 1958 55 SECTION206. REPEAL OF REDUCTION OF BENEFITS BASED ON DISABILITY Section 206 of the bill repeals section 224 of the Social Security Act, which requires that the disability insurance benefit, and the child's insurance benefit, of a disabled child who has attained age 18, be reduced by the amount of any other periodic Federal benefit (except compensation paid to a veteran by the Veterans' Administration for his service-connected disability, a reduction which was eliminated last year) or State workmen's compensation benefit paid on account of disability.The repeal of section 224 is effective with respect to benefits for the month m which the bill is enacted and succeeding months. SECTION 207. EFFECTIVE DATES• Section 207 (a) provides effective dates for the amendments made by title II of the bill. The amendments relating to applications for a disability determination (sec. 201 of the bill) would apply with respect to applications filed after June 1961. The amendments relating to the retroactive payment of disability- insurance benefits (sect. 202 of the bill) would apply with respect to applications filed after December 1957. The amendments relating to the retroactive effect of applications for disability determinations (sec. 203 of the bill) would apply with respect to applications filed after June 1958. The amendments relating to the insured status requirements for a disability freeze and for disability insurance benefits (sec. 204 of the bill) would apply with respect to (1) applications for disability-insurance benefits or for a disability determination filed on or after the date of enactment of the bill, and (2) applications for such benefits or for such a determination filed after 1957 and prior to date of enactment of the bill if notice to the applicant of the decision of the Secretary of Health, Education, and Welfare with regard to the application has not been given on or prior to the date of enactment of the bill. No benefits for the month in which the bill is enacted or for any prior month would be payable or increased by reason of these amendments. Redetermination of the amount of monthly benefits to exclude periods. of disability established by virtue of these amendments would not be prevented by the limitations placed on benefit recomputations by section 215 (f) (1) of the law. The amendments relating to benefits for the dependents of disability insurance beneficiaries (sec. 205 of the bill) would apply with respect to monthly benefits under title II of the Social Security Act for months after the month in which the bill is enacted, but only if application for such benefits is filed on or after the date of enactment of the bill.The provision relating to repeal of reduction of benefits based on disability (sec. 206 of the bill) would apply with respect to monthly benefits under title II of the Social Security Act for the month in which the bill is enacted and succeeding months Section 207 (b) of the bill provides that in the case of an individual who would not be entitled to monthly benefits under section 202 of the act as a husband, widower, former wife divorced, or parent except 56 SOCiALSECURITY AMENDMENTSOF 1958 for the enactment, of section 205 of the bill, the requirement thatsuch an individual file proof of support within a 2-year period shall not apply if such proof is filed within 2 years after the month in which the bill is enacted. TITLE Ill—PROVISIONS RELATING TO ELIGIBILITY OF CLAIMANTS FOR SOCIAL SECURITY BENEFITS, AND MISCELLANEOUS PROVI,- SIONS SEOTION 301. ELIGIBILITY OF SPOUSE FOR DEPEND- ENTS OR SURVIVORS BENEFITS Husband's in3urance bene/it8 Section 301 (a) (1) amends section 202 (c) of the Social Security Act by making inapplicable in certain cases the requirement for husband's insurance benefith that the wife be currently insured and that the husband be dependent on her--cases in which the husband was. actually or potentially entitled to widower's, parent's, or (disabled) child's insurance benefits in the month before his marriage to the person on the basis of whose earnings he is claiming hubapd's insurance benefits. Section 301 (a) (2) amends the definition of "husband" in section 216 (f) of the Social Security Act to include a man who in the mortb. prior to the month of his marriage to an individual was actually or potentially entitled to widower's, parent's, or (disabled) child's insurance benefits.Under existing law, he must be married to her for at least 3 years or be the, father 0±herson or daughter. Wido'w'8 inrance bene/iti Section 301 (b) (1) amends subparagraph (B) of section 202 (e) (3) of the Social Security Act to provide for reinstating widow's benefits, which were terminated because the widow remarried, in cases where the widow's husband dies within 1 year after the remarriage and he was not fully insured.Present law permits reinstatement of widow's benefits only if the new husband dies within 1 year and she does not qualify as his widow. Section 301 (b) (2) amends the definition of "widow" in section 216 (c) of the Social Security Act by including a woman whose deceased husband had legally adopted her son or daughter while she was married to him and while the son or daughter was under age 18 and a woman who, in the month before the monthof her marriage to the person on the basis of whose earnings she isclaiming benefits, was actually or potentially entitled to widow's, parent's, or (disabled) child's insurance benefits. Widower'8 inavra?we bene/1t8 Section 301 (c) (1) amends section 202 (f) of the Social Security Act by making inapplicable in certain cases the requirement for wici- ower's insurance benefits that the deceased wife have been a currently insured person and that the widower have been dependent on her— cases in which he was actually or potentiallyentitled to parent's, widower's, or (disabled) child's insurance benefits in the month prior to his marrige to her. Section 01 (c) (2) amends the definition of "widower" in section 216 (g) of the Social Security Act to include a man whose son or SIOCIIIUJ SDCURITY AMNDMEiN'1 OF1958 57 daughterwas adopted by the deceased wife while he was married to her and while the son or daughter was under age 18.Also included would be a man who, in the month before his marriage to the person on the basis of whose earnings he is claiming benefits was actually or potentially entitled to widower's, parent's,or(disailed) child's insurance benefits. Definition of "wife" Section 301 (d) amends the definition of "wife" in section 216 (b) of the Social Security Act to include awoman who, in the month prior to the month of her marriage to the individualon whose record benefits are claimed, was actually or potentially entitled to widow's, parent's, or (disabled) child's insurance benefits. Definition of "/ oinier wife divorced" Section 301 (e) amends the definition of "former wife divorced" in section 216 (d) of the Social Security Act to includea woman whose husband legally adopted her sonor daughter while she was married to him and while the child was under age 18. Effective date Section 301 (f) provides that the amendments m'ade by section 301 shall apply with respect to monthly benefits for months following the month in which the amendments are enacted, but only ifan apph- cation for the benefits is filed on or after the date of enactment. SECTION 302.ELIGIBILITY OF CHILD FOR DEPEND- ENTS OR STJRVIVORS BENEFITS Definition of "child" Section 302 (a) amends the definition of "child" in section 216 (e) of the Social Security Act to include the legally adopted child ofa retired person without compliance with the requirement inpresent htw that the child have been adopted for at least 3years.It further provides that a child who was living as a member ofa deceased person's household would be considered the adopted child of the deceasedper- son if, at the time that person died, the child was not receivingregu- lar contributions toward his support fromsomeone other than the deceased or his spouse or from a welfare organization furnishing services or assistance for children, and if the survivingspouse legally adopts the child within 2 years after thatperson dies. Effective date Section 302 (b) provides that the amendment made by section 302 shall apply with respect to monthly benefits beginning after the dtte of enactment of the bill, but only if an application for the benefits is filed on or after that date. SECTION 303. }LIGIBILITY OF REMARRIED WIDOWS FOR MOTHER'S INSURANCE BENEFITS Section 303 adds a new paragraph (3) to section 202 (g) of the Social Security Act to provide that, where mother's benefitswere terminated because of the remarriage ofa widow or former wife .58 SOCIAJ4SECURITY AMENDMEFSOF1958 divorced, they shall be reinstated if the remarriage is ended within 1 year by the husband's death and if she cannot become entitled to mother's insurance benefits on his earnings when he dies. The House bill woud have rthnstated the mother's benefits if her new husband died within 1 year and if she was not his "widow" as defined in the law. The committee changed this provision because in most cases the widow would have been the "widow" of the new husband as defined in the law but could not receive mother's insurance benefits on his earnings because she could not meet another requirement for entitlement to mother's insurance benefits—that she have her second husband's child in her care.Benefits under this section would not be payable earlier than the month in which the husband dies, the 12th month before the month in which an application is filed to reinstate the earlier benefits, or the month after the month in which these amendments are enacted, whichever is the latest. SECTION 304. ELIGIBILITY FOR PARENT'S INSURANCE BENEFITS Provisions relating to eligibility Section 304 (a) amends section 202 (h) (1) of the Social Security Act by removing the bar to payment of parent's insurance benefits where a widow or child actually or potentially entitled to benefits survives a deceased worker.The amendment is made effective for months following the month in which the bill is enacted, but only if an application for benefits is filed on or after the date of enactment. Deaths before effective date Section 304 (b) is a saving clause to provide that benefits for pei- sons who are on the benefit rolls when the amendment made by sul- section (a) becomes effective shall not be reduced, through the operation of the provisions which limit the amount of the benefits which may be paid on the basis of a single earnings record (sec. 203 (a) of the Social Security Act), because of a parent's entitlement which results from the provisions of this section of the bill. Proof of support in cases of death8 be/ore effective date Section 304 (c) extends7 for 2 years after the month in which this bill is enacted, the period in which a parent may file proof of support by the deceased son or daughter in order to qualify for such benefits in cases in which parents are entitled to benefits by reason of the amendments made by this section. SECTION 305. ELIGIBILITY FOR LTJMP-STJM DEATH PAYMENTS Requirement that surviving spouse be a member of deceased's household Section 202 (i) of present law provides that a spouse may receive a lump-sum death payment on the death of the worker if he or she was "living with" the worker at the time of death.The term "living with" is defined to mean that the spouse was living in the same household with the worker, or that the spouse was receiving regular con- SJOC1AL SECURITY AEDMEINTS OF 1958 59 •tributionsfrom the worker, or that the worker was under a court orderto contribute to the spouse's support. Section 305 (a) amends section 202 (i) to delete thisprovision and substitutes a requirement that the spouse be living in thesame household with the worker at the time of death. Section 305 (b) removes the definition of "living with" fromsec- tion 216 (h) of the Social Security Act since it isno longer required for any purpose. Effective date The amendments made by section 305are made effective for lump- sun-i payments based on the earnings of workers who die after the month of enactment. SECTION 306. ELIGIBILITY OF DISABLED PERSONS FOR

• CHILD'S INSURANCE BENEFITS Provisions relating to dependency Section 306 (a) amends section 202 (d) of the Social SecurityAct to provide that the dependency of a disabled child who isover 18 (a condition of his ehgibility for benefits) shall be determined inthe manner provided in present law for the child who is under age 18. This would eliminate the special, additional, requirement that the disabled child over 18 be receiving at least half his supportfrom the worker in order to be deemed dependenton him. Effective date The amendment is made effective for monthly benefits for months after the month in which this bill is enacted, but only if n application for such benefits is filed on or after the date of enactment of the bill. SECTION 307. ELIMINATION OF MARRIAGE AS BASIS FOR TERMINATING CERTAIN SURVIVORS BENEFITS Child's insurance benefits Section 307 (a) amends section 202 (d) of the Social Security Act to provide that a (disabled) child's insurance benefits shall not be terminated because of marriage if the (disabled) child marriesa person entitled to old-age insurance benefits, disability insurance benefits, widow's insurance benefits, widower's insurance benefits, (disabled) child's insurance benefits, mother's insurance benefits,or parent's insurance benefits.In the case of such child's marriage to a man entitled to disability insurance benefits or (disabled.) child's insurance benefits, her benefits will end when her spouse is no longer entitled to his benefits i.inless the spouse dies or, in case he was entitled to disability insurance benefits, he becomes entitled to an old-age insurance benefit. Widow's insurance benefits Section 307 (b) amends section 202 (e) of the Social Security Act to provide that a widow's insurance benefits shall not be terminated by reason of her remarriage if the remarriage is to a person entitled to widower's, parent's, or (disabled) child's insurance benefits.In case 60 SOCIAL SECURITY AMEDMETS OF1958 of her remarriage to an individual entitled to (disabled) child's insurance benefits, her entitlement will end if he ceases to be under a clisa- bility. Widower'8 insurance bene/it8 Section 307 (c) amends section 202 (f) of the Social SecutityAct to provide that a widower's insurance benefits shall not be terminathd because of his remarriage if the remarriage is to a person entitled to widow's, mother's, parent's, or (disabled) child's insurance benefits. Mother'8 in€uranee bene/it8 Section 307(d)amends section 202 (g) of the Social Security Act to provide that a mother's insurance benefits shall not be terminated by reason of her remarriage if the remarriage is to a person entitled to old-age, disability, widower's, parent's, or (disabled) child's i- surince benefits.In case of her remarriage to a man entitled to disability insurance benefits or (disabled) child's insurance benefits, her benefits will end when her spouse is no longer entitled to his benefits unless the spouse dies, or, in case he was entitled to disability insurance benefits, he becomes entitled to an old-age insurance benefit. Parent'8 in8urance bene/it8 Section 307 (e) amends section 202 (h) of the Social Security Act to provide that a parent's insurance benefits shall not be terminated because of remarriage if the remarriage is to a person entitled to widow's, widower's mother's, parent's or (disabled) child's insurance benefits.In case the remarriage is to a male individual entitled to (disabled) child's insurance benefits, the female parent's entitlement will end iher new husband ceases to be under a disability. Deduction pro'vidons Section 307 (f) amends section 203 (c) of the Social Security Act by redesignating the present subsection (c) as paragraph (1) of subsection (c) and adding a new paragraph (2) to provide for deductions from a (disabled) child's or mother's insurance benefits for any month in which the person entitled thereto is married to someone entitled to an old-age insurance benefit who incurs deductions from his old-age insurance benefits because of his earnings. Deductions on account of refusal to accept rehabilitation 8ervzcea Section 307 (g) amends section 222 (b) of the Social Security Act to provide for deductions from a (disabled) child's or mother's insurance benefits for any month in which the person entitled thereto is married to someone entitled to disability insurance benefits who incurs deductions, for such month, fot refual to accept rehabilitation services. Effective date Section 307 (h) provides that the amendments made by section 307 (other than the amendments to the deduction provisions made by subsections (f) and (g)) shall be effective for months following the month in which this bill is enacted.In the case of benefits terminated before enactment which would not have been terminated had this bill been in effect, however, the amendments will be effective only if an application for such benefits is ified after the month in which the bill SCTiAL SFRirrA JNDMFTS OF 1958 61 isenacted.The amendment made by subsection (f) applies to benefits for months in any taxable year of the working spouse beginning after the month in which this bill is enacted; the amendment made by subsection (g) applies to benefits for months after such month of enactment in which deductions are incurred by the spouse for refusal to accept rehabilitation services. SECTION 3Ô8. AMOUNT WHICH MAY BE EARNED WITH- OUT LOSS OF BENEFITS Section 308 of the bill makes several changes in section 203 of the Social Security Act, which relates to imposition of deductions from old-age and survivors insurance benefits on account of earningsover the exempt amount or occurrence of other events. Section 308 (a) of the bill amends section 203 (e) (2) of the act to change the order of charging earnings in excess of the exempt amount ($1,200 for a full taxable year) to months of the taxable year. Excess earnings are to be charged (at the rate of $80 per month) to the first month of the taxable year and then to each succeedin month, instead of (as under existing law) to the last monthan then to each preceding month. Section 308 (b) of the bill amends section 203 (e) (3) (A) of the act to make a conforming change. Section 308 (c) of the bill amends sections 203 (e) (2) (D) and 203 (e)(3)(B)(ii) of the act to increase from $80 to $100 the amount of wages that a beneficiary may earn in a month without having benefits withheld even if excess earnings are charged to such month as indicated above, provided he does not perform substantial services in self-employment in such month.(This change does not affect the provision, described above, which requires that earnings in excess of the exempt amount be charged to the months of the year in units of $80.) Section 308 (d) of the bill amends section 203 (g) (1) of the act to provide that a beneficiary who has had his benefits suspended under the earnings test for all months (of a taxable year) in which he is under 72, does not have to file an annual report of earnings with the Secretary for that year.It further provides that the beneficiary (or his survivors) has a period of 3 years, 3 months, and 15 days after the close of the year in which to file information that benefits are due for any month in the year; if this is not done, no benefits may be paid for such month. Section 308 (e) makes a conforming change in section 203 (I) of the act, which relates to good cause for failure to make required reports. Section 308 (f) of the bill makes the amendments made by the section effective for taxable years beginning after the month of enactment. SECTION 309. REPRESENTATION OF CLAIMANTS BE- FORE SECRETARY OF HEALTH, EDUCATION, AND WELFARE Section 309 of the bill amends section 206 of the Social Security Act to eliminate the requirement that an attorney desiring to represent claimants before the Secretary must, as a matter of course, file a certificate of his right to practice. 62 SOcIALS LHU'FY AMEqDME!NT9 OF 1953 SECTION 310. OFFENSES UNDER TITLE II OF THE SOCIAL SECURITY ACT Section 310 amends section 208 of the Social Security Act, which is designed to prolect the old-age and survivors system against fraud. The present section 208 specifically applies to the making of false statements (such as tax returns, tax claims, and the like) about coy- ered earnings for the purpose of obtaining or increasing benefits; and to the making of false statements, affidavits or documents in connection with an application for benefits,regaràless of whether made by the applicant or some other person.Section 310 of the bill amends section 208 to make the penalty provision clearly applicable in connection with willful failure to disclose material information as. well as positive action; in connection with noncovered aswell as covered earnincrs; and in connection with suspensions, terminations, and misuse of%enefits, and disability determinations, as well as in connection with applications for benefits.The penalty provision would thereby be clarified and brought up to date to take account of major amendments to the program adopted in 1954 and 195, such as the provisions on disability and the application of theearnings test to noncovereci work. SECTION 311. EXTENSION OF COVERAGE IN CONNECTION WITH GUM RESIN PRODUCTS Section 311 (a) of the bill amends section 210 (a) (1) of the Social Security Act by removing the specific exclusion from employment of service performed in connection with the production or harvesting of crude gum (oleoresin) from a living tree or the processing of such crude 'um into gum, spirits of turpentine, and gum resin, if such processing is carried oii by the original producer ofthe crude gum. Subsection (b) provides that the amendment made by subsection (a), shall apply to service performed after 1958. SECTION 312. EMPLOYMENT FOR NONPROFIT ORGANIZATIONS Section 312 (a) of the bill amends section 210 (a) (8) (B) of the Social Security Act to make the exclusion from employment now pro vided by section 210 (a) (8) (B) conform to the changes that section 405 of the bill makes in section 3121 (k) of the Internal RevenueCode of 1954.Subsection (b) provides that the amendment made by sub-i section (a) shall be effective with respect to certificates filed under section 3121 (k) of the Internal Revenue Code after the date. of enactment. SECTION 313. PARTNER'S TAXABLE YEAR ENDING AS RESULT OF DEATH' Section 313 (a) of the bill provides tor the crediting of adeceased partner with a share of the partnership's earnings or1oss for social- security purposes, for the year of his death. A detailed discussionof this amendment appears in the explanation (in this report)of section 403(a) of the bill. SOCEAL SCtJPdTY AMFNDMEtNTS OF1958 63 Section313 (b) of the bill provides that the amendment made by subsection (a) shall apply with respect to individuals who die after the date of enactment of 'the bill; and with respect to mdividuals who die after 1955 and on or before the date of enactment, but only if th requirements Of section 403 (b) (2) of the bill are met. SECTION 314. GRATUITOUS WAGE CREDITS FOR AMERI- CAN CITIZENS WhO SERVED IN ARMED FORCES OF ALLIED COUNTRIES General rule Section 314 (a) of the bill amends section 217 of the Social Security Act to extend the noncontributary wage credits, provided under section 217 of the act, to certain American citizens who, prior to Decem- ber 9, 1941, entered the active military or naval service of countries that, on September 16, 1940, were at war with a countrywith which the United States was at war during World War II.Wage credits of $160 would be provided for each month of such service performed after September 15, 1940, and before July 25, 1947. To qualify for such wage credits, an individual must either have been a United States'citizen throughout the period of his active service or have lost his United States citizenship solely because of his entrance into such active service.He must have resided in the United States for at least 4 years during the 5-year period ending on the day of his, enrance into such active service and must have been domiciled in the United States on such day. Separation from such active service must either have been (1) through discharge under conditions other than dishonorable after active service of at least 90 days or by reason of an injury incurred or aggravated in line of duty, or (2) through death in such serviôe. Paragraph (2) of the ew subsection provides that the parent of an individual to whom paragraph (1) applies shall have 2 years after the date bf enactment of the bill, or after the date of the death of such.individual, whichever is later, in which to file proof of support as required in section. 202 (h) of the Social Security Act. Reimbursement to disability in8urance trust fund Section 314 (b) of the bill makes a technical change in section 217 (g) of the Social Security Act, which authorizes appropriations to reimburse the "trust fund" for costs arising out of the granting of non-. contributory wage credits under such section 217.The term "trust' fund" is changed to, "trust funds," in recognition of the creation of the separate Federal disability insurance trust fund by the 1956 amendments. Effective date Paragraph (1) of section 314 (c) of the bill provides that the amendment made by' section 314 (a) shall apply only with respect to monthly benefits under sections 202 and 223 of the Social Security Act for months after the month in which the bill is enacted, to lump-sum death payments under section 202 of the act in the case of deaths occurring after the month in which the bill is enacted, and to periods of disability under section 216 (i) of the act in the case of applications 64 SOCIIALSFCURITY A IENDMETh OF 1958 for a disability determination filed after the month in which the bill is enacted. Paragraph (2) of section 314 (c) of the bill provides that the primary insurance amount. of an individual to whom the amendwent made by section 314 (a) of the bill is applicable shall be recomputed to reflect, in any benefit to which such individual (or his survivors) may already be entitled, the wage credits provided by the amendment made by section 314 (a)ofthe bill. SECTION 315. POSITIONS COVERED BY STATE AND LOCAL RETIREMENT SYSTEMS Division of retirement 8y8t ems Paragraph (1) of seçtioi 315 (a) of the bill divides section 218 (d) (6) of the act into a number of subparagraphs, and modifies the provisions of such section which permit social security coverage to be extended to only those members of a State or local retirement system who desire such coverage.These provisions are modified in three way. First, Massachusetts and Vermput ire added to the list of States to which such provisions apply. Second, the provisions (for extending coverage to only those mew- bers of a retirement system who desire such coverage) are modified by the addition of a new subparagraph (E) which makes coverage available, under these provisions, for persons who have an option to join a State or local system but who have not chosen to become members of the system.If the modification providing coverage under the divided retirement system procedure is apprpved after 1959, individuals having an option to join the State or local system would have to be treated in the same manner. as members of the system; the State would have no option as to the treatment of such individuals. How- ever, if the modification is approved bf ore 960, the State would have the option as to whether these persons would be given an opportunity, under the divided retirement system provision, of securing coverage. In the case of coverage actions which have been completed (whether before or after enactment date) coverage could be made available by the State, if it so desired, to persons having an option to join a State or local system under the procedure (described below) provided for in a new subparagraph (F). Third, the provisions for covering only those members of a State or local retirement system who desire such coverage would be modified by the addition of a subparagraph (F).This new subparagraph would give mdividuals who are in the group of persons which did not desire social security coverage another chance to obtain coverage. The State could transfer these persons to the group of persons desiring coverage if a modificationproviding for such coverage is mailed, or otherwise delivered, to the Secretary before 1960, or, if later, within 1 year after coverage was approved for the group which elected in favor of coverage.Coverage could be provided under this procedure only for those persons who filed a request therefor with the State before the date of approval by the Secretary of the modification providing for the coverage of the additional persons. Paragraph (2) of section 315 (a) of the bill amends section 218 (d)(7) of the act (provithng a simplified procedure for social SOCLAI SECURITY AMENDMErS OF1958 65 securitycoverage under the provisions of sec. 218 (d) (6), which relate to extension of coverage to those persons under State or local retirement systems desiring such coverage) to take account of the rearrangement of section 218 (d) (6). Paragraph (3) of section 315 (a) of the bill amends section 218 (k) (2) of the act, which makes applicable to interstate instrunien- talities the provisions of section 218 (d) (6) which permit the extension of Social Security coverage to only those persons under State or local retirement systems who desire such coverage.Paragraph (3) makes applicable to interstate instrumentalities the provisions of paragraph (1) of the bill which relate to the coverage of an individual who is not a member of a State or local retirement system but is eligible to. become a member of such system.Paragraph (3) further amends sectioii 218 (k) (2) of the act to take into account the rearrangement of section 218 (d) (6) of the corresponding provision of prior law. Coverage under other retirement system8 Section 315 (b) amends section 218 (d) of the act by addinga new paragraph (8)to facilitate coverage for persons in positions which are covered under more than one State or local retirement. system.Subparagraph (A) of time new paragraph provides that if, after December 31, 1958, an agreement is made applicable to service in positions covered by a State or local retirement system, service. performed by an individual in a position covered by such a system may not be excluded from the agreement because the position is also covered under another retirement system. Subparagraph (B) of the new paragraph provides that subparagraph (A) shall not apply to services performed by an individual in a position covered under a retirement system. if such individual on the day the agreement is made applicable to service performed in positions covered by such retiremeit system,.is not a member of suth system but is a member of another system.Subparagraph (C) provides thftt in cases where, prior to 1959, an agreement is made applicable to service in positions covered by any retirement system, the State may modify the agreement to make subparagraphs (A) and (B) applicable to such system. Thus, in the case of retirement systems brought under coverage before 1959, the operation of subparagraphs (A) and (B) would be at the option of the State; in the case of retirement systems brought under coverage after 1958 subparagraphs (A) and (B) would apply automatically.The new subpararah (D) states that nothing in the paragraph authorizes the application of an agreement to services in any policeman's or fireman's position in those States where such coverage is not specifically authorized in the act. Retroactive coverage for certain State and local government em- ployee8 Section 315 (c) of the bill amends section 218 (f) of the act by adding a new paragraph (2) to make retroactive coverage available under State agreements to certainjersons whose employment with the State or locality may be terminated before the agreement or modification extending coverage to the individual's position isexe- cuted.Under present law only persons who are employed on the date the coverage agreement or modification is executed may obtain 66 sociAj SECURITY AJYIEDME;NTS OF 1958 retroactivecoverage. Under the new paragraph the State could obtain retroactive coverage for all persons employed by the State or locality on a date specified by the State. The date specified could not be earlier than the date the State submits the modification. If no date is specified by the State, retroactive coverage would be available only for individuals who are still employees on the date the modification is approved by the Secretary.The new provision would be effective for agreements or modifications executed after the enactment date.

TITLE P1—AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1954 SECTION 401. CHANGES IN TAX SCHEDULES Self-employment income tax Section 401 (a) amends section 1401 of the Internal Revenue Code of 1954 to increase the social-security tax rate on self-employment income. Under present law the taxes on self-employment income are as follows: Tax rate Taxable years beginning after: (percent) 1956 3% 1959 4 1964 4V8 1969 1974 6% The tax rates provided by the bill are as follows: Tar,, rate Taxable years beginning after: (percent) 1958 33/4 1959 4Y2 1962 1965 6 1968 6% Tax on employees and employer8 Sections 401 (b) and 401 (o) amend section 3101 and section 3111, respectively, of the Internal Revenue Code of 1954 to increase the social security tax rate on wages for both employees and employers. Under present law the tax rates are as follows: - Tavrate, employer and e-mpioyee, each Calendar years: (pcent) 1957—59 inclusIve 2 1960—64 inclusive 23/4 1965-69 inclusive - 3¼ 1970—74 inclusive 3% 1975 and after 414 Thetax rates provided by the bill are as follows: Tax rate, empioyer and employee, each Calendar years: (percent) 1959 2Y2 1960—62-Inclusive 3 1963-65 (inclusive) 3 1966—68 inclusive 4 1969 and after 4'/2 Effectivedates Section 401 (d) provides that the amendment made by section 401 (a) of the bill, shall apply with respect to taxable years which ()C13AL SEE1JIIPY A NDMENTS OF 1958 67 beginafter December 31, 1958, and that the amendments made by subsections ('b) and (c) of section 401 of the bill shall apply with respect to remuneration paid after December 31, 1958. SECTION 402. INCREASE IN TAX BASE Definition of 8elf-e?mployment income Section 402 (a) of the bill amends section 1402 (b) (1) of the code by increasing the limitation on self-employment income subject to the self-employment tax (for taxable years ending after 1958) from $4,200 to $4,800. Definition of wages Section 402 (b) of the bill amends section 3121 (a) of the code, relating to the definition of the term "wages" for purposes of the Federal Insurance Contributions Act.Section 3121 (a) (1) of existing law provides that the term "wages" does not include that part of the remuneration paid within any calendar year by an employer to an employee which exceeds the first $4,200 of such remuneration (exclusive of remuneration excepted from wages by the succeedin paragraphs of sec. 3121 (a)) paid within such calendar year by suc employer to such employee for employment.The 'amendment would increase the amount of the limitation from $4,200 to $4,800 but otherwise would make no change in the provisions of section 3121 (a). FederaZ 8ervice Section 402 (c) of the bill amends section 3122 of the code, relating to Federal service, so as to conform the provisions of such section to the increase made by the bill in. the limitation On wages from $4,200 to $4,800. Special ref und8 of employee taa, Section 402 (d) of the bill amends section 6413 (c) of the code, relating to special refunds of employee tax paid on aggregate wages in excess of $4,200 received by an employee from more than 1em- •ployer during a calendar year, so as to conform (for calendar years after 1958) the special refund provisions to the increase made by the bill in the limitatiOn on wages from $4,200 to $4,800. Effective date Under section 402 (e), the amendments made by subsections (b) and (c) of section 402 are made applicable only with respect to remuneration paid after 1958. SEOTION 403. PARTNER'S TAXABLE YEAR ENDING AS THE RESULT OF DEATH Section 403 of the bill amends section 1402 of the Internal Revenue Code of 1954 by adding a subsection. (f), relating to thecomputation of the "net earnings from self-employment" of a partner whose taxable year ends, because of his death, within the taxableyear of the partnership. 68 OCIA1,SECURITY AMENDMENTh OF 1958 General rule Under section 1402 (a) of the 1954 Code the distributive share of partnership income which the partner is required to include mcom- puting his net earnings from self -employment is based on the ordinary income or loss of the partnership for the taxable year of the partnership ending within or with the partner's taxable year. If the partner's taxable year ends, because of his death9 on any day other than the last day of the partnership's taxable year, the partner's final taxable year would not include any part of the ordinary income or loss of the partnership for its current taxable year because such current taxable year does not end within the partner's last taxable year. Thus, for such partner's last taxable year no amount of his distributive share of the partnership income or loss for the current partnership taxable year would be included in his net earnings from self- employment. The new section 1402 (f) provides that if, as a result of a partner's death, his taxable year ends within (but not with) the taxable year of the partnership there will be included in computing such partner's net earnings from self-employment for the taxable year ending with his death so much of the deceased partner's distributive share of the partnership's ordinary income or loss for the partnership taxable year as is not attributable to an interest in the partnership during any period beginning on the first day of the first calendar month following the month in which the partner died. Under paragraph (1) of new section 1402 (f) the ordinary income or loss of the partnership is treated as if it had been realized or sustained ratably over the partnership taxable year for purposes of determining under iew section 1402 (f) the deceased partner's distributive share which is attributable to any interest in the partnership during any period on or after the first day of the first calendar month following the month in which such partner died. Under paragraph (2) of section 1402 (f) the term "deceased partner's distributive share" is defined, for purposes of the new subsection, to include the share of his estate or of any other person succeeding, by reason of the death of the partner, to rights with respect to his partnership interest. The "deceased partner's distributive share" does not include any share attributable to a partnership interest which was not held by the deceased partner prior to his death.Thus, if a deceased partner's estate should increase its interest in the partnership the amount of the distributive share attributable tosuch additional interest acquired by the estate would not be included in computing the "deceased partner's distributive share" of the partnership's ordinary income or loss for the partnership taxable year. Effective date Subsection (b) of section 403 of the bill contains the effective date provision applicable to new section 1402 (f).The new section 1402 (f) applies with respect to individuals who die after the date of the enactment of this bill.It will also apply to an individual who died after 1955 and on or before the date of the enactment of this bill if (1) there is filed before January 1, 1960, a self-employment tax return (or amended return) for the taxable year ending as a result of the individual's death, and (2) where the return is filed solely for the SOCEAJ.a SEiCURITY ENDMETS OF1958 69 purpose of reporting net earnings from self-employment resulting Irom the new section 1402 (f), the return is accompanied by the amount of self-employment tax attributable to such net earnings.In a case in which new section 1402 (f) does apply to an individual who died after 1955 and on or before the date of the enactment of this bill, no interest or penalty is to be assessed or collected on the amount of any self-employment tax due solely by reason of the operation of new section.1402 (f). SECTION 404. SERVICE IN CONNECTION WITH GUM RESIN PRODUCTS Removal of evclu8ion from definition of employment Section 404 (a) of the bill amends section 3121 (b) (1) of the code, relating to the exclusion from employment of certain types of agricul tural labor.Section 3121 (b) (1), as amended by the bill, retains the exclusion contained in subparagraph (B) of section 3121 (b) (1) of existing law.However, the amendment removes the exclusion contained in existing section 3121 (b) (1) (A) applicable to service performed in connection with th production or harvesting of any commodity defined as an agricultural commodity in section 15 (g) of the Agricultural Marketing Act, as amended.Under the amendment services referred to in the preceding sentence will be covered under the Federal Insurance Contributions Act on the same basis as other agricultural labor. Effective date Under section 404 (b) of the bill, the amendment made by section 404 (a) is made effective with respect to service performed after 1958. SECTION 405. NONPROFIT ORGANIZATIONS WAIVER CERTIFICATES General rule Section 405 (a) of the bill amends section 3121 (k) (1)of the In- ternal Revenue Code of 1954, relating to waivers of tax exemption which may be filed by certain religious, charitable, etc., organizations. Under present law, such an organization may file a certificate waiving exemption from tax under chapter 21 of such code only if two-thirds or more of its employees concur in the ffling of such certificate, and such certificate is accompanied by. a list containing the signature, address, and social security account number (if any) of each employee who concurs in the filing of such certificate. Such list may be amended, pursuant to existing law, by the filing of a supplemental list at any time before the expiration of 24 months following the first calendar quarter for which the certificate is effective or at any time before Jan- uary 1, 1959, whichever is later.The certificate becomes effective, under present law, for the calendar quarter in which ified or the following calendar quarter, whichever is specified in the certificate,except that in the case of employees concurring on a supplemental list ified after the first month following the first calendar quarter for which the certificate is in effect, the certificate becomes effective with respect to services performed by such employees in the calendar quarter following the calendar quarter in which the supplemental list is filed. 70 socra SECURITY AMENDME(TSOF1 95 a Section 405 (a) of the bill amends section 3121 (k} (1) of thi code so as to provide that a certificate filed by an organization pursuant to that section shall become effective for the calendar quarter in which filed, for the following calendar quarter, or for any calendar quarter preceding the calendar quarter in which the certificate is filed, whichever is specified in the certificate by the organization, except that, in the case of a certificate filed before January 1, 1960, the certificate nay not be made effective earlier than January 1, 1956. An orgamzation thathas filed a certificate prior to enactment of the bill but after 1955 may request that the certificate be made effective for any calendar quarter prececjing the calendar quarter for which it originally was effective, hut not earlier than January .1, 1956.In the case of a certificate filed after 1959, the certificate may not be made effective for a calendar quarter earlier than the fourth calendar quarter preceding the calendar quarter in which the certificate is filed.Furthermore,in the case of employees concurring on a supplemental list filed after the first month following the calendar quarter in which the certificate is filed, the, certificate is effective with respect to services performed by such employees in the calendar quarter in which the supplemental list is filed.In addition, section 405 (a) of the bill amends section 3121 (k) (1) of the code so as to provide that an organization described in section 3121 (k) (1) which employs individuals who are in positions covered by a pension, annuity, retirement2 or similar fund or system established by a State or political subdivision thereof, and which employs individuals who are not in such positions, shall separate its employees who are in such positions and its employees who are not in such positions into 2 groups for purposes of section 3121 (k) (1) of the code. One group shall consist of employees who are members, or are eligible to become members, of such fund or system; and the other group shall consist of all remaining employees. A waiver may be filed with respect to the employees in either group, or separate waivers may be filed with respect to the employees in the two groups, provided two-thirds or more of the employees in the particular group concur in the filing of the certificate.Section 405 (a) of the bill also amends section 3121 (k) (1) of the code so as to provide that, in the case of any certificate filed pursuant to section 3121 (k) (1) which is effective earlier than the calendar quarter in which it is filed., all returns and taxes for the earlier calendar quarters shall be due on the last day of the first calendar month following the calendar quarter in which the certificate is filed.The statutory period for assessment of such taxes shall not be less than 3 years from such due date. Conforming amendment Section 405 (b) of the bill amends section 3121 (b) (8) (B) of the Internal Revenue Code of 1954, which, in effect, provides an exemption from the tax under chapter 21 of the code in respect of services performed for certain religious, charitable, etc., organizations. The amendment made by section 405 (b) of the bill is a conforming amendment made necessary by reason of the new subparagraph (Econ- tained in the amendment of section 3121 (k) (1) of the code made by section 405 (a) of the bill. Under present law, services performed as an employee of such an organization are excepted from employment (and the remuneration SOCTIAL SECURffTYAMEaWMETS OF 1958 71 therefor is thus exempt from tax) under chapter 21 unless the employee's signature, appears on the list of employees concurring in the filingofa certificate under section 3121 (k) (1) of the code (relating to waivers of tax exemption which may be ified by such an órganiza- tion) and such services are performed on or after the date on which the certificate became effective with respect to such employee, or unless the employee entered the employ of the organization after the calendar quarter rn which the certificate was filed. Section 405 (b) of the bill amends section 3121 (b)(8) (B) SG as to add a new provision in respect of employees of an organization which, under the new section 3121 (k)(1) (E) of the code, is required to divide its employees into 2 groups for purposes of section 3121 (k)(1)(see the discussion in this report of the amendment.s made by sec. 405 (a) of the bill).Pursuant to this new provision,. services performed as a member of such a group by an individual who became a member of that group after the. calen4ar quarter in. which a certificate under section 3121 (k) (1) was filed with respect to such group shall not be excepted from employment under section 3121 (b) (8) (B) of the code. However, a member of one such group with respect to which a certificate is in effect who becomes a mernbei- of the -other group shall not, as to his services as a member of such other group, be covered by the certificate filed with respect to the first. group. Effective date Pursuant to section 405 (c) of the bill, the amendments made by sections 405 (a) and 405 (b) of the bill are effective only with respect to certificates under section 3121 (k) (1) of the code which are filed after the date of enactment of the bill. SECTION 406. EXEMPTION OF UNEMPLOYMENT BENEFITS FROM LEVY Section 406 of the bill amends section 6334 (a) of the code, relating to enumeration of property exempt from levy, by adding a paragraph (4) dealing with unemployment benefits.Pursuant to such paragraph (4), amounts payable to an individual under an unemployment compensation law of the United States of any State or Territory or of the District of Columbia or of the dommonwealth of Puerto Rico,. with respect to the unemployment of such individual, including any portion Of the amount which is payable with respect to dependents, are expressly exempted from levy for 'the collection of any tax imposed by the Internal Revenue Code of 1954. TITLE V—AMENDMENTS RELATING TO PUBLIC ASSISTANCE Sections 3 (a), 1003 (a), and 1403 (a) of the Social Security Act now provide for paying to each State with a plan approved under titles I, X, and XIV, respectively, four-fifths of the first $30 of the average monthly money payment per recipient, plus one-half of the remainder of such average payment, but excluding that part of any payment to any individual for any month in excess of $60. With respect to assistance expenditures for medical care or any other type of remedial care in behalf of recipients, the Federal payment is one-half within an average monthly expenditure of $6 per recipient. 72 SOCIAL SECURITY AMENDMENTS OF 1958 SECTION 501. OLD-AGE ASSISTANCE Section 501 of the bill would amend section 3 (a) of the SQcial Security Act so as to provide for an average monthly maximum of $65 on the amount of State expenditures for old-age assistarice in which the Federal Government would share, and to relate a portion of the Federal contribution to the fiscal ability of the State. The Federal payment would be four-fifths of the first $30 of the average monthly payment per recipient, including assistance in the form of money payments and in the form of medical or any other remedial care, plus an amount that would be equal to the Federal percentage of the remainder (determined for each State as set out in sec. 505 of tJae bill), but excluding: that part of the average monthly payment per recipient in excess of $65. The number of recipients to be used in determining the Federal payment with respect to any month would be the number who received cash payments for that month, plus the number with respect to whom expenditures were made in such month as old-age assistance in the form of medical care.In determining the latter number, individuals who were eligible when the care was provided would be countd even though not eligible when the medical bill was paid. SECTIONS 503 AND 504. AID TO THE BLIND AND TOTALLY DISABLED Sections 503 and 504 amend sections 1003 (a) and 1403 (a) of the Social Security Act relating to aid to the blind and aid to the permanently and totally disabled, respectively, so as to provide a similar formula for the programs of assistance for the blind and disabled. SECTION 502. AID TO DEPENDENT CHILDREN Section 403 (a) of the Social Security Act now provides for paying to each State with a plan approved under title IV, fourteen-seven- te.enths of the first $17 of the average monthly payment per recipient plus one-half the remainder of such average payment, but excluding that part of any payment with respect to the first dependent child in the home and the adult caretaker in excess of $32 each, and with respect to each of the other dependent children in the home in excess of $23.With respect to assistance expenditures for medical care or any other type of remedial care in behalf of recipients of aid to dependent children, the Federal payment is one-half within an average monthly expenditure of $3 per dependent child, and with respect to the adult caretaker within an average monthly expenditure of $6. Section 502 of the bill would amend section 403 (a) of the Social Security Act so as to provide for an average monthly maximum of $30 on the amount of State expenditures for aid to dependent children in which the Federal Government would share, and to relate a portion of the Federal contribution to the fiscal ability of the State.The Federal payment would be five-sixths of the first $18 of the average monthly payment per recipient, including assistance in the form of SOCIAL SECURiTY MNDMNTS OF1958 73 moneypayments and in the form of medical or any other type of remedial care, plus an amount that would be equal to the Federal percentage of the remainder (determined for each State as set out in sec. 505 of the bill), but excluding that part of the average monthly payment per recipient in excess of $30. The number of recipients for purposes of determining the maximum Federal share with respect to any month would be determined in the manner described above for old-age assistance. SECTION 505. FEDERAL MATCHING PERCENTAGE Section 505 would amend subsection (a) of section 1101 of the Social Security Act by adding a new paragraph defining the Federal percentage of State expenditures under titles I, IV, X, and XIV. The Federal percentage for any State (other than Puerto Rico, the Virgin Islands, and Guam) would be derived by relating the State's per capita income to the national per capita income.For a State with a per capita income equal to or above the national per capita income, the Federal percentage would be 50 percent.Where a State's per capita income was less than the per capita income of the Nation, the Federal percentage would be more than 50 percent.The bill provides that the Federal percentage shall in no case be less than 50 percent or more than 70 percent.The Federal percentage for Alaska and Hawaii is specified to be 50 percent. The Federal percentage would be promulgated each even-numbered year, based on data of the Department of Commerce on per capita income for the 3 most recent calendar years for which satisfactory data are available, and would be conclusive for 8 successive quarters beginning July 1 after such promulgation.Provision is made for a promulgation to be made as soon as possible after enactment of the bill and such promulgation would be conclusive for each of the 10 quarters in the period from January 1, 1959, through June 30, 1961. SECTION 506. EXTENSION TO GUAM Section 506 amends the term "State" when used in titles I, IV, V, 'VII, X, and XIV to include Guam, t.hus making Federal grants-in- aid under these titles available to Guam. SECTION 507. INCREASE IN LIMITATIONS ON PUBLIC- ASSISTANCE PAYMENTS TO PUERTO RICO AND VIR- GIN ISLANDS Section 507 amends section 1108 of the Social Security Act to increase the limitation on the total annual Federal payments for public assistance under title I, IV, X, and XIV to Puerto Rico from $5,312,500 to $8,500,000.The limitation with respect to the Virgin Islands would be increased from $200,000 to $300,000.Section 1108 is also amended to establish a limitation of $400,000 on such payments to Guam to which Federal grants are made available under section 506 of the bill. 74 SOCLAL SECURITY AMNDMEINTS OF 1958 SECTION508. MATERNAL AND CHILD-CARE GRANTS FOR GUAM Section 508 provides that, until such' time as the Congress may by appropriation or other law provide, the Secretary shall, in place of the uniform grant of $60,000 now authorized for each State for each of the 3 grant programs under title V, allot such smaller amounts to Guam as he may deem appropriate. SECTION 509. TEMPORARY EXTENSION OF CERTAIN SPECIAL PROVISIONS RELATING TO STATE. PLANS FOR AID TO THE BLIND Section 509 would amend section 344 (b) of the Social Security Act Amendments of 1950, as amended, so as to extend from June 30, 1959, through June 30, 1961, the special provisions relating to the approval of certain State plans for aid to the blind under title X. SECTION 510. SPECIAL PROVISION FOR CERTAIN INDI. ANS REPEALED Section 510 of the bill repeals section 9 of the Act of April 19, 1950, as amended, relating to additional Federal sharing under titles I, IV, and X in assistance provided to Navajo and Hopi Indians residing on reservations. SECTION 511. TECHNICAL AMENDMENT Section 511 of the bill would make a technical amendment in section 2 (a) (11) of the Social Security Act to make clear that in the description in the State plan of services relating to self-care there shall be included a description of the steps taken to assure, in the provision of such services, maximum utilization of other agencies providing similar or related services. SECTION 512. EFFECTIVE DATES Section 512 specifies the effective dates for certain amendments made by title V of the bill.The sections of the bill relating to the formula for Federal matching of State public-assistance expenditures (secs. 501, 502, 503, O4, and 505) are effective for months after September 1958. The amendments relating to the extension of titles I, IV, X, and XIV of the Social Security Act to Guam in section 506 would become effective for the months after September 1958. The amendments relating to the extension of title V of the Social Security Act to Guam and to the allocation to Guam of Federal funds under that title, made by sections 506 and 508, respectively, of the bill, would become effective for fiscal years ending after June 30, 1959. The amendments made by section 507 relating to the limitation on Federal public-assistance grants to Puerto Rico, the Virgin Islands, and Guam, would become effective for fiscal years ending after June 30, 1958. The technical amendment made by section 511 of the bill would become effective October 1, 1958. SoCIAL EC'UR1ITY.AMFNDMEINTS OF1958 .75

TITLEVI—MATERNAL.AND CHILD WELFARE SECTION 6ó1. CHILD WELFARE SERVICES Section 601 amends the present provisions of part 3, title V of the Social Security Act as follows: 1. It increases the amount authorized for annual appropriation for grants to the States for child-welfare services from the present $12 million to $17 million. 2. It removes the present provisions of the law with respect to the use of Federal child-welfare funds in predominantly rural areas or other areas of special need. 3. It. changes the formula for allotment of Federal child-welfare funds. The present law provides for a uniform grant of $40,000 to each State, with the remainder allotted on the basis of the proportion that the rural child population under 18 years of age of each State bears to the total rural population of the United States under such age.The bill provides that the sums appropriated for each fiscal year shall be allotted by the Secretary for use by cooperating State public-welfare agencies which have plans developed jointly by the State agency and the Secretary as follows: To each btate he shall allot such portion of $60,000 as the amountappropriatefi bears to the amount authorized to be appropriated, and he shall allot to each State an amount which bears the same ratio to the remainder of the sums appropriated for such year as the product of (1) the population of such State under the age of 21 and (2) the allotment percentage of such State bears to the sum of the corresponding products of all the States.The allotment percentage for any State would be 100 percent less the State percentage; and the State percentage would be that percentage which bears the same ratio to 50 percent as the per capita income of such State bears to the per capita income of the continental United States (excluding Alaska); except that (a) the allotment percentage shall in no case be less than 30 percent or more than 70 percent, and (b) the allotmeut percentage shall be 50 percent in the case of Alaska and 70 percent in the case of Puerto Rico, the Virgin Islands, and Guam. The bill also provides that if the amount so allotted is less than the State's base allotment, the amount shall be increased to such base allotment, and the total of the increases thereby required shall be derived by proportionately reducing the allotments of the other States, but with such adjustments as may be necessary to prevent the allotment of any State from being reduced to less than its base allotment. The base allotment of any State for any fiscal year is defined as the amount which would be allotted to such State for such year under the provisions of section 521 of the law as iu effect prior to the enactment of the Social Security Amendments of 1958, as applied to an appropriation of $12 million. 4. It adds new sections on payments to the States and on the Fed- éral share.The bill provides that the Secretary shall from time to time pay to each State with a plan developed, jointly by the State agency and the Secretary, an amount equal to the Federal share. For the fiscal year ending June 30, 1960, and each year thereafter, the Federal share for any State shall be 100 percent less that per- 76 SOCIALSECURITY A1ETDMFNTS OF1958 centagewhich bears the same ratio to 50 percent as the per capita income of such State bears to the per capita income of the continental United States (excluding Alaska), except that (1) in no case shall the Federal share be less than 331/3percentor more than 66% percent, and (2) the Federa' share shall be 50 percent in the case of Alaska• and 66% percent in the case of Puerto Rico, the Virgin Islands, and Guam. For the fiscal year ending June 30, 1959, the Federal share shall be determined pursuant to the provisions of section 521 as in effect prior to the enactment of the Social Security Amendments of 1958. The bill provides that the Federal share and the allotment percent- aie for each State shall be promulgated by the Secretary between July 1 and August 31 of each even-numbered year, on the basis of the average per capita income of each State and of the continental United States (excluding Alaska) for the 3 most recent calendar years for which satisfactory data are available from the Department of Commerce. Such promulgation shall be conclusive for each of the .2 fiscal years in the period beginning July 1 next succeeding such promulgation, provided that the Secretary shall promulgate such Federal shares and allotment percentages as soon as possible after the enactment of the Social Security Amendments of 1958, which promulgation shall be conclusive until July 1, 1961. 5. It modifies the provisions of the present law with respect to the use of Federal child-welfare funds for the return of runaway children. The bill provides that these funds may be used for paying the costs of returnmg any runaway child who has not attained the age of 18 to his own community in another State, and of maintaining such child until such return (for a period not exceeding 15 days), in cases in which such costs cannot be met by the parents of such child or by any person, agency, or institution legally responsible for, the support of such child.The present law provides that these funds may be used for paying the cost of returning any runaway child who has not attained the age of 16 to his own community in another State in cases in which such return is in the interest of the child and the cost thereof cannot otherwise be met. 6. It adds a new section to authorize reallotment of Federal child welfare funds.This section provides that the amount of any allotment to a State' for any fiscal year which the State certifies to the Secretary will not be required for carrying out the State plan shall be available for reallotment from time to time, on such dates as the Secretary may fix, to other States which the Secretary determines (1) have need in carrying out their State plans so developed for sums in excess of those previously allotted to them, and (2) will be able to use such excess amounts during such fiscal year. Such reallotments shall be made on the basis of the State plans, after taking into consideration the population under the age of 21, and the per capita income of each such State as compared with the ppulation under the age of 21, and the per capita income of 'all such States with respect to which such a determination by the Secretary has been made. Any amount so reallotted to a State shall be deemed part of its annual allotment. )CLth SWU.RITYAMNT)MENTS OF1958 77. SECTION602. MATERNAL AND CHILD HEALTH Section 602 amends the present provisions of part 1, title V of the Social Security Act by increasin the amount authorized for annual appropriation for grants to the States for maternal and, child health sevibes1from the present $16.5 million.to $21.5 million.The bill also increases correspondingly the amounts specified in subsections. (a) and (b) of section 502 of the present law (for allotment in accordance with the provisions of each such subsection) so that they continue to represent, respectively, one-half of the amount authorized to be appropriated, namely, $10,750,000. With respect to the uniform grant of $60,000 to each State, now provided under section 502 (a) of the law, the bill provides that the Secretary shall allot this amount to each State each year even though the amount appropriated for such year is less than $21,500,000. SECTION 603. CRIPPLED CHILDREN'S SERVICES Section 603 amends the present provisions of part 2, title V of the Social Security Act by mreasing the amount attthorized for annual appropriation for grants to the States for crippled children's services from the present $15 million to $20 million. The bill also increases correspondingly the amounts specified in subsections (a) and (b) of section 512 of the present law (for allotment in accordance with the provisions of each such subsection) so that they continue to represent, respectively, one-half of the amount authorized to be appropriated, namely, $10 million. With respect to the uniform grant of $60,000 to each State, now provided under section 512 (a) of the law, the bill provides that the Secretary shall allot this amount to each State each year even though the amount appropriated for such year is less than $20 million. TITLE Vu—MISCELLANEOUS PROVISIONS SECTION 701. FURNISHING OF SERVICES BY DEPART- MENT OF HEALTH, EDUCATION, AND WELFARE Section 1106 (b) of the Social Security Act now authorizes the fur- and charging. therefor, to persons requesting it, of information permitted under applicable regulations; it does not provide for furnishing of services and the imposition of charges therefor where the Secretary of Health, Education, and Welfare deems such charging appropriate.Section 701 of the bill amends section 1106 (b) to provide for'furnishing services, and for collecting, and depositing in the old-age and survivors insurance and disability insurance trust funds, of appropriate charges for such services.Such services will not be provided, however, where they would unduly interfere with the administrttion of the old-age and survivors insurance program. SECTION 702. MEANING OF TERM "SECRETARY" Section 702 of the bill provides that the term "Secretary," as used m the provisions of the Social Security Act, set. forth in the bill, means the Secretary of Health, Education. and Welfare where the context does not otherwise require. 78 SOCIALSECURITAMEaWMETSOF1958 SECTION 703. AMENDMENT PRESERVING RELATION- SHIP BETWEEN RAILROAD RETIREMENT AND OLD- AGE, SURVIVORS, AND DISABILITY INSURANCE Section 703 amends section 1 (q)ofthe Railroad Retirement Act so asto provide that references in the Railroad Retirement Act to the "Social Seëurity Act" and to the "Social Security Act, as amended," are references to the Social Security Act as amended in 1958 (that is, as amended by all acts amending the Social Security Act during and preceding 1958). SECTION 704. ADVISORY COUNCIL ON PUBLIC ASSISTANCE This section would provide for an Advisory Council on Public Assistance for the purpose of reviewing the status of the public assistance program in relation to the old-age,survivors, and disability insurance program, the fiscal capacities of theStates and the Federal Government, and any other factors bearing on the amount and proportion of the Federal and States' shares in the program. The Coun- cil would be appointed by the Secretary of Health, Education, and Welfare and be composed of the Commissioner of Social Security, a Chairman, and 12 other members representing employers and employees (iii equal numbers), persons concerned with the administration and financing of State and Federal programs, and other persohs with appropriate special Imowlede or qualifications, and the pubUc. The Council would report its findings and recommendations iot later than January 1, 1960, to the Secretary and the Congress. ColmoN RULE In the opinion f the committee, it is necessary to dispensewith the requirements of subsection 4 of rule XXIX of the StaidingRules of the Senate in order to expedite the business of the Senate in con nection with this report.

Calendar No. 2453

85CONGRESS 2n SESSION

[Report No. 2388:1

IN THE SENATE OF THE UNITEDSTATES

AUGUsT 1, 1958 Read twice and referred to the Committee onFinance

AUGUST 14, 1958 Reported by Mr.BYRD.with amendments [Omit the part struck through urid in black brakels anti insert the partprinted in italicj

AN ACT To increase benefits under the FederalOld-Age, Survivors, and Disability Insurance System, to improve theactuarial status of the Trust Funds of such System,and otherwise improve such System; to amend the publicassistance and maternal and child health and welfare provisionsof the Social Security Act; and for other purposes.

1 Be it enacted by the Senate and House ofRepresenta'

2tives of the United States of America in Congressassembled,

3That this Act may be cited as the "Social SecurityAmend

4ments of 1958". I 2

1 TITLE I—INCREASE IN BENEFITS TJNDER TITL1

2 II OF THE SOCIAL SECURITY ACT

3 IYCREASE 1N BENEFIT AMOUNTS

4 Primary Insurance Amount

5 Sec. 101. (a)Subsection(a)of section 215 of the

6Social Security Act is amended to read as follows:

7 "Primary Insurance Amount

8 "(a) Subject to the conditions specified in subsections

9 (b),(c), and (d)of this section, the primary, insurance 10 amount of an insured individual shall be whichever of the iifollowing is the largest:

12 "(1) The amount in column IV on the ]ineon

13 which in column III of the following table appears his

14 average monthly wage (as determined under subsection

15 (b));

16 "(2)Theamount in column IV on the line on 17 which in column II of the following tableappears his 18 primary insurance amount (as determined under sub-

19 section (c) )

20 "(3) The amount in column IV on the line on 21 which in column I of the following tableappears his 22 primary insurance benefit(as determined under sub-

23 section (d) );or 24 "(4) In the case of an individual whowas entitled 25 to a disability insurance benefit for the month before the 3

1 month in which he became entitled to old-age insurance

2 benefits or died, the amount in column IV which is equal

3 to his disability insurance benefit.

"TABLE FOR DTRMINDO PRUL&ZT INSURANCE AMOVNT AND MAXIMVM FAMILY BENEFITS

"I U In Iv V "(Prtmary Insurance (Primary Insurance (Average monthly (Primary 1n8ur. (Mailmnm benefli under 1939 amount under 1954 wage) ance imount) family Act, as modifled) Act) beneflte)

"If an Individual's Or hi primary Insur-Or h15 avorage monthly And the mail. primary Insurance ance amount (ag deter. wage (as determined The amount re•mum amount .f benflt (as determined mined under subsec. under Bubsec. (b)) 18— ferred to In the beneflts payable under subsec. (d)) Is— (c)) La— preceding para- (a provided In graphs of this sec. 203 (a)) on subsection the ba2i$ of hI But not But not But not shaU be— wages and self. "At least— more At least— more At least— more employment than— than— than— Income Shall be—

$10. 00 $30. 00 $54 $33 $53. 00 "$10. 01 10. 48 $30. 10 31. 00 $55 58 34 54. 00 10. 49 11. 00 31. 10 32. 00 57 5s 35 55. 00 11.01 11. 48 32. 10 33. 00 59 80 38 58. 00 11. 49 12. 00 33. 10 34. 00 61 81 37 57. 00 12. 01 12. 48 34. 10 35. 00 82 83 38 58. 00 12. 49 13. 00 35. 10 36. 00 84 85 39 59. 00 13. 01 13. 48 36. 10 37. 00 88 87 40 80. 00 13. 49 14. 00 37. 10 38. 00 88 89 41 81. 50 14. 01 14. 48 38. 10 39. 00 70 70 42 83. 00 14. 49 15. 00 39. 10 40. 00 71 72 43 84. 50 15. 01 15. 60 40. 10 41. 00 73 74 44 88. 00 15. 61 16. 20 41. 10 42. 00 75 78 45 87. 50 18. 21 18. 84 42. 10 43. 00 77 78 48 89. 00 18. 85 17. 80 43. 10 44. 00 79 80 47 70. 50 17. 81 18. 40 44. 10 45. 00 81 81 48 72. 00 18. 41 19. 24 45. 10 46.00 82 83 49 73. 50 19. 25 20. 00 48. 10 47. 00 84 85 50 75. 00 20. 01 20. 84 47. 10 48. 00 88 87 51 78. 50 20. 85 21. 28 48. 10 49. 00 88 89 52 78. 00 21. 29 21. 88 49. 10 50. 00 90 90 53 79. 50 21. 89 22. 28 50. 10 50. 90 91 92 54 81. 00 22. 29 22. 68 51. 00 51. 80 93 94 55 82. 50 22. 69 23. 08 51. 90 52. 80 95 98 58 84. 00 23. 09 23. 44 52. 90 53. 70 97 97 57 85. 50 23. 45 23. 76 53. 80 54. 60 98 99 58 87. 00 23. 77 24. 20 54. 70 55. 60 100 101 59 88. 50 24. 21 24. 60 55. 70 56. 50 102 102 80 90. 00 24. 61 25. 00 56. 80 57. 40 103 104 61 91. 50 25. 01 25. 48 57. 50 58. 40 105 108 62 93. 00 25. 49 25. 92 58. 50 59. 30 107 107 63 94.50 25. 93 26. 40 59. 40 60. 20 108 109 84 98. 00 28. 41 26. 94 60. 30 61. 20 110 113 65 97. 50 28. 95 27. 48 61. 30 62. 10 114 118 68 99. 00 27. 47 28. 00 62. 20 63. 00 119 122 67 100. 50 28. 01 28. 68 63. 10 64.00 123 127 68 102. 00 28. 69 29. 25 64. 10 64. 90 128 132 69 104. 00 29. 26 29. 68 65. 00 65. 80 133 138 70 107. 80 29. 69 30. 38 65. 90 66. 80 137 141 71 111. 20 30. 37 30. 92 68. 90 67. 70 142 146 72 115. 20 30. 93 31. 52 67. 80 68. 70 147 151 73 119. 20 31. 53 32. 00 68. 80 69. 60 152 155 74 122. 80 32. 01 32. 60 69. 70 70. 50 156 160 75 126. 40 32. 61 33. 40 70. 60 71. 50 161 185 76 130. 40 33. 41 33. 88 71. 60 72. 40 188 169 77 134. 00 33. 89 34. 50 72. 50 78. 30 170 174 78 137. 60 34. 51 35. 20 73. 40 74.30 175 179 79 141. 60 35. 21 35. 80 74. 40 75. 20 180 183 80 145. 20 35. 81 36. 40 75. 30 76. 10 184 188 81 148. 80 36. 41 37. 08 78. 20 77. 10 189 193 82 152. 80 87. 09 37. 80 77. 20 78.00 194 197 83 158. 40 37. 61 38 20 78.10 78.90 198 202 84 160. 00 38. 21 39. 12 79. 00 79. 90 203 207 86 184. 00 39.13 39. 68 80. 00 80. 80 208 211 88 167. 80 4 4

"TABLEFOR DETERMINING PRIMARY INSURANCE AMOUNT AND MAXIMUMFAuLY BENEFITS—Continued

•I II III IV V "(Primary Insurance (Primary msurance (Average monthly (Primary Insur- (Maximum benefit under 1939 amount under 954 wage) ance amount) family Act, as modified) Act) benets)

'If an Individual's Or his primary Insur-Or his average monthly And the max!- primary Insurance ance amount (as deter- wage (as determined The amount ro-mum amount of benefit (as determined mined under subsec. under subsec. (b)) Is— ferred to In thebcneflts payable under subsec. (1)) Is— (c)) is— preccding para- (as provided In graphs of this sec. 203 (a)) on subsection the basis of his But not But not But not ha1l be— wages and self- At least—- more At least— more At least— more employment than— than— than— ifleomeshailbe—

"$39. 89 $40. 33 $80. 90 $81. 70 $212 $216 $87 $171. 20 40. 34 41. 12 81. 80 82. 70 217 221 88 175. 20 41. 13 41. 76 82. 80 83. 60 222 225 89 17& 80 41. 77 42. 44 83. 70 8450 226 230 90 182. 40 42. 45 43. 20 84. 60 85. 50 231 235 91 186. 40 43. 21 43. 76 85. 60 86. 40 236 239 92 190. 00 43. 77 44. 44 86. 50 87. 30 240 244 93 193. 60 44. 45 44. 88 87. 40 88. 30 245 249 94 197. 60 44. 89 45. 60 88. 40 89. 20 250 253 95 201. 20 89. 30 90. 10 254 258 96 204. 80 90. 20 91. 10 259 263 97 208. 80 91. 20 92. 00 264 267 98 212. 40 92. 10 92. 90 268 272 99 216. 00 93. 00 93. 90 273 277 100 220. 00 9400 94. 80 278 281 101 223. 60 94. 90 95.80 282 286 102 227. 20 95. 90 96. 70 287 291 103 231. 20 96. 80 97. 60 292 295 104 234. 80 97. 70 98. 60 296 300 105 238. 40 98. 70 99. 50 301 305 106 242. 40 99. 60 100. 40 306 309 107 246. 00 100.50 101. 40 310 314 108 249. 60 101. 50 102. 30 315 319 109 253.60 102.40 103.20 320 323 110 254.00 103.30 104.20 324 328 111 254.00 104. 30 105. 10 329 333 112 254.00 105.20 106.00 334 337 113 254.00 106. 10 107. 00 338 342 114 254. 00 107. 10 107. 90 343 347 115 254.00 108.00 108.50 348 351 116 254.00 352 356 117 254.00 357 361 118 254.00 362 365 119 254. 00 366 370 120 254. 00 371 375 121 254. 00 376 379 122 254.00 380 384 123 254. 00 385 389 124 254. 00 390 393 125 254. 00 394 398 126 254. 00 399 400 127 254. 00"

I 5

"TABLEP01?1)ETERMININGPRIMARY IN8URAN0Z AMOUNT AND MAXIMUM FAMILY 13EvEFIT9

"I II Ill IV V (Primary in8urance (Average inonlhly (Primary inaur- (Maximum fl(PrimarU Ifl8urance famUy benefitunder 1939 amount under 1954 wage) aflee arnouiU) Act,a modified) Act) benefit8)

"If an individuaZ'8 Or h18 primary nRur• Or 11i8averagemonthly . And the maxi- primarji insurance anc arnouni (us defer- wage (us delermned Theamount re- mum amount of benefit (a8 determined mined under .ubec. under 8ubec. (b)) is— ferred to in the beneftt8 paabte (c)) 18— preceding para- (a8 provided in under ubec. (d)) s— gruph of thi8 8cc. 20.9 (a)) on —______8ub8ecion the bai of hi8 Wages and 8elf- Butnol J?, nol llu nl 8hu.Zl he— more ill ka— more empl''iaen! "At Zea8t— more Al least— Income I&a1l he-- than— than— than—

$10. 00 $30. 00 $54 $8.5 $'78 00 "1o. 01 10. 48 $30. 10 81. 00 $55 Sf; 34 54. 00 11. 00 31. 10 32. 00 57 58 85 I5.00 10. 49 50. 00 11. 01 11. 48 L2.10 33. 00 59 (10 36 12.00 83.10 84. 00 (ii f/I 37 57. 00 11. 49 58. 00 12. 01 12.48 84.10 80. 00 38 13. 00 35.10 36. 00 (14 65 39 i9. 00 12. 49 60. 00 13. 01 18. 48 86. 10 37. 00 6(1 87 40 14. 00 87. 10 88. 00 68 89 41 61. 50 18. 49 (iS. 00 14. 01 14. 48 88.10 39. 00 70 70 42 15. 00 39.10 40. 00 71 72 48 (14. 50 14. 49 68. 00 15. 01 15. 60 40. 10 41. 00 7773 74 44 (77.00 16. 20 41. 10 42. 00 76 45 15. 61 Iii).00 10. 84 42.10 48. 00 77 78 46 10. $1 70. 00 18. 85 17. 60 48. 10 44. 00 79 80 47 48 72. 00 17. 01 18. 40 44.10 45. 00 81 81 19. 24 4ô. 10 46.00 82 83 49 73.50 18. 41 75. 00 20. 00 46. 10 47. 00 84 85 50 19. 25 76. 50 20. 01 20. 84 47. 10 48. 00 86 87 51 02 78. 00 20. 05 J1. 28 48.10 49. 00 88 89 21. 88 49.10 50. 00 90 90 58 79. 50 21. P9 81. 00 52.28 50. 10 50. 90 91 92 54 51. 89 82. 50 68 ol. 00 51. 80 98 94 55 22.29 22. 84. 00 2fd. 69 23. 08 51. 90 52. 80 95 96 156 52. 90 53. 70 97 97 57 85. 50 23. 09 8.44 87. 00 23. 45 8.76 53. 80 54. 60 98 99 58 54. 70 55. 60 100 101 59 88.50 23. 77 24..0 90. 00 24. 60 So. 70 58. 50 102 102 60 24. 21 91. 50 24. 61 25. 00 56. 00 57. 40 108 104 61 62 93. 00 2ô. 01 25.48 57.50 58. 40 105 106 58. 50 09.80 107 107 68 94. 50 25. 49 25.9f2 96. 00 26. 40 5,9.40 60. 20 108 109 64 25. 93 97. 50 26. 41 26. 94 60.30 61. 20 110 113 65 46 61. 30 82. 10 114 118 66 99. 00 6. 95 27. 100. 50 28.00 6. 20 t13.00 119 122 67 27. 47 68 102. 00 28.01 28. 68 63.10 64.00 128 127 64. 10 64.90 128 182 69 105. 60 28. 69 29.25 108. 80 68 65. 00 65. 80 133 136 70 29. 26 29. 112. 80 29. 69 30. 86 65. 90 06. 80 137 141 71 66. 90 67. 70 142 146 72 118. 80 30. 37 30. 92 120. 00 30. 93 31. 86 67. 80 68. 60 147 150 73 68. 70 69. 60 151 155 74 124. 00 31. 37 32. 00 128. 00 32. 01 32. 60 69. 70 70. 50 156 160 75 76 181. 20 32. 61 38. 20 70. 60 71. 40 161 164 71. 50 72. 40 165 169 77 135. 20 33. 21 88.88 13.9. 20 33. 89 84. 50 72.50 73. 80 170 174 78 79 142. 40 34.51 85.00 78. 40 74. 20 175 178 188 80 146. 40 35.01 85. 80 74.80 75. dO 179 81 150. 40 ,435•81 36. 40 75. 80 76. 10 184 188 82 154. 40 86. 41 87.08 76.20 77.10 189 198 88 157. 60 37. 09 37.60 77.20 78. 00 194 197 6

"TABLEFOR DETERMINING PRIMARY INSURANCE AMOUNT AND MAXIMUM FAMILY BENEFITS—Continued

"I II III IV V "(P'rimary insurance (Primaryinsurance (AveraQe mo',U hi v (Primary in8ur- (Maximum eneflt under 1939 amoumtunder1954 wage) ante amount) fzmily Act,aa modified) Aa) benefit8)

"If an individual's Or his primary in8ur- Or hi8 average monUily And the mazi- primary Insurance ance amount (a8 deter- wage (a8 determined The amount re- mum amount of benefit (as determined mined under 8ub8ec. under 8ub8ec. (b)) 18—- ferred to in the benefits payable under suteec. (d)) Is— (C)) Is— preceding para- (a8 provided in Qraph8ofthi8 sec. O3(a)) on 8ub8ec.on theba88 of hi8 Bta not But not Bu not 8h(ill be— wage8 and 8elf- "At jeast— more At leaat— more At least— more employment than— than— than— income 8hall be—

"$37. 61 $38. 20 $78. 10 $78. 90 $198 $20P2 $84 $161. 60 38. 21 39. 12 79. 00 79. 90 !203 207 85 165. 60 39. 13 39. 68 80. 00 80. 80 208 211 86 168. 80 39. 69 40. 33 80. 90 81. 70 21!2 216 87 172. 80 40. 34 41. 12 81. 80 82. 70 217 221 88 176. 80 41. 13 41. 76 82. 80 83. 60 222 225 89 180. 00 41. 77 42. 44 83. 70 84. 50 226 230 90 184. 00 42.45 43. 20 84. 60 85. 50 231 235 91 188. 00 43. 21 43. 76 85. 60 86. 40 236 239 9f 191. 20 43. 77 44. 44 86. 50 87. 30 240 244 93 195. 20 44. 45 44. 88 87. 40 88 30 245 249 94 199. 20 44. 89 45. 60 88. 40 89. 20 250 253 95 202. 40 89. 30 90. 10 254 258 96 206. 40 90. 20 91. 10 259 263 97 210. 40 91. 20 92. 00 264 267 98 213. 60 92. 10 92. 90 268 272 99 217. 60 93. 00 93. 90 273 277 100 221. 60 94. 00 94. 80 278 281 101 p.24. 80 94. 90 95. 80 282 286 102 228. 80 95. 90 96. 70 287 291 103 232. 80 96. 80 97. 60 292 295 104 236. 00 97. 70 98. 60 296 300 105 240. 00 98. 70 99. 50 301 305 106 244. 00 99. 60 100. 40 306 309 107 247. 20 100. 50 101. 40 310 314 108 251. 20 101. 50 102. 30 315 319 109 254. 00 102. 40 103. 20 320 323 110 254. 00 103. 30 104. 20 324 328 111 254. 00 104. 30 105. 10 329 333 112 254. 00 105. 20 106. 00 334 337 113 254. 00 106. 10 107. 00 338 34t 114 254. 00 107. 10 107. 90 343 347 115 254. 00 108. 00 108. 50 348 351 116 254. 00 352 356 117 254. 00 357 361 118 254. 00 362 365 119 254. 00 366 370 V20 254.00 371 375 121 254.00 376 379 12P2 p254. 00 380 384 123 254. 00 385 389 1f4 254.00 390 393 125 254. 00 394 398 126 254. 00 399 400 127 254. 00"

AverageMonthly Wage

2 (b) (1)Section215 (b)(1) of such Act is amended

3bystriking out "An" and inserting in lieu thereof the follow- 4• ing: "For the purposes of column III of the table appearing

5in subsection (a) of this section, an". 7

1 (2) Such section 215 (b) is further amended by adding

2at the end thereof the following paragraph:

3 "(5) The provisions of this subsection shall be appli-

4cable only in the case of an individual with respect t& whom

5not less than six of the quarters elapsing after 1950 are

6quarters of coverage, and—

7 "(A) who becomes entitled to benefits under sec-

S tion 202 (a) or section 223 after ,he occondmonthfel—

9 lowing he month i whith he Social eurity Amcnd

10 mcnt e4 495S ae enacted December 1958, or

11 "(B) who dies after such ccond month without

12 being entitled to benefits under such section 202 (a) or

13 section 223, or

14 "(C) who files an application for a recomputation

15 under section 215(f)(2)(A)after such ccond

16 month and is(or would, but for the provisions of sec-

17 tion 215 (f)(6), be) entitled to have his primary in-

18 surance amountrecomputed under such section, or

19 "(D) who dies after such second month and whose

20 survivors are (or would, but br theprovisions of section

21 215(f)(6), be)entitled to a recomputation of his

22 primary insurance amount under section 215(f)-(4) ."

23 (4); or.

24 "(E) who files an application, for arecomp'utation 8

1 under subparagraph (B) of section 102 (f)(2)of the

2 Social Security Anendmens of 1954 after such month

3 and is (or would, but for the facfthat suehrecomputa

4 tion would not result in a higher primary insurance

5 amount for such individual, be)entitledto have hi

6 primary insurance arnount rtcornputed under such sub-

7 paragraph."

8 Primary Insurance Arnont Ullder 1954 Act

9 (c) Section 215 (c)of chAct amended to read

10as follows:

11 "Primary Insurance Amount Under 1954 Act

12 "(c)(1) For the purposes o o1rnnIIof the table

13appearing in subsection (a)oft thsection,an individual's

14primary insurance amount shallbecomputed as provided in,

15and subject to the limitatiom pcfied u, (A) this section

16as in effect prior to the enactmentofth Social Security

17Amendments of 1958, and(B)the applicable provisions

18of the Social Security Amndnienth of 1954.

19 "(2) The provisions c1 thsubeDtion shallbe appli-

20cable only in the case of an ndividua wk.=

21 "(A) who became entitled to benefits under section

22 202 (a)or section 223p4e thi4 month eI— 23 lewing 4e month i wh4th the SeeW eetu4ty

24 mcnt of 4958 were o, or died priorto

25 January 1959, and 9

1 "(B) .4e4 prior e such third month to whom the

2 provisions of paragraph (5) of subsection (b) are not

3 applicable."

4 Primary Insurance Benefit Under 1939 Act

5 (d) Section 215 (d) of such Act is amended to read

6 as follows:

7 "Primary Insurance Benefit Under 1939 Act

8 "(d)(1) For the purposes of colu.mn I of the table

9appearing in subsection(a)of this section, an individuai'g

10primary insurance benefit shall be computed as provided in

11this title as in eftect prior to the enactment of the Social

12Security Act Amendments of 1950, except that—

13 "(A) In the computation of such benefit, such in-

14 dividual's average monthly wage shall (in lieu of being

15 determined under sectioi 209(f)of such title as in

16 effect prior to the enactment of such amendments) be

17 determined as provided in subsection (b) of this section

18 (but without regard to paragraph (5) thereof), except

19 that his starting date shall be December 31, 1936.

20 "(B) For purposes of such computation, the date

21 hebecame entitled to old-age insurance benefits shall

22 be deemed to be the date he became entitled to pri-

23 mary insurance benefits.

24 "(0) The 1 per centum addition provided for in

25 section 209 (e)(2) of this Act as in effect prior to the 10

1 enactment of the Social Security Act Amendments of

2 1950 shall be applicable only with respect to calendar

3 years prior to 1951, except that any wages paid in any

4 year prior to such. year any part of which was included

5 in a period of disability shall not be counted.Notwith- 6 8tandlng the preceding sentence, the wages paid in the

7 year in which such period of disabilitybeganshill be

8 counted if the counting of such wages would result ina 9 higher primary insurance amount.

10 "(D) The provisions of subsection (e) shall beap- 11 plicable to such computation. 12 "(2) The provisions of this subsection shall be appli-

13cable only in the case ofan individual— 14 "(A) with respect to whom at leastone of the 15 quarters elapsing prior o 1951 is a quarter ofcoverage; 16 "(B) who meets the requirements ofany of the

17 subparagraphs of paragraph (5)of subsection (b)of 18 this section; and 19 "(0) who attainedage 22 after 1950 and with 20 respect to whom less than six of the quarters elapsing 21 after 1950 are quarters ofcoverage, or who attained 22 such age before 1951."

23 Minimum Survivorsor Dependents Benefit 24 (e) Section 202 (m)of the Social Security Act is 25amended by striking out "$30" whereverit occurs and' 11

1inserting in lieu thereof "the first figure in colunm IV of

2the table in section 215 (a) ".

3 Maximum Benefits

4 (f)Subsection (a)of section 203 of the Social Secu-

5rity Act is amended to read as follows:

6 "Maximum Benefits

7 "(a) Whenever the total of monthly benefits to which

8individuals are entitled under sections 202 and 223 for a

9month on the basis of the wages and self-employment income

10of an insured individua' is greater than the amount appearing

11in column V of the table in section 215 (a) on the line

12on which appears incolumn IV such insured individual's

13primary insurance amount, such total of benefits shall be

14reduced to such amount; except that—

15 "(1) when any of such individualssoentitled

16 would (but for the provisions of section 202' (k)(2)

17 (A) )beentitled to child's insurance benefits on the 18 basis of the wages and self-employment income of one

19 or more other insuredindividuals, such total of benefits

20 shall not be reduced to less than the smaller of:(A)

21 the sum of the maximum amounts of benefits payable on

22 the basis of the wages and self-employment income of

23 all such insured individuals, or (B) the last figure in

24 column V of the table appearing in section 215 (a), or

25 "(2) when any of such individuals was entitled 12

1 (without the application of section 202 (j)(1)and sec-

2 tion 223 (b)) to monthly benefits undersection 202 or

3 section 223 for he ccond month fdllowing he month

4 which I+e Social ecurity Amendments 04 1058 wcrc

5 onactcd December 19i58, and the primary insurance

6 amouiit of the insured individual on thebasis of whose

7 wages and self-employmentincome such monthly benefits

8 are payable isdetermined under the provisiolls of section

9 215(a)(2), then such total benefits shall not be

10 reduced to less than the larger of— ii. "(A) the amount determined under this sub-

12 section without regard to this paragraph, or

13 "(B) the amount determined under this sub-

14 section as in effect prior to the enactment of the

15 Social Security Amendments of 1958 or the amount

16 determined under section 102(h)of the Social

17 Security. Amendments of 1954, as the case may be,

18 plus the excess of—

19 "(i) the primary insurance amount of such

20 insured individual in column IV of the table 21 appearing in section 215 (a), over 22 "(II) his primary insurance amount deter- 23 mined under section 215 (c), or

24 "(3) when any ofsuch individualsisentitled 25 (without the application of section 202(j)(1)and 18

1 section 223 (b)) to monthly benefits based onthe wages

2 and self-employment income of an insuredindividual with

3 respect to whom a period ofdisability(as defined in

4 section 21 (i)) began prior to 1e thhdmonth follow

5 g he month i which heociaI Sccurity Amend

6 ments e -1-D58 were enactedJanuary 1959 and con-

7 tinued unintcrrruptcdly until—

8 "(A) he became entitled to benefitsunder see-

9 tion 202 or 223, or

10 "(B) he died, which ever first occurred,

11 and the primaryinsuranceamount of such insured mdi-

12 vidual is determined under the provisions ofsection 215

13 (a)(1)or (3) and is not lessthan $68, then such

14 total of benefits shall not be reduced toless than the

15 smaller of—

16 "(0) the last figure in column V of thetable

17 appearing in section 215 (a), or

18 "(D) the amount in column V of such table on

19 the same line on which, in column IV, appearshis

20 primary insurance amount, plus the excess of—

21 "(i) such primary insurance amount, over

22 "(ii) the smallcst smaller amount in col-

23 umn II of the table on theline on which appears

24 such primary insurance amount.

25In any case in which benefits are reduced pursuant tothe 14

1preceding provisions'of this subsection, such reduction shall

2be made after any deductions under this section and after

3any deductions under section 222 (b).Whenever a reduc-

4tion is inde under this subsection, each benefit, except the

5old-age or disability insurance benefit, shall be proportion-

6ately decreased."

7 Effective Date

8 (g) The amendments made by this section shall be

9 applicable in the case of monthly benefits under title II of the 10Social Security Act, for months after the ccond month 4o1— 11Iowlig the month which 1$B Ae is enacted December

121958, and in the case of the lump-sum death payments under

13such title, with respect to deaths occurring after such oeen4 14month. 15Primary Insurance Amount for Certain Disability Insurance

16 Beneficiaries 17 (h) If an individual was entitled to a disability insur- 18ance benefit under section 223 of the Social Security Act 19for the second month after the month i which h4s Ae 20enacted December 1958, and became entitled to old-age 21insurance benefits under section 202 (a)of such Act, or 22died, in the tIth4 month aftcr he month i+ which h4s Ae 23is enacted January 1959, then, forpurposes of paragraph 24 (4)of section 215(a)of the Social Security Act, as 25amended by this Act, the amount in column IV of the table 15 appearing in such section 215 (a) for such individual shall 1 be the amount in such column on the line on which in column 2 II appears his primary insurance amount (as determined 3 under subsection(c)of suèh section 215) instead of the amount in column IV equal to his disabilityinsurance benefit. Saving Provision 6

-(43-Withrcpcct ømenthly benefitsimdcr e fE the Sead SeeuriyA%payable pursuan o eetion2 8

-(4-)- Ae fe ay me+th prior to he th4 month 9- following the mth o4 eemcnt o4 MS Act, he primary 10 in@uraneeamou ef the imlividuni e he basisef whose wages an4 c1f employment i+ie€ei+eh monthly bcncfits ae 12 s høugh hs Ae ha been 13 amount sh4 be e1 iii4i- 14enacted; such primaryinurancc purposc cction 15vidua1' primary inurancc ftmeuIFt Of month e11ow 162-1-h ef such Ae ei months after the ccontI

17 determined im4cr section 18than the primaryi swriee amount h4s Act, a&A 19245 o4 he Socia' Seeuy s amended y ft 20shail be rounded the next h4ghe 4e14a i it i

21mu1tip1 Oedollar.

22 (i) In the case of any individual to whom the provisions

23of subsection (b) (5) of section 215 of the Social Security

24Act, as amended by this Act, are applitable and on the basis

25of whose wages and self-employment income benefits are pay- .1

1 able for months prior to January 1959, his primary insur-

2 ance amount for purposes ofbenefits for such prior months

3 shall, if based on an application for such benefits or for a

4recomputation of such amount, as the case may be,filed

5 after December 1958, be determined under such section 215,

6 as in effect prior to the enactment of this Act, and, ifsuch

7individual's primary insurance amount as so determined is

8largerthan the primary insurance amount determined for

9him under section 215 as amended by this Act, such larger

10primary insurance amount (increased to the next higher dol-

11lar if it is not a multiple of a dollar) shall, for months after

12December 1958, be his primary in$uraneeanwuntfor pur-

13poses of $'ueh $ection 2i (and of the other provisions) of 14the Social Security Act as amended by this Act in lieu of 15the amount determined without regard to this sub$ection.

16 INCREAS1 IN EARNINGS BASE FROM $4,200 TO $4,800

17 Definition of Wages 18 SEc. 102.(a)(1) Paragraph (2) of section 209 (a) 19of the Socia' Security Act is amended to read as follows: 20 "(2) That part of remuneration which, after re- 21 muneration (other than remuneration referred to in the 22 succeeding subsections of this section)equal to $4,200 23 with respect to employment has been paid toan in- 24 dividualI during any calkndar year after 1954 and prior 17

1 to 1959, is paid to such individual duringsuch calendar

2 year;".

3 (2) Section 209 (a) of such Act is further amended by

4adding at the end thereof the following new paragraph:

5 "(3) That part of remuneration which, after re-

6 muneration (other than remuneration referred to in the

7 succeeding subsections of this section) equal to $4,800

8 with respect to employment has been paid to an in-

9 dividual during any calendar year after 1958, is paid

10 to such individual during such calendaryear;". ii Definition of Self-Employment Income

12 (b) Paragraph(1)of section 211(b)of the Social

13Security Act ismended to read as follows:

14 "(1) That part of the net earnings from self-

15 employment which is in excess of—

16 "(A) For any taxable year ending prior to

17 1955,(i)$3,600, minus(ii)the amount of the

18 wages paid to suchindividual during the taxable

19 year; and

20 "(B) For any taxable year ending after 1954

21 and prior to 1959,(i)$4,200, minus(ii)the

22 amount of the wages paid to suchindividual during

23 the taxable year; and

H. R. 13549 2 18

1 "(0) For any taxable year ending after 1958,

2 (i)$4,800, minus(II)the amount of the wages

3 paid to such individual during the taxable year; or".

4 Definitions of Quarter and Quarter of Coverage

5 (c)Clauses(II)and(ill)of section 213(a)(2)

6 (B)of the Social Security Act are amended to read as

7follows:

8 "(ii) if the wages paid to any individual in any

9 caiendaryear equal $3,600 in the ease of a calendar 10 year after 1950 and before 1955, or $4,200 in the

11 case of a calendar year after 1954 and before 1959,

12 or $4,800 in the case of a calendar year after 1958,

13 each quarter of such year sha1 (subject to clause 14 (i))be a quarter of coverage; 15 "(iii)if an individual has self-employment in

16 comefor a taxable year, and if the sum of such 17 incomeand the wages paid to him during suchyear 18 equals $3,600 in the case ofa taxable year begin- 19 ning after 1950 and ending before 1955,or $4,200 20 in the case of a taxableyear ending after 1954 21 and before 1959, or $4,800 in thecase of a taxable

22 year ending after 1958, each quarter any partof 23 which falls in such year shall(subject to clause

24 (1))bea quarter of coverage ;". 19

1 Average Monthly Wage

2 (d)(1) Paragraph (1)of section 215 (e)of such

3 Act is amended to read as follows:

4 "(1) in computing an individual's average monthly

5 wage there shall not becounted the excess over $3,600 in

6 the case of any calendar year after 1950 and before 1955,

7 theexcess over $4,200 in the caseof any calendar year

8 after 1954 and before 1959, and the excess over $4,800

9 in the case of any calendar year after 1958,of (A) the

10 wages paid to him insuch year, plus (B) the self-em-

11 ployment income credited to such year (asdetermined

12 undersection 212) ;".

13 (2) Section 215 (e) of such Act is further amendedby

14striking out "(d)(4)" each place it appears and inserting

15in lieu thereof "(d) ".

16TITLE 11—AMENDMENTS RELATING TODIS-

17 ABILITY FREEZE AND DISABILITY INSIIR-

18 ANCE BENEFITS

19 APPLICATION FOR DISABILITY DETERMINATION

20 SEC. 201. Section 216 (i)(2) of the Social Security

21Act is amended—

22 (1) by striking out "while under a disability," in

23 the second sentence and inserting in lieu thereof "while

24 under such disability,"; and 20

1 (2) by striking out "one-year" in clause(ii)of

2 subparagraph (A) and inserting in lieu thereof "eight-

3 een-month".

4 RETROACTIVE PAYMENT OF DISABILITY INSURANCE

5 BENEFITS

6 SEC. 202. (a) Section 223 (b) of such Act is amended

7by adding at the end thereof the following new sentence:

8 "An individual who would have been entitled to a disability

9insurance benefit for any month after June 1957 had he

10filed application therefor prior to the end of such ni,nth

11shallbe entitled to such benefit for such month if he files

12application therefor prior to the end of the twelfth month

13immediatelysucceeding such month."

14 (b) The first sentence of section 223 (c)(3)of such 15Act(defining the term "waiting period" for purposes of 16applications for disability insurance benefits)is amended to 17read as follows: 18 "(3) The term 'waiting period' means, in the case 19 of any application for disability insurance benefits, the 20 earliest period of six consecutive calendar months— 21 "(A) throughout which the individual who 22 fIles such application has been under a disability

23 which continues without intcrniptionuntilsuch 24 application is filed, and 25 "(B)(i) which begins not earlier than with 21

1 the first day of the eighteenth month before the

2 month in which such apl)licatiofl is filed if such in-

3 dividual is insured for disability insurance benefits

4 in such eighteenth month, or(ii)if he is not so

5 insuredin such month, which begins not earlier

6 than with the first day of the first month after such

7 eighteenth month in which he is so insured."

8RETROACTIVE EFFECT OF APPLICATIONS FOR DISABILITY

9 DETERMINATION

10 Sc. 203. Paragraph (4)of section 216(i)of such iiAct is amended by striking out "July 1957" andinserting

12in lieu thereof "July 1960", by striking out "July 1958"

13and inserting in lieu thereof "July 1961", and bystriking

14out ",ifsuch individual does not die prior to July 1, 1955,".

15 INSURED STATUS REQUIREMENTS

16 Disability Freeze

17 SEC. 204.(a) Paragraph (3)of section 216(i)of

18such Act is amended to read as follows:

19 "(3) The requirements referred to in clauses (A) and

20 (B) of paragraphs (2) and (4) are satisfied by anindividua'

21. with respect to any quarter only if—

22 "(A)he would have been a fully insured in-

23 dividual(as defined in section 214) had he attained

24 retirement age and filed application for benefits under

25 section 202 (a) on the first day of such quarter; and "(B) he had not less than twenty quarters of

2 coverage during the forty-quarter period which ends with such quarter, not counting as part of such forty-

4 quarter period any quarter any part of which was included in a prior period of disability unless such quarter was a quarter of covcrage- coverage;

7 except that the pvovis'ioii of subparagiaph (A) of this para-

8graph shall not apply in the ca. of any individval wit/i re-

9 spectto whom a period of disability would, but for .uch sub- j()paragraph,begin prior to 1951." ii. Disability Insurance Benefits

12 (b) Section 223 (c)(1)(A) of such Act is amended j.3bystriking out "fully and currently insured" and inserting

14in lieu thereof "fully insured".

15BENEFITS FOR THE DEPENDENTS OF DISABILITY INSURANCE

16 BENEFICIARJES

17 Payments from Disability Insurance Trust Fund

18 SEc. 205.(a) The first sentence of section 201 (h) of

19such Act is amended by inserting ",andbenefit payments

20required to be made under subsection (b), (c), or (d)of

21. section 202 to individuals entitled to benefitson the basis 22of the wages and self-employment income of an individual 23entitled to disability insurance benefits," alter "section 223". 23

1 Wife's Insurance Benefits such Act is 2 (b)(1) Subsection (b) of section 202 of "old-age" where- 3amended by inserting "or disability" after

4ever it appearstherein. (2) So much of paragraph (1)of such subsection s

jfollowsthe colon is amended by striking out"or" the first time it appears and insertingimmediately before the period at the end of such paragraph",orher husband eeae&, prior .o 1e month tiwhichh attains rctircrncn-t tge te be be+efit" 'i iwl entitled to dis- 10entitlede 44aM144y inaraiiec ability insurance benefits and is iotentitled to old-age insur—

12ancebenefits". Husband's Insurance Benefits 13 (c)(1) of 14 (c)(1) Subparagraph (C) of subsection

15such section 202 is amended toread as follows: "(C) was receiving at least one-half of hissupport, prescribed 17 s determinedin accordance with regulations

18 by the Secretary, from such individual— which did 19 "(i) if she had a period of disability which she became 20 not end prior to the month in benefits, 21 entitled to old-age or disability insurance time she 22 atthe beginning of such period or at the

23 became entitled to such benefits, or 24

1 "(ii)if she did not have sucha Period of disa-

2 bility, at the time she became eiititlcdto such bcnc-

3 fits,

4 a.nd filed proof of such support within twoyears after the

month in which she filed application withrespect to such

6 period of disability or after the monthin which she

7 becanieentitled to such benefits,as the case may be, or,

S if shc did not have sucha period, two years after the

9 month in which she became entitledto such benefits,

10 and"

ii (2) The remainder of such subsection(c)(1)is 12amended by inserting "or disability" after"old-age" wher-

13ever it appears therein.

1.4 (3) So nuch of such subsection(c)(1)as follows 15thc colon is further amended bystriking out "or" the first 16timeit appears and inserting immediatelybefore the period

17attheCII(l tII('rCof'', or ]iiwife +t4*tfHf*f* 4—h-*en1

18i+ wI+iek t**s ft 6k1gern ++ hcII('fitf4

19 -+) J+* 4i44 114 4I H4H1tH *+ft4* i.'I/O! efl/!/lCd

20 /0(/!.'al.I!1if!/jii.// )'iut"e Ienfi/. uiiil uol CU/I/If il lo o11—aqe

21 Iii.iii,',i, r' Ieii cf/Is''.

22 Child's Insurance Benefits 23 (d)Section 202 (d)(1)of such Act is amendedto 24read as follows:

25 "(d)(1) Every child (as defined insection 216 (e) ) 25

1 ofan individual entitled toold-age or disability insurance

2 benefits, or of au individual who dies a fully or currently in-

3sured individual after 1939, if such child—

4 "(A)has filedapplication forchild's insurance

5 benefits,

6 "(B)at the time such application wasfiled was

7 unmarriedand either(i) had not attained the a.ge of

s eighteenor(II) was under a disability(as defined in

9 section223(c) )whichbegan before he attained the

10 ageof eighteen, and

11 "(C)was dependent uponsuch individual—

12 "(i)ifsuch individual li:id a period of dis-

13 abilitywhich did not end prior to the month in

14 whichhe became entitled to old-age or disability

15 insurancebenefits or(if he has died) prior to the

16 monthin which he died, at the beginning of such

17 periodor at the time hebecame entifled to such

18 benefitsordied,

19 "(ii)if such individual did not have such a

20 periodand is living, at the time such application

21 wasfiled, or

22 "(iii)if such individual did not have such a

23 period and has died, at the time of such death,

24shallbe entitled to a child's insurance benefit fOreach month,

25beginning with the first month after August 1950 inwhich 26

1such child becomes so entitled to such insurance benefits and

2 ending with the month preceding the first month in which

3any of the following occurs: such child dies, marries, is

4adopted (except for adoption by a stepparent, grandparent,

5aunt, or uncle subsequent to the death of such fully or cur-

6rently insured individual), attains the age of eighteen and

7is not under a disability(as defined in section 223 (c))

8which began before he attained such age, or ceases to be

under a disability(as so defined) on or after the dayon

10which he attains age eighteen.Entitlement of any child to benefits under this subsection on the basis of the wages and

12self-employment income of an inlividual entitled to disabifity

13insurance benefits shall also end with the month before the 14 month i whieh such individual ccascs be cntitlcd e such

15bcncfitu un1cs @uth individual the month whie he

1 cca@c e be e entitlcd first month for which such individual

17is not entitled to such benefits unless such individual is, for

18such later month, entitled to old-age insurance benefitsor

19unless he dies in such month."

20 Widower's Insurance Benefits 21 (e) Subparagraph (D) of section 202 (f)(1) of such 22Act is amended to read as follows:

23 "(D) (i) was receiving at least one-half of hissup- 24 port, as determined in accordance with regulations pre- 25 scribed by the Secretary, from such individual at the 27

timeof her deathor, if such individual had a period of

2 disabilitywhich did not end prior to the month in which she died, at the time such period began or at the time of her death, an(1 ified proof of such support within two years after the date of such death, or, if silo had such a period of disability, within two years after the month in which she filed application withrespect to such period of disability or two years after the date of such death, as the case may be, or (ii) was receiving at

10 lease one-hall of his support, as determined iii accordance with regulations prescribed }iy the Secretary, from such

12 individual, and she was a currently insured individua',

13 at the time she becameentitledto old-age or disability

14 insurance benefits or,if suchhidividuahad a period

15 of (lisaluhity whiehdidriot end prior tothemonth in

16 which she bec:inio so entitled, at the time such period

began orat,the time she became entitledtosuch

18 benefits, aridfi'ed proof of such support within two

19 yearsafter the iriontli in which she betnrne entitled to

20 such benefits, or, if she had such a period of disability,

21 within two years after the mouth in which she filed

22 application with respect to such period of disability or

23 two years after the month iii which she became entitled

24 tosuch benefits, as the case iriay be, and". 28

1 Mother's Insurance Benefits

2 (f)Section 202 (g)(1)(F) of such Act is amended

3by inserting "or, if such individual had a period of disability

4which did not end prior to the month in which he died, at

5 thetime such period began or at the time of such death"

6after "death".

7 Parent'sInsurance Benefits

8 (g)Subparagraph (B)of section 202 (h)(1)of

9such Act is amended to read as follows:

10 "(B)(i)was receiving at least one-half of his

11 support from such individual at the time of such mdi-

12 vidual's death or,if such individual had a period of

13 disability which did not end prior to the month in 14 which he died, at the time such period began or at the 15 time of such death, and (ii) filed proof of such support

16 within two years after the date of such death,or, if such 17 individualhad such a period of disability, within two 18 years after the month in which such individual filed ap-

19 plicationwith respect to such period of disabilityor 20 two years after the date of such death, as the case may 21 be,". 22 Simultaneous Entitlement to Benefits 23 (h)Section 202 (k)of such Act is amended by in- 24serting "or disability" after "old-age" each time it appears 25therein. 29

1 Adjustment of Benefits of Female Beneficiaries

2 (i)(1) Subparagraph (B) of paragraph (5)of see-

3 tion 202 (q) of such Act is amended to read as follows:

4 "(B) the number equal to the number of months

5 for which the wife's insurance benefit was reduced under

6 such paragraph (2), but for which such benefit was

7 subject to deductions under paragraph (1) or(2)of

8 section 203(b), under section 203(c), or under

9 section 222 (b) ,".

10 (2) Such paragraph is further amended by striking out

11the period at the end of subparagraph (C) and inserting in

12lieu thereof ",and",by striking out "(A), (B), arid (C)"

13in the material following subparagraph (C) and inserting

14in lieu thereof "(A), (B), (0), and (D) ",andby adding

15after subparagraph (C) the following new subparagraph:

16 "(D) the number equal to the number of months

17 for which such wife's insurance benefit was reduced un-

18 der such paragraph (2), but in or after which her en-

19 titlement to wife's insurance benefits was terminated be-

20 cause her husband ceases to be under a disability, not

21 including in such number of months any month after

22 such termination in which she was entitled to wife's

23 insurance benefits.". 30

1 (3) Subparagraph (A) of paragraph (6) of such sec-

2tion 202 (q) is amended to read as follows:

3 "(A) the number equal to the number of months

4 for which such benefit was reduced under such para-

5 graph, but for which such benefit was subject to deduc-

6 tions under paragi'ah -(*ei -()- e4cetiGn 2 (h)-

7 under cctionø (0),ei undel!cction 22 (b), and".

8 (4) Such paragraph is furthef amcn1cd y strikinget+t

9e period a he ed ef trnbparagraph -fG3-&ftdinserting i

10l4ei± thereof and", by tfiki1g 4)-i(B), an4 (C)"

11 i he materialfollowingubpftragraph-(-G3- aH4 incrting

12i14euthcrcof1-(-A)- (B),(C),frIt4 (D)",andyadding

13after subparagraph -(-03-h.e fellowing iew 9u13paragaph: 14 "(D) the number cgual 1øhenumber ef month

15 fe which such wifoinsurancesection 203 (b) (1) or 16 (2), under section 203 (c), or under section 222 (b),". 17 (4) Such paragraph is further amended by striking out 18"(A), (B), and (C)" in the material following subpara- 19graph (C) and inserting in lieu thereof "(A), (B), (C), 20and (D)", by redesignating subparagraph (C) as subpara- 21graph (D), by inserting "and" at the end of subparagraph 22(B)and by adding after such subparagraph (B) the fol- 23lowingnew subparagraph: 24 "(C) the number equal to the number of months for

25 whichsuch benefit was reduced under such paragraph, 1 but in or after which her entitlement towife's insurance

2 benefits was terminated because her husband ceased to

3 be under a disability, not including in suchnumber of

4 months any month after such termination inwhich she

5 was entitled towife's insurance benefits.".

6 Deduction Provision

7 (j) Section203 (c) of such Act is amended byinsert-

8 ing a comma and "based on the wages andself-employment

9income of an individual entitled to old-ageinsurance bcncfits

10benefits," after "child's insirance benefit" thefirst time it

11appears therein.

12 Circumstances Under Which Deductions NotRequired

13 (k) Section 203 (h)of such Act is amended to read

14as follows:

15 "Circumstances Under Which Deductions NotRequired

16 "(h) In the case of any individual, deductions by reason

17ofthe provisions of subsection (b), (f), or (g)of this sec- 18tion, or the provisions of section 222(b), shall, notwith-

19standing such provisions, be made from the benefits towhich

20such individual is entitled only to the extent thatsuch de-

21ductions reduce the total amount which wouldotherwis&be 22paid, on the basis of the same wages andself-employment 23income, to such individual and the otherindividuals living

24in the same household." .32

1 Currently Insured Individual

2 (1) Section 214 (b) of such Act is amended by insert

3 i+i.g disability" immediately "old age" striking out

4"or" immediately preceding "(3)" and by inserting "or (4)

5 in the case of any individual entitled to disability insurance

6 benefits, the quarter in which he most recently became entitled

7to disability insurance benefits," immediately after "section,".

8 Rounding of Benefits 9 (m) Section 215 (g) of such Act is amended by strik- 10ing out "sections 203 (a) and 224" and inserting in lieu

1-i thereof"section 203 (a) ".

12 Deductions on Account of Refusal To Accept Rehabilitation

13 Services 14 (n) Section 222 (b) of such Act is amended by insert- 15ing after paragraph (2)(added by section 307 (g) of this 16Act) the following new paragraph: 17 "(a)Deductionsshall be made from any wife's, has- 18band's,urchild's insurance bee benefit, basedon the wages 19and self-employment income of an individual entitled to dis- 20 ability insurance benefits benefits, to which a wife, husband,01. 21 child is cntitled entitled, until the total of such deductioiis

22equal such wife's, husband's, or child's insurance benefitor 23benefits under section 202 for any month in which the mdi- 24vidual, on the basis of whose wages and self-employment 25income such benefit was payable, refuses to accept rehabilihi- 33 refusal, are 1tion services and deductions, on account of such

2imposed under paragraph (1) ."

3 Suspension of Benefits Based on Disability adding at 4 (o) Section 225 of su.ch Act is amended by the end thereof the following new sentence: "Wheneverthe disability insurance 6benefits of an individual entitled to a benefit are suspended for any month, thebenefits of any (c), or (d) 8individual entitled thereto under subsection (b), of section 2Q 202,onthe basis of the wages and self- suspended for 10employment income of such individual, shall be such month."

DISABILITY 12REPEAL OF REDUCTION OF BENEFITS BASED ON hereby repealed. 13 SEC. 206. Section 224 of such Act is

14 EFFECTIVE DATES

15 SEC. 207.(a) The amendments made by section 201

16shall apply with respect to applications for adisability deter-

17minationunder section 216 (i)of the Social Security Act

18filed after June 1961.The amendments mide by section

19202 shall apply with respect to applications fordisability

20insurance benefits under section 223 of such Actfiled after

21December 1957.The amendments made by section 203

22shall apply with respect to applications for a disability deter-

23mination under such section 216 (i)filed after June 1958. 24 The amendments made by section 204shall apply with

H.R.13549 3 respect to(1) applications for disability insurance benefits

2under such section 223 or for a disability determination under such section216 (i)filed on or after the date of enactment

1ofthis Act, and (2)applicationsfor such benefits or for

such adetermination filed after 1957 and prior to such date of

6enaetinent if the applicant has iiot died prior to such date of

7 enactment and if notice to the applicant of the Secretary's decision with respect thereto has not been givell to himon or

9 to stidi date. (xce1)t thaL (A )itobenefits under title II

10of the So:ial Seiirity A (t. for the iitoittltiii WhiCh this Ad i fleIla(te(1 or aity plior itwittli hia11 be payableor inereased by

12reason of the amendments made by S(ctior1 204 of this A t,

13and (B) the provisions of Scetioit 2 I 5 (f)(1) of the Soia.l

14Security Act shall iot prevciit reeoiuputation of monthly beiiefits under section 202 of su(1J At (butiio sudi recompu— tatiori shall be icgirded as a reconiputatioii for purposes of section 215 (f)of such Act) The amendments made by eet,ioit 205 (other titan by t4i÷* -f4-- sihsectiovs(k) (iii(i(m) ) hllapply with respet to iiioiitiily 1)enefits U]id(1

title II of the Social Security A (t for monthsi ftcr tlic month in which this Act is enacted, but only ifan application for sneh benefits is filed on or after the (late of enactment of thisAct.The amendments madc by section 206 and by .I4)ffP1}4-)fl-(-k-)- sub'ectionR (k) and(m)of section 205 shall

25applywith respeet to monthly bcnefits under title II of the 35

1 SocialSecurity Act for the month in which this Act is

2 enactedand succeeding months.

3 (b) In the case of any husband, widower, or parent

4who would not be entitled tobenefits under section 202 (c),

5section 202 (f), and section 202 (h),respectively, of the

6SocialSecurity Act except for the enactment of section205

7 ofthis Act, the requirement in such section 202(c), sec-

8tion202 (1), or section 202 (h), as the case maybe, that

9proofof support be filed within a two-yearperiod shall not

10applyif such proof is filed within two years afterthe month

11 inwhich this Act is enacted.

12 TITLEIll—PROVISIONS RELATING TO ELIGI-

13 BILITYOF CLAIMANTS FOR SOCIAL SECTJ-

14 RITYBENEFITS, AND MISCELLANEOUS PRO-

15 VISIONS

16 ELIGIBILITYOF SPOUSE FOR DEPENDENTS OB SURVIVORS

17 BENEFITS

18 Husband'sInsurance Benefits

19 SEO.301.(a)(1) Section 202(c)of the Social

20SecurityAct is amended by redesignating paragraph(2)

21 asparagraph(3)and adding after paragraph(1)the

22followingnew paragraph:

23 "(2)The requirement in paragraph (1) that the mdi-

24vidualentitled to old-age or disability insurance benefits be

25acurrenfly insured individua', and the provisions ofsub- 30

1. paragrapi (C)ofsuch paragraph, shall not be applicable in

2 the case of ally husband who—

3 "(A) in the month prior to the month of his mar-

4 riage to such individua' was entitled to, or on application

5 thereforand attainment of retirement age in such prior

6 month wou'd have been entitled to, benefits under sub-

7 section(1)or (h).; or

8 "(B) in the month prior to the month of his mar-

9 ria.ge to such individual had attained age eighteen and it) was entitled to, or oil application therefor would have ii been entitled to, benefits under subsection (d) ."

12 (2) Section 216 (f)of such Act is amended to read as

13follows:

14 "(f)The term 'husband' means the husband of an 15individual, but only if(1) he is the father of her son or 16daughter,(2) he was married to her for a period of not

17less than three years immediately preceding the dayon 18which his appflcation is filed, or (3)ii the month prior to 19the month of his marriage to her (A) hewas entitled to, 20or on application therefor and attainment of retirement age

21. in such Prior Im)ntlI would have been entitled to, benefits 22under subsection (f)or (h) of section 202, or (B) he had 22attained age eighteen and was entitled to, oron application 24thereforwould have been entitled to, benefits under subsec- 25tion (d) of such section." 37

1 Widow's Insurance Benefits

2 (b)(1) Subparagraph (B) of section 202(e)(3)

3 of such Act is amended by striking out"but she is not

4his widow (as defined in section 216 (c) )"andinserting

5 in lieu thereof "which occurs within one year aftersuch

6 marriage and he did not die a fully insured individuaV'.

7 (2) Section 216 (c) of such Act is amended to read as

8foilows:

9 "(c) The term 'widow' (except when used insection

10 202 (i)) means the surviving wife of anindividual, but ii.only if(1) she is the mother of his son or daughter,(2.)

12 she legally adopted his son or daughter while she wasmarried

13to him and while such son or daughter wasunder the age

14of eighteen,(3) he legally adopted her son or daughter

15while she was married to him and while such son or daughter

16 was under the age ofeighteen, (4) she was married to him.

17at the time both of them legally adopted achild under the

18 age of eighteen, (5) she wasmarried to him for a period of

19not less than one year immediatelyprior to the day on

20which he died, or (6) in the month prior to themonth of

21. hermarriage to him (A) she was entifled to, or onapplica-

22tiontherefor and attainment of retirement age in such prior

23 monthwould have been entifled to, benefits under subsection

24 (e)or (h)of section 202, or (B) she had attained age

25eighteenand was entitled to,or on applicationtherefor 38

1 would have been entitled to, benefits under subsection (d)

2of such section,"

3 Widower'sInsurance Benefits

4 (c)(1) Section 202 (f)of such Act is amended by

5redesignating paragraph(2)as paragraph(3)and by

6adding after paragraph (1) the following new paragraph:

7 "(2)The requirement in paragraph(1)thatthe

8deceased fully insured individual also be a currently insured

9individual, and the provisions of subparagraph (D) of such

10paragraph, shall not be applicable in the case of any mdi-

11vidual who—.

12 "(A)in the month prior to the month of his

13 marriage to such individual was entitled to, or on ap- 14 plication therefor and attainment of retirement age in 15 such prior month would have been entitled to, benefits

16 under this subsection or subsection (h); or 17 "(B)in the month prior to the month of his mar-

18 riageto such individual had attained age eighteen and 19 was entitled to, or on application therefor would have 20 been entitled to, benefits under subsection (d) ." 21 (2) Section 216 (g)of such Act is amended to read 22as follows: 23 "(g) The term 'widower' (except when used in section 24202(i)) means the surviving husband of an individual, 25but only if (1) he is the father of her n or daughter, (2) U

1. he legally adopted her son ordaughterwhile he was married

2 to her and while such soii or daughter was under the age

3 of eighteen,(3)she legally adopted his son or daughter

4while he was married to her and while such son or daughter

5 was under the age of eighteen,(4)lie was married to her

6at the time both of them legally adopted a child under the

7 ageof eighteeii,(5) he was married to her for a period of

8not less than one year immediately prior to the day onwhich

9she died, or(6)in the month before the month of his

10rrlarriage to her (A) he was entitled to, or on application

11therefor and attaiiiirientof retirerneiit age in such prior

12month would have been entitled to, benefits under subsec-

13tion (f) or (h) of section 202, or (B) he had attained age

14eighteen arid was entitledto,or on application therefor

15wouldhave been entitled to, benefits under subsection(d)

16of such section."

17 Definition of Wife

18 (d) Section 216 (b) of such Act is amended by striking

19out "or" at the end of the clause (1), and byinserting before

20the period at the end thereof: ",or(3) in the month prior

21 to the month of her marriage to him (A) wasentitled to,

22or on application thereforand attainment of retirement age

23in such prior month would have been entitled to, benefits

24undersubsection(e)or(h)of section 202, or (B) had

25attained age eighteen and was entitled to, or on application 40

1therefor would have been entitled to, benefits under subsection

2 (d) of such section".

3 Definitionof Former Wife Divorced (e)Section 216 (d)of such Act is amended to read

as follows:

6 "(d) The term 'former wife divorced' means a woman divorced from an individual, but only if (1) she is the mother of his son or daughter,(2) she legally adopted his son or daughter while she was married to him and while such son

10or daughter was under the age of eighteen, (3) he legally adopted her son or daughter while she was married to him

12and while such son or daughter was under the age of eighteen, or (4) she was married to him at the time both of them

14legally adopted a child under the age of eighteen."

15 Effective Date

16 (f) The amendments made by this section shall apply

17with respect to monthly benefits under section 202 of the Social Security Act for months beginning after the date of

19enactment of this Act, but only if an application for such

20benefits is filed on or after such date.

21ELIGIBILITy OF CHILD FOR DEPENDENTS OR SURVIVORS

22 BENEFITS

23 Definition of Child

24 SEC. 302. (a) Section 216 (e) of such Act is amended

25to read as follows: 41

1 "(e) The term 'child' means (1) the child orlegally

2 adopted child of an individual, and (2)in the case of a

3living individual, a stepchild who has been suchstepchild

4for not less than three years immediately preceding the

5 day on which application for child's benefits isfiled, and

6 (3) in the case of a deceased individual, a stepchildwho

7has been such stepchild for not less than one yearimmedi-

8ately preceding the day on which such individual died.For

9purposes of clause(1), a person shall be deemed, as of

10the date of death of an individual, to be thelegally adopted

11child of such individual if such person was at the timeof

12such individual's death living in such individual's household

13and was legally adopted by such individual'ssurviving spouse

14after such individual's death but before the end of two

15years after the day on which suchindividual died; except

16that this sentence shall not apply if at the timeof such

17individual'sdeath suchperson was receiving regular conS

18tributions toward his support from someone other than such

19individual or his spouse, or from any public or private wel-

20fare organization 'which furnishes services orassistance for

21children."

22 Effective Date

23 (b) The amendment made by this section shallapply

24with respect to monthly benefits under section 202of the

25Social Security Act for months beginningafter the date of 42

I enactirient of this A Ct,,bittonlyif an applicatL)n for such

2 benefitsis filed on or after such date.

ELIGIBILITY OF REMARRIED WIDOWS FOR MOTUER'S

4 INSURANCE BENEFITS

5 Sc.303. Section 202 (g) of the Social Security Act is

6 amended by adding at the end thereof the following new

7paragraph:

8 "(3) In the case of anywidowor former wife divorced

9of an individual—

10 "(A) who marries another individual, and

11 "(B) whose marriage to the individual referred to

12 in subparagraph (A) is terminated by his death but she

13 i. not h wi4w a defiue4+e4i*rn l- -(-+4-isnot,

14 anduponfiinqaj)plwutjon Iher'foi' in th month in

15 which he died would not be, (1,tt/ed to bevefii for such

16 mont/i on the basis of h'is wages(t'i(l.eif-enlpioym(ni

17 income,

18the marriage to the individual referred to in clause(A) 19shall, for the purpose of paragraph (1), be deemed not to 20have occurred. No benefits shall be payable under this sub- 21section by reason of the preceding sentence for any month

22prior to whichever of the following is the latest:(i)the 23month in which the death referred to in subparagraph (B)

24of the preceding sentence occurs,(II)the twelfth month 25before the month in which such widow or former wife 43

1 divorced files application for purposes of this paragraph,

2or (ill) the month following the month in which this para-

3graph is enacted."

4 ELIGIBILITY FOR PARENT'S INSURANCE BENEFITS

5 Provisions Relating to Eligibility

6 SEC. 304. (a)(1) So much of section 202 (h)(1) of

7the Social Security Act as precedes subparagraph (A)is

8amended to read as follows:

9 "(1) Every parent (as defined in this subsection) of an

10individual who died a fully insured individual after 1939,

11if such parent—".

12 (2) The amendment made by this subsection shall apply

13with respect to monthly benefits under section 202 of the

14Social Security Act for months beginning after the date of

15enactment of this Act, but only if an application for such

16benefits is filed on or after such date.

17 Deaths Before Effective Date

18 (b) Wherefr—

19 (1) one or more persons were entitled(without

20 the application of section 202(j)(1)of the Social

21 Security Act) to monthly benefits under section 202 of

22 such Act for the month in which this Act is enacted on

23 the basis of the wages and self-employment income of an

24 individual; and

25 (2) a person isentitled to a parent's insurance 44

1 benefit under section 202(h)of the Social Security

2 Act for any subsequent month on thebasis of such wages

3 andsell-employment income and such personwould

4 not be entitled to suchbenefit but for the enactment of

5 this section; and

6 (3) the total of the benefits to which all persons are

7 entitled under section 202 of the SocialSecurity Act on

8 the basis of such wages andself-employment income for

9 such subsequent month are reduced by reasonof the ap-

10 plication of section 203 (a) of such Act,

11then the amount of the benefit towhich each such person

12referred to in paragraph (1)of this subsection is entitled

13for such subsequent month shall beincreased, after the a1p1i-

14cation of such section 203(a), to the amount it would

15have been if no person referred to inparagraph (2) of this

16subsection was entitled to a parent's insurancebeiiefit for

17such subsequent month on the basis of such wagesand self-

18employment income.

19Proof of Support in Cases of Deaths BeforeEffective Date

20 (c) In the case of any parent who would not beentitled

21to parent's benefits under section 202(h) of the Social Secu-

22rity Act except for the enactment of this section, therequire-

23ment in such section 202 (h) thatproof of support be filed

24within two years of the date of death of the insuredindividual

25 referred to therein shall not apply if such proof is filed withiu 1 the two—year period beginning with the first day of the month

2 afterthe month in which this Act is enacted.

3 ELIGIBILITY FOR LUMP-SUM DEATH PAYMENTS

4 Requirement That Surviving Spouse Be a Member of

5 Deceased's Household

6 5ic. 305.(a)The first sentence of section 202(i)

7of the Social Security Act is amended by inserting "in the

8arrie house}iohd" after "living".

9 Provisions Relating to Widows and Widowers

10 (b) Section 216(h)of such Actis amended by

11strikingout paragraph (3).

12 Effective Date

13 (c) The amendments made by this section shaH apply

14inthe ease of hiirip-surn death payments under such section

15202(i)oil the basis of the wages and self-employment

16incomeof any i1i(iividual who dies after the month in which

17thisAct is enacted.

18 ELTGIBTLJTYOF I)JSABLED PEESONS FOIL CIIILI)'S INS UliANCE

19 BENEFITS

2() Provisions Relating to Dependency

21. S1c.306.(a) Section 202 (d)of the Social Security 22Actis amended by striking out "who has not attained the

23ageof eighteen" each place it appears in paragraphs (3), 24 (4), and(5)thereof, and by striking out paragraph (6). 46

1 Effective Date

2 (b) The amendments made by this section shall apply

3with respect to monthly benefits under section 202 of the

4Socia1 Security Act for months beginning after the date of

5enactment of this Act, but only if an application for such

6benefits is ified on or after such date.

7 ELIMINATION OF MARRIAGE AS BASIS FOR TERMINATING

8 CERTAIN SURVIVORS BENEFITS

9 Child's Insurance Benefits

10 SEC. 307. (a)Section 202 (d) of the Social Security

11Act is amended by inserting immediately after paragraph

12 (5) thereof the following new paragraph:

18 "(B) another individual who has attained theage 19 of eighteen and is entitled to benefits under this sub-

20 section, 21such child's entitlement to benefits under this subsection 22shall, notwithstanding the provisions of paragraph (1), not 23be terminated by reason of such marriage; except that, in 24the case of such a marriage to a male individual entitled to 25benefits under section 223 (a)or this subsection, the pre- 47

1 cedingprovisions of this paragraph shall not apply with

2respect to benefits for months after the last month for which such individual is entitled to such benefits tinder section 223

. (a)or this subsection uidess(i)lie ceases to be so entitled

5 byreasonof 1ii4eMl+death, or(ii)in the case of an mdi—

(; Vi(Iualwho was entitled to benefits under section 223(a),he

7 i entitled, for the month following such hist mouth, to beric—

sfitsumler suhsetion (a) of this section."

9 Widow's Insurance Benefits

:1i (b) Section202 (e)of such Act is amended by insert- i ing at the eid thereof thefollowing new paragraph:

112 "(4)In the ease of a widow who marries—

13 "(A) an individual entitled to benefits under sub-

14 section (1) or (h) of this section, or

15 "(B) an individual who has attained the age of

16 eighteen and is entitled to benefits imder subsection (d),

17such widow's entitlement to benefits under this subsection

18shall, notwithstanding the provisions of paragraph (1), not

Ic-) he tetnimated by fCHSO.li of sueli marriage; except that, iu

2() thecase of siwliaullarriage to an individual eiititled to

21J)('IIeIits iirider iibseton (d),thepreceding provisions of

22this paragraphshall ot apply with respect tobenefitsfor

23months after the last month for which such individual is

24entitled to such benefits under subsection(d)unless he

25ceasesto be so entitled by reason of his death." 48

1 Widower's Insurance Benefits

2 (c) Section 202 (f) of such Act is amended by adding

3at the end thereof the following new paragraph:

4 "(4) In the case of a widower who marries—

5 "(A) an individual entitled to benefits under sub-

6 section (e), (g), or (h), or

7 "(B) an individual who has attained the age of

8 eighteen and is entitled to benefits under subsection (d),

9such widower's entitlement to benefits under this subsection

10shall, notwithstanding the provisionsof paragraph(1), iinot be terminated by reason of such marriage."

12 Mother's Insurance Benefits

13 (d) Section 202 (g) of such Act is t4nrnded by adding

14after paragraph (3)(added by section 303 f this Act)

15the following new paragraph:

16 "(4) In the case of a. widow or former wife divorced 17 who marries—

18 "(A) an individual entitled to benefits under sub-

19 section (a), (f), or (h), or under section 223 (a), or

20 "(B) an individual who has attained the age of

21 eighteen and is entitled to benefits under subsection (d),

22the entitlement of such widow or former wife divorced to

23benefits under this subsection shall, notwithstanding the pro-

24visions of paragraph (1), not be terminated by reason of

25such marriage; except that, iiithecase of such a marriage 49

1to an individual entitled to benefits under section 223(a) or

2subsection(d)of this section, the preceding provisions of

3this paragraph shall not apply with respect to benefits for

4monthsafter the last month for which such individual is

5entitled to such benefits under section 223 (a) or subsection

6 (d)of this section unless(i)lie ceases to be so entitled by

7reason of his death death, or(ii)in the case of an individual

8who was entitled to benefits under section 223 (a), he is

9entitled, for the month following such last month, to benefits

10under subsection(a)of this section."

11 Parent'sInsurance Benefits

12 (e) Section 202 (h)of such Act is amended by add-

13 ingat the end thereof the following new paragraph:

14 "(4)In the case of a parent who marries—

15 "(A)an individual entitled to benefits under this

16 subsection or subsection (e), (f), or (g), or

17 ".(B)an individual who has attained the age of

18 eighteen and isentitled to benefits under subsection

19 (d),

20such parent's entitlement to benefits under this subsection

21 shall,notwithstanding the provisions of paragraph (1), not

22beterminated by reason of such marriage; except that, in

23the case of such a marriage to a mate individual entitled

24 tobenefits under subsection(d), the preceding provisions

H.R.13549 4 50

1of this paragraph shall not apply with respect to benefits

2for months after the last month for which such individual

3is entitled to such benefits under subsection(d) unless he

4ceases to be so entitled by reason of hisdeath."

5 Deduction Provisions

6 (f)Subsection(c)ofsection 203 of such Actis

7amended by inserting "(1)" after "(c) ",byredesignating

8subparagraphs(1)and(2)as subparagraphs (A) and

9 (B), respectively, by striking out "paragraph (1)" and

10inserting in lieu thereof "subparagraph (A) ",andby add-

11ing at the end of such subsection the following new para-

12graph:

13 "(2) Deductions shall be made from any child's insur-

14ance benefit to which a child who has attained the age of

15eighteen is entitled or from any mother's insurance benefit

16to which a person is enfitlcd entitled, until the total of such

17deductions equals such child's insurance benefit or benefits

18or mother's insurance benefit or benefits under section 202

19for any month—

20 "(A) in which such child or person entitled to

21 mother'sinsurancebenefitismarriedtoan indi

22 vidual entitled to old-age insurance benefits under sec-

23 tion 202 (a) who is under the age of seventy-two and

24 for which month such individual is charged with any 51

1 earnings under the provisions of subsectioii(e)of this

2 section, or

3 "(B)in which such child or person entitled to

4 mother's insurancebenefitsismarriedtothe mdi—

5 vidual referred to in subparagraph (A) and on seven

6 or more diflereiit calendar days of which such mdi-

7 vidualengaged in noncovered remunerative activity out-

8 side the Unitcd States."

9Deductions on AccountofRefusal To Accept Rchabilitation

10 Services

11 (g) Section 222 (b) of such Act is amended by insert- 12 ;g "(1)" after "(b)", and by adding at the end thereof

13the following new paragraph:

14 "(2) Deductions shall be made froin any child's in-

15surance benefit to which a child who has attained the age of

16eighteen is entitled or from any mother's insurance benefit

17towiiieli a person IS eff41-e4 (flhi1iC(i,untilthe tOtal of suieli

18deductions equals such child's insnrallee benefit or benefits or

19such mother's insurance benefitorbenefits under ectioii 202

20for any month in which such child or person entitled to

21mother's insurance benefits is married to an individual who

22is entitled to disability insurance benefits and in which such

23individual refusesto accept rehabilitation services and a

24deduction, on account of such refusal,is imposed under 52

1paragraph (1).If both this paragraph and paragraph (3)

2are applicable to a child's insurancebenefit for any month,

3only an amount equal to such benefit shall be deducted."

4 Effective Date

5 (h)(1) The amendments made by this section (other

6than by subsections (f) and (g)) shall apply with respect

7to monthly benefits under section 202 of the SocialSecurity 8 Act for months following the month in whichthis Act is

9enacted; except that in any case. in which benefits were ter-

10minated with the close of the month in which this Act is

11enacted or any prior month and, if the amendments made by

12this section had been in effect for such month, such benefits 13 would not have been terminated, theamendments made by

14this section shall apply with respect to monthly benefits

15under section 202 of the Social Security Act for months

16beginning after the date of enactment of this Act, but only

17if an application for such benefits is filed after such date.

18 (2) The amendment made by subsection (f)shall ap-

19ply with respect to monthly benefits under section 202 -(-4)-

20of the Social Seeui4ty A fo months iantaxable ycar, 21of 4he iiidividualei he 1asis ewhosc wages arid c1f cm

22ploymcnt income such bcncfits ae payable subsection (d) or

23(g) of section 202 of the Social Security Act for month$ in 53 any taxable year, of theindividual to whom the person en-

2 titled to such benefits is married, beginning after the month in which this Act is enacted. (3) The amendments made by subsection (g)shall

5apply with respect to monthly benefits under section 202of month 6the Social Security Act for months, occurring after the in which this Act is enacted, in which a deduction is incurred

8under paragraph (1)of section 222 (b)of the Social Se-

9curity Act. jjj AMOUNTWBIOH MAY BE EARNED WITHOUT LOSS OF

11 BENEFITS

12 SEc. 308.(a)Section 203(e)(2)of such Act is

13amended by strikingout"last month" and "preceding 14 month"wherever they appear and substituting in lieu thereof

15"first month" and "succeeding month", respectively.

16 (b) Section 203 (e)(3)(A) of such Act is amended

17by striking out "the term 'last month of such taxable year'

18means the latest month" andsubstituting in lieu thereof

19"the term 'first month of such taxable year' means the

20earliest month".

21 (c) Subsections (e)(2)(D) and (e)(3)(B)(ii)

22of section 203 of such Act are each amended by striking

23out "$80" and inserting in lieu thereof "1QQ", 54

1 (d) Section 203 (g)(1)of such Act is amended to

2read as follows:

3 "(g)(1)(A)If an individualisentitled to any

4monthly insurance benefit under section 202 during any

5 taxable year in which he has earnings or wages, as corn-

6puted pursuant to paragraph(4)of subsection(e), in

7 excess of the product of $100 times the number of months

8in such year, such individual (or the individual who is in

9receipt of such benefit on his behalf) shall make a report to

10the Secretary of his earnings (or wages) for such taxable

11year.Such report shall he made on or before the fifteenth

12day of the fourth month following the close of such year,

13and shall contain such information and be made in such

14manner as the Secretary may by regulations prescribe.Such

15report need not be made for any taxable year (i) beginning

16with or after the month in which such individual attained

17the age of 72, or (ii)if benefit payments for all months (in

18such taxable year) in which such individual is under age 72

19have been suspended fei a14 stie1 mei-th e4 suchyear under 20the provisions of the first sentence of paragraph (3) of this

21subsection.

22 "(B) If the benefit payments ofan individual have 23been suspended for all months in any taxable year under

24the provisions of the first sentence of paragraph (3) of sub- 25section(g), no benefit payment shall be made to such 55 Iindividual for any such month in such taxable year after the

2 expiration of the period of three years, three months, and

3fifteen days following the close of such taxable year unless

4within such period the individual, or some other person

5 entitled to benefits under this title on the basis of the same

6wages and self-employment income, ifies with theSecretary

7information showing that a benefit for such month is payable

8to such individual."

9 (e) Section 203 (1) of such Act is amended by striking

10out "(g)" and inserting in lieu thereof "(g)(1)(A) ".

11 (f) The amendments made by this section shall be

12applicable with respect to taxable years begirmirig after the 13 month in which this Act is enacted.

14 REPRESENTATION OF CLAIMANTS BEFORE SECRETARY OP

15 flEALTH, EDUCATTON, AND WELFARE

16 SEC. 309. The second sentence of section 206 of the

17SocialSecurity Act is amended by striking out "upon filing

18with the Administrator a certificate of his right to so practice

19from the presiding judge or clerk of any such court".

20 OFFENSES UNDER TITLE II OF THE SOCIAL SECURITY ACT

21 SEC. 310. Section 208 of the Social Security Act is

22amendedto read as follows:

23 "PENALTIES

24 "SEC. 208. Whoever—

25 "(a) for the purpose of eausing an increase in any 56

1 payment authorized to be made under thistitle, or for

2 the purpose of causing any payment to be madewhere

3 no payment isauthorized under this title, shall make or

4 cause to be made any false statement orrepresentation

5 (including any false, statement or representation in con-

6 nection with any matter arising under subchapter E of

7 chapter 1, or subchapter A or E of chapter 9 of the

8 Internal Revenue Code of 1939, or chapter 2 or 21 or

9 subtitle F of the Internal Revenue Code of 1954) as to—

10 "(1) whether wages were paid or received for

11 employment (as said terms are defined in this title

12 and the Internal Revenue Code), or the amount of

13 wages or the period during which paid or the person

14 to whom paid; or

15 "(2) whether net earnings from self-employ-

16 ment (as such term is defined in this title and in the

17 Internal Revenue Code) were derived, or as to

18 the amount of such net earnings or the period dur-

19 ing which or the person by whom derived; or

20 "(3) whether a person entitledtobenefits 21 under this title had earnings in or for a particular

22 period(as determined under section 203(e)of 23 this title for purposes of deductions from benefits), 24 or as to the amount thereof; or 57

1 "(b) makes or causes to be made any false state-

2 mentor representation of amaterial fact in any app11-

3 cation for any payment or for a disability determination

4 under this title; or

5 "(c) at any time makes or causes to be made any

6 false statement or representation of a material fact for

7 use in determining rights to paymentunder this title; or

8 "(d) having knowledge of the occurrence of any

9 event affecting (1) his initial or continued right to any

10 payment under this title, or (2) the initial or continued

11 right to any payment of any other individual in whose

12 behalf he has applied for or is receiving such payment,

13 conceals or fails to disclose such event with an intent

14 fraudulently tosecure payment either ina greater

15 amount than is due or when no payment is authorized;

16 or

17 "(e)having made application to receive payment

18 under this title for the use and benefit of another and

19 having received such a payment, knowingly and willfully

20 converts such a payment, or any part thereof, to a use

21 other than for the use and benefit of such other person;

22shall be guilty of a misdemeanor and upon conviction thereof

23shall be fined not more than $1,000 or imprisoned for not 24 more than one year, or both." 58

1 5410K LEAVE P*6 OP STATE AND LOCAL EMPLOYEES

2 SEO 311. -(4Subsection-(43-ofsection 2Oofthe Social

3Security Aet is amended by inserting immediately before

4the semicolon a period and the following: As used in this

5subsection, the term ±sick pay ineludes remuneration for

6servicein the employ of a State, or a political subdiiv4sion

7 dinseetion8ftofaState7oran

8instrumentality of two or more StatesT paid to an employee

9thereof for a period during which he was absent from work

10because of siekness.

11 -fh3- The amendment made by subsection -(*3-shallhe

12applicable to remuneration paid after the enactment of this

13Act, except that, in the ease of any coverage group which

14is included under the agreen tent of a State under section 24-8

15of the Social Security Act, the amendment made by subsection

16 -(*3-shallalso be applicable to remuneration for any member

17of such coverage group with respect to services performed 18after the effective date7 spetilfied in such agreement1 for such 19coverage group, if such State has paid or agrees prier to Jan 20uary 4- 19&9 to pay, prior to such date7 the amounts which

21under section 24-8 -(-e3- would have been payable with respect 22to remuneration of all members of such coverage group had

23the amendment made by subsection -(*3-beenin effect on and 24after January 4-7 4-54Failureby a State to make sueh 59

1payments p4oi ø Janmy 4- 4459. shall be trcatcd the same

2&s failure ø make payrnctts whendue u-ii4cetion2-18(c)-

3 EXTENSION OF COVERAGE IN CONNECTION WITH GUM RESIN

4 PRODUCTS

5 SEC. &19 311.(a)Section 210 (a)(1) of the Social

6Security Act is amended to read as follows:

7 "(1)Service performed by foreignagriciiltural

8 workers (A) under contracts entered into in accord-

9 ance with title 'Vofthe Agricultural Act of 1949, as

10 amended, or (B) lawfully admitted to the United States

11 from the Bahamas, Jamaica, and the other British

12 West Indies, or from any other foreign country or

13 possession thereof, on a temporary basis to perform 14 agricultural labor ;".

15 (b) The amendment made by subsection (a) shall apply

16with respect to service performed after 1958.

17 EMPLOYMENT FOR NONPROFIT ORGANIZATION

18 SEC. M- 312.(a)Section 210 (a)(8)(B) of title II 19of the Social Security Act is amended to read as follows: 20 "(B) Service performed in the employ of a reli- 21 gious, charitable, educational, or other organization de- 22 scribed in section 501 (c)(3) of the Internal iRevenue 23 Code of 1954, which is exempt from income tax under 24 section 501(a)of such Code, but this subparagraph 25 shall not apply to service performed during the 'period 60

1 for which a certificate, filed pursuant to section 3121

2 (k) of the Internal Revenue Code of 1954, is in effect

3 if such service is performed by an employee—

4 "(i) whose signature appears on the list ified

5 by such organization under such section 3121 (k),

6 "(II)who became an employee of such organi-

7 zation after the calendar quarter in which the cer-

8 tificate (other than a certificate referred to in clause

9 (111)) wasfiled,or

10 "(iii)who,after the calendar quarter in which

11 the certificate was filed with respect to a group

12 described in paragraph(1)(E)of such section

13 3121 (k), became a member of such group, 14 except that this subparagraph shall apply with respect

15 to service performed by an employee as a member of

16 a group described in such paragraph(1)(E) with

17 respect to which no certificate is in effect;".

18 (b) The amendment made by subsection,(a)shall

19apply with respect to certificates filed under section 3121

20 (k)(1)of the Internal Revenue Code of 1954 after the

21date of enactment of this Act.

22PARTNER'S TAXABLE YEAR ENDING AS RESULT OF DEATH

23 SEC. .344 313.(a)Section 211 of the Social Security

24Act is amended by adding at the end thereof the following 25 new subsection: 61

1 "Partner's Taxable Year Ending as Result of Death

2 "(f) In computing a partner's net earnings from self-

3employment for his taxable year which ends as a result of his

4death (but only if such taxable year ends within,andnot

5with, the taxable year of the partnership), there shall be in-

6cluded so much of the deceased partner's distributive share

7of the partnership's ordinary income or loss for the partner-

8ship taxable year as is not attributable to an. interest in the

9partnership during any period beghrning on or after the first

10day of the first calendar month following the month in which iisuch partner died.For purposes of this subsection—

12 "(1) in determining the portion of the distributive

13 share which.is attributable to any period specified in the

14 preceding sentence, the ordinary income or loss of the

15 partnership shall be treated as having been realized or

16 sustained ratably over the partnership taxable year; and

17 "(2)theterm 'deceasedpartner'sdistributive

18 share' includes the share of his estate or of any other

19 person succeeding, by reason of his death, to rights with

20 respect to his partnership interest."

21 (b)The amendment made by subsection(a)shall

22apply—

23 (1) with respect to individuals who die after the

24 date of the enactment of this Act, and

25 (2) with respect to any individual who died after 62

1. 1955 and on or before the date of the enactment of this

2 Act, but only if the requirements of section 403 (b) (2)

3 ofthis Act are met.

4GRATUITOUS WAGE CREDITS FOR AMERICAN CITIZENS WHO

5 SERVEDIN TilEARMEDFORCES OF ALLIED COUNTRIES

6 GeneralRule

7 SEO. &1-'& 314.(a)Section 217 of such Act is amended

8by adding at the end thereof the following new subse(tion:

9 "(h)(1) Fm the purposes. of this e(tiOii tu+4 Mef4le++

110 -4-5 -(-44-,aiiy individual who the Secretary finds—

11 "(A) served during World War TI (as defined in

12 subsection(d)(1))in the active military or naval

13 service of a country which was on September 16, 1940,

14 at war with a country with which the United States

15 was at war during World War II;

16 "(B) entered into such active service on or before

17 December 8,1941; 18 "(C) was a citizen of. the United States through- 19 out such period of service or lost his United States 20 citizenship solely becauseof his entrance intosuch

21 service;

22 "(D) had resided in the United States for a period

22 or periods aggregating four years during the five-year

24 period ending on the day of, and was domiciled in the 63 United States on the day of, such entrance into such

2 active service; and released from such 3 "(E)(i)was discharged or

4 service under conditions other than dishonorable after active service of ninety days or more or by reason of a

6 disability or injury incurred or aggravated in service in line of duty, or

8 "(ii) died while in such service, shall be considered a World War II veteran (as defined in

10subsection (d)(2)) and such service shall be considered to have been performed in the active military or naval serv-

12ice of the United States.

13 "(2) In the case of any individual to whom paragraph

14 (1)applies, proof of support required under section 202

15 (f)or (h)may be filed by a paen at any timeprior to the

16expiration of two years after the date of such individual's

17death or the date of the enactment of this subsection, which-

18ever is the later."

19 Reimbuisement to Disability Insurance Trust Fimd

20 (b)(1) Section 217 (g)(1)of the Social Security

21Act is amended by deleting "Trust Fund" and inserting in

22lieu thereof "Trust Funds".

23 (2) Section 217 (g)(2) of the Social Security Act is

24amended by deleting "the Trust Fund" each time it appears 64

1 therein and inserting in lieu thereof "the Federal Old-Age

2 andSurvivors Insurance Trust Fund" the first time and

3 "such Trust Fund" the other times.

4 Effective Date

5 (c)(1)The aniendment made by subsection(a)

6 shall apply only withrespect to(A)momithly benefits

7 uiider sections 202 and 223 of the Social Security Act for

8months after the month in which this Act is enacted, (B)

9lump-sum death payments under such section 202 in the

10case of deaths occurring after the mouth in which this Act

11is enacted, and (C) periods of disability under section 216

12 (1)in the case of applicatioii for a disability determination

13filed after the nionth in which this Act is enacted.

14 (2) In the case of any individual—

15 (A) who is a World War II veteran (as defined

16 in section 217(d)(2)ofthe Social Security Act)

17 wholly or partly by reason of service described in section

18 217 (h)(1)(A) of such Act; and

19 (B) who (1) became entitled to old-age insurance

20 benefits under section 202(a)of the Social Security

21. Act or to disability insurance benefits under section 223

22 of such Act prior to the first day of the month follow-

23 ing the month in which this Act is enacted, or(II)

24 died prior to such first day, and whose widow, former

25 wife divorced, widower, child, or parent is entitled for 65

1 the month in which this Act is enacted, on thebasis of

2 his wages and self-employment income, to a monthly

3 benefit tinder section 202 of such Act; aad

4 (C) any part of whose service described in section

5 217 (h)(1)(A) of the Social Security Act was not

6 included in the computa.tion of his primary insurance

7 amount under section 215 of such Act but would have

8 been included in such computation if the amendment

9 made by subsection (a) of this section had been effective

10 prior to the date of such computation,

11the Secretary of Health, Education, and Welfare shall, not-

12withstanding the provisions of section 215 (f)(1)of the

13SocialSecurity Act,recomputetheprimary insurance

14amount of such individuai upon the filing of an application,

15after the month in which this Act isenacted, by him

.16 or(if he has died without filing such an application) by

17any person entitled to monthly benefits under section 202

18of the Social Security Act on the basis of his wages and

19self-employment income. Such recomputation shall be made

20only in the manner provided in title II of the Social Security

21Act as in effect at the time of the last previous computation

22or recoinputation of such individual's primary insurance

23amouiit, arid as though application therefor was filed in the 24 month in which application for such last previous computa-

II. IL 13549 5 1 tion or recomputation was ified.No recomputation made

2 under this subsection shall be regarded as a recomputation

3 under section 215 (f) of the Social Security Act. Any such

4reconiputation shall be effective for and after the twelfth

5 monthbefore the month in which the application is ified, but

6 in no case for the month in which this Act is enacted or

7 any prior month.

8 POSITIONS COVERED BY STATE AND LOCAL RETIREMENT

9 SYSTEMS

10 Division of Retirement Systems

11 Sic. 444-44 3i.'.(a)(1) Section 2118(d)(6)of the

12Social Security Act i amended to read as follows:

13 "(6)(A) If a retirement system covers positions of 14employees of the State and positions of employees of one or

15more political subdivisions of the State, or covers positions

16of employees of two or more political subdivisions of the

17State, then, for purposes of the preceding paragraphs of this

18subsection, there shall, if the State so desires, be deemed to 19be a separate retirement system with respect to anyone or

20more of the political subdivisions concerned and, where the

21retirement system covers positionsof employees of the 22State, a separate retirement system with respect to the State 23or with respect to the State and any one or more of the

24political subdivisions concerned.

25 "(B) If a retirement system covers positions ofem- 67

1 ployees of one or more institutions of higher learning, then,

2for purposes of such preceding paragraphs there shall, if tbe

3 State so desires, be. deemed to be a separate retirement sys-

4tern for the employees of each such institution ofhigher

5learning.For the purposes of this subparagraph, the terIi

6'institutions of higher learning' includes junior colleges and

7teachers colleges.

8 "(0)Forthepurposesofthissubsection,any

9retirement system estabhshed by the State of CaIiforni,

10Connecticut, Florida, Georgia, Massachusetts, Minnesota, 11 New York, North Dakota, Pennsylvania,Rhode Island,

12Tennessee, Vermont,Washington,Wisconsin, or the Tei,ij

13tory of Hawaii, or any political subdivision of any such State

14or Territory, which, on, before, orafter the date of enactment

15of this bparagraph subparagraph, is divided into two divi-

16sions or parts, one of which is composed of positions of mem-

17bers of such system who desire coverage under an agreement

18under this section and the other of which is composed of posi-

19tions of members of such system who do not desire such coy-

20erage, shall, if the State or Territory sodesires and if it is

21provided that there shall be included in such division or part

22composed of members desiring such coverage the positions of

23individuals who become members of suchsystem after such. 24coverage is extended, be deemed to be a separateretirement 25system with respect to each such division or.part. 68

1 "(D) The position of anyindividualwhich is covered by

2 any retirement system to which subparagraph (C) is appli-

3cable shall, if such individual is ineligible to become a mem-

4ber of such system on August 1, 1956, or, if later, the day

5he first occupies such positiont, be deemed to be covered

6by the separate retirement system consisting of the positions

7of members of the division or partwhodo not desire cover-

8age under the insurance system established under this title.

9 "(E) An individual who is in a position covered by a

10retirement system to which subparagraph (C) is applicable

11and who is not a member of such system but is eligible to

12become a member thereof shall, for purposes of this subsec-

13tion(other than paragraph -f8.)-- (8)),beregarded as a 14 member of such system; except that, in the case of any retire- 15ment system a division or part of which is covered under the 16agreement (either in the original agreement or by a modi- 17fication thereof), which coverage is agreed to prior to 1960, 18the preceding provisions of this subparagraph shall apply 19only if the State so requests and any such individual re- 20ferred to in such preceding provisions shall, if the State so 21requests, be treated, after division of the retirement system 22pursuant to such subparagraph (C), the same as individuals 23in positions referred to in subparagraph (F). 24 "(F) In the case of any retirement system dividedpar- 25suant to subparagraph (C), the position of any member of 69

1the division or part composed of positions ofmembers who

2 do not desire coverage may be transferred to the separate

3 retirement system composed of positions of members who

4desire such coverage if it is so provided in a modification of

5such agreement which ismailed, or delivered by other

6means, to the Secretary prior to 1960 or,if later, the expira-

7tion of one year after the date on which such agreement, or

8the modification thereof making the agreement applicable to

9such separate retirement system, as the case may be,is

10agreed to, but only if, prior to such modification or such

11later modification, as the case may be, the individual occu-

12pying such position files with the State a written request

13for such transfer.

14 "(G) For the purposes of this subsection, in the case

15of any retirement system of the State of Florida, Georgia,

16Minnesota, North Dakota, Pennsylvania, Washington, or

17the Territory of Hawaii which covers positions of employees

18of such State or Territory who are compensated in whole 19or in part from grants made to suchState or Territory under

20title ITT, there shall be deemed to be, if such State or Tern-

21tory so desires, a separate retirement system with respect to 22any of the following: 23 "(i) the positions of such employees;

24 "(ii) the positions of all employees of such State 25 or Territory covered by such retirement systemwho are 7()

1 employed in the department of such State or Territory

2 inwhich the employees referred to in clause(i)are

3 employed;or

4 ". (iii)employees of such State or Territory coy-

5 eredby such retirement system who are employed in

6 suchdepartment of such State or Territory in positions

7 otherthan those referred to in clause(i) ."

8 (2)Paragraph (7)of section 218 (d)of such Act is

9 amendedby striking out "(created under the fourth sentence

10ofparagraph (6) )" and inserting in lieu thereof "(created ii.undersubparagraph (C)of paragraph(6)or the corre-

12sponding provision of prior law) ";andby striking out "the

13fourthand fifth sentences of paragraph (6)" and inserting

14in lieu thereof "subparagraphs (C) and (D) of paragraph

1.5 (6) ortiucorre.pondniq promswn of prior law".

1G (3)The second sentence of paragraph (2)of section

17 218(k)of such Act is amended by striking out "the pre-

18ceding sentence" and inserting in lieu thereof "the firstsen-

19tence of this paragraph".The last sentence of such para- 20graphis amended by striking out "the fourth sentence of

21. subsection(d)(3)" and inserting in lieu thereof "sub-

22imragraph(C) ofsubeetiori(d) (ti)orthecorre—

2:.pomiw.jpioviw n.ofprtrlaw''.Suchparagraph is 24 furtherniiieridcd by .iriert.ing alter thefirstsentence the 25followingnew sentence: "An individual who is in a position 71

1 covered by a retirement system divided pursuant to the

2 preceding sentence and who is not a member of such system

3 but is eligible to become a member thereof shall, for purposes

4of this subsection, be regarded as a member of such system.

5Coverage under the agreement of any such individual shall

6 be provided under the same conditions, to the extent prac-

7 ticable, as are applicable in the case of the States to which

8 the provisions of subsection(d)(6)(C) apply."

9 Coverage Under Other Retirement Systems

10 (b) Section 218 (d) of such Act is amended by adding

11at the end thereof the following new paragraph:

12 "(8) (A) Notwithstanding paragraph (1), if tinder the

13provisions of this subsection an agreement is, after December

1431, 1958, made applicable to service performed in positions

15covered by a retirement system, service performed by an

16individual inaposition covered by such a system may iiot be

17excluded from the agreement because such posit.io is also

18covered under another retirement system.

19 "(B) Subparagraph(A)shall not apply toserviOe

20performed by an individual in a position covered under a

21retirement system if such individual, on the day the agree-

22ment is made applicable to service performed in positions coy-

23ered by sach retirement system, is not a member of such 24system and is a member of another system.

25 "(C) If. an agreement is made applicable, prior to 1959, 72

1to service in positions covered by any retirement system, the

2preceding provisions of this paragraph shall be applicable

3in the case of such system if the agreement is modified to so

4provide.

5 "(D) Except in the case of agreements with the States

6' named in subsection(p)and agreements with interstate

7instrumentalities, nothing in this paragraph shall authorize

8the application of an agreement to service in any policeman's

9or fireman's position."

10 Retroactive Coverage

11 (c)(1)Section 218(f)of such Act is amended

12by inserting "(1)" immediately after "(f) ",byredesignat-

13ing clauses (1), (2), (3), and (4) thereof as clauses (A), 14 (B), (0), and (D), respectively, and by adding at the 15end thereof the following new paragraph: 16 "(2) In the case of service performed by members

17of any coverage group—

18 "(A) to which an agreement under this section 19 is made applicable, and 20 "(B) with respect to which the agreement, or 21 modification thereof making the agreement so applicable, 22 specifies an effective date earlier than the date of execu-

23 tionofsuch agreement and such modification,re- 24 spectively, 25the a.greement shall,if so requested by the State, be ap-. 73

1plicable to such services(to the extent the agreement was

2not already applicable) performed before such date of execu-

3tion and after such effective date by any individual as a 4 member of such coverage group if he is such a member on

5a date, specified by theState, which is earlier than such date

6of execution, except that in no case may the date so specified

7be earlier than the date such agreement or such modification,

8as the case may be, is mailed, ordelivered by other means,

9to the Secretary."

10 (2) The amendment made by this subsection shall ap-

11ply in the case of any agreement, or modification of an

12agreement, under section 218 of the Social Security Act,

13which is executed after the date of enactment of this Act.

14 POLIOE MEN AND HEMHE 9 INc1*TATE INTRU

15 MTAHTIES

16 SEq. 317. Subsection -fk3- e section Social

17SecurityAe iamcndcd by adding 4ie e4 thcrcof 4ie

18following iew paragraph:

19 "(3) Any agrccmcnt with ay iiitrurncna1ity e we 20 e more Sae ei4efed iø puruant 4e may,

21notwithstanding he proviioris e subscctio -(-*-(4)-(A)

22&B4 he rcfcrcnce thcrcto subcctions -f4)- -(4-)- ai4 -(4)-

23 (3), apply o crvice pcrformcd by cmployccs e sueh 4ti-

24slrumcntality n ay po1iccrnan'c e fireman's position covcred 25 by a retirement ytem only upon cornp1ianco ø the 74 1 ttt*1)1il(tit4*kwith44H rc(plir('rflcIItf 8f *hcctiu.*+ -(4)—

2 (3)-.4-efthe purpose Øf the pcee4ugeritcneet rctirc

3IlicIlt 4eH- w1iiIi (ftS 1)O4EtiOI 44 policciiieii (W hrcincii, 4 W tHftl 4b*f +4f* 41*ll 4 the iitruiuciita1ity e+i+—

een-t+4 1.e 4e+j-,+e4 1e cparutc reircnieiit

64yitC1flWith IfqJee1 the poffltiOI1 SIWI{ pOlicelllim e

7firemci, +i beth tt e et1se may be

8TITLE TV—AMENDMENTS TO THE INTERNAL

9 REVENUE CODE OF 1954

10 CHANGES IN TAX SCHBDULES

11 Self-Employment Income Tax

12 SEC. 401. (a)Section 1401 of the Internal Revenue

13Code of 1954 (relating to rate of tax on self-employment

14income) is amended to read as follows:

15"SEC. 1401. RATE OF TAX. 16 "In addition to other taxes, there shall be imposed for

17each taxable year, on the self-employment income of every

18individual, a tax as follows:

19 "(1) in the case of any taxable year beginning

20 after December 31, 1958, and before January 1, 1960,

21 the tax shall be equal to 3* percent of the amount of

22 the seif-eniploymerit income for such taxable year;

23 "(2) iii the (ase of any taxal)le year beginning after

24 December 31, 1959, and befOre January 1, 1963, the 75

1 tax shall be equal to 44- percent of the amount of the

2 self-employment income for such taxable year;

3 "(3) in the case of any taxable year beginning

4 after December 31, 19(32, andbeforeJanuary 1, 1966,

5 thetax shall be equal to 5- percent of the amount of

6 the self-employment income for such taxable year;

7 "(4) in the case of any taxable year beginning

8 after December 31, 1965, and before January 1, 1969,

9 the tax shall be equal to 6 percent of the amount of

10 the self-employment income kr such taxable year; and

11 "(5) in the case of any taxable year beginning

12 after December 31, 1968, the tax shall be equal to

13 6* percent of the amount of the self-employment income

14 for such taxable year."

15 Tax on Employees

16 (b) Section 3101 of such Code (relating to rate of tax

17onemployees under the Federal Insurance Contributions

18Act) is amended to read as follows:

19"SEC. 3101. RATE OF TAX.

20 "In additicm to other taxes, there is hereby imposed

21 on the income of every individual a tax equal to the follow-

22ing percentages of the wages (as defined in section 3121

23 (a) )receivedby him with respect to employment(as 24defined in section 3121 (b) )— 76

1 "(1) with re8pect to wages received duringthe

2 calendar year 1959, the rate shall be 2+ percent;

3 "(2) with respect to wages received during the

4 calendar years 1960 to 1962, both inclusive, the rate

5 shall be 3 percent;

6 "(3) with respect to wages received during the

7 calendar years 1963 to 1965, both inclusive, the rate

8 shall be 3+ percent;

9 "(4) with respect to wages received during the

10 calendar years 1966 to 1968, both inclusive, the rate ii shall be 4 percent; and

12 "(5) with respect to wages received after Decem-

13 ber 31, 1968, the rate shall be 44- percent."

14 Tax on Employers

15 (c) Section 3111 of such Oode (relating to rate of tax

16on employers under the Federal Insurance Oontributions

17Act) is amended to read as follows:

18"SEC. 3111. RATE OF TAX.

19 "In addition to other taxes, there is hereby imposed on

20every employer an excise tax, with respect to having mdi-

21viduals in his employ, equal to the following percentages of

22the wages (as defined in section 3121 (a)) paid by him 77

j.withrespect to employment (as defined in section 3121

2 (b))— "(1) with respect to wages paid during the calen-

4 dar year 1959, the rate shall be 2+ percent;

5 "(2) with respect to wages paid during the calen-

6 dar years 1960 to 1962, both inclusive, the rate shail be 3 percent;

8 "(3) with respect to wages paid during the calen-

9 dar years 1963 to 1965, both inclusive, the rate shall be

10 3+ percent;

11 "(4) with respect to wages paid during the calen-

12 dar years 1966 to 1968, both inclusive, the rate shall be

13 4 percent; and 14 "(5) with respect to wages paid after December

15 31, 1968, the rate shall be 4f percent."

16 Effective Dates

17 (d)The amendment made by subsectIon(a)shall

18apply with respect to taxable years beginning after Decem-

19ber 31, 1958.The amendments tnade by subsections (b)

20and (c) shall apply with respect to remuneration paid after 21December 31, 1958. 78

1 INCREASE IN TAX BASE

2 Definition of Self-Employment Income

3 SEC. 402. (a)(1) Subparagraph (B) of section 1402

4 (b)(1) of the Internal Revenue Code of 1954 is amended

5to read as follows:

6 "(B) for any taxable year ending after 1954

7 and before1959,(i)$4,200, minus(ii)the s amountof the wages paid to such individual during

9 the taxable year; and".

10 (2) Paragraph (1) of section 1402 (b) of such Code is further amended by adding at the end thereof the following 12 newsubparagraph:

13 "(C) for any taxable year ending after 1958,

14 (1)$4,800, minus(ii)the amount of the wages

15 paid to such individual during the taxableyear; or".

16 Definition of Wages

17 (b) Section 3121(a)of such Code (relating to the

18definition of wages) is amended by striking out "$4,200"

19wherever it appears and inserting in lieu thereof "$4,800".

20 Federal Service

21 (c)Section 3122 of such Code (relating to Federal

22service)is amended by striking out "$4,200" wherever it

23appears and inserting in lieu thereof "$4,800". 79

1 Refunds

2 (d)(1) Paragraph (1)of section 6413 (c)of such

3Code is amended to read as follows:

4 "(1) IN QEIcERAL.—If by reason of an employee

5 receiving wages from more than one employer during a

6 calendar year after the calendar year 1950 and prior to the calendar year 1955, the wages received by him during

8 such year exceed $3,600, the employee shall be entitled

9 (subject to the provisions of section 31 (b)) t a credit

10 or refund of any amount of tax,with respect to such

11 wages, imposed by section 1400of the Internal Revenue

12 Code of 1939 and deducted from the employee's wages

13 (whether or not paid to the Secretary or his delegate),

14 which, exceeds the tax with respect to the first $3,600

15 of such wages received; or if by reason of an employee

16 receiving wages from more than one employer (A)

17 during any calendar year after the calendar year 1954

18 and prior to the calendar year 1959, the wages received

19 by him during such year exceed $4,200, or (B) during

20 any calendar year after thecalendar year 1958, the

21 wages received by him duringsuch yearexceed

22 exceed $4,800, the employee shall be entitled (subject to the

23' provisions of section 31 (b)) to a credit or refund of 80

1 any amount of tax, with respect to such wages, imposed

2 by section 3101 and deducted from the employee's

3 wages (whether or not paid to the Secretary or his

4 delegate), which exceeds the tax with respect to the

5 first $4,200 of such wages received in such calendar year after 1954 and before 1959, or which exceeds the

7 taxwith respect to the first $4,800 of such wages

8 received in such calendar year after 1958."

9 (2) Subparagraph (A)of section 6411 3(c)(2)of

10such Code is amended to read as foflows:

11 "(A) FEDERAL EMPLOY1ES.—In the case of

12 remuneration received from the United States or a

13 wholly owned instriunentality thereof during any

14 calendar year, each head of a Federal agency or

15 instrumentality who makes a return pursuant to

16 section 3122 and each agent, designated by the head

17 of a Federal agency or instrumentality, who makes

18 a return pursuant to such section shall, for purposes

19 of this subsection, be deemed a separate employer,

20 and the term 'wages' includes for purposes of this

21 subsection the amount, not to exceed $3,600 for the

22 calendaryear 1951, 1952, 1953, or 1954, $4,200

23 forthe calendar year 1955, 1956, 1957, or 1958, 24 or $4,800 for any calendar year after 1958, deter- 81

1 mined by each such head or agent as constituting

2 wages paid to an employee."

3 Effective Date

4 (e) The amendments made by subsections (b) and (c)

5 shall be applicable only with respect to remuneration paid

6after 1958.

7PARTNER'S TAXABLE 'YEAR ENDING AS RESULT OF DEATH

8 General Rule

9 Sc,. 403.(a)Section 1402 of the Internal Revenue

10Code of 1954 is amended by adding at the end thereof the

11following new subsectim:

12 "(f) PARTNER'S TAXABLE YEAR EimING AS TUE 13 RESULT OF DEATH.—In computing a partner's net earnings

14from self-employment for his taxable year which ends as a

15result of his dea.th (but only if such taxable year ends within, 16 nd not with, the taxable rear of the partnership), there

17shall be included so much of the deceased partner's distribu- 18tive share of the partnership's ordinary income &r loss for

19the partnership taxable year asis not attributable to an 20interest in the partnership during any period beginning on 21or after the first day of the, first calendar month following 22the month in which such partner diedFor purposes of this

23subsection—

H.R.13549. 6 82

1 "(1) in determining the portion of the distributive

2 share which is attributable to any period specified in the

3 preceding sentence, the ordinary income or loss of the

4 partnership shall be treated as having been realized or

5 sustained ratably over the partnership taxable year; and

6 "(2) theterm'deceasedpartner'sdistributive

7 share' includes the share of his estate or of any other

8 person succeeding, by reason of hisdeath, to rights with

9 respect to his partnership interest."

10 Effective Date

11 (b)(1) Except as 1)rovided in paragraph(2), the 12 amendment made by subsection(a)shall apply only with

13respect to individuals who die after the date of the enact- 14 ment of this Act.

15 (2) In the case of an individual who died after 1955 and

16on or before the date of the enactment ofthis Act, the amend- 17 ment made by subsection(a)shall apply only if— 18 (A) before January 1, 1960, there is filed a return 19 (or amended return)of the tax imposed by chapter 2 20 of the Internal Revenue Code of 1954 for the taxable 21 year ending as a result of his death, and 22 (B) in any case where the return is filed solely 23 for the purpose of reporting net earnings from self-em- 24 ployment resulting from the amendment made by sub- 83

1 section(a), the return is accompanied by the amount

2 of tax attributable to such net earnings.

3In any case described in the preceding sentence, no interest

4or penalty shall be assessed or collected on the amount of

5any tax due under chapter 2 of such Code solely by reason

6of the operation of section 1402 (f) of such Code.

7 SERVICEIN CONNECTION WITH GUM RESIN PRODUCTS

8 SEC. 404. (a) Section 3121(b)(1)of the Internal

9Revenue Code of 1954 (relating to definition of employ-

10ment) is amended to read as follows:

11 "(1)service performed by foreignagricultural

12 workers (A) under contracts entered into in accord-

13 ance with title V of the Agricultural Act of 1949, as

14 amended (65 Stat. 119; 7 II. S. C. 1461—1468),or

15 (B) lawfully admitted to the United States fromthe Bahamas, Jamaica, and the other British West Indies,

17 or from any other foreign country or possession thereof,

18 on a temporary basis to perform agricultural labor;".

19 (b) The amendment made by subsection(a)shall

20apply with respect to service performed after 1958..

21 NONPEOFIT ORGANIZATION'S WAIVEBCERTIFICATES 22 SEC. 405. (a) Section 3121 (k)(1)of the Internal 23Revenue Code of 1954 is amended to readas follows: 84

"(1)WAIVEROF EXEMPTION BY OROANIZA-

TION.—

3 "(A) An organization described in section 501

4 (c)(3) which is exempt from income tax under section 501 (a) may file a certificate (in such form

6 and manner, and with such official, as may be pre-

7 scribedby regulations made under this chapter)

8 certifying that it desires to have the insurance sys-

9 tem established by title II of theSocial Security

10 Act extended to service performed by its employees ii and that at least two-thirds of its employees concur

12 in the filing of the certificate.Such certificate may

13 be filed only if it is accompanied by a list contain-

14 ing the signature, address, and social security ac-

15 count number(if any)of each employee who

16 concurs in the filing of thecertificate.Such list

17 may be amended at anytime prior to the expira-

18 tion of the twenty-fourth month following the calen-

19 dar quarter in which the certificate is filed, by filing

20 with the prescribed official a supplemental list or

21 lists containing the signature, address, and social

22 security account number (if any) of each additional

23 employee who concurs in the filing of the certificate.

24 The list and any supplemental list shall be filed in 85

1 such form and manner as may be prescribed by

2 regulations made under this chapter.

3 "(B) The certificateshall be in effect(for

4 purposes of subsection (b)(8)(B) and for pur-

5 posesof section 210 (a)(8)(B)of the Social

6 SecurIty Act) for the period beginning with which-

7 ever of the following may be designated by the

8 organization:

9 "(i) the first day of the calendar quarter

10 in which the certificate is filed,

11 "(ii) the first day of the calendar quarter

12 succeeding such quarter, or

13 "(ill)the first day of any calendar quarter

14 preceding the calendar quarter in which the

15 certificateisfiled,except that,inthecase

16 of a certificate filed prior to January 1, 1960,

17 suchdate may not be earlier than January 1,

18 1956, and in the case of a certificate filed after

19 1959,such date may not be earlier than the

20 first day of the fourth calendar quarter preced-

21. ingthe quarter in which such certificate is filed. "(C) In the case of service performed by an

23 employeewhose name appears on a supplemental

24 listfiledafterthefirstmonth followingthe 86

1 calendar quarter in which the certificate is filed, the

2 certificate shall be in effect (for purposes of subsec-

3 tion (b)(8)(B) and for purposes of section 210

4 (a)(8)(B.) of the Social Security Act) only with

5 respect to service performed by suchindividual for

6 the period beginning with the first day of the calen-

7 dar quarter in which such supplemental list is filed.

8 "(D) The period for which a certificate filed

9 pursuant to this subsection or the correspondingsub-

10 section of prior law is effective may be terminated

11 by the organization, effective at the end of a calen-

12 dar quarter, upon giving 2 years' advance notice in

13 writing, but only if,at the time of the receipt of

14 such notice, the certificate has been in effect for a

15 period of not less than 8 years.The notice of ter-

16 miiiation may be revoked by the organization by

17 giving, prior to the close of the calendar quarter

18 specified in the notice of termination, a written

19 notice of such revocation.Notice of termination or

20 revocation thereof shall be filed in such form and

21 manner, and with such official, as may beprescribed

22 by regulations made under this chapter.

23 If an organization described in subpara-

24 graph (A) employs both individuals who are in

25 positions covered by a pension, annuity, retirement, 87

1 or similar fund or systemestablished by a State or

2 by a political subdivision thereof and individuals

3 who are not in such positions, the organization shall

4 divide its employees into two separate groups. One

5 group shall consist of all employeeswho are in

6 positions covered by such a fund or system and (1)

7 are members of such fund or system, or(ii)are

8 not members ofsuchfundorsystem but are

9 eligible to become nieinbers thereof; and the other

10 group shall colisist of all reinaiiihigemployees. Ai

11 organization which has SO divided its employees

12 into two groups may file a certificate pursuant to

13 subparagraph (A) with respect to the employees 14 in one of the groups if at least two-thirds of the

15 employees in such group oncnr in the filing of the

certificate.The organization may also file' such a 17 certificate with respect to the employees in the 18 other group if at least two-thirds of the employees 19 in such other group concur in the filing of such

20 certificate.

21. "(F) An organization which filed a certificate 22 under this subsection after 1955 but prior to the 23 enactment of this subparagraph ,rnay file a request 24 at any time before 1960 to have such certificate 25 effective, with respect to the service of individuals 88

ofsuchcertificate 1 who concurredinthe filing filing, of a supplementaI 2 (initially or through the subparagraph and 3 list)prior to enactment of this filing of such new request,for 4 who concur in the first day of any 5 the period beginningwith the first calendar quarter 6 calendar quarter preceding the effective and following the last 7 for which it was Such request shall be 8 calendar quarter of 1955. in such form and manner 9 filed with such official and under io as may beprescribed by regulations made this 11 this chapter.If a request is filed pursuant to

12 subparagraph— of computing interest 13 "(i) for purposes

14 and for purposes ofsection (3(351(relating to

15 addition to tax for failure tofile tax return),

16 the due date for the returnand payment of the

17 tax for any calendar quarterresulting from the

18 filing of such request shall be thelast day of the

19 calendar month following thecalendar quarter

20 in which the request is filed; and

21 "(ii) the statutory period for the assess-

22 ment of such taxshall not expire before the

23 expiration of 3 years from suchdue date.

24 "(G) If a certificate filed pursuant tothis paragraph is effective for one or morecalendar quarters 89

1 priorto the quarter in which the certificate is filed,

2 thee—

3 "(i) for purposes of computing interest

4 and for purposes of section 6651(relating to

5 addition to tax for failure to file tax return), the

6 due date for the return and payment of the tax

7 for such prior calendar quarters resu1ting from

8 the filing of such certificate shall be the last

9 day of the calendar month following the calen-

10 dar quarter in which the certificate is filed; and

11 "(ii) the statutory period for the assess-

12 ment of such tax shall not expire before the

13 expiration of 3 years from such due date."

14 (b) Section 3121 (b)(8)(B) of the Internal Reve-

15nue Oode of 1954 is amended to read as follows:

16 "(B) service performed in the employ of a

17 religious,charitable, educational, or other organiza-

18 tion described in section 501(c)(3) which is

19 exempt from income tax under section 501(a),

20 but this subparagraph shall not apply to service per-

21 formed during the period for which a certificate, filed

22 pursuant to subsection (k)(or the corresponding

23 subsection of prior law), is in effect if such service

24 is performed by an employee— 90

1 "(1) whose signature appears on the list

2 filed by such organization under subsection (k)

3 (or the corresponding subsection of prior law),

4 "(II) who became an employee of such

5 organization after the calendar quarter in which

6 the certificate (other than a certificate referred

7 to in clause(iii) )wasfiled, or

8 "(iii) who, after the calendar quarter in

9 which the certificate was filed with respect to a

10 group described in section 3121(k)(1)(E),

11 became a meniber of such group,

12 except that this subparagraph shall applywith re-

13 spect to service performed by anemployee as a 14 member of a group described in section 3121 (k)

15 (1)(E) with respect to which no certificate is in

22EXEMPTION OF UNEMPLOYMENT BENEFITS FROM LEVY 23 SEc. 406. Section 6334 (a)of the Internal Revenue 24Code of 1954 (relating to enumeration of property exempt 91.

1from levy)is amended by adding at the end thereof the

2followingnew paragraph:

9 "(4) UNEMPLoYMENTBENEFITS.—Any amount

4 payableto an individual with respect to his unemploy-

5 ment (including anyportionthereof payable with re-

6 spect to dependents) under an unemployment compensa-

7 tion law of the United States, of any State or Territory,

8 or of the District of Columbia orof the Commonwealth

9 ofPuerto Rico." 10 TITLEV—AMENDMENTS RELATING TO PUBLIC

11 ASSISTANCE

12 OLD-AGE ASSISTANCE

13 SEc. 501. Subsection(a)of section 3 of the Social

14Security Act is amended to read as follows:

15 "(a) From the sums appropriated therefor, the Secre-

16tary of the Treasury shall pay to each State whichhas an

17approved plan for old-age assistance, for each quarter, be-

18ginning with the quarter commencing Oetobe .1.- 1958 Jan-

19uary 1,i959, (1)in the case of any State other than Puerto

20Rico, the Virgin Islands, and Guam, an amount equal to the

21sum of the followingproportions of the total amounts ex-

22pended during such quarter as old-age assistance under the

23State plan (including expenditures for insurancepremiums 92

1for medical or any other type of remedial care or the cost

2thereof)—

3 "(A) four-fifths of such expenditures, not counting

4 50 much of any expenditurewith respect to any month

5 as exceeds theproduct of $30 multiplied by the total

6 number of recipientsof old-ageassistance for such

7 month (which total number, for purposes of this elause

8 &4 c1auc (B) 4 purpoc e clause-(-23-subsec-

9 tion, means (i) the number of individuals who received

10 old-age assistance in the form of money payments for

11 such month, plus(ii)the number of other individuals

12 with respect to whom expenditures were made in such

13 month as old-age assistance in the form of medical or

14 any other type of remedial care).; plus

15 "(B) the Federal percentage of the amount by

16 which such expenditures exceed the maximum which

17 may be counted under clause(A), not counting

18 so much of any expeiiditure with respect to any month

19 as exceeds the product of $65 multiplied by the total

20 number of such recipients of old-age assistance for such

21 month;

22and (2) in the case of Puerto Rico, the Virgin Islands, and

23Guam, an amount equal to one-half of the total of the sums

24expended during such quarter as old-age assistance under

25the State plan(including expenditures for insurance pre- 93

1 miums for medical or any other type of remedial care or

2 the cost thereof), not counting so much of anyexpenditure

3with respect to any month as exceeds $6 $35multipliedby

4the total number of recipients of old-agc assistance forsuch

.5 month; and (3) in the case of any State, an amountequal

6to one-half of the total of the sums expendedduring such

7 quarteras found necessary bythe Secretary of Health, Edu-

8cation, and Welfare for the proper a.nd efficientadministra-

9tion of the State plan, including services which are provided

10by the staff of the State agency (or of thelocal agency

1.1 administering the State plan in the political subdivision)

1.2 to applicants for and recipients of old-ageassistance to help

13them attain self-care."

14 AIDTODEPENDENT CUILDREN

15 SEC. 502. Subsection(a)of section 403 of the Social 16Security Act is amended tO read as follows: 17 "(a) From the sums appropriated therefor, the Secre- 18tary of the Treasury shall pay to each Statewhich has an 19approved plan for aid to dependent children, for each quarter, 20beginning with the quarter commencing October 4- 4458 21January 1,1959, (1)in the case of any State other than 22Puerto Rico, the Virgin Islands, and Guam, an amount 23equal to the sum of the following proportions of the total 24amounts expended during such quartcr as aid to dependent 25children under the State plan(including expenditures for 94

1 insurance premiums for medical or any other type of reme-

2 dial care or the cost thereof) —

3 "(A) five-sixths of such expenditures, not counting

4 so much of any expenditure with respect to anymonth

5 as exceeds the product of $18multiplied by the total

6 number of recipients of aid to dependent children for such month (which total number, for purposes of this

8 clause afid ee -3-&4 parposc e clause -f2-)- sub-

9 section, means (i) the 1IIllnl)er of individuals with respe't

10 to whom aid to depetidetit duidreri in the loriri of money

11 payments is paid for such month, plus(ii)the number

12 of other individuals with respect to whom expenditures

13 were made in such month as aid todependent children

14 in the form of medical or any other type of remedial

15 care) ; plus

16 "(B) the Federal percentage of the amount by

17 which such expenditures exceed the maximum which

18 may be counted under clause (A), hi not counting so

19 much of any expenditure with respect to any month

20 as exceeds the product of $344 $30 multiplied by thetotal

21 number of recipients of aid to dependent children for

22 such month;

23and (2)in the case of Puerto Rico, the Virgin Islands,

24and Guam, an amount equal to one-half of the total of the

25sums expended during such quarter as aid todependent 95

1 children under the State plan (including expenditures for

2 insurance premiums for medical or any other type of remedial care or the cost thereof), not counting so much of any expenditure with respect to any month as exceeds $18 multiplied by the total number of recipients of aid to

6 dependent children for such month; and (3) in the case of any State, an amount equal to one-half of the total of the

8sums expended during such quarter as found necessary by

9theSecretary of Health, Education, and Welfare for the ioproper and efficient administration of the State plan, in- iicluding services which are provided by the staff of the State

12 agency (or of the local agency administering the State plan

13in the polifica.l subdivision)to relatives with whom such

14children(applying for or receiving such aid)are living,

15in order to help such relatives attain self-support or self-

16care, or which are provided to maintain and strengthen

.17family life for such children."

18 AID TO TUEBLIND

19 SEc. 503. Subsection (a) of section 1003 of the Social

20Security Act is amended to read as follows:

21 "(a) From the sums appropriated therefor, the Secre-

22tary of the Treasury shall pay to each State which has an

23approved plan for aid to the blind, for each quarter, begin- 24fling with the quarter commencing Octobcf 4 198 Janu-

25ary 1,1959, (1)in the case of any State other than Puerto 96

1Rico, the Virgin Islands, and Guam, an amount equal to

2 the sum of the following proportions of the totai amounts

3expended during such quarter as an aid to the blind under

4the State plan(including expenditures for insurance pre-

5 miums for medical or any other type of remedial care or

6the cost thereof)—

7 "(A) four-fifths of such expenditures, not counting

8 so much of any expenditure with respect to any month

9 as exceeds the product of $30 multiplied by the total

10 number of recipients of aid to the blind for such monih

11 (which total number, for purposes of this c1aue flid

12 e1auc -fB)- and ppøses e e].e -(-2-3- subsectioi,

13 means (i) the number of individuals who received aid to

14 the blind in the form of money payments for such month,

15 plus(ii)the number of other individuals with, respect 16 to whom expenditures were made in such month as 17 aid to the blind in the form of medical or any other 18 type of remedial care) ; plus 19 "(B) the Federal percentage of the amount by 20 which such expenditures exceed the maximum which

21 may be counted under clause (A), bii1notcounting so 22 much of any expenditure with respect toany month as 23 exceeds the product of 64 $65 multiplied by the total 24 number of such recipients of aid to the blind for such 25 month; 97 j.and (2) in the case of Puerto Rico, the Virgin Islands, and

2 Guam, an amount equal to one-half of the totai of the sums

3expended during such quarter as aid to the blind under the

4State plan (including expenditures for insurance premiums for medical or any other type of remedial care or the cost

6 thereof), not counting so much of any expenditure with re-

7 spectto any month as exceeds $86 $35multipliedby the total

8number of recipients of aid to the blind for such month; and

9 (3) in the case of any State, an amount equal to one-half

10of the total of the sums expended during such quarter as

11found necessary by the Secretary of Health, Education, and

12Welfare for the proper and efficient administration of the

13State plan, including services which are provided by the staff

14of the State agency (or of the local agency administering the

15State plan in the political subdivision) to applicants for and

16recipients of aid to the blind, to help them attain self-support

17or sell-care."

.18 AID TO TUE PERMANENTLY AND TOTALLY DISABLED

19 SEC. 504. Subsection (a) of section 1403 of the Social

20Security Act is amended to read as follows:

21 "(a) From the sums appropriated therefor, the Secre-

22tary of the Treasury shall pay to each State which has an

23approved plan for aid to the permanently and totally dis-

24abled, for each quarter, beginning with the quarter com-

H.R.13549 7 98

1mzicing Optobor 47 1068 January 1,1959, (1)in the case

2of any State other than Puerto Rico, the Virgin Islands, and 2Guam, ai amount equal to the sum of the following propor-

4tions of the total amounts expended during such quarter as

5aid to the permanently and totally disabled under the State

6plan(including expenditures for insurance premiums for

7medical or any other type of remedial care or the cost

8thereof)—

9 "(A) four-fifths of such expenditures, not counting 10 so much of any expenditure with respect t3 any month as 11 exceeds the product of $30 multiplied by the total 12 number of recipients of aid to the permanently and i3 totally disabled for such month (which total number, 14 for purposes of this elause and clause (B) 4 £e p-

1.5 poses o4 e1auo -(-23-subsection,means (i) the number of 16 individuals who received aid to the permanently and totally disabled in the form of money payments for such

18 month, plus(ii)the number of other individuals with 19 respect to whom expenditures were made in such month 20 as aid to the permanently and totally disabled in the 21 form of medical or any other type of remedial care)

22 plus 23 "(B) the Federal percentage of the amount by 24 which such expenditures exceed the mR.imum which 99 may be counted under clause (A), bi not counting

2 so much of anyexpen4itur with respect to any month

3 as exceeds the product of 66 $65multipliedby the

4 total number of such recipients of aid to the perrnnentiy

5 aid totally disabled for such month.;

6and (2) in the case of Puerto itico, the Virgin Islands, and

7Guam, an amount equal to one-half of the total of the sums

8expended during such quarter as aid to the permanently

9and totally disabled under the State plan(including ex-

10penditures for insurance premiums for medical or any other

11type of remedial care or the cost thereof), not counting

12so much .of any expenditure with. respect to. any month as

13exceeds 6 $35multipliedby the total number of recipi-

14ents of aid to the permanently and totally disabled for suth

15month; and (3) in the case of any State, an amount equal to

16one-half of the total of the sums expended during such

17quarter as found necessary by the Secretary of Health, 18Education, and Welfare for the proper and efficient admin- 19istration of the State plan, including servicea whiche 20provided by the staff of the State agency (or of the local

21agency administering the State plan in the: political sub- 22division) to applicants for and recipients of aid to theper- 23 manently and totally disabled to help them attain self-sup-

24port or. self-care." 100

J FEDERAL MATCHING PERCENTAGE

2 Srxj.505. Subsection (a) of section 1101 of the Social

3Security Act.is amended by adding at the end thereof the fol-

4lowingnew paragraph:

5 "(8)(A) The 'Federal percentage' for anyState

6 (otherthan Puerto Rico, the Virgin Islands, and Guam)

7 shall be 100 per centum less the State percentage; and

8 theState percentage shall be that percentage which

9 bearsthe same ratio to 50 per centum as the square of

10 the per capita income of such State bears to the square

11 ofthe per capita income of the continental United States

12 (excluding Alaska) ; except that(i)the Federal per-

13 centageshall in no case be less than 50 per centum or

14 more than 70 per centum, and(ii)the Federal per-

15 centage shall be 50 per centum for Alaska and Hawaii. iii "(B) The Federal percentage for each State (other

17 than Puerto Rico, the Virgin Islands, and Guam) shall

18 be promulgated by the Secretary between July 1 and

19 August 31 of each even-numbered year, on the basis of

20 the average per capita income of each State and of the

21 continental United States(excluding Alaska)for the

22 three most recent calendar years for which satisfactory

23 data are available from the Department of (Jomnierce.

24 Such promulgation shall be conclusive for each. of the

25 eight quarters in the period beginning July 1 next suc- 101

1 ceeding such promulgation: Provided, That the Secre-

2 tary shall promulgate such percentage as soon as possi-

3 ble after the enactment of the Social Security Amend-

4 ments of 1958, which promulgation shall be conclusive

5 for each of the clcvcn ten quarters in the period begin-

6 fling October 4-i. 1958 January 1, 1959, and ending with

7 the close of June 30, 1961."

8 EXTENSION TO GUAM

9 SEC. 506. Section 1101 (a)(1) of the Social Security

10Act is amended by striking out "Puerto Rico and the Virgin

11Islands" and inserting in lieu thereof "Puerto Rico, the Vir-

12ginIslands,and Guam".

13INCREASE IN LIMITATIONS ON PUBLIC ASSISTANCE PAY-

14 MENT5 TO PUERTO RICO AND THE VIRGIN ISLANDS

15 SEC. 507. (a) Section 1108 of the Social Security Act is

1.6 amended by striking out "$5,312,500" and "$200,000" and 17inserting in lieu thereof "$8,500,000" and "$300,000", re- 18spectively, by striking out "and" immediately following the 19semicolon, and by adding immediately before the period at

20the end thereof ";andthe total amount certified by the

21 Secretary under such titles for payment to Guam with respect

22toany fiscal year shall not exceed $400,000". 23 (b) The heading of such section is amendedto read

H.R.13549 8 102 j"LIMITATIONON PAYMENTS TO PUERTO RICO, THE VIRGIN

2 ISLANDS, AND GUAM"..

3 MATEENAL AND CHILD WELFARE GRANTS FORGUAM

4 S&.508.Such section 1108 is further amendedby

5adding at the end thereof the following new sentence:"Not-

6withstanding the provisions of sections 502 (a)(2), 512

7 (a)(2), and 522 (a), and until such time as theCongress 8 may by appropriation or other lawotherwise provide, the

9Secretaryshall,inlieuofthe $60,000, $60,000, and

10$60,000, respectively, specified in suchsections, allot such iismaller amounts to Guam as he may deemappropriate." 12 TEMPORARY EXTENSION OF CERTAIN SPECIAL PROVISIONS

13 RELATING TO STATE PLANE FOR MD TO THE BLIND

14 SEc. 509. Section 344 (b) of the SocialSecurity Act 15 Amendments of 1950 (Public Law 734,Eighty-first Con-

16gress), as amended, is amended by striking out"June 30,

171959" and inserting in lieu thereof "June 30, 1961".

18 PEOIAL P1CVI@ION FO1i CERTAIN INDIANS PEALE1)

19 SEe 510. Effective i+i he ease e4 paymdnts with rcpcct 20 e penditurc y Statc, td plun approvcd under4e

21 op e4 theSocial Sceurity Act, 4ei quarters bcginning

22aftcr September 1058, seeee4 he Ae e4 April

231D50, a amended .f2& Q 63), is iepca1cd7 103

1 TECHNICAL AMENDMENT

2 SEC. M4 510.Section2 (a)(11) of the Social Security

3Act is amended by inserting before the period at the end 4thereof ",includinga description of the steps taken to assure,

5in the provision of such services, maximum utilization of

6other agencies providing similar or related services".

7 EFFECTIVEDATES

8 SEC. 511.Notwithstanding the provisions of sections 9 305 and 345 of the Social Security Amendments of 1956, 10as amended, the amendments made by sections 501, 502, 11503, 504, 505, nd 506 shall be effective— 12 (1) in the case of money payments, undera State 13 plan approved under titleI, IV, X, or XIV of the 14 Social Security Act, for months after Scptcmb Decem- 15 ber 1958, and 16 (2)in the case of assistance in the form of medical 17 or any other type of remedial care, under such a plan, 18 with respecttoexpenditures made after September 19 December 1958. 20The amendment made by section 506 shall also become 21effective, for purposes of title V of the Social Security Act, 22for fiscal years ending after June 30, 1959.The amend- 23ments made by section 507 shall be effective for fiscal years 104

1ending after June 30, 1958.The amendment made by fiscal years ending after 2section 508 shall be effective for 510 shall 3June 30, 1959.The amendment made by section

4become effective October 1, 1958. 5 TITLEVI—MATERNAL AND CHILD WELFARE

6 CifiLD WELFARE SERVICES

7 SEC. 601. Part 3 of title Vof the Social Security Act

Sis amended to read as follows:

9 "PART 3—CmLD-WELFABE SERVICES

10 "APPROPRIATION

11 "SEC. 521. For the purpose ofenabling the United

12States, through the Secretary, to cooperatewith State public-

13welfare agencies in establishing, extending,and strengthen-

14ing public-welfare services(hereinafter in this title referred

15to as 'child-welfareservices') for the protection and care of

16homeless, dependent, and neglectedchildren, and children

17in danger of becoming delinquent, there ishereby authorized

18to be appropriated for eachfiscal year, beginning with the

19fiscal year ending June 30, 1959, the sumof $17,000,000.

20 "ALLOTMENTS TO STATES

21 "SEc. 522. (a) The sums appropriated for eachfiscal

22year under section 521shall be allotted by the Secretary

23for use by cooperating State public-welfareagencies which

24have plans developed jointly by the State agencyand the

25Secretary, as follows: He shall allot to each Statesuch por- 105

1 tionof $60,000asthe. amount appropriated under sectiOn

2 521for such year bears to the amount authorized to be so

3appropriated; and he shall allot to each State an amount

4which bears the same ratio to the remainder of the sums so

.5 appropriated for such year as the product of (1) the popula-

6tionof such State under the age of 21 and (2) the allot-

7mentpercentage of such State (as determined under section

8524)bears to the sum of the corresponding products of all

9theStates.

10 "(b)(1) If the amount allotted to a State under sub-

11section(a) for any fiscal year is less than such State's base

12allotment,it shall be increased to such base allotment, the total

13ofthe increases thereby required being derived by propor-

14tionatelyreducing the amount alloted under subsection (a)

15toeach of the remaining States, but with such adjustments

16 asmay be necessary to prevent theallotment of any such

17remainingState under subsection(a) from being thereby

18reducedto less than its base allotment.

19 "(2)For purposes of paragraph (1)the base allot-

20mentof any State for any fiscal year means the amount

21 whichwould be allotted to such State for such year under

22theprovisions of section 521, as in effect prior to the enact-

23ment of the Social Security Amendments of 1958, asapplied 24to an appropriation of $12,000,000. 106

1 "PAYMENT TO STATES

2 "SEc. 523.(a) From the sums appropriated therefor

3and the allotnient available under cction this part, the

4Secretary shall fromtime to time pay to each State with a

5plan for child-welfare services developed as provided in such

6section 24 this part an ainouiit equal to the Federal share

7 (as determined under section 524)of the total sum ex-

8pended under such plan (including the cost of administration

9 of the plan) in meeting the costs of district, county, or other

10local child-welfare services, in developing State services for

11the encouragement nd assistaiice of adequate methods of

12community child-welfare organization, in paying the costs of

13returning any runaway child who has not attained the age

14of eighteen to his OWILcommunityin another State, and of 15maintaining such child until such return(for a period not 16exceeding fifteen day), iii cases in which such costs cannot

17be met by the paremits of siidi child or by any person, agency,

18or institution legally responsible for the support of such child:

19Provided, That iiidevelopingsuch services for children the

20facilities and experience of voluntary a.gen1es shall be utilized

21in accordance with child-care programs and arrangements

22in the States and local conimnunities as may be authorized by

23the State.

24 "(b) The method of computing and paying such amounts

25shall be as follows: 107

1 "(1) The Secretary shall, prior to the beginning of each

2period for which a payment is to be made, estimate the

3amount to be paid to the State for such period under the

4provisions of subsection (a).

5 "(2) From the allotment available therefor, the Secre

6tary shall pay the amount so estimated, reduced or increased,

7as the case may be, by any sum(not previously adjusted

8under this section) by which he finds that his estimate of the

9amount to be paid the State for any prior period under this

10section was greater or less than the amount which should

11have been paid thereunder to the State for such prior period.

12 "ALLOTMENT PERCENTAGE AND FEDERAL SHARE

13 "SEc. 524.(a)The 'allotment percentage' for any 14State shall be 100 per centum less the State percentage;

15and the State percentage shall be that percentage which

16bears the same ratio to 50 per centum as the per capita in-

17come of such State bears to the per capitaincome of the con-

18tinental United States(excluding Alaska); except that

19 (A) the allotment percentage shall in no case be less than

2030 per centum or more than 70 per centum, and (B) the

21allotment percentage shall be 50 per centum in the case of 22Alaska and 70 per centum in the case of Puerto Rico, the 23Virgin Islands, and Guam. 24 "(b)For the fiscal year ending June 30,1960, 25and each year thereafter, the 'Federal share' for any State 108

1shall be 100 per centum less that percentage which bears

2the same ratio tcl 50 per centiim as the per capita income of

3such State bears to the per capita income of the continental

4UnitedStates (excluding Alaska), except that(1)in no

5case shall the Federal share be less than 33* per centum

6ormore than 66-s- per centurn, and (2) the Federal share

7shallbe 50 per centum in the case of Alaska and 66.- per

8centum in the case of Puerto Rico, the Virgin Islands, and

9Guam. For the fiscal year ending June 30, 1959, the

10Federalshare shall be determined pursuant to the provisions iiof section 521 as in effect prior to the enactment of the

12Social Security Amendments of 1958.

13 "(c) The Federal share and the allotment percentage

14for each State shall be promulgated by the Secretary between

15July 1 and August 31 of each even-numbered year, on the

16basis of the a.verage per capita income of each State and of

17thecontinental United States(excluding Alaska)for the

18three most recent calendar years for which satisfactory data

19are available from the Department of Commerce.Such

20promulgation shall be conclusive for each of the two fisca.l

21years in the period beginning July 1 next succeeding such

22promulgation: Provided, That the Secretary shall promul-

23gatesuch Federal shares and allotment percentages as soon

24aspossible after the enactment of the Social Security Amend- 109

1ments of 1958, which promulgation shall be conclusive for

2each of the 3 fiscal years in the period ending June 30, 1961.

3 "REALLOTMENP

4 "SEc. 525. The amount of any allotment to a State

5under section 522 for any fiscal year which the State certifies

6to the Secretary will not be required for carrying out the

7State plan developed as provided in such section shall be

8available for reallotment from time to time, on such dates as

9the Secretary may fix, to other States which the Secretary

10determines (1) ha.ve need in carrying out their State plans

11so developed for sums in excess of those previously allotted

12to them under that section and (2) will be able to use such

13excess amounts during such fiscal year.Such reallôtments 14shall be made on the basis of the State plans so developed,

15after taking into consideration the population under the age 16of twenty-one, and the per capita income of each such 17State as compared with the population under the age of

1.8 twenty-one, and the per capita income of all such States 19with respect to which such a determination by the Secretary 20has been made. Any amount so reallotted to a State shall 21be deemed part of its allotment under section 522."

22 MATERNAL AND CHILD UEALTH 23 SEC. 602. (a) Section 501 of such Act is amended by 24striking out "for the fiscal year ending June 30, 1951, the 110

1sumof$15,000,000, and for each fiscal year beginning after

2June 30, 1951; the sum of $16,500,000" and inserting in

3lieu thereof "for each fiscal year beginning after June 30,

41958, the sum of $21,500,000".

5 (b) Section 502 (a)(2) of such Act is amended by

6striking out "for each fiscal year beginning after June 30,

7 1951, the Federal Security Administrator shall allot $8,250,-

8000 as follows: He shall allot to each State $60,000 and shall

9allotto each State such part of the remainder of the $8,250,-

10000"and inserting in lieu thereof "for each fiscal year begin-

11ning after June 30, 1958, the Secretary shall allot $10,750,-

12000 as follows: He shall allot to each State $60,000 (even

13though the amount appropriated for such year is less than 14$21,500,000), and shall allot each State suchpart of the 15remainder of the $10,750,000".

16 (c) Section 502(b)of such Act is amended by 17striking out "the fiscal year ending June 30, 1951, the 18 sum of $7,500,000, and for each fiscal year beginning after 19June 30, 1951, the sum of $8,250,000" and inserting in 20lieu thereof "each fiscal year beginning after June 30, 1958, 21the sum of $10,750,000".

22 ORIPPLED OmLDREN's SERVIOES 23 SEc. 60g. (a) Section 511 of such Act is amended by 24 striking out "for the fiscal year ending June 30, 1951, the 25sum of $12,000,000, and for each fiscal year beginning 111

1after June 30, 1951, the sum of $15,000,000" and inserting

2in lieu thereof "for each fiscal year beginning after June 30,

3 1958, the sum of $20,000,000".

4. (b) Section 512 (a)(2) of such Act is amended by

5striking out "for each fiscal year beginning after June 30,

61951, the Federal Security Administrator shall allot $7,500,-

7000 as follows: He shall allot to each State $60,000, and shall

8allot the remainder of the $7,500,000" and inserting in lieu

9thereof "for each fiscal year beginning after June 30, 1958,

10the Secretary shall allot $10,000,000 as follows: He shall

11allot to each State $60,000 (even though the amount appro-

12priated for such year is less than $20,000,000) and shall allot

13the remainder of the $10,000,000". 14 (c) Section 512 (b) of such Act is amended by strik- 15ing out "the fiscal year ending June 30, 1951, the sum of 16$6,000,000, and for each fiscal year beginning after June

1.7 30, 1951, the sum of $7,500,000" and inserting in lieu 18thereof "each fiscal year beginning after June 30, 1958, the 19sum of $10,000,000". 20 TITLE VII—MISOELLANEOUS PROVISIONS

21FURNISHING OF SERVICES BY DEPARTMENT OF HEALTH,

22 EDUCATION, AND WELFARE 23 SEC. 701. Section 1106 (b) of the Social Security Act 24is amended to read as follows: 25 "(b) Requests for information, disclosure of which is 112

1authorized by regulations prescribed pursuant. to subsection

2 (a)of this ectio, and requests for eic-vices, rny, subject

3to such limitations may be prescribed by the Sretary to

4avoid undue interf&ence with his funetons under this Act,

5be complied with if the agency, person, or organization

6making the request agrees to pay for the information or serv-

7ices requested in such amount, if any (not exceeding the cost

8of furnishing the information or services), as may be deter-

9minedby the Secretary.Payments for information or serv-

10ices furnished pursuant to this section shall be made in ad-

11vance or by way of reimbursement, as may be requested by

12the Secretary, and shall be deposited in the Treasury as a

13special deposit to be used to reimburse the appropriations

14 (including authorizations to make expenditures from the

15Federal Old-Age and Survivors Insurance Trust Fund and 16the Federal Disability Insurance Trust Fund) for the unit

17or units of the Department of Health, Education, and Wel- 18fare which furnished the information or services."

19 (JOVEHAGE ie{ EflThN EMPLOYEES )i TAX EXEMT 20 O4ZATIWfHfi Pf+3 * 21 SØ27 4Section4O 4*ehe Social 22SecurityAmcndme e 1954 e4 by 4king ei

23 "ha@failcd ø ifie prior ø th.e eRactmdnt ef the SoeW Sccurity 24Amcndmcnthe 1-9.5 a4eiig i 14 heiee "did 113 1 nehtwe ii cffcct, during e cntirc periodi whichthe

2individual was e employed,".

-fb)-Scction 4ø 43- -f33-of he SocialSecurity

4Amcndmcnt of 1054iamended by incrting "pcrforrncl

5during e period in which such organization 4i4 ne hae

6a valid wa4ef ccrificatc" after "service".

7 -fe)-Scctioi 4ø -(-a.)--(-53-of he SocialSccurity

8Amcndmcnts of 1054 amended by incrting "without

9knowledge 4ha a waiver ccifite was ncecsary, e after

10-in good faith and"-

11 MEANINGOFTBBM "SECRETABY"

12 SEO. 4 702. As used in the provisions of the Social

13Security Act amended by this Act, the terms "Secretary",

14unless the context otherwise requires, means the Secretary of

15Health, Education, and Welfare.

16 AMENDMENT PRESERVING EELATIONSHIP BETWEEN RML-

17 ROADRETIREMENTAND OLD-AGE, SURVIVORS, AND

18 DISABILITY INSURANCE

19 SEo. Q4 703. Section 1 (q) of the Railroad Retirement

20Act of 1937, as amended, is amended by striking out "1957"

21and inserting in lieu thereof "1958".

22 ADVISORY COUNCIL ON PUBLIC ASSISTANCE

23 SEC. 704. (a) There is hereby established an Advisory

24Council on Public Assistance for the purpose of reviewing 114

1 thestatus of the public assistance programin relation to the

2old-age,survivors, and disability insurance program,the

3fiscalcapacities of the States and the Federal Government,and

4any other factorsbearing on the amount and proportion of

5theFederal and States sharesinthejntbiicassist wie

6program..

7 (b) The Council shall be appointed by the Secretary

S before January 1959 without regard to the civil-service laws

9andshall consist of the Commissioner of Social Security, as

10chairman,and of twelve other persons who shall, to the extent

11possible,represent employers and employees in equal numbers,

12personsconcerned with the administration or financing of the

13Stateand Federal programs, other persons with special

14knowledge,experience, or qualifications with respect to the

15program,and the public.

16 (c)(1) The Council is authorized to engage such teclini-

17calassistance, as may be required to carry out its functions,

18andthe Secretary shall, in addition, make a'vailable to the

19Councilsuch secretarial, clerical, and other assistance and

20suchother pertinent data prepared by the Department of

21Health,Education, and Welfare as it may require to carry

22outsuch functions. 23 (2)Members of the Council, while serving on business

24ofthe Council (inclusive of travel time), shall receive com-

25pensationat rates fixed by the Secretary, but not exceeding 115

1$50 per day; and shall be entitled to receive actual and neces-

2 sary traveling expenses and per diem in lieu of subsistence

3 whileso serving away from their places of residence.

4 (d)The Council shall make a report of its findings and

5 recommendations (including recommendations for changes in

6the provisions of sections 3, 403, 1003, and 1403 of the Social

7 Security Act) to the Secretary and the Congress, such report

8to be submitted not later than January 1, 1960, after which

9datesuch Council shall cease to exist. Passed the House of Representatives July 31, 1958. Attest: RALPH R. ROBERTS, Clerk. Calendar No. 2453 Mm CONGRESS 2ri SEssioN . . [Report No. 2388] AN ACT To increase benefits under the Federal Old-Age, Survivors, and Disability Insurance System, to improve the actuarial status of the Trust Funds of such System, and otherwise improve such System; to amend the public assistance and maternal and child health and welfare provisions of the Social Security Act; and for other purposes.

AUGUST 1, 1958 Readtwiceand referred to the Committee on Finance AUGUST 14, 1958 Reported with amendments

GPO 861-630

______

1958 CONGflSSIONAL.RECORD —SENATE 17793 SOCIAL SECURITY AMENDMENTS poses, which had been reported from OF 1958 the Committee on Finance with amendments. Mr. JOHNSON of Texas.Mr. Presi- Mr. JOHNSON of Texas.Mr. Presi- dent, I move that the Senate proceeddent, I ask unanimous consent that two to the consideration of Calendar 2453,of the technicians of the Social Security House bill13549, to increase benefitsAdministration be granted the privilege • under the Federal old-age, survivors,of the floor during the consideration of • and disabilityinsurance system—thethisbill—namely, RobertJ.Meyers, so-called social security benefit increaseChief Actuary of the Social Security bill. Administration; and Charles E. Haw- The PRESWING OFFICER. Thekins,legislative ilaison officer of the question isofl agreeing to the motionSocial Security Administration. of the Senator from Texas. The PRESIDING OFFICER.With-S The motion was agreed: to; and theout objection, it is so ordered. Mr. KERR. Mr. President, I asked Senate proceeded to ôosider the billunanimous consent that the committee (H. R. 13549) to increase benefits underamendments be agreed to en bloc; and the Federal old-age, survivors, and dis-that the bill, as thus amended, be con- • abilltyinsurance system, to improvesidered as original text, for the purpose the actuarial status of the trust fundsof amendment. of such system, and otherwise improve The PRESIDING OFFICER. With- suchsystem;toamend thepubllcout objection, it is so ordered. assistanceandmaternalandëhild Tue committee amendments agreed to health anUwelf are provisions of theen bloc are as follows: Social Security Act; and for other pur- On page 3, after line 3, to strike out: "Table for determininv primary insurance amount and maximum family benefits

'II H III •iv V I II III TV V "(Primary insurance(Primary insurance (Average (Primary(Maximum (Primary insurance(Primary Insurance (Average (Primary(Maximum benefit under 1939 amount under monthly insurance family benefit under 1939 amount under monthly insurance family Act, as modified) - 1954 Act) wage) beneflts) amount) Act, as modified) 1954 Act) wage) ' amount) bexiefits)

Or his primary "If an Individual's Or his average And the If an Individual's - Orhis primary Or his average And the primary Insurance Insurance amountmonthly wage - - maximum primary Insurance Insurance amountmonthlywage maximum benefit (as deter- (as determmed (as determined The amount of benefit (as deter- (as determined (as determined The amount of mined under under subsec. under subsec. amount benefits mined under under subsec. under subsec. amount benefits subsec. (d)) Is— (c)) Is--— (b))Is— referred payable (as subsec. (d)) Is— (c)) is— (b)) Is— referred payable (as toin theprovided In toIn theprOvided in precedingsec. 203 (a)) precedingsec. 203 (a)) - paragraphson the basis paragraphs on the basis ofthls ofhiswages ofthis ofhlswages "At But not At But not At.But not subsection and self- At But not At But not At But not subsection and self- least— more least— more least— moreshall be— employ- . least— morO least— more least—- more shall be— employ- than— than— than— ment than— than— than— ment Income ' income shall be— - shallbe—

$30.00 $54 $33 $53.00 "$35.81 $36.40 $75.30 - $76.10 $184 $188 $81 $148.80 "$10.01 10.48 $30. 10 31. 00 $55 56 34 54. 00 36. 41 37.08 76. 20 77. 10 189 193 82 152. 80 10.49 11.00 31.10 32.00 57 68 35 55.00 '37.09 37.60 77.20 78.00 194 197 83 156.40 11.01 11.48 32.10 83.00 59 60 36 56.00 37.61 38.20 78.10 78.90 198 202 84 160.00 11.49 12.00 83.10 34.00 61 61 37 57.00 38.21 39.12 79.00 79.90 203 207 85 164.00 12.01 12.48 34.10 35.00 62 63 38 58.00 39.13 39.68 80.00 80.80 208 211 86 167.60 12.49 13.00 64 35.10 36.00 65 39 59.00 39.69 40.33 80.00 81.70 , 212 216 87 171.20 13.01 13.48 36.10 37.00 66 67 40 60.00 40.34 41.12 81.80 82.70 217 221 88 175.20 13.49 14.00 37.10 38.00 68 69 41 61.50 41.13 41.76 82.80 83.60 222 225 89 178.80 14.01 14.48 38.10 39.00 70 70 42 63.00 41.77 42.44 83.70 84.50 226 230 00 182.40 14.49 15.00 39.10 40.00 71 72 43 64.50 42.45 43.20 84.60 85.50 231 235 91 186.40 15.01 15.60 40.10 41.00 73 74 . 44 66.00 43.21 43.76 85.60 86.40 236 239 92- 190.00 15.61 16.20 41.10 42.00 75 76 45 67.50 43.77 44.44 86.50 87.30 240 244 $3 193.60 16.21 16.84 42.10 43.00 77 78 46 69.00 44.45 44.88 87.40 88.30 245 249 04 197.60 16.85 17.60 43.10 44.00 79 80 47 70.50 44.89 45.60 88.40 89.20 250 253 95 201.20 17.61 18.40 .44.10 45.00 81 81 48 72.00 89.30 00.10 254 258. 96 204.80 18.41 19.24 45.10 46.00 82 83 49 73.50 00.20 91.10 259 263 97 208.80 19.25 20.00 46.10 47.00 84 85 50 75.00 . 91.20 92.00 264 267 98 212.40 20.01 20.64 47.10 48.00 86 87 51 76.50 92.10 92.00 263 272 99 216.00 20.65 21.28 48.10 4900 88 89 52 78.00 93.00 93.90 273 277 100 220.00 21.29 21.88 49.10 50.00 90 90 53 79.50 94.00 94.80 278 281 101 223.60 21.89 22.28 50.10 50.90 91 92 54 81.00 94.90 95.80 282 286 102 227.20 22.29 22.68 51.00 51.80 93 94 55 82.50 95.90 96.70 287 291 103 231.20 22.69 23.08 51.90 52.80 95 96 56 84.00 96.80 97.60 292 295 104 234.80 23.09 23.44 52.00 53.70 97 97 57 85.50 97.70 98.60 296 300 105 238.40 23.45 23.76 53.80 54.60 98 99 58 87.00 98.70 99.50 301 305 106 242.40 23.77 24.20 54.70 55.60 100 101 59 88.50 99.60 100.40 306 309 107 246.00 24. 21 24. 60 55.70 56. 50 102 102 60 oo. 00' 100. 50 101. 40 310 314 108 249. 60 24.61 25.00 56.60 57.40 103 104 61 91.50 ' ' 101.50 102.30 315 319 109 253.60 25.01 25.48 57.50 58.40 105 106 62 93.00 102.40 103.20 320 323 110 254.00 25.49 25.92 58.50 59.30 107 107 63 94.50 103.30 104.20 324 328 111 254.00 25.93 26.40 59.40 60.20 108 109 64 96.00 104.30 105.10 329 333 112 254.00 26.41 26.94 60.30 61. 20 110 113 65 97. 50 105.20 106.00 334 337 113 254. 00 26. 95 27. 46 61.30 62. 10 114 118 66 99. 00 106. 10 107. 00 338 342 114 254.00 27. 47 28.00 62. 20 63.00 119 122 67 100. 60 107. 10 107.90 343 347 115 254.00 28.01 28.68 63.10 64.00 123 127 68 102.00 108.00 108.50 348 351 116 254.00 28.69 29.25 64. 10 64.90 128 132 69 104,00 352 356 117 254.00 29.26 29.68 65.00 65. 80 133 136 70 107. 60 357 361 118 254.00 29.69 30.36 65.90 66.80 137 141 71 111.20 362 365 119 254.00 30.37 30. 92 66.90 67.70 142 . 146 72 115. 20 366 370 120 254.00 30.93 31. 52 67. 80 68.70 147 151 73 119. 20 371 375 121 254. 00 31.53 32.00 68.80 69.60 152 155 74 122,80 376 379 122 254.00 32.01 32.60 69.70 70.50 156 160 75 126.40 380 384 123 254.00 32.61 33. 40 70.60 71.50 161 165 76 130. 40 385 389 124 254. 00 33.41 33.88 71.60 72.40 166 169 77 134.00 300 393 125 254.00 33.89 34. 50 72. 50 73.30 170 174 78 137. 60 394 398 126 254.00 34.51 35.20 73.40 74.30 175 179 79 141.60 899 400 127 264.00" 35.21 35.80 74.40 75.20 180 183 80 145.20 17794 CONGRESSIONAL RECORD —SENATE August 15 And in lieU thereof, to insert: "'Tabiefordetermining primary insurance amount and maximum family benefits

"I II In Iv V I U III IV V "(Primary Insurance(Primary nsur9nce (Average (Primary(Maximum(Primary insurance (Primary Insurance (Average (Primary(Maximum benefit wider 1939 amount under monthly Insurance family benefit under 1939 amount under monthly Insurance family Act, as modified) 1954 Act) wage axnoujt) benefits) Act, as modified) 1954 Act) wage) amount) benefits)

"If an individual's Or his primary Or his average And the If an Individuals Or his primary Or his average And the primary insurance insurance amount monthly wage maximum primary insurance insurance amountmonthly wage maximum benefit (as deter- (as determined (as determined The amount of benefit (as deter- (as determined (as determined The amount of mined under under subsec. under subsec. amount benefits mined under under subsec. under subsec. amount benefits (e)) is— (b)) is— referred payable (as subsec. (d)) is— (c)) is— (b)) is— - referred payable (as subsec. (d)) is— to in theprovided in to in theprovided in precedingsec. 203 (a)) precedingsec. 203 (a)) paragraphson the basis paragraphson thc basis of this of his wage of this of ills wages "At But not At But not At But notsubsection and self- At But not At But not At But notsubsection and self- least— more least— more lea8t— more shall be— employ- least— more least— more least— more shall be— employ- than— than— than— ment than— than— than— ment income . income shall be— shall be—

$10.00 $30.00 $54 $33 $53.00 "$35. 81 $36. 4 $75.30 $76. 10 $184 $188 $81 $150. 4 "$10. 01 10. 48 $30. 10 31. 00. $55 56 34 54.00 36.41 37.08 76. 20 77. 10 180 193 82 154. 4 10.49 11. 00 31. 10 32. 00 57 68 35 55.00 37. 09 37.60 77. 0 78.00 194 197 83 157. 60 11. 01 11.48 32. 10 33.00 9 60 36 56.00 37.61 38.20 78. 10 78.90 19 202 84 161. 60 11.49 12.00 33. 10 34.00 61 61 37 57.01) 38. 21 39. 12 79.00 79. 90 203 207 86 165. 60 12.01 12.48 34.10 35.00 62 63 38 58.00 39. 13 39.68 80.00 80.80 208 211 86 168.80 12.49 13.00 35. 10 36.00 64 65 39 59.00 39.69 40.33 80. 90 81. 70 212 216 87 172.80 13.01 13.48 36. 10 37.00 66 67 4 60.00 40. 34 41. 12 81.80 82. 70 217 221 88 176.80 13.49 14.00 37.10 38.00 68 69 41 61.50 41.13 41.76 82.80 83.60 222 225 89 180.00 14. 01 14.48 38. 10 39.00 70 70 42 63.00 41. 77 42.44 83. 70 84. 50 226 230 90 184.00 14.49 15.00 39. 10 40.00 71 72 43 64. 50 42. 45 43. 20 84. 61) 85. 60 231 235 91 188.00 16. 01 15. 60 40. 10 41.00 73 74 44 66.00 43.21 43. 76 85.60 86.40 236 239 92 191. 20 16. 61 16.20 41. 10 42.00 75 76 45 67.50 43.77 44.44 86. 50 87.30 24 244 93 195.20 16. 21 16. 84 42. 10 43.00 77 78 46 69.00 44.45 44. 88 87. 4 88. 30 245 249 94 199.20 16. 85 17.60 43. 10 44.00 79 80 47 70. 50 44. 89 45.60 88.40 89. 20 250 253 95 202. 4 17. 61 18. 4 44. 10 45.00 81 81 48 72.00 89.30 90. 10 254 25S 96 206.40 18.41 19.24 45.10 46.00 82 83 49 73.50 90.20 91.10 259 263 97 210. 4 19. 25 20.00, 46. 10 47.00 84 85 50 75.00 91.20 92.00 284 287 98 213.60 20.01 20. 64 47. 10 48.00 86 87 51 76.50 92. 10 92.90 268 272 99 217.60 20.65 21.28 48.10 49.00 88 89 62 78.00 93.00 93.90 273 277 100 221.60 21. 29 21.88 49. 10 60.00 90 90 53 79.50 • 94.00 94.80 278 281 101 224.80 21.89 22.28 50.10 O. 90 91 92 54 81.00 94.90 95.80 282 286 102 2. 80- 22.29 22.68 1. 00 51.80 93 94 M 82.50 90 06.70 287 291 103 232.80 22.69 23.08 61.90 52.80 95 96 5 84.00 06.80 97.60 292 295 104 236.00 23.09 23.44 62.90 53.70 97 97 57 85.50 97.70 98. 60 296 300 105 24ft 00 23.45 23.76 53.80 64.60 98 99 58 87.00 98.70 99.50 301 305 106 244.00 23.77 24.20 54.70 65.60 100 101 59 88.50 99.60 100.40 306 309 107 247.20 24.21 24. 60 55.70 66. 50 102 102 fO lO. 00 100. 50 101. 4 310 314 108 251.20 24. 61 25.00 66. 60 57.40 103 104 61 91.50 • 101.50 102.30 315 319 109 254.00 25.01 25.48 57.50 58.40 105 106 62 93.00 102. 4 103.20 320 323 110 254. 00 25.49 25.92 68. 50 59.30 107 107 63 94.50 103.30 104.20 324 328 111 254. 00 25.93 26.40 69.40 60.20 108 1{)9 64 06.00 104.30 10& 10 329 333 112 254. (1) 26.41 26.94 60. 30 61.20 110 113 65 97. 50 105.20 106.00 334 337 113 254.00 26.95 27.46 61.30 62.10 114 118 66 99.00 106.10 107.00 338 342 114 254.00 27.47 28.00 62.20 63. 00 119 122 67 100. 50 107. 10 107.90 343 347 115 254.00 28. 01 28.68 63. 10 64.00 123 127 68 102.00 108.00 108.50 348 361 116 2t4. 00 28. 69 29. 25 64. 10 64.90 128 132 69 105.60 352 356 117 254.00 29.26 29.68 65.00 65.80 133 136 70 108. 80 367 361 118 254.00 29.69 30.36 65. 90 66. 80 137 141 71 112.80 . 362 365 119 254.00 30.37 30.92 66.90 67.70 142 146 72 116 80 366 370 120 254.00 30.93 31.36 67.80 68.60 147 150 73 120.00 371 375 121 254.00 31.37 32.00 68.70 69. 60 151 155 74 124.00 376 379 122 25400 32. 01 32.60 69. 70 70. 50 156 160 75 128. 00 380 384 123 254.00 32. 61 33.20 70. 60 71.40 161 164 76 131. 20 385 389 124 254.00 33. 21 33.88 71. 50 72. 40 165 169 77 135. 20 390 393 125 254.00 33. 89 34. 50 72. 50 73. 30 170 174 78 139. 20 394 398 126 254.00 34. M 35.00 73.40 74. 20 175 178 7 142.40 99 400 127 254.00" 35. 01 35. 80 74. 30 75. 20 179 183 80 146.40

On pane 6, line 2. after "(b)" to insertwhich the Social Security Amendments ofthis act Is enacted" and insert "December "(1); on page7,line ,afterthe word1958 were enacted, or," and insert "or died1958"; in line 22, after the word "in" where 'atter", tostrike out "the second month -priorto January 1959, and; on page 9, lineit occurs the first time, to strike out "the following the month in which the Social1, after "(B) ",tostrike out 'died prior tothird month after the month in which this Security Amendments of 1958 are enacted"such third month" and insert "to whom theact is enacted" and insert "January 1959,"; and insert "December 1958"; in line 11, afterprovisions of paragraph(5)of subsectionon page 15 after line 6, to strike out: the word "such'to strike out "second'; in(b) are not applicable.'; on page 12, line 1, "(i) With respect to monthly benefits un- line 15 after the word such", to strike outafter "(1)' to insert "and section 223 (b)'; der title II oX the Social: Security Act payable "second'; in line 19, after the word 'such",in line 3, after the word "for" to strike outpursuant to section 202 (j)(1) of such act to strike out "second"; in line 22, after "(t) ","thesecond month tollowing the month infor any month prior to the third month tol- to strike out "(4)."" and insert "(4);"; afterwhich the Social Security Amendments oXlowing the month oX enactment of this act, line 23, to insert: 1958 were enacted" and insert "Decemberthe primary insurance amount oX the in- "(E) who files an application tor a recom-1958"; in line 25, after "(1) "toinsert "anddividual on the basis oX whose wages and putation under subparagraph (B) oX sectionsection 223 (b) ";onpage 13, line 4, afterself-employment income such monthly bene- 102(t)(2)of the Social Security Amend-the word °to" to strike out "the third monthfits are payable shall be determined as though ments oX 1954 after such month and is ('rfollowing the month in which the Socialthis act had not been enacted; such primary Would, but for the tact that such recom-Security Amendments oX 1958 were enacted"insurance amount shall be such individual's putation would not result in a higher pri-and insert "January 1959'; in line 7, afterprimary insurance amount for purposes of mary insurance amount or such individual,the word "continued"; to strike out "unin-section 215 oX such act for months after the be) entitled to have his primary insuranceterruptedly";inline22,afterthe wordse*ond month following the month in which amount recomputed under such subpara-"the", to strike out "smallest'and insert it is larger than the graph." "smaller'; on page14, line10,after thethis act is enacted it On page 8, Une 20, atter the word "mdi-word "after", tostrike out "the secondprimary insurance amount determined un- vidual", to strike oUt "who"—"; in linemonth following the month in which thisder section 235 of the Social Security Act as 21, atter "(A)". to Insert 'who"; in lineact is enacted" and insert "December 1958":amended by this act, and shall be rounded 22, after "section 223", to strike out "priorin line 19. after the word 'for", to strike outto the next higher dollar if it is not a multi- to the third month following the month in"the second month after the month in whichpIe or a dollar." 1958 CONGRESSIONAL RECORD —SENATE And in' lieu thereof to insert: 8, afterthe word lnsertlng', to Insert 'aure to make payments when due under' sec- "(i) In the case of any individual to whomcomma and'; in line 9, alter the word 'In-tion 218 (e) the provisions of subsection (b)(5) of sec-surance', to strike out 'benefits' and insert On page 59, ,at the beginning of line 5, to tion215ofthe, Social -SecurityAct,as'benefits,'; on page 32, line 2, alter the word,change the 'section,number from "312" to amended bi this act, are applicable and on'by', to strike out 'Inserting "or disability""311"; at the beginningof line 18, to change the basis 'of those wages and self-employ-immediately after "old "'"andinsertthe section number from "313" to "312"; on ment income benefits are payable for months"striking out 'or' immediately preceding '(3)'page 60, at the beginning of line23, to prior to January 1959, hIs primary insuranceand by Inserting 'or (4) in the case of anychange the section .numberfrom "314" to amount for purposes of benefits for suchIndividual entitled to disability Insurance"31?"; on page62, at the beginning of line prior months shall, if based qn an application - benefits,the quarter in which he most re-7, to change the section number from "315" for such benefits or for a recomputation ofcently became entitled to disability insur-to "314"; in 'line 9 after the word "section", such amount, as the case may be, filed alterance benefits,' Immediately alter 'section,' ";where it appears the first time, to strike out December '1958, be determined under suchinline 18, after the word "Insurance", to"and seçt1bn 215 (d)"; on page 63, at the section 215, as in effect prior to the enact-strike out "benefit" and insert "benefit,";beginning. 61. hue 15, to insert "(1) or"; on ment of this act, and, if such individual'sin line 20, after the word tinsurance", topage 66,: at'thebeginning of lineii, to primaryinsurance amount as so determined,strike out "benefits" and insert "benefits,";change t1ie, $ctiOn number from "316" to is larger than the primary insurance amountin line 21, after the word "is", to strike out"315"; on.page.67, line 12, after the name determined for him under section 215 as"entitled" and insert "entitled,"; on page"Tennessee"; to, insert "Vermont"; in line amended by this act, such larger ,primary33, line 9, after the word "section", to strike15, alter the Word "this", to strike out "sub- insurance amount (increased to the nextout "202" and insert "202,"; on page 34,paragraph" pnd insert "subparagraph,"; on higher dállar ifit is not a multiple of aline 18, after the word "by", to strike outpage 68, line 13, after the word "paragraph", dollar)shall, for months after December"subsection(k)" and insert "subsectionsto strike out "(8))" and insert "(8)) ,";on 1958, be his primary insurance amount for(k) and (m)"( at the beginning of line 24,page 70, line 15, after the numeral "(6) ",to purposes of such section 215 (and of theto strike out. "subsection (k)" and insertinsert "or the corresponding provision of other provisions) of the Social Security Act"subsections (k) and (m) ";onpage 42, atprior laws"; in line 22, after the numeral as amended by this act in lieu of the amountthe beginning of line 13, to strike out "is (6) ",toInsert "or the corresponding provi- determined without regard to this subsec-not his widow as defined in section 216 (c)"sion of prior law"; on page 73, after line 13, tion." - and insert "is not, and upon filing applica-to strike out: Onpage 20. line 23, after the word "continues", to strike out "without interrup-tion therefor in the month in which he died "POLICEMEN AND FIREMEN OF XNTERSTATE tion"; on page 22, line 6, after the word "of",would not be, entitled to benefits for, such INSTRUMENTALITIES to strike out "coverage." and insert "cover-month on the basis of his wages and self- "SEC. 317. Subsection (k)of section 218 age; except that the provisions of subpara-employment income,"; on page 47. line5,'of the Social Security Act is amended by graph (A) of this paragraph shall not applyafter the word "his", to strike out "death"adding at the end thereof the following new in the 'case of any individual with respectand insert "death,"; on page 49, line 7, afterparagraph: to whom a period of disability would, butthe word "his", to strike out "death" and "'(3) Any agreement with any instrumen- for such subparagraph, begin prior to 1951."insert "death,"; on page 50, line 16, aftertality for two or more States entered into On page 23, line 8, after the word "hus-the word "is", to strike out "entitled" andpursuant to this act may, nOtwithstanding band", to strike out "ceases, prior to theinsert "entitled,"; on page 51, line 17, afterthe provisionS of subsection (d) (5) (A) and month in which he attains retirement age,the word "is", to strike out "entitled" andthe references thereto in subsections(d) to be entitled to disability insurance bene-insert "entitled,"; at the beginning of line(1) and (d) (3), apply to service performed fits" and insert "is not entitled to disability19, to insert "such"; on page 52, line 19,by employees of such instrumentality in any insurance benefits and is not entitled to old-after the word "under", to strike out' "sec-policeman's or fireman's position covered by age insurance benefits." tion 202 (d) of the Social Security Act fora retirement system, but only upon com- On page 24; line 17, alter the word "wife,"months in any taxable year, of the individualpliance, to the extent practicable, with the to strike out "ceases, prior to the month inon the basis of whose wages and self employ-requirements of subsection(d)(3).For which she becomes entitled to old-age in-ment income such benefits are payable" andthe purpose of the preceding sentence, a surance benefits, to be entitled to disabilityinsert "subsection (d) or (g) of section 202retirement system which covers positions of insurance benefits" and insert "is not en-• of the Social S9curity Act for months in anypolicemen or firemen, or both, and other titled to disability insurance benefits andtaxable year, ot the individual to whom thepositions shaU, 11 the instrumentality con- is, not entitled to old-age insurance bene-person entitled to such benefits is married,";cerned so desires, be deemed to be a separate fits."; on page 26, at the beginning of lineon page 54, lIne 19, after the word "sus-retirement system with respect to the posi- 14, to strike out "month in which such indi-pended", to strike out "for all Such monthstions of such policemen or firemen, or both, vidual ceases to be entitled to such bene-of such year"; at the top of page 58, to strikeas the case may be.'" fits unless such individual is, for the monthout: On page 79, at the beginning of line 22, in which he ceases to be so entitled" and in- SICK LEAVE PAY OF STATE AND LOCAL to insert "exceed $4,800, the employee shall sert "first month for which such individual EMPLOYEES be entitled (subject to the"; on page 90, line is not entitled to such benefits unless such "SEC. 311. (a)Subsection(i)of section20, after the word "Act", to insert "and re- individualis,for such later month"; on209 of the Social Security Act is amended byquests med under subparagraph (F) of such page 30, line 6, after the word "under", toinserting immediately before the semicolonsection after such date"; on page 91, line 18, strike out "paragraph (1) or (2) ot sectiona period and the following: 'As used in thisafter the word "commencing", to strike out 203(b), under section 203(c), or undersubsection, the term 'sick pay' includes re-"October1,1958" and insert "January1, section 222 (b), and"."; alter line 7,to strikemuneration for service In the employ of a1959"; on page 92, line 7, after the word out: State or a political subdivision (as defined"this", to strike out "clause and clause (B) "(4) Such paragraph Is further amendedin section 218 (b) "(2) of a State, or an in-and for purposes of clause (2)" and insert by striking out the period at the end ofstrumentality of two or more States, paid to"subsection"; inline17,alter the letter subparagraph(C)and insertinginlieuan employee thereof for a period during"(A)", to strike out "but"; in line 19, after thereof', and ',by striking out '(A), (B), andwhich he was absent from work because ofthe word "of", to strike out "$66" and insert (C)' in the material following subparagraphsickness.' "$65"; on page 93, line 3, after the word (C) and inserting in lieu thereof '(A), (B), "(b) The amendment made by subsection"exceeds", to strike out "$36" and insert (C), and (D)', and by adding after sub-(a) shall be applicable to remuneration paid"$35"; in line 20, after the word "commenc- paragraph (C) the following new subpara-after the enactment of this act, except that,ing", to strike out "October 1, 1958" and graph." in the case ot any coverage group which isinsert "January 1, 1959"; on page 94, at the At the beginning of line 14, to strike outincluded under the agreement of a Statebeginning of line 8, to strike out "clause and "(D) the number equal to the number ofunder section 218 of the Social Security Act,clause (B) and for purposes of clause (2)" months for which such wife's insurance"the amendment made by subsection(a) and insert "subsection"; in line 18, after the and insert "section 203 (b) (1) or (2) undershall also be applicable to remuneration forletter "(A) ",tostrike out "but"; in line 20, section 203 (c), or under section 222 (b) ""anymember of such coverage group withafter the woid. "of," to strike out "$33" and After line 16, to insert: insert "$30"; on page 95, line 24, after the "(4) Such paragraph is further amendedrespect to services performed after the effec—word "commencing", to strike out "October by striking out '(A), (B), and (C)' in thetive date, specified in such agreement, for1, 1958" and insert "January 1,1959"; on material following subparagraph (C)andsuch coverage group, if such State has paidpage 96, lIne ii, after the word "this", to inserting in lieu thereof '(A), (B), (C), andor agrees, prior to January 1, 1959, to pay,strike out "clause and clause(B) and for (D)', by redesignating subparagraph (C) asprior to such date, the amounts which underpurposes of clause (2)" and insert "subsec- subparagraph (D), by inserting 'and' at thesection 218(e)would have been payabletion";in line 23, after the word "of", to end of subparagraph (B) and by addingwith respect to remuneration of all membersstrike out "$66" and insert "$65"; on page after such subparagraph (B) the followingof such coverage group had the 'amendment97, line 7, after the word "exceeds", to strike new subparagraph." made by subsection (a) been in effect onout "$36" and insert "$35"; on page 98, line Alter line 23, to insert: and after January1,1951.Failure by a1, after the word "commencing", to strike "'(C) the number equal to the numberState to make such payments prior to Janu-out "October 1, 1958" and insert "January of months for which such'; on page 31, lineary 1, 1959, shall be treated the same as fail-1, 1959"; in line 14, after the word "this", 17796 CONGRESSIONAL RECORD —SENATE August 15 tostrike out "clause and clause (B) and or (c) (1) The Council is authorized to en- DISABILITY purposes of clause (2)" and insert "subsec-gage such technical assistance, aa may be re- tion"; on page 99, line 3 after the Wordquired to carry out its functions, and the First.Provide benefits for wives, de- 'of", to strike out "$66" and insert "$65";Secretary shall, in addition, make availablependent husbands, and children of dis- in line 13, after the word exceeds", to striketo the Council such secretarial, clerical, andability insurance beneficiaries like those out $36" and insert $35"; on page 101, lineother assistance and such Other pertinentnow provided for dependents of old-age 5, after the word "the", where it appears thedata prepared by the Department of Health,insurance beneficiaries.Set forth re- first time, to strike out 'eeven" and InsertEducation, and Welfare as it may require toquirements for entitlement and amends 'ten"; in line 6, after the word beginning",carry out such functions. appropriate provisions in present law to to strike out "October 1, 1958" and insert "(2) Members of the Council, while servingapply to such benefits. "January 1, 1959"; on page 102, line 1, afteron business of the Council (inclusive of the name "Puerto Rico", to insert "The";travel time), shall receive coitnpensation at Second. Eliminates the disability ben- after line 17, to strike out: rates fixed by the Secretary, but not exceed-efits offset provision for disability in- ing $50 per day; and shall be entitled to re-surance benefits arid childhood disabil- "SPECIAL PROVISION 'OR CERTAIN INDIANS ceive actual and necessary traveling expenses ity benefits. REPEALED and per diem in lieu of subsistence while so Third. Removes the requirement for "SEC. 510. Effective in the case o pay-serving away from their places of residence. ments with respect to expenditures by States, eligibility for the disability freeze or for "(d) The Council shall make a report ofdisability insurance benefits that a dis- under plans approved under title I, lv, or Xits findings and recommendations (including of the Social Security act, or quarters be-recommendations for changes in the provi-abled worker have 6 quarters of cover- ginning afler, September 30, 1958, section 9sions of sections 3, 403, 1003, and 1403 of theage out of 13 calendar quarters before of the act o April 19, 1950, as amended (25Social Security Act) to the Secretary and the disablement.Adds fully insured status U. S. C. 639) ,isrepealed." Congress, such report to be submitted notas a requirement for the freeze in order On page 103, at the beginning o line 2,later than January 1, 1960, after which dateto make requirements for both freeze to change the section number from "511"such Council shalL cease to exist." to "510'; at the beginning of line 8, to change and cash benefits alike. the section number from "512" to '511"; in Mr. KNOWLAND. Mr. President, will Fourth. Provides that, for disability line 14, after the word •'after", to strike outthe Senator from Oklahoma yield? insurance benefit applications filed after "September" and Insert "December"; in line December 1957 disability benefits may 18, after the word after",to strike out 'Sep- Mr. KERR.I yield. be paid for as many as 12 months before tember" and insert "December"; on page 106, Mr. KNOWLAND. DidIcorrectlythe month in which the application is line 3, after the word "under", to strike outunderstandtherequestwhichwasfiled. "section 522" and insert 'this part"; in linegrantedtobethatthecommittee Fifth. Postpones for 3 years the June 5, alter the wordin", to strike out "suchamendments be agreed to en bloc? 30, 1958, deadline for filing fully retrO-. section 522" and insert.thls part"; on page Mr. KERR. Yes; my request was that 110, line 7, alter the word •'the", to Insert active disability freeze applications. "Federal Security"; on page 111, line 6, afterthe committee amendments be agreed Sixth. Requires that a person be con-. the word "the", to insert "Federal Security";to en bloc; and that the bill, as thustinuously disabled throughout his freeze on page 112, after line 18, to strike Out: amended, be considered as original text,period and until disability freeze appli-. 'COVERAGE FOR CERTAIN EMPLOYEES OF TAXfor the purpose of amendment. Thatcation isfiled, and permits disability EXEMPTORGANIZATIONSWHICH PAID TAX request by me was agreed to. freeze applications filed after June 30, 'SEc. 702.(a) Section 403 (a) (1) of the Mr. KNOWLAND.Verywell. 1961, to establish a freeze period begin- SocialSecurity Amendments of1954is Mr. KERR. Mr. President,H.R.ning as early as 18 months before the amended by striking Out has failed to file13549, the social security amendmentsmonth of filing. prior to the enactment of the Social Securityof 1958, makes the following major im- PROVISION FOR BENE'ITS TOR DEPENDENTS Amendmentw of 1956' and inserting in lieuprovements in the social-security pro-. thereof 'did not have in eftect, during thegram: First. Where a person over age 18 is entire period in which the individual was the child of a deceased or retired insured so employed.' INCREASES IN BENEflS AND EARNINGS BASE worker and has been disabled since be-. '(b) Section 403(a)(3) o the Social First. Increases benefit amounts forfore age 18, provides for the payment of Security Amendments of 1954 is amended byall beneficiaries—those now on the rollsbenefits to the child without requiring inserting 'performed during the period in Which such organization did not have aand those who will come on in the f u-proof, as required under present law, valid waiver certificate' after 'service.' ture—by about7 percent, with an In-that he has been dependent upon the "(c) Section 403(a)(5)of the Socialcrease of at least $3 in the amountworker for one-half of his support. The Security Amendments o 1954 is amended bypayable to the retired worker. Increasechange would make the requirement for inserting without knowledge that a waiverthe maximum on total benefits payablethe disabled adult child the same as for certificate was necessary, or' alter •in goodto a family from $200 to $254.Benefitthe child under age 18. faith and'." increases will be effective for January Second. Provides benefits for the de-. On page 113, at the beginning of line 12,1959. The Increased benefits will be re-pendent parent of a deceased worker to change the section number from "703"flected in checks received February 3,even though there Is a widow or child to "702";at the beginning of line19, to change the section number from "704" to 1959. of the worker who is,ormay become, "703"; and alter line 21, to insert a new Second. Increases,effective in1959,eligible for benefits.Benefits payable section, as ZollOws: the maximum amount of annual earn-to other survivors of a worker in the ingstaxableand month of enactment will not be de- "ADVISORY COUNCIL ON PUBLIC SS1STANCE creditabletowardcreased if a parent comes on the rolls. "SEC. 704. (a) There is hereby establishedbenefits from $4,200 to $4,800. Third. Provides for the payment of a an Advisory Council on Public Assistance for TAX RATE the purpose of reviewing the status of the lump sum to the widow of a deceased public assistance program in relation to the Increases the scheduled rates in theworker only if she was livng in the same old-age, survivors, and disability insurancelaw by one-fourth of 1 percent each forhousehold with him or had paid his program, the .scal capacities of the Statesemployees and employers, and three-burial expenses. and the Federal Government, and any othereighths of1 percent for the self-em-. Fourth. Provides for payment of bene- Zactors bearing on the amount and propor- fits to a child if the child was adopted tion o the Federal and States shares in theployed, above the rates now scheduled public assistance program. and provide for the scheduled increase Inby the widow of a worker within 2 years (b) The Council shall be appointed bythe rates to take place every 3 years in-after the worker died, If the child had the Secretary before January 1959 withoutstead of every 5 years. been living in the worker's household, regard to the civil-service laws and shall and if the child had not been supported consist of the Commissioner of Social Secu- [In percenti by anyone else. rity, as chairman, and of 12 other persons Bm- Em- Self-em- Fifth. Permits payment of benefits to Who shall, to the extent possible, represent ployers ployees ployed the mother of a child if the child had employers and employees in equal numbers, been adopted by her deceased husband. persons concerned with the administration 1959 2,4 23/i 33j Sixth. Removes the 3-year adoption or financing o the State and Federal pro- 1960—62 3 3 4requirement for the child of a retired grams, other persons with special knowledge, 1963—65 33/i 33/i 5 196-68 4 4 6 worker. experience, or qualifications with respect to 1909 and thereafter 434 43 $% Seventh. Where two secondary bene.. the program, and the public, ficiaries over age 18 marry each other— 1958 CONGRESSIONALRECORD —SENATE J7797 for example, the dependent parent ofand make a portion of the Federal con-from $15 million to $20 million, and the one worker and the widow of another—tribution related to the pro capita in-authorization for child welfare services provide for continuing the payment ofcome of the States. from $12 million to $17 million.These benefits to both beneficiaries The maximum amount of payment toincreases would raise the total author- RL'TIREMENTT Bed blind, fld thsabled P8OflSiiiizCd for the three prOgrams frOfl $43.5 First. Provides tiat a pezson will notwhichthe Federal Government will par-million to $58.5 million. lose a benefit under the retirement testticipate, set in the House bill at $66 Briefly,that, summarizes the pro- for any month in which he has notmonthly on an average basis, was re-,visions of H. R. 13549 as amended by earned wages m excess of $100—-ratherduced to $65.In 'the aid to dependentthe Committee on Finance and as 1e- than $80 as under present law—pro-children program the maximum was re-ported to this body. vided he does not perform substantialduced from $33 to $30. The PRESIDING 'OFFICER(Mr. servicesin self-employment m that The effective date of increases in theMORSE in the chair).The bill is open

month. - . . Federal share of payments made underto amendment. Second.Drops the requirement that aFederal-Statepublicassistancepro- Mr. YARBOROTJGH. Mr. President, person who Is not entitled to receivegrams was moved from October 1, 1958,I ask unanimous consent to withdraw benefits durrng a year bèèatise he Is-to January 1, 1959. . ' my printed amendments which were o!- working and who has in 'fict not received 'The'bill etends the benefits of thefered by me yesterday and printed, and any benefits nevertheless must file anfour public assistance programs to Guamwhich are identified as 8—14—58--B. annual report of his earnings under thewith a dollar limitation on the total Fed- ThePRESIDINGOFFICERThe retirement test. ' eral grants of $400,000. ' Senator is at liberty to withdraw his• COVERAGE Thedollar limitation on total Federalamendments. The bill modifies the existing law togrant, to Puerto Rico is increased from Mr. YARBOROTJGH.I offer herewith fadilitate.tha social-security coverage of$5,312,500 to $8,500,000 and to Virginamendments to the bill.In substance employees of nonprofit organizations anci'1sl from $200,000 tol300,000. they are identical to those which I of- certainState indlocalgovernment BLIND PROGRAMS—MISSOtIRI *ii PENNSYLVANIA fered on yesterday, but there were tech- workers. . , . SpecialprovisionsregardingStatenical corrections to be made in 2 or 3 P7BLICASSISTANCE blifld programs in Pennsylvania andcolunins. The bill would change the formula de-Missouri would be extended from June ThePRESIDINGOFFICER. The 30, 1959, to June 30, 1961. termming the. Federal share of assist- . amendments offered by the Senator fiom ance payments to provide' an average . MATZNALAND CHILD WELFARE Texas will be stated. maximum on State expehditures for a- The authorization for• maternal and The LEGISLATIVE CLERK.It is proposed sistance in which there an be Federalchild health would be increased fromto strike out the table ppearing on pages. sharing, including assistance in the form$16.5 .ni1lion to $21.5 million, the au-5 and 6, and to insert in lieu thereof the of medical care and as money payments,thoritn:ror crippled children servicesfollowing table: "Table for determining Øzy insurance amount an maximum family benefit8

I II Iii Iv V I II m , iv v (Primaryinsurance(Primaryinsurance V.' (Primary(Maxininni"(Primary tnbranoe(Primary insurance (I'rlmazy(Maximum benefitunder 1939 amountunder ' (Average Insurance family benefit ui4c? 1939 amount under (Average Insurance -family act, as modified) 1954 act) ' ' monthly wage) amonnt' benefits) act, as modified) 1954 act) monthly wage) amount benefits)

. '" payable) -, . b1e .

an thdlvldnal's Or his primary ' Or.bis average And the "If an Individual's Or his primary Or his average And the primary insurance Insuranceamount monthly wage ' maximum primary Insurance Insurance amount monthly wage maximum benefit (as deter- (as determined (asdetermined , amount of benefIt (as deter- (as determined (as determIned amount of mined under under snbsec. undersubsec. 'fl 'benefits mined under under subsec. under subsec. The flfg BubeC. (d)) is— (c))12— ,: (b)) Is— amount payable subsec. (d)) Is— (c)) Is— amount payable -. .,', (b)) Is— reed (as pr feffed (as pro-

'.'-V' vided In ' toithc : to In the vided in ' . precedingsec. 203 (a)) ' precedingsec. 203 (a))

. ' ' paaphs the bis .. pagraphs on the basis ntnot utnot ut not Of this' of his wages utot ut not nt not of this of his wages "At mor,:' At more -At moresubsectIon and self- At ' more At more At moresubsection:and sell- least— than— least— than— ' least—than—shilk be— emp1o- least— than— lea6t— than— least—than—shall be— employ- ' .' ' . ' . ment . ment ' income income . V 812a11 be— . shall be—

$1000 $30.00 $54 $33 $53.00 $25.61 26.O4 $Z8. 70 $5950 $107 $108 $65 $97.50 '$10. 01 10.48 • $30.10 31.00 56 5400 26.05 26.52 9.60 60.40 109 109 66 99.00 10.49 11.00 31. 10 ,3OO 57 58 35 55.00 26.53 27.00 60.50 61.30 110 114 67 100.60 11.01 11.4S 32. 10 00 59 60 36 6. 00 2701 27.52 61.40, 62. 115 118 68 102.00 11.49 12.00 3. 10 34 00 61 61 37 57.00 27.5.3 08 62.30 63. 10 119 1z 69 103.50 12.01 12. 48 34. 10 35.00 62 63 38 5800 28:09 .68 63 a) 64.00 124 127 70 105.00 2.4Q 12.95 35.10 35.90 64 39 59.00 2&69 29.25 64.10 6.00 1 132 71 106. 50 12.96 13. 40 3 00 38.80 66 66 40 €0.00 29.26 29.84 6. 10 5. 90 133 137 72 109.60 13.ft 13. 84 31.OO 37. 70 67 68 41 61.50 29.85 30.36 66.00 66.80 138 141 73 112. 13.85 14.28 37. 80 3& 60 69 70 42 63.00 30.37 O. 92 66.90 67.70 142 146 '74 116. 80 14.29 14. 75 38. 70 39; 50 71 71 43 4.5') 30.93 31.36 67.80 6& 60 147 150 75 120.00 14.76 15.24 39. 60 4a 40 72 44 66.00 31.37 32.00 68.70 69.50 151 155 73 14.00 15.25 15.76 40.50 41.30 74 75 45 67.O 32.01 32.60 69.60 70. 40 156 159. 77, 127.20 15.77 16.32 41.40 ••42.2O 76 76 46 32.61 70.50 71.30 160 13l. 16. 33 16.93 42.30 -4&10 77 78 47 70. . 3& 21 33.70 71.40 72. 20 .165. "168 134. 40 1&94 17.60 4 20 44.O) 79 48. 72.0(1 33.71 34. 40 72.30 73. 10 173 80 13& 40 17.61 18.40 44. 10 4& O( 81 4? 49 73. &) 3441 33.00 73.20 74.00 174 '171 81 141.60 18. 41 19.15 45.10 45• . 82 83 50 75. 35.01 35.60 74. 10 .75 1)() 182 82 145.60 19. 16 19.84 46.00 46.$O. 84. 85 51 •76.50 35.61 38.28 75. 10 Z5. 90.183 I8 83 14g. 60 19.85 44 46.90 -47.. 86 86 52- 78.00 36.29 6. 80 76.00 76.80 191 84 152. . V•12 20.45 21.04 87 88 53 79. O 36.81 37.40 76.90 77.70 196 85 i& 80 21.05 21.59 48Th 89 90 54 81.00 37.41 38.00 77.80 7& 60 197 2E0 88 160.00 21.60 2O5 49.60 50.40 91 55 82.50 38.01 38.76 78.70 79. &) 201 87 164.00 fl. 06 22.45 (i(UO 51.30 92 03 84.00 3&77 89.32 79.60 80.40 206 209 88 167. 2 46 2S5 41.40 2. 94 94 57 85. O 39.33 80. &) 81 O 210 214 89 1z1. 286 23. 21 52.30 53.10 95 96 87.00 40(11 4 68 81.40 8 20 215 218 90 174.40 '23.22 '23.56 3. 54.00 97 98 S. 50 - 4O9 4144 82.30 83. 10 219 223 91 178.40 23.57 23.96 4.1O 55.00 99 100 €0 90.00 41.4 42.00 83. 84 224 227 181.60 23.97 24.36 58. 10 101 101 61 91.50 42.01 42.68 84. 10 85.00 228 232 03 1&5. 60 24.37 24.76 O. 00 56.80 102 103 93.00 42.69 43.56 8. 10 85.90. 233 94 189.60 24.77 25. 16 56. 90 57. 70 104 104 63 94.60 43.57 44. 12 86.00 86.80 -'238 241 95 192. 80 25. 17 25.60 57.80 58.60 105 106 64 96.00 44.13 4t78 86.90 87.70 242 246 98 196.80 17798 CONGRESSIONAL RECORD —SENATE August 15 STablefor determiningprimary in8urance amount and maximum family benefit8—Continued

"I H III IV V 'I H III Iv V (Primary Insurance(Primary Insurance (Primary(Maximum"(Primary Insurance(Primary Insurance (Primary(Maximum benefit under 1939 amount under (Average Insurance family benefit under 1939 amount under (Average Insurance family act, as modified) 1954 act) monthly wage) amount benefits) act, as modIfied) 1954 act) monthly wage) amount benefits) . payable) payable)

°If:an Individual's Or bis primary Or his average And the "If an Individual's Or his primary Or his average And the primary Insurance Insurance amountmonthly wage maximum primary insurance Insurance amount monthly wage maximum benefit (as deter. (as determined (as determined amount of benefit (as deter- (as determined (as determined amount of mined under - under subsec. under subsec. The benefits mined under under subsec. under subsec. The benefits subsec.(d)) Is— (c)) Is— (b)) Is— amount payable subsec. (d)) is— (c)) 1— (b)) Is— amount payable — referred -(as pro- referred (as pro- to In the vided In to In the vided in

. precedingsec. )3 (a)) . precedingsec. )3 (a)) paragraphson the basis paragraphs on the basis But not Butnot But not of this of his wages But not But not But not of this of his wages "At more At more At noresubsection and self- "At more At more At more subsection and self- least— than— least— than—least— than—shall be— employ- least— than—, least— than—lea8t— than—shall be— employ- . ment . ment

. Income Income -- - shall be— . shall'be—

$44.79 $45.60 $87.80 $88.60 $247 $250 $97 $200.00 $103.20 $1000 $324 $327 $114 26O.00 88. 70 89. 50 251 255 98 204.00 104. 10 105.00 328 332 115 260.00 89.60 90.40 256 259 99 207.20 105.10 105.90 333 337 116 '260.00 9O5O 91.30 260 24 100 211.20 106.00 106.80 338 341 117 260.00 91.40 92.20 26 268 101 214. 40 106.90 107. 70 342 346 118 260.00 92.30 93. 10 269 273 102 218.40 107.80 108.50 347 3O 119 260.00 93.20 94.00 274 277 103 221.60 351 355 120 260.00 94.10 95. 00 278 282 104 225.60 356 359 121 260.00

287 105 229.60 • 95. 10 95.90 283 ao - a 26o. 00 - 291 106 i 96. 00 96.80 288 232.80 365 368 1 260. 00 96.90 97.70 292 296 107 236.80 369 373 124 260.00 97.80 9& 60 297 300 108 240.00 . 374 377 125 260.00 - 98.70 99.50 301 305 1D9 -244.00 ' 878 382 126 260.00 99.60 100.40 306 309 110 247.20 383 887 127 260.00 100.50 101.30 310 314 111 251.20 388' 391 128 260.00 101.40 102. 20 315 318 112 254.40 392 396 129 260.00 102.30 103. 10 319 323 113 258.40 37 400 ISO 260.00"

On page 13, line 13 strike out 'Is not7 percent. My amendment would simply There Is one further item which I less than $68" and insert in lieu thereofIncrease the payment to 10 percent, anthink makes the amendment of the Sen- 9s $70, then such total oi benefits shallIncrease from 7 percent to 10 percent,atór from Texas more justified at this not be reduced to less than $108.90, oror an additional 3 percent increase. moment.I noted recently an article In such primary insurance amount s so de- How much are these people receiving?the New York Times which stated that termined and Is not less than $71." There is a belief held by some In thisthe largest single increase in the cost of Mr. KNOWLAND. Mr. President, willcountry that social-security paymentsliving, compared to other items, was In the Senator yield? are high; that the payments are muchmedical care. Who are the people who The PRESIDING OFFICER. Doeshigher than the old-age pensions. pro-necessarily require the most medical the Senator from Texas yield to thevide. That is not true.In many Statescare?Itistheelderlypeople.Of Senator from California? the old-age pensions are higher than thecourse, elderly people become sick more Mr. YARBOROUGH. Provided I dosocial-security payments the people havefrequently than do the younger people, not lose the floor. earned by putting their money into theand they suffer the long, tragic, linger- The PRESIDING OFFICER.It is sosocial-security fund. ing illnesses which deplete family in- understood. Mr. NEUBERGER. Mr.President,come and exchequer if there Is any to will the Senator yield? • deplete. Mr. KNOWLAND. The Senator from Mr. YARBOROUGH. I yield to the So I say to the Senator from Texas, Texas has offered his amendment, whichSenator from Oregon. I think he has submitted an amend. I understand is the pending question, Mr. NEUBERGER. Mr. President, Iment which has added justification to- but did the Senator Intend merely towish to associate myself with the re-day because of the distressing inflation make an opening statement?He wasmarks being made by the distinguishedwhich has eroded the purchasing power not planning on having a vote on hIsjunior Senator from Texas.I feel cer-of so many elderly people who must live amendment tonight; was he? tain the Senator from Texas has beenon fixed incomes. Mr. YARBOROUGH. It depends onaware of the great and unfortunate in- Mr. YARBOROUH. -Ithank the how long the majority and minoritycrease in the cost of living which has oc-distinguished junior Senator from Ore- leaders plan to stay in session tonight.curred In the past 2 or 3 years.If I amgon for his very pertthent remarks. Mr. KNOWLAND. I suggest that thenot mistaken, it has been the steepestThe elderly people are caught in the Senator proceed with his statement. Increase In the cost of living ever to takerising spiral of inflation. The PRESIDING OFFICER. Theplace in our country In a comparable As has been pointed out, the spiral of Senator from Texas has the floor. period, other than durIng a shootingInflation has been moving up and up, at Mr. YARBOROUGH. Mr. President,war. a rate during the past 2 years which has the amendment which I have offered to The people who are the most directnever been exceeded except in the midst H. R. 13549 would change the social-victims of such an increase in the costof a shooting war. security payment increase from 7 per-of living are the elderly people, who must These people are too old to be able to cent to 10 percent.H. R. 13549 as itlive on retirement Incomes.Their in-.increase their earnings by winning pro- passed the House and as it was reportedcomes are fixed.There Is no opportunitymotions in a trade, a business or a fac- by the Senate committee would increaseto increase them because of increasedtory.They are past the age of employ- the monthly payments which would becorporateprofitsorimproved wageability in nearly all businesses. A few made under the social-security law toagreements negotiated by labor unions.of them may be able to supplement In- old people, retired workers, survivingThe elderly people are caught in the vise.come as baby sitters or night watchmen, widows or widowers, children, and sur- It seems to me the amendment of thebut few trades are open to them. viving parents, all across the board, butable Senator from Texas takes on added The bill, without an Increase to 10 the Increase in the payments would bepertinence when we conMder that fact.percent, would fall to provide an amount 1958 CONGRESSIONALRECORD —SENATE 17799 sufficient to enable elderly people to have Mr. HUMPHREY. The old-age andAny Senator who has ever been in a sortie measure of livable income. Howsurvivors' insurance beneficiaries? hospital to look over who is in the hos- much do these people receive?The Mr. YARBOROUC*H. The amend-pital knows that in community after averagepayment acrossthe. Unitedment would raise the 7 percent increasecommunity from 65 to 75 percent of the States is $64.50 a month, for a personprovided in the bill to 10 percent. beds are occupied by the aged. living on retirement pay.I am not Mr. HUMPHREY.I am happy the Today many a person must literally speaking of the widows of dead workers,Senator has offered the amendment.Isacrifice his meager earnings because of for the average pay to the widows is $51say to the Senator that a few minutessickness.Many a county or Stateis a month, or less than $2 a day.That isago I laid such an amendment on thehard pressed because of the post of hos- far less than the old-age pension pay-desk in my own name, but I am happypitalization for our aged.I see no rea- ments in many States. to associate m'self with the amendmentson why thesocial-security program We Voted a 10-percent increase foroffered by the Senator from Texas. should not provide for at least 60 days the Federal workers. We voted a 10- Of course 10 Percent is a fair andnursing home or hospital care as a basic percent increase for the postal workers.reasonable figure.I believe the Senatorminimum.I know that there are mil- We voted a 10-percent increase in theJust stated that when it comes to our-lions of young people tonight who only retirement pay of Federal workers. Weselves, the employees of the Govern-wish that their dear mother or father voted, last year, a 10-percent increasement, legislative employees, or whateverhad a kind of hospital-insurance pro- for disabled veterans.Even a year agogroup of employees it may be, we thinkgram under social security which would the cost of living had gone up so muchof a 10-percent increase as a reasonablesupplement their voluntary plans, so that we in the Congress felt a 10-per-adjustment, even though some of thosethat they would be given hospital care. cent increase was required to permit theemployeeshave had salary increases I am not talking about socialized med- disabled veterans a measure of income- -sin 'there were increases granted hitheicine.- I-am not talking about doctors. which was necessary to enable them social security structure. I am not talking about any kind of Brit- live as they had lived 4 or s years ago. Furthermore, I am of the opon thatish Labor Party socialized medicine.I I wish to serve notice on the Senateif one carefully examines the financingam not even talking about medical inthat the yeas and nays are going to beof the social security system, he will findsurance.That has nothing whatsoever requested on this amendment. We arethese increases can be granted withoutto do with the case.I am merely argu- going to ask for a quorum call tonight,in any way jeopardizing the stability ofing that when someone qualifies—under so that a sufficient number of Senatorsthe fund. In fact, there will be tremen-social security—a woman aged 62. or a will be present to have a representativedous funds accumulating under the taxman.. aged 65—and is stricken with ill- vote when the yeas and nays are called.schedule which is provided in the bill. ness, he should be entitled, by insurance, I think this type of. legislation calls The grants of money are needed now.not by gift, not by charity, not out of forahumanheart.ItcallsforWhen I say the grants of money arethe kindness of some rich man's heart, humanity. needed, I refer to the insurance the billnot because of relief, but because of in- Eleven million people are drawing so-provides.It is the insurance under thesurance, to hospitalization, rather than cial-security payments. To smallersocial security system which is neededthattheStates,counties,charities, groups—to 1millionhere, 2million churches, and, indeed, families them- there, another half million somewherenow.It is not needed in the year 2000selves, should be compelled literally to else—we have granted 10 percent in-or the year 2020. use the last dime available for hospitali- creases. When we consider the 11 mil- An insurance officer calculates on an actuarial basis a program for 75 or 100zation of the aged. lions who need it the worst they have Irepeat, thisisnot medical care. been told: "You may have only 7 per-years hence, but what we need to thinkThat is a private matter, as to who shall cent."It would be an inadequate bill,about is not only that which is ahead,be one's doctor, and what kind of care with a 7 percent increase.I think thewhich is indeed important, but also thehe will receive.I am talking about a Senate ought to go on record in this mat-actual benefits which will accrue to thebed, about shelter for a person who is ter. individual citizen now. ill.I have an amendment on the desk Mr. HUMPHREY. Mr. President, will I conclude on this note: There is nowhich provides such care:I intend to the Senator yield? piece of legislation which Congress hasoffer it.It may not be adopted.I am Mr. YARBOROUGH. In a moment ever passed which was more importanttold that it will not be.But the day is will yield to the distinguished Senatorto the well-being of America than socialnot far off when every Member of the from Minnesota. security legislation.There is no pieceSenate can look back with a great deal My amendment will not cause anyof legislation considered by this Con-of pride to the fact that Congress pro- taxes to be raised.My amendment willgress which is more important than thatvided for the elderly people of America not add any tax burden.The bill re-increasing the benefits under the -socialat least a modicum of hospital care in ported by the House and reported by thesecurity system.There is no group ofthe great community hospitals we have Senate committee already contains anpeople in America getting a rawer deal,built throughout the land. increasein the payrolltax of one-getting mistreated quite so much by the impact of inflation and the price rises, as Mr. JOHNSON of Texas.Mr. Presi- quarter of 1 percent, from 2 '4percenttothe elderly people who are the recipi-dent, will my colleague yield to me? 2 '/2percent.That is a sufficient in-ents of old-age and survivors' insurance Mr. YARBOROUC*H.I yield to my crease to pay for the 10 percent increaseand others who come under social se-senior colleague. in payments my amendment would pro-curity. Mr. JOHNSON of Texas.The hour is vide. growing late, and many Members have I shall explain why my amendment Our job, on the premise of sheer equity and social justice, is to at least keep theleft the Chamber.I am sure they de- would .not cause an increase in the taxpayments up with the cost of living andsire to be present before a vote is taken rate, but before I do so, I shall yieldto at least give some modicum of reliefon this very important amendment. to the distinguished Senator from Mm-in terms of increased benefits to those It is planned to have the Senate meet nesota. at10o'clocktomorrow morning.I Mr. HUMPHREY.I thank the Sen-who are qualified under the program ofwonder if it would be possible, after the ator from Texas for his courtesy insocial security. morning hour is concluded, after the in- yieldin* to me. I join with the Senator.I shall havetroduction of bills and the transaction I understand the Senator from Texasmore to say about this matter in theof routine business, to arrange a definite has proposed at least a 10 percent in-morning hour tomorrow.I understandtime for a vote, or if a unanimous-con- crease be granted to the beneficiarieswe will be given that opportunity. sent agreement could be reached with of the social-security system. I plan to offer an amendment, whichregard to the debate, both pro and con, Mr. YARBOROUGH. The Senator isI want to note tonight, to provide forwith a vote on the amendment to come correct, hospital insurance for our aged people.at the conclusion of debate.I wonder 17800 CONGRESSIONAL RECORD —SENATE August 15 if such an arrangement would be satis- Mr. NEUBERGER. Mr. President, IInstead of a 7 percent increase, that factory, in order that Members who mayasked unanimous consent to be allowed towould make it possible for the aged of be in their offices may know that theyjoin as a cosponsor. this land, the retired, the widows, and will not be recalled to the Chamber this Mr. YARBOROUGH. Mr. President, Isurvivors, to live substantially better. evening.I do not know how much timeask unanimous consent that the distin- For that reason, I am pleased to sup- the junior Senator from Texas wouldguished Senators from Minnesota andport the Senator's position. need tomorrow. He could use such timeOregon be permitted to join as cospon- Mr. President, I ask unanimous con- as he needed this evening, but I suggestsors of the axnendnent. sent that the tabulation to which I have that at the conclusion of the morning The PRESIDING OFFICER. Withoutreferred, which shows the soundness of hour 30 minutes be allowed on theobjection, it is so ordered. the Senator's position from a fiscal point amendment, to be divided between the Mr. LONG.Mr. President, will theof view, be printed in the RECORD at this author of the amendment and the minor-Senator yield? point in support of the argument. ity leader. Mr. YARBOROUGH.I yield to the Mr. YARBOROUGH. Mr. President, Mr. YARBOROUGH. The suggestiondistinguished Senator from Louisiana. I ask unanimous consent that the table of the distinguished majority leader is Mr. LONG. In my judgment the Sen-referred to by the distinguished Senator perfectly acceptable to the sponsor ofator is sound in the position he hasfrom Louisiana be printed at this point the amendment.I did not hear howtaken.A number of us voted for thein the RECORD.It shows—and I wish to much time had been suggested. position the Senator is taking when thisrefer to this fact again—that by the Mr. JOHNSON of Texas.At the con-question was considered in the Financeyear 2000 there would be in this fund, if clusion of the morning hour— Committee. the rates voted by the House and recom- Mr. YARBOROUGH. How much time As one of those who voted that way,mended by the committee were adopted, should be allocated? I feel that this should be a 10 percenta balance of $163 billion.If the 10 per- Mr. JOHNSON of Texas. How muchbill,for the reason the Senator hascent increase were granted, there would time does the Senator think he wouldmentioned, as well as for other reasons.be in the fund by the year 2000, $117,— need? 042,000,000. Mr. YARBOROUGH.Ibelieve30 I made a request of the chief actuary minutes to a side would be acceptable.of the Department of Health, Education, There being no objection, the table Mr. JOHNSON of Texas. I ask unaniand Welfare to tabulate what wouldwas ordered to be printed in the RECORD, mous consent that, at the conclusion ofhappen to the social security fund if theas follows: the morning hour tomorrow, the debateSenator's amendment were adopted.IProgress of OASJ trust fund under modifica- on the pending amendment be limitedhave the figures before me. They show tion of H. R. 13549 increasing benefits by to 30 minutes to a side, the time to bethat if we should pay a 10 percent in- 10 percent (or $5) instead of by 7 percent controlled by the sponsor and by thecrease, under the schedules in the bill, (or $3) intermediate-cost estimate at 3 minority leader. paying the increase every year starting percent interest The PRESIDING OFFICER(Mr.in 1960 and running up to the turn of [In millions] the century, at the turn of the century MoRsE in the chair).The Presiding Of- Under bill modified to increase Unuci ficer finds himself in an embarrassingthe fund would then have $117 billion benefits 10 percent bill in it.If we did not adopt this amend- passed situation.In his capacity as a Senator Calendar by he would not agree to a unanimous-con-ment, and passed the bill in the form in year Con- Benefit Inter- House, sent request tonight on the bill. which it came from the House, the in- tribu-paymentsest onBalancebalance lionsand otherfund 2 in fundin fund Mr. JOHNSON of Texas.The pro-crease in the fund by the year 2000 outgo 1 posed unanimous-consent agreement re-would bring it up to $163 billion. The issue, as I see it, is whether, dur- lates only to this single amendment. 1958 $7, 297 $8, 685 $565 $21, 584 $21, 608 The PRESIDING OFFICER.Theing the next 40 years, we want these old 1959 8,632 10, 132 563 20, 647 20, 971 Chair, in his capacity as a Senator, can-people to have the benefit of that $40 1960 10, 621 10, 705 577 21,140 21, 794 1961 11,106 11,314 610 21,542 22, 552 not agree to such a request, either onbillion, or whether we want to pile up 1962 11,256 11,929 636 21, 505 22, 902 the bill or on any amendment. the money in such a manner that we 1963 13,124 12, 374 656 22, 911 24, 722 1964 13, 662 12, 725 701 24, 539 26,784 Mr. LONG. Mr. President, will thecould retire the entire public debt by 1965 13, 830 13, 058 748 26, 059 28, 762 Senator yield? the most aggressive sort of payroll tax, 1970 19,404 15,767 1,254 44,869 50,330 whereby we would not allow a man any 11)75 20, 880 18, 595 1,928 67, 331 76, 432 Mr. YARBOROUGH.I will yield in a 1980 22, 301 21, 747 2, 464 84, 881 98, 678 moment to the distinguished Senatorexemption for a wife or children, or for 2000 29, 095 30,710 3,424117,042 163, 448 from Louisiana. Before I yield, I shouldpersonal expenses, and would not tax him more than $4800.That is what 1 Administrativeexpenses and payments to the rail- Jike to say that the distinguished Sena- road retirement account. tor from Minnesota [Mr. HUMPHREY] hascould be termed a most aggressive form 2At3 percent, except 2.6 percent in 1958, 2.7 percent shown his broad grasp of governmentalof personal income tax. in 1959, 2.8 perccnt in 1960, and 2.9 percent in 1961. policies tonight, as he has done many Some contend that it would be desir- Fund exhausted in 2042. times before, in his description of theable to build the fund up to $285 billion Mr. YARBOROUGH. Mr. President, plight of the aged and the actuarialby the year 2020.If we accumulate suchI wish to note for the record that I have soundness of this fund, as well as in hisan enormous fund, the old folks willbeen joined in offering my amendment convictionthattheseelderlypeoplehave to get by on less. by the Senator from Minnesota [Mr. ought to get something now, rather than Eventually, when the fund is built up,HUMPHREY], the junior Senator from to have money piling up in the fund un-assuming that the public debt remainsOregon[Mr. NEUBERGER],thesenior til the year 2050 A. D., to which someconstant, the Government will hold allSenator from Oregon [Mr. MoRsE], and funds are projected.Many billions ofthe Government bonds.Every bond ofthe Senator from South Carolina [Mr. dollars will be piled up that will not bethe United States Government will beJoHNsToN]. used. held by the United States Government, Mr. President, I ask unanimous con- Mr. HUMPHREY. Mr. President, willand I presume we could adopt a resolu-sent that at this point in the RECORD the Senator yield? tion to declare that the public debt nothere may be printed in full the amend- Mr. YARBOROUGH.I yield. longer exists, inasmuch as the Govern-ment I have offered. Mr. HUMPHREY.I wonder ifthement itselfhasallthe Government The PRESIDING OFFICER. Without Senator will permit me to join with himbonds, and the Government owes theobjection, it is so ordered. as the sponsor of this amendment, inobligation to make such payments any- The amendment offered by Mr. YAR- order truly to associate myself with theway. Even if we had such an enormousBOROUGH, on behalf of himself and other wonderful endeavor on the part of thefund, I am sure that no one would sug-Senators, ordered to be printed in the Senator from Texas. gest discontinuing the payroll tax. RECORD, 15 as follows: Mr. YARBOROUGH.It is an honor If we can look forward to this fund Strike out the table appearing on pages to have the distinguished Senator fromaccumulating to $110 billion by the year5 and 6, and insert in lieu thereof the fol- Minnesota join as a sponsor. 2000, and having a 10 percent increaselowing table: ______

1958 CONGRESSIONALRECORD —SENATE 17801 "Table for determining primary insurance amount and maximum family benefits

"I II III IV V I II- III IV V "(Primary Insurance(Primary insUrance (Average (Primary(Maximum (Primary insurance (Primary insurance (Average (Primary(Maximum benefit under 1939 amount under monthly insurance family benefit under 1939 amount under monthly insurance family act, as modified) 1954 act) wage) amount benefits), act, as modified) 1954 act) wage) amount benefits)

payable) . payable)

"If an individual's Or his primary Or his average And the If an individual's Or his primary Or his average And the primary insurance insurance amount monthly wage maximum primary insurance insurance amount monthly wage maxiniutn benefit (as deter- (as determined (as determined The amount of benefit (as deter- (as determined (as determined The amount of mined under under subsec. under subsec. amount benefits mined under under subsec. under subsec. amount benefits

Subsec. (d)) is— (c)) is— (b)) is— referred payable (as subsec. (d)) is— (c)) is— , (b))is— referred payable (as - ' toin the provided in toin theprovided in precedingsec. 203 (a)) precedingsec. 03 (a)) paragraphs on the basis paragraphs on the basis of this of his wages of this of his wages "At But not At But not A4 But not subsection and self- At But not At But not At But not subsection and self- least— more least-— more least— more shall be— employ- least— more least— more least—more sball be— employ-

than— than— than— ment than— ' than— than— ment

income ' income shall be— shall be—

$10. 00 $30.00 $54 $33 $53.00 $35.01 $35.60 $74.10 $75.00 $178 $182 $82 $145.60 "$io.01 10. 48 *30. 10 - 31.(10 $15 56 34 54. 00 35. 61 36. 28 75. 10 75. 90 183 187 83 149.60 10.49 11.00 31.10 32.00 57 68 35 55.00 36.29 36.80 76.00 76.80 188 191 84 152.80 11. 01 11.48 32. 10 33. 00 59 60 , 36 56. 00 36. 81 37. 40 76. 90 77. 70 192 196 85 156. 80 11.49 12.00 33.10 34.00 61 61 87 7. 00 37.41 38.00 77.80 78.60 197 200 86 160.00 12. 01 12. 48 34. 10 35. 00 62 63 38 58.00 38. 01 38.76 78. 70 79. 50 201 205 87 164. 00 12. 49 12. 9.5 35. 10 35.90 434 65 39 â9. 04) 38. 77 39. 32 79.60 80. 40 206 209 88 167. 20 12. 96 13. 40 36.00 36.80 66 66 40 60.00 39. 33 40.00 80. 50 81. 30 210 214 89 171. 20 13.41 13.84 36.90 37.70 67 68 41 61.50 40. 01 40.68 81.40 82.20 215 218 90 174.40 91 13.85 14.28 ' 37.80 38.60 69 70 .42 63.00 40. 69 41.44 82.30 83.10 219 223 178.40 14.29 14.75 38.70 39.50 71 71 43 64.50 41.45 42.00 83.20 84.00 224 227 92 181.60 14.76 15.24 .39.60 40.44) 72 73 44 66.00 42.01 42.68 84.10 85.00 228 232 93 , 185.60 15.25 15. 76 40. 50 41.30 74 75 45 67. 50 42. 69 43. 56 85. 10 85.90 233 237 94 189. 60 15.77 16. 32 41. 41) 42.20 76 76 46 69. 00 43. 57 44. 12 86. 00 86. 80 238 241 95 192. 80 16.33 16.93. 42.30 43.10 77 78 47 70.50 44.13 44.78 86.90 87.70 242 246 96 196.80 16.94 17.60 43.20 44.00 79 80 48 72.00 44.79 45.60 87.80 88.60 247 250 97 200.00 17.61 18.40 44.10 45.00 81 81 49 73.50 88.70 89.50 251 255 98 204.00 18.41 19.15 45.10 45.90 82 83 50 ?5.00 89.60 90.40 256 259 99 - 207.20 19.16 19.84 46 00 46.80 84 85 51 76.50 90.50 91.30 260 264 100 211.20 19.85 20:44 46.90 47.70 86 86 52 78.00 91.40 92.20 265 268 101 214.40 20.45 21.04 47.80 48.60 87 88 53 79.50 92.30 93.10 269 273 102 218.40 21.05 21.59 48.70 49.50 89 90 54 81.00 93.20 94.00 274 277 103 221. (10 21.60 22.05 49.60 50.40 91 91 55 82.50 94.10 95.00 278 282 104 225.60 22.06 22.45 50.50 51.30 92 93 56 Moo 95.10 95.90 283 287 105 229.60 22.46 22.85 51.40 52,20 94 94 57 85.50 96.00 96.80 288 291 106 232.80 22.86 23.21 52.30 53.10 95 96 58 87.00 96.90 97.70 292 296 107 236.80 23.22 23.56 53.20 54.00 97 98 59 88.50 97.80 98.60 297 300 108 240.00 23.57 23.96 54.10 55.00 99 100 60 90.00 98.70 99.50 301 305 109 244.00 23.97 24.36 55.10 55.90 101 101 61 91.50 99.60 100.40 306 309 110 247.20 24.37 24.76 56.00 56.80 102 103 62 93.00 100.50 101.30 310 314 111 251.20 24.77 25. 16 56.90 57. 70 104 104 63 94. 50 101. 40 102. 20 315 318 112 254. 40 25. 17 25.60 57. 80 58. 60 105 106 64 96. 00 102. 30 103. 10 ''319 323 113 258. 40 25:61 26 04 58. 70 59:50 107 108 65 97.50 103. 20 104. 00 324 327 114 260. 00 26.05 26.52 59.60 60.40 109 109 66 99. 104.10 105.00 328 332 115 260.00 26.53 27.00 60.50 61.30 110 114 67 100.50 105.10 105.90 333 337 116 260.00 27.01 27.52 61.40 62. 20 115 118 68 102.00 106. 00 106. 80 338 341 117 260. 00 27.53 28.08 62.30 63.10 119 123 69 103.50 106.90 107.70 342 346 1j8 260.00 28.09 28.68 63.20 64.00 124 127 70 105.00 107.80 108.50 347 350 119 260.00 28.69 29.25 64.10 65.00 128 132 71 ' 106.50 351 355 120 260.00 29. 26 29. 84 65. 10 65.90 133 137 72 109. 60 ' 356 359 121 260. 00 29. 85 30. 36 66. 00 66. 80 138 141 73 112. 80 360 364 122 260. 00 30.37 30.92 66.90 67.70 142 146 74 116.80 365 368 123 260. 00 30. 93 31.36 67. 80 68,60 147 150 75 120. 00 369 373 124 260. 00 31.37 32. 00 68.70 69. 50 151 155 76 124. 00 374 377 125 260. 00 32. 01 32.60 69. 60 70. 40 156 159 77 127. 20 378 382 126 260. 00 32.61 33.20 70.50 71.30 160 164 78 131. 383 387 127 260.00 33. 21 33.70 71. 40 72. 20 165 168 79 134. 40 388 391 128 260. 00 33.71 34. 40 72. 30 73. 10 169 173 80 138. 44) 392 396 129 260. 00 34.41 35.00 73.20 74.00 174 177 81 141.60 397 400 130 260,00"

On page 13, line 13, strike out "is not lessreceived.This iswhatthestudyafford very niuch more, particularly be- than $68" and insert in lieu thereof "is $70,showed: cause their medical costs increase. then such total of benefits shall not be re- Aside from social-security benefits, i Medicines which one could buy 25 years duced to less than $108.90, or 'such primaryout of every 5 retired couples, more thanago for perhaps 75 cents at the local Insurance amount is so determined and is drugstore, on a prescription, now cost $2 not less than $71." 1 out of every 4 single workers, and more than 1 out of every 3 aged widows whoor $3, and sometimes even $4 or $5. Mr. YARBOROUGH. Mr. President,received any additional money income, I have talked to the owners of small those opposing the 10-percent increasehad less than $75 in additional income acorner drugstores in the towns in my say that sometimes the people drawingyear.That is not $75 a month, but lessState, and they have said that higher social-security benefits have other in-than $75 an additional income a year.old-age pensions and higher old-age come, and therefore do riot need thisThat income came from different sources.security benefits, which I am advocating, additional money, and that they are well One-fourth of the couples and agedare one of the most needed things in this off.Let us look at the facts. country. For many millions of Americans, so-widows and one-third ofthe retired I have had the owners of small drug- cial security is the only retirement in-single workers received all their incomestores in the towns of my State tell me, come they receive, from old-age pensions.Because social—with tears in their eyes, that old people A study was conducted for the Bousesecurity benefits were so low, it took thecome into their drugstores and ask for of Representatives last December by theold-age pension to make it possible forcreditinorderto buy some drugs. Department of Health, Education, andthem to get perhaps a loaf of bread, andThese drugstore owners have told me Welfare, to determine the number ofperhaps a bottle of milk—but generallythat they have given these old people people on social security who receivedbeans and potatoes—because on $2 a day,all the credit they can under their own additional income, and how much theyor less, when people get old they cannotcredit structure with their banks. They 17802 CONGRESSIONAL RECORD —SENATE August 15 are unable to extend any more creditby the Senator from Oregon [Mr. NEU-ropolitan area, a young couple trying to to these old people.They are beingBERGER], the Senator from Minnesotastart life together and raise a family, do asked to extend this additional credit[Mr. HUMPHREY], the Senator from Ore-not have, in 95 percent of the cases, so that the old people can get the medi-gon [Mr. MORsE], and the Senator fromenough money to care for the bed cases cines they so badly need.I have beenSouth Carolina [Mr. J0HNST0N]—wouldof grandparents.Therefore, under our told by such drugstore owners that theytake a larger share of the tax moneysociety, as the Senator from Minnesota would be glad to extend them morewhich is already being raised and would[Mr. HUMPHREY] has said, the passage credit, but are unable to do o. Medi-put it in the payments, and would put aof the Social Security Act back in the cine is one item we ought to considersmaller share in the actuarial fund.Itmid-1930s was one of the greatest ad- as one reason for higher payments. would not involve deficit ljnaniing.Itvances made by this Government in its We must remember that with thewould not add to the $12½billiondomestic establishment and in its do- average retired worker drawing socialdeficit to which reference has been mademestic policy that it had ever made. security of $64.50, if we were to increaseon the floor of the Senate tonight.It The amendment I have offered is an that amount by 7 percent, we would in-would not cause a tax increase, becauseact of justice.It is an act of humanity. crease it by the payment about $4. that has already been voted in the HouseIt is an act of actuarial soundness.It is If we were to increase it by 10 percent,bill.It would result in a different splitgood fiscal policy, because the payments we would be paying $6.45 a month more.of the money raised by the taxes. Mymade will stay at home.This money That is not a large sum of money.Itamendment would give these starvingwill not be put in a sock.It will help is enough, probably, for1 more bottlepeople some income now, whereas thebusiness recovery, because these people. of medicine, and perhaps for anothercommittee reported bill would put aliving on such narrow margins, 99 times loaf of bread every 3 or 4 days. Not anlarger share into the fund, so that thereout of 100 spend every last cent of it, additional loaf of bread every day, butwould be $163 billion in it in the yeargenerally on credit, before it is obtained. every 3 or 4 days, if we add a bottle2000. It goes into the channels of trade. of needed medicine. These elderly people will all be dead Mr. President, I yield the floor. That is the only increase I am askingand buried by the year 2000.I say let for.It is too little, yes; it is not enough.us give a share of it now to humanity. However, I am asking only for whatLet us give it now to people so that they seems to be within grasp of the attain-can buy bread and medicine and live able.I cannot understand how a rea-and breathe and let the good air blow sonable man could vote against such anover their bodies, and let them see the amendment, particularly when we re-bright sunshine; and not let disease and member that it would not raise the pay-lack of food break down their bodies. roll tax.That is already raised one-Any doctor will say that a starving body fourth of1 percent by the House billaffects the mind.It is no wonder that and by the bill recommended by theso many of the older people should be committee. afflicted with mental illness. The purpose of that raise was to take It is a fact that physical illness and care of the 7-percent increase whichundernourishment breaks down the vi- was voted.It was also said to be fortality and the resistance of the body. the purpose of making the social-secur-Medical science has proved that to be ity fund actuarially sound.It is saida fact.Medical science has added to by some statisticians that the social-the problem.It has lengthened the life security fundisactuarially unsoundof man, but it has not lengthened his and that there is a deficit in it of somevitality along with it. $400 million.Therefore, the increase I am glad the distinguished Senator in taxes voted was not merely to coverfrom Minnesota [Mr. HUMPHREY] men- the 7-percent increase in the payments,tionedthechildren.Ingenerations but also to make it actuarially sound.gone by, the care of the old was not such The increase in the tax would put intoa great burden on the children as it is the fund, in addition to paying for thetoday. We lived in an agrarian econ- 7-percent increase, $42 '/2 million excessomy. The grandfathers and the grand- a year. mothers fitted into that economy. They This $42 '/2million additional whichlived on the farm. They helped to milk would be collected under taxes under thethe cows and to tend the calves and the bill as passed by the House and underhogs, while the more vigorous younger the bill as reported by the Senate com-and middle-aged members of the family mittee, would be cut down somewhatdid the hard physical labor on the farm. if we raised the social security paymentsThat day has gone in America.It has by 10 percent, instead of by the 7 per-gone forever. Even farming has become cent, as recommended by the committee.mechanized, requiring able-bodied work- However, there would still be, from themen. There is no place in the present increase in the payroll taxes, an excessfarm economy for the old people. They of $17/ million a year more in taxeshave no work to do. They no longer fit collected than the amount of the in-Into that society.It is not because the crease in payments. children are heartless. Through the ef- With the $17'/2 million more a year inforts of medical science many more peo- taxes already voted in the House bill andple are now living teyond the age of 65. recommended by the Senate committeeThe number was much smaller a half over the amount the 10 percent wouldcentury ago.The older people con- cost,itwould mean wiping out thestituteagreat number today.The actuarial deficit in the course of years.present economy does not support them That is why no additional tax is requiredby their labor, as it once did in a hand- by my amendment. The additional taxlabor economy. has already been voted by the House and We have become an urban people In has already been recommendei by theone generation.In one generation we committee. have changed to the point where only The only difference would be that un-about 12 percent of our people live on der my amendment—now cosponsoredfarms and ranches. In a congested met- 1958 CONGRESSIONALRECORD —SENATE 17955

SOCIAL SECURITY AMENDMENTS OF 1958 ThePRESIDINGOFFICER. Is there further morning business?If not, morning business is closed. The Chair lays before the Senate the unfinished business. The Senate resumed the consideration of the bill (H. R. 13549) to Increase benefits under the Federal old-age, survivors, and disability insurance system, to improve the actuarial status of the trust funds of such system, and otherwise im-. prove such system; to amend the public assistance and maternal and child health and welfare provisions of the Social Security Act; and for other purposes. The PRESIDING OFFICER. The question Is on agreeing to the amendment offered by the junior Senator from Texas [Mr. YARBOROUGHI. Mr. JOHNSON of Texas.Mr. Presi- dent, before the time limitation on the amendment begins, I suggest the absence of a quorum, with the understanding that the time for the quorum call will not be charged to either side. 17956 CONGRESSIONAL RECORD —SENATE August 16 ThePRESIDING OmCETh. The The PRESIDING OFFICER 'is thetawould be levied In accordance with the clerk will call the the roll.The Under-objection?Without objection, it is soprovisions of the bill as passed by the standing is that the time for the quorumordered. House and as reported by the Senate call will not be charged to either side. Mr. CURTIS.Mr. President, I askcommittee.The-amendmentI propose The legislative clerk proceeded to callunanimous consent that the Senate tem-would increase the payments, but would the roll. pórarily lay aside the further considera-leave part of the new tax money, thus Mr. JOHNSON of Texas.Mr. Presi-tion of the amendment submitted by theraised, to be used to help improve the dent, I ask unanimous consent that theSenator from Texas [Mr. YARBOROUGH],actuarial status of the fund.Thus, the order for the quorum call be rescinded. without causing him to lose the floor,fund would be in good shape. The PRESIDING OFFICER(Mr.and do so for the, limited purpose of The statistics which were presented on ICEFAUvER in the chair),Without objec-permitting me to submit, without de-the floor, last evening, by the distin- tion, it is so ordered. bate, an amendment which I under-guished junior Senator from Louisiana Mr. JOHNSON of Texas.Mr. Presi-stand is acceptable to the authors of the[Mr. LONG] show that if the amendment dent, a parliamentary inquiry. bill and to the Department. I propose is defeated, by the year 2000, The PRESIDING OFFICER. The The PRESIDING OFFICER. Is therethe fund will have in it actuarially, ac- Senator from Texas will state it. objection? - cording to computation made by the De- Mr. JOHNSON of Texas.I under- Mr.MORSE. Mr. President, reservingpartment ofHealth,Education, and stand that under the unanimous-consentthe right to object—and certainly I wishWelfare, the stupendous sum of $163 agreement, the distinguished junior Sen-to cooperate with my friend, the Sena-billion. ator from Texas [Mr. YARB0R0UGH], thetor from Nebraska—I must state that I If the amendment I propose is adopted, author of the amendment, controls thecannot bind myself in advance, withoutthen, according to the computation of time of Senators who wish to speak inknowing what is provided by the amend-theBoard,the Government agency favor of the amendment; and the dis-ment referred to.It may be that thewhich administers the fund, by the year tinguished minority leader [Mr. KNow-Department likes the amendment, and it2000 the fund will have in it the sum LAND] controls the time of Senators whomay be that other Senators like theof $117 billion.The table which shows wish to speak in opposition to the amend-• amendment; but I wish to have an op-those figures was placed in the RECORD ment.Is that correct? portunity to examine and consider thelast evening by the junior Senator from The PRESIDING OFFICER.Thatproposed amendment, rather than toLouisiana [Mr. LONG].The table was Is cOrrect. bind myself, in advance, to its adoption.received from the Department of Health, Mr. JOHNSON of Texas.I further Mr. CURTIS. Mr. President, I with-Education, and Welfare.So the fund understand that the Senate is now pro-draw the request. then would be actuarially sound. ceeding under the time limitation pro- The PRESIDING OFFICER. The re- My amendment will cause a portion of vided by the agreement.Is that correct?quest of the Senator from Nebraska isthe increased tax revenues thus obtained The PRESIDING OFFICER. Thatwithdrawn. to be used now to increase the pay- Is correct. Mr. YAREOROUGIT.Mr. Presi-ments. But the amendment will leave a Mr. YARBOROUGH. Mr. President,dent— portion of the increased tax revenues to on the question of agreeing to the amend- The PRESIDING OFFICER. Howbe appliedto what almost everyone ment which I have proposed, I ask for themuch time does the Senator from Texasagrees will be an actuarial deficit In the yeas and nays. yield to himself? fund. My amendment will do that at a ThePRESIDINGOFFICER. Is Mr. YARBOROUGH.I yield myselfslower rate than that at which it would there a sufficient second? 12 minutes. be done by the bill as reported by the The yeas and nays were ordered. ThePRESIDINGOFFICER. TheSenate committee. Mr. REVERCOMB. Mr. President, ISenator from Texas is recognized for 12 Mr. President, these payments are rise to a parliamentary inquiry. minutes. needed. Mr. YARBOROUGH. Mr. President, I Mr. YARBOROUGH. Mr. President, First of all, let us consider what my yield for that purpose to the Senatorthe amendment was submitted on yester-amendment provides.It provides for infrom West Virginia; and I ask unani-day by me, on behalf of myself, the Sen-creasing by 10 percent the amount of the mous consent that the time required forator from Minnesota [Mr. HUMPHREY],payments to the beneficiaries of the his parliamentary inquiry not be chargedthe junior Senator from Oregon [Mr.fund.The committee has proposed a to the time available to me under theNEUBERGER], the senior Senator from7-percent increase. terms of the unanimous-consent agree-Oregon [Mr. MORSE], the Senator from In terms of the money which the bene- ment. South Carolina [Mr. JoHNsToj, and theficiaries receive, and on which they must The PRESIDING OFFICER. Is thereSenator from Louisiana [Mr. LONG]. live, what willthe adoption of my objection?Without objection, it is so The amendment is proposed to Houseamendment mean? Today, the average ordered. bill13549, which would increase thepayment made under the Social Security Mr. REVERCOMB. Mr. President, mysocial-security payments and the public-Act to retired workers is $64.10 a month. parliamentary inquiry is as follows: As Iwelf are payments. The amendment isThe average payment to the widows of understand,theunanimous-consentdirected only to the portion of the billretired workers is $51 a month.If we agreement, which limits to 1 hour thewhich would increase the social-securityaverage all the types of social security time available for debate, applies onlypayments. payments—thosetoretiredworkers, to debate on the amendment of the The bill, as passed by the House ofthose to the children of deceased work- junior Senator from Texas [Mr. YAR-Representatives, and as reported by theers, those to the widows of deceased BOROUGH], and does not extend beyondSenate committee, provides for a 7-per-workers, those to the grandparents who that amendment.Is that correct? cent increase in the social-security pay-are entitled to receive the payments; in ments. Both the House version of the billother words, if we average all types of The PRESIDING OFFICER. That isand the Senate committee version of thepayments thus made, we find that the correct. bill provide for an increase in the social-average payment made today by the Mr. REVERCOMB. Ithankthesecurity payroll tax from 2 to 2½Federal Government is $54.40. Chair. percent.But the increased tax revenues If the 7-percent increase voted by the Mr. CURflS.Mr. President, will thethus obtained would not be used byHouse of Representatives and recom- Senator from Texas yield at this time tomeans of the provisions of the House ver-mended by the Senate committee is me, with the understanding that the timesion and the Senate committee versionmade, the payments will be increased by required for that purpose not be chargedof the bill, because it was the purpose ofthe amount of $3.71 a month, in the case to the time available to him under theboth versions not only to increase theof the average social-security payment provisionsofthe unanimous-consentbenefits, but also to improve the actuarialof $54.40 a month. If the 10-percent in- agreement? status of the fund. crease which my amendment proposes is Mr. YARBOROUGH. I yield, with that My amendment does not provide formade, the average social-security pay- understanding. using for increased benefit payments allment will be increased by $5.44 a month. Mr. CURTIS. I so request, Mr. Presi-the money which would be ttained byIn other words, under the provisions of dent. means oj the Increases taxes whichmy amendment, the increase in the av- 1958 CONGRESSIONAL RECORD —SENATE 17957 eragemonthly payment willbe-$5.44a Mr. CASE of South Dakota.Mr.In this category and the cost to them of month, Instead of $3.71 a month. MyPresident, reserving the right to object,new diugs which are so vital.The re-. amendment wifi increase by $20.76 aI understand the time is to be takensults of that investigation came out last year—a small amount-.—the amount theout of the time under the agreement. week, and they proved we were -correct average recipient receives. The PRESIDING OFFICER. That Isin our premise that the prices charged I know that when the Members of thecorrect, out of the time of the Senatorwere exorbitant, and that the cost of Senate return to their home States, theyfrom Texas. medical care could eat up a large per- will find that these elderly people are Mr. KEFAtJVER.I congratulate thecentage of the income of these people. having a desperate time in trying tojunior Senator from Texas for present- The result was that about six chemi- make ends meet.As they grow older,ing this amendment, and for his argu-cal concerns were indicted..I think they need more medicines, which, on thements in support of it.I think anyonethere may be other- indictments. So we average, cost $3, $4, or $5 a bottle; andwho has recently visited persons re-were rendering yeoman service in that the more expensive medicine costs aceivingsocial-securitybenefitsmustrespect. TheSenatorfrom - Texas great deal more than that.These eld-realize it is a1most impossible for thempointed out that approximately 50 per- erly people are unable to purchase suffi-to survive on their present payments.cent of the income of persons in the cient medicine with the low paymentsThe amendment proposes a modest in-category. we are discussing was used in they now receive. crease, which the additional tax willpaying for drugs, which bring 500, 600, We request only a modest increase.Itallow. and 700 percent profit to companies will be possible for the proposed 10 per- As I understand, the present paymentswhich sell the drugs. cent increase to be paid from the taxwere set in 1954 and they were set too Mr. YARBOROUGH.I thank the dis- revenues raised by means of the provi-low, in my opinion.Is that not correct?-tinguished senior Senator from Wash- sions of the House version of the bill Mr. YARBOROUGH. That is correct.ington for his very valuable contribution and the Senate committee's version of Mr. KEFAUVER.Is it not true thaton the -question of the expense of medical the bill; and part of those additionalsince 1954 there has been more thancare for the people we are seeking to tax funds will remain, to be applied toa 10-percent increase in the cost of liv-assist. the actuarial deficit. ing, according to statistics of the Labor Mr. MAGNUSON. Mr. President, I Mr. PASTORE and Mr. KEFAtJVERDepartment? ask unanimous consent that my name addressedthe Chair. Mr. YARBOROUGH. The increasemay be added as a cosponsor of the. The PRESIDING OFFICER. Doeshas been far more than 7 percert.Iamendment. the Senator yield, and if so, to whom?tlünk the distinguished Senator from The PRESIDING OFFICER Withiut Mr. YARBOROUGH. I yIeld, 1 min-Tennessee Iscorrect.There has beenobjection, it is so ordered. ute to the Senator from Rhode Islandan 8-percent increase in the past 2 years. Mr. YARBOROUGH. I wish to point [Mr. PASTORE], not out of the 12 minutes Mr. KEFAUVER. I know it has beenout that we have given the average which I have allotted to myself, but outmore than 10 percent. So all the Sena-amount Per month per person under soof the overall 30 minutes on my amend-tor's amendment would really do wouldcial security.Statistics show that as to. ment. - be to bring the payments, which were Mr.PASTORE.I compliment the dis-low to begin with, in line with the in-the 11 million people on social security, tinguished Senator from Texas for thecreased cost of living.I think it is fair1 out of every S retired couples, 1 out of -, excellent presentation of his amendment.to point out that with the increase inevery4 single retired workers, and 1 oi.t Is it his firm conviction, after study, thatthe price of steel and other items, weof every 3 aged widows, have no other the fund can sustain the increase of 10can anticipate further inflation. source of ilicome, or, even if they have percent? The PRESIDING OFFICER. Theadditional income, it is, on the average, Mr. YARBOROUGH. Yes; it can. time of the Senator has expired. less than $75 a year. I have in my hand an explanation and Mr YARBOROUGH.I yield 1 fur- One-fourth of the retired couples and' a detailed analysis from the Legislativether minute to the Senator from Ten-one-third of the single retired workers Reference Service of the Library of Con-nessee. received all their income from old-age gress. While time under the unanimous- The PRESIDINO OFFICER. Thepensions.In the case of widows they consent agreement will not permit meSenator from Tennessee is recognizedreceive supplementary payments, sim-. to read in full the explanation, I askfor 1 additional minute. ply because social security payments are unanimous consent thatitmay be Mr. KEFAUVER. There will be fur-lower than old-age payments. - printed in the RECORD.I will insert thether inflation before we can ever get Inspite of the belief of many persons, report later in my remarks. around to considering again increasingsocial-security benefits are not so high as The PRESIDING OFFICER.Is therethe benefits under the social-securityold-age benefits.Social security pay- objection?The Chair hears none andlegislation. ments have to be supplemented to keep, it Is so ordeTred. Mr. MAGNUSON. Mr. President, willpeople from starving.I have asked what Mr. PASTORE. Mr. President, wifithe Senator yield? the cost will be under the bill as reported the Senator yield further? Mr. YARBOROUGH.I yield to theby the Senate committee, providing for Mr. YARBOROUGH. I yield to thedistinguished Senator from Washington.increases in payroll taxe&It is fifty.. Senator from Rhode Island. Mr. MAGNUSON. I merely wanted toseven one-hundredths of 1 percent.As ask unanimous consent and the permis-passed by the House, and as it went Mr. PASTORE.I am very happy tosion of the junior Senator from Texasthrough the Senate committee, the addi- support the amendment of the distin-to add my name as a cosponsor of thetional benefits would use twenty-five guished junior Senator from Texas. amendment. one-hundredths of 1 percent of the addi-' Mr. President, 1 ask unanimous con- Mr. YARBOROUGH. I am happy totional tax money raised. The fund is to sent that the name of the junior Sen-have the cosponsorship of the distin-that extent overfinanced. ator from Rhode Island may be addedguished senior Senator from Washing- If my amendment shall be adopted,, it as a cosponsor of the amendment. ton. will use up another twentyfive one-hun- The PRESIDING OFFICER. Without Mr. MAGNUSON. When I came Intodredths of 1 percent of the payroll tax. objection, it is so ordered. the Chamber the junior Senator fromThe plan will still be overfinanced to the Mr. KEFATJVER. Mr. President, willTexas was mentioning the small fixedextent of seven One-hundreds of 1 per- the Senator yield? incomes which elderly people have. Incent. The additional tax as voted by the Mr. YARBOROUGH. I yield to theaddition, usually, elderly persons needHouse and Senate committee will result distinguished Senator from Tennessee.mOre medical care than others, andin leaving $17112 million a month to be Mr. President, I request unanimousmuch of their income goes to pay forput into the fund to make the fund actu- consent that the distinguished Senatordrugs and other medical care. arially sound. '. from Tennessee may be granted 2 min- The junior Senator from Texas gave The PRESIDING 0fl'ICER. The utes at this point.I have not quitevery valuable help to the Committee ontime 'the Senator has allotted to hiinsell completed ny 12 minutes. Interstate and Foreign Commerce when,has expired. - The PRESIDING OFFICER. Withoutabout a year ago, we directed the Fed- Mr.CASE of New Jersey.' Mr. Presi- objection, the Senator from Tennesseeeral Trade Commission to look Into thedent, wifl the Senator yield me 1 mlii- is recognized for 2 minutes. exorbitant prices being charged personsute? 17958 CONGRESSIONAL RECORD —SENATE August 16 Mr. YARBOROUGH.]t yield 1 miii- Mr. YARBOROUGH. I yield 2 mIn- I wish also to. say that we have in- ute to the Senator from New Jersey. utes to the Senator from Wisconsin. creased Government employees' salaries ThePRESIDflIGOFFICER. The ThePRESIDmGOFFICER. The10 percent this year.All the large cor- Senator from New Jersey is ecognJzedSenator from Wisconsin Is recognizedporations. during the same period of for 1 mInute. for 2mthutes - tunecovered by the b-percent increase Mr. CASE of New Jersey.The junior Mr. PROXMIRE.I warmly commendin governmental salaries, increased sal- Senator from Texas has taken thethe Senator from Texas on the offeringaries of their employees, in some cases, words out of my mouth, un a way. of the amendment. The Senator fromeven more.Senators wifi find that most In behalf of the Senator from NewTexas has recently won a great victorycorporations of the United States have York [Mr. JAvrrS], the Senator fromin Texas.The Senator won by a smash-increased salaries of employees almost Maine [Mr. PAYNE], and myself, on Julying 200,000 votes against a very formi-twice that amount. That is what the 9 I Introduced a bill providing for a 10-dableopponent. Oneofthegreatrecords of the committee show. percent increase In social security pay-reasons the Senator from Texas won his Senators will also find, that the cost ments.Would the Senator have anyvictory was that he had a- slogan in hisof living since the beginning of 195 has objection to our associating ourselvescampaign of "YARBOROUGH will put theincreased approximatelg 13 percent, ac- with his amendment? jam on the lower shelf."This slogancording to the evidence produced in the Mr YARBOROUGH. It Is an honorreally caught on in Texas, and the peoplehearings- of the committee; to have the distinguished junior Senatorof Texas recognized that the Senator The terms of the bifi would provide from New Jersey associate himself as awould fight for all the people, particu-for the additional cost.That Is another cosponsor of the amendment. We wêl-larly the little people who have beenitem of importance. Senators will notice come support from the other side of theforgotten and who do not receive fromthat the increases in tax rates are shown aisle.I think the amendment shouldtheir Government what they deserveon page 77: have strong support from both sides. Mr. President, the Senator from Texas • (1) with reipect to wages paid during the Mr. President, the Senator from Ten-iskeepinghispromise today—rightcalendar year 1959, the rate shall be 2'/a nessee [Mr. KEFAUVER] has asked me if Inow—by putting the jam where it be-percent; would request that his name be added aslongs, right on that lower shelf. (2) wIth respect towages paid during the a tosponsor, and I so request. Mr. President, I warmly support thecalendar years 1960 to 1962, both Inclusive, The PRESIDmG OFFICER. With-amendment, because there Is not anythe rate shall be 3 percent; out objection, the names of the juniorquestion—whether one Is conservative or (3) wIth respect to wages paid during the Senator from New Jersey and the senior calendar years 1963 to 1965, both Incluatve, liberal, whether one believes hi helpingthe rate shaU be 31/2percent—. Senator from- Tennessee will be added asthose people who need help or not—that cosponsors of the amendment of thethe social-security system Is a system of The PRESIDG OFFICER. The junior Senator from Texas. insurance.The social-security system Istime of the Senator from South Caro- Mr. CASE of New Jersey.I thank thea system which gives self-reliance to ourUna has expired. Senator.The Senator is correct aboutolder people.If the system does the job Mr. YARBOROUGH. I yIeld 1 addI- the sze of the increase In the cost ofit should, if it is adequate, it will meantional minute to the Senator from South living since 1954.It is roughly 8 per-our older people can live in dignity andCarolina. cent.Theincreaseinthegeneralself-respect without relying 'on charity The PRESIDG OFFICER. The standard f living, as measured by in-or the sufferance of relatives or the StateSenator from South Carolina is reco- creased wage rates in the country since or anyone else. nized for 1 more minute. that time, is about 12 percent. A 10 per- The Senator has offered a fine amend- Mr. JOHNSTON of South Carolina.I cent increase in benefits isnomore thanment.I enthusiastically support thecontinue to read from page 77: fair insofar as it would represent anamendment.I am delighted to see the (4) with respect to wages paid during the opportunity for our older citizens tonumber of cosponsors is increasing.Icalendar years 1966 to 1968, both inclusive, share, partially, in the general riEe inhope by the time the vote is taken thethe rate shall be 4 percent; and the standard of living, as well as to meetamendment will have 95 cosponsors. (5) with respect to wages paid after De. the cost incident to the increase in the cember 31, 1068, the rate shaU be 4'/2 percent. cost of living since that time. The PRESIDING OITICER. Do other The Senator is also correct in regardSenators desire to speak on the amend- I have not heard one Senator say on to the question of financing the amend-ment? the floor that the fund would not be sol- ment.The increase in the wage base Mr. JOHNSTON of South Carolina.vent and would not make possible the from $4,200 to $,800, plus the accelera-Mr. President, will the Senator yield mepayment of a 10-percent increase.That tion f already scheduled increases in2 minutes? being so, the old people of this Nation tax rates, provided by the House bill and Mr. YARBOROUGH. I yield 2 min-are entitled to the increase. We are by the Senate committee amendment,utes to the distinguished Senator frompaying more than 10 percent additional will more than take care of the 10-per-South Carolina. to those aged people who did not pay cent increase in benefits. We were as- The PRESIDG OFFICER. Theanything into the fund atall.Why sured earlier this year by the trustees ofSenator from South Carolina Is recog-should we not provide an increase for the social security trust fund that thenized for 2 minutes. the people who are paying into the fund, fund is solvent under existing law. Mr. JOHNSTON of South Carolina.and who will pay their pro rata share? ThePRESIDINGOFFICER. TheMr. President, the amendment would do I commend the Senator from Texas time of the Senator has expired. nothing but that which is right underfor offering the amendment, and I am Mr. YARBOROUGH. Mr. President,existing circumstances. The committeeglaI to be a cosponsor of the amend- I yield 1 additional minute tothe Sena-on which I serve, of which the Senatorment. tor from New Jersey. from Texas [Mr. YARBOROUGH] Is a mem- Mr. YARBOROUGH. Mr. President, Mr. CASE of New Jersey.In addi-ber, increased retirement benefits in 1956.I commend the distinguished senior Sen. tion, the former Secretary of Health.On October 1 we increased the rates anator from South Carolina for his re Education, and Welfare, Mr. Folsom,average of between 25 and 30 percent.marks and hiscoauthorshipof the testified this June, before the HouseThat was an increase for the people whoamendment. The Senator has been a Ways and Means Committee that thehad been working for the Government,leader in the field of Improving working fund was absolutely sound.Even withbut who had retired. We aLso Increasedconditions for Federal employees, and the amendment, providing a 10-percentapproximately 10 percent the paymentshisleadershipis well known. increase in benefits, the bill wifi increasefor those who were alreadyretired. I yield the floor, Mr. President, reserv- the income of the trust fund by moreThis year we have again increased theing the remainder of my time on the than the cost of the increased benefits.payments 10 percent. All this was neces-anendment for rebuttal. Therefore, there can be no question assary and just.So the need for increas- The PRES1DG OFFICER(Mr. to the fiscal responsibility of the pendinging social-security benefits Is just. PROxMIRE in the chair).The question amendment.I hope very much the I make these statements to show thatIs on agreeing to the amendment offered Senate will agree to it. those who are retired were entitled to theby the Senator from Texas [Mr. YAR- Mr. PROXMIRE. Mr. President. willincrease, even as a result of the fundsBoRoUGH] for himself and other Sena- the Senator yield me 2 minutes? they were paying at that time. tors. 1958 CONGRESSIONAL RECORD —SENATE 17959 Mr.KERR. Mr. President, I ask theAmerican principles of justice by Impos- Mr. LONG. The Senator well knows acting minority leader to yield me 10ing a tax on the present group of employ-that the reporters do not always get minutes. ers and employees to provide additionalthings down exactly the way we say Mr. CASE of South Dakota.Mr.benefits to those already retired underthem.1 had In mind not the year 2000; President, I yield 10 minutes to the Sen-provisions of law which fix their benefits.but the year 2020.Under the schedule. ator from Oklahoma. - I would vote for additinnal assistanceset forth in the committee report, we ThePRESIDII'IGOFFICER. Theto those now retired on the old-age as-would eventually build up a fund exceed- Senator from Oklahoma is recognizedsistance rolls, but I would do £0 on theing $285 billion.I believe that is about for 10 minutes. basic, honest principle of making suchwhat the public debt is. Mr. KERR. Mr. President, there is nobenefits available to every citizen of this Mr. KERR.I say to the good Senator Senator on this floor who would go fur-country equally in need, and on the basisthat I was present when he. made the ther to provide a 10-percent increase in-of paying it out of a tax which wouldstatement.I thought I understood him, stead of t 7-percent increase, or a $5 in-apply to every taxpayer in the country.and I got the RECORD to read his state- crease instead of a $3 increase, than the The teclmicians and actuarial expertsment: He wOnt on to say: senior Senator from Oklahoma, if, in thetold our committee that as of the pres- Some contend that It would be desirable first place, it were presented in a mannerent time there is an actuarial deficit ofto build the fund up to $285 billion by the 0.42 of 1 percent of the payroll; that,year 2020. In which it would be justified, and if, inwith the additional benefits and the im- the second place, it could be done with-position of the tax proposed in the bill, But that was in a paragraph subse- out jeopardizing the passage of a billthat deficit will be reduced to less thanquent to the one I have just read. which the authors of the amendment, inone-fourth of 1 percent; that the pro- Mr. LONG. Mr. President, will the my judgment, have as great a desire toposed amendment of the Senator fromSenator yield? avoid jeopardizing as any other MembersTexas, if made a part of the bill without Mr. KERR. I yield. of the Senate. making provision for the taxes neces- Mr. LONG.I do not believe the Sen- The bill which is before the Senatesary to pay it, would then increase theator is under the misapprehension that provides for additional benefits to thoseactuarial deficit to 0.54 of 1 percent. thejuniorSenatorfromLouisiana who are now retired, and to those who I believe in being generous.I believethinks the public debt is $163 billion. will retire. The bill provides a tax to payin being just, and I believe in meeting Mr. KERR. No; but I will tell the for those additional benefits to those whothe responsibilities of the office which ISenator what I do think. have retired and to those who will re-occupy.I could not do that if I would The. Senator was present in the com- tire.The actuarial experts of the De-vote for a measure on the assumption ofmittee yesterday when the authorization partment of Health, Education, and Wel-actuarialsoundness, which does notto increase the debt limit to $288 billion fare came before the committee and tes-exist,- except, in my judgment, in thewas approved. The Senator from Okla- tified as to the actuarial soundness of theminds of wishful thinkers. homa believes that it will have to be more program under existing law and under I will illustrate what I am talkingthan $300 billion before 2 more years the proposed amendment. Those tech-about.I wish to say something abouthave gone by.Let me say to my friend nicians and actuarial experts have beenone of the. dearest friends I have, thethat the statement that $163billion with the Department for many years.junior Senator from Louisiana[Mr.would pay off the entire national debt is They were in the Department under theLoNG], wlio is present.I should like hisas nearly accurate as is the statement Democratic administrations and haveattention. He said on the floor of thethat this fund would be actuarially continued under the Republican admin-Senate last night: sound, with the amendment proposed by If we did not adopt this amendment, andthe Senator from Texas and without pro- istration.So far as I know, Mr. Presi-passed the bill in the form in which it came dent, neither their professional abilityfrom- the House, the tncrease in the fund byvision for additional taxes. nor their integrity has ever been ques-the year 2000 would bring it up to $163 There is another element in the bill tioned. billion. which I know is in the minds of Senators. They tell us that as of this time there The issue, as I see it, is whether, duringWe read in the Bible, "For what shall it is an actuarial deficit of 0.42 of 1 per-the next 40 years, we want these old peopleprofit a man if he shall gain the whole to have the benefit of that $40 billion, orworld and lose his own soul?"I ask, cent with the present rate of tax incomewhether we want to pile up the money in and benefits provided; and that the in-such a manner that we could retire the en-What would we profit if we were to increased tax provided in the bill is neces-tire public debt by the most aggressive sortcrease the benefit to 12 percent, or $7, sary to provide the money to pay forof payroll tax. and have thflill vetoed? the increased benefits to be given under I do not ptbpose to kjd the old people the bill and to reduce the actuarial ThePRESIDINGOFFICER. Thein Oklahoma.They would not receive time of the Senatpr from Oklahoma hasany benefit from a veto. They could not deficit. expired. Mr. MARTIN of Pennsylvania.Mr. eat a veto. They could not clothe them- Mr. KERR. Mr. President, I ask forselves in a veto. President, may we have order?This is5 additional minutes. a most important statement, one of the Mr. CASE of South Dakota. - Imight say to them,- "The Congress most important relating to the bill, and I yieldgave you 10 percent, and that fellow in 5 additional minutes to the Senator fromthe White House—what is his name— all Senators should pay close attentionOklahoma. toit. Mr. KERR. As I understand thatPresident Eisenhower—vetoed it." The PRESIDING OFFICER (Mr.language, it tells us that if the bill is' not Do Senators think I would help my- CLARK in the chair).The Senate will beamended, and goes into effect and re-self with those people? They would rein order so that the very important re-mains in effect—- ply, "You could have got 7 percent for marks of the Senator from Oklahoma Mr. MARTIN of Pennsylvania.Mr.us, or $3."I might say, "Oh, but I may be heard. President, will the Senator yield? thought you were entitled to $10 or $5." Mr. KERR.If Senators are sincere In Mr. KERR.I yield. I- do think they are entitled to it, and if believing that this fundisactuarily Mr. MARTIN of Pennsylvania. CanI thought there was a chance of getting sound without an increased tax, theythe Senator translate that into dollars?it for them, and if we had before us a should be here with an amendment toI think it would be more understandablemeasure which was fiscally sound, and delete the tax feature from the bill, be-to many of us.If necessary, I will yieldwhich woulçl provide it, I would vote for cause the increased tax is being imposedtime to the Senator to do . it.But I do not propose to kid myself to provide benefits for a few people who Mr. KERR.I shall try to do so. or my people in Oklahoma; and! will will make no contribution to the amount If I correctly understand the Senator'not participate in an action which, in of money necessary to provide the in-from Louisiana, he tells us that by the myjudgment, would insure defeat of the - creased benefits.The only justificationyear2000 the fund would be $163 billion,,bill through a veto. for an increased tax is to make this fundwhich would be enough to retire the en- Mr. THYE.Mr. President, will the actuarily sound. tire public debt. Senator yield for a question' If the fund is actuarily sound, with- Mr. LONG. Mr. President, will the Mr. KERR. With pleasure. out an increased tax, then we are beingSenator yield? - - Mr.THYE. Was the pèndiñg améndr irresponsible and doing violence to basic Mr. KERR.I yield. . mentconsidered in committee? 17960 CONGRESSIONAL RECORD —SENATE August 16 Mr.KERR. The amendment was of. Mr. THYE. As I examine the pro- SOCIAL SECURITY AMENDMENTS fered in committee by the distinguishedposals In the committee bill, I find that OF 1958 Senator from Tennessee (Mr. GORE], andMinnesota would receive $4,5O9OOO in a very eloquent presentation was made byadditional money. The increase for old- The Senate resumed the consideration him on behalf of the amendment. It wasage assistance would be $7.63 a month.of the bill(H. R. 13549) to increase considered by the committee.On theThe increase for a dependent childbenefits under the Federal old-age, sur- basis of the advice of the actuarial ex-would be $1.35 a month. The amount ofvivors, and disability insurance system, perts of the Department of Health, Edu-aid to the blind would be increased byto improve the actuarial status of the cation, and Welfare, as to how much it$7.46 a month. trust funds of such system, and other- would jeopardize the bill, and also on The PRESIDINGOFFICER. Thewise improve such system; to amend the the basis of what we regard to be thetime of the Senator from Minnesota haspublic assistance and maternal and child attitude of the Secretary of Health, Edu-expired. health and welfare provisions of the Mr. THYE. May I have an additionalSocial Security Act; arid for other pur- cation, and Welfare, it was voted down In poses. committee. half minute? Mr. CASE of South Dakota.I yield a Mr. CASE ofSouth Dakota. Mr. Mr. THYE. On thissubject,the President, I yield 2 minutes to the Sen- House bill contains the same provisionhalf minute to the Senator from Minne- found in the Senate bill, does it not?• sota. ator from Pennsylvania. Mr.THYE. Thetotallydisabled Mr. MARTIN of Pennsylvania.Mr. Mr. KERR. In that regard; yes. would receive an increase of $7.01 aPresident, I have been very greatly im- Mr. THYE.It does? montli.This matter is of great impor-pressed by what the distinguished Sen- Mr. KERR. Yes. tance to all of us.It is of great con-atorfrom Oklahoma hassaid.No Mr. THYE.I have listened to the dis-cern to me.It is of great concern to memember of the Committee on Finance Is tinguished Senator from Oklahoma inthat the bill pass, and not be rejectedmore in favor of taking care of the un- his defense of the committee action andor vetoed. fortunate of this country and w1io Is his explanation.It is most impressive. Mr. KERR.I thank the Senator. more interested in keeping the bill actu- I wish to commend the distinguished arially sound than is the Senator from Senator from Oklahoma for making Oklahoma. clear to us what isliwolved in the Mr. JOHNSON of Texas.Mr. Presi- amendment.I, like the Senator from dent, may we have order? Oklahoma, know that my people in Min- The PRESIDING OFFICER.The nesota cannot be clothed in a veto. Senate will be in order. The PRESIDING OFFICER. The Mr. MARTIN of Pennsylvania.Un- time of the Senator has expired. fortunately, a few years ago we increased Mr. CASE of South Dakota.I yield the benefits to a point beyond the re- 5 additional minutes to the Senator from ceipts in the fund. We do not want Oklahoma. that situation to occur again.Social Mr. THYE. Nor can they be clothed security is really a forced saving.It has with an explanation.I commend the done a great deal of good in the United Senator. States. We do not 'wish to endanger it. Mr. KERR.I thank the Senator.If It is not fair to those who make contri- an amendment were offered providing butions.Therefore I wish to associate additional benefits, and if the amend- myself with the sound argument of the mentwereactuariallyandfiscally distinguished Senator from Oklahoma. sound, and if we had time to stay in ses- I sincerely hope that the amendment sion and take action on a veto, I would will be rejected. support such an amendment. Those ThePRESIDING OFFICER. The conditions do not prevail with respect to question is on agreeing to the amend- the pending amendment.Therefore, I ment offered by the junior Senator from say to my colleagues that, in my judg- Texas. ment, we can take to our people the re- Mr. MARTIN of Pennsylvania.Mr. sults of the bill that is before us, with President, will the Senator from South some additional amendments which I Dakota yield me 1 more minute? believe we will have to take—not to in- Mr. CASE of South Dakota.I yield 1 crease the amounts, but to make some minute to the Senator from Pennsyl- reductions in the assistance part of the vania. bill—and all of us, including the Sena- Mr. MARTIN of Pennsylvania. The tor from Oklahoma, will be able to take Senate should take into consideration home a sack half full, rather than go one other point.There has been some home and show our people a sack which talk about a possible Presidential disap- would have been wonderful had it been proval of the bill if it is made more ex- full, but which had had the bottom shot pensive than it was when it came from the House and as approved by the Com- out of it by a veto. mittee on Finance. We must remember Mr. CASE of South Dakota.I am that the President of the United States wifling to yield back the remainder of has the overall picture to consider.It my time. will be only a few days before the Senate Mr. THYE. Mr. President, will the will be confronted with the question of Senator yield? raising the debt limit.From the best Mr. KERR.I yield back to the acting information we can get, our fiscal officials minority leader the remainder of the 3 do not see a chance of balancing the minutes I have been yielded. budget for the next 4 or 5 years, and per- Mr. THYE. Mr. President, will the haps longer.That is a serious thing distinguished Senator from Oklahoma confronting the people of the United yield? States.Our old people are confronted The PRESIDING OFFICER. The with a serious situation, as are the young acting minority leader i in control of men and women who are starting out in the time. life.So we must take those things into consideration, too.It is absolutely nec- Mr. THYE. Will the acting minority essary for our President to have the cour- leader yield me a minute? age to take ail of those matters into con- Mr. CASE of South Dakota.I yield 1 sideration when bills are before him for minute to the Senator from Minnesota. approval or disapproval. 17964 CONGRESSIONAL RECORD —SENATE August16

SOCIAL SECURITY AMENDMENTS OF 1958 The Senate resumed the 'consideration of the bill (H. R. 13549) to Increase benefits under the Federal. old-age, survivors, and disabllity Insurance system, to Improve the actuarial status of the trust funds of such system, and other- •wlse improve such system; to amend the publicassistance and mate1nal and child health and welfare provisions of the Social Security Act; and for other purposes. The PRESIDING OFFICER.' The -que$lon recurson agreeingtothe amendment of the Senator from Texas • [Mr. YARBOROUGH). The proponents of the amendment have 10 minutes remaining; the opponents have 9 minutes. Mr. YARBOROUGH. Mr. President, I believe the opponents have 4 minutes. Mr. WILEY. Mr. President— The PRESIDING OFFICER. Does the Senator from Texas yield time to the Senator from Wisconsin? Mr. YARBOROUGH. I yield 1 minute • to the distinguished Senator from Wis- consin. NEEDED: 10PERCENr INCREASE IN SOCIAL SECURITY RETIREMENT BENEFITS Mr. WILEY. Mr. President, I rise to support the amendment proposing to raise the level of retirement benefits from 7 percent to 10 percent. The more than 12 million folks on social security, I believe, deserve such an Increase in benefits.As the Finance • Committeereports,Wages havein- -creased about 12 percent and prices about 8 percent since the last benefit increase was put into effect In 1954. Now the question Is, Can we face our senior citizens and say: "The costs of - livinghave gone up 8 percent since your lastImprovementInbenefits.The • chances are that you won't get another Increase for at least a couple of years. -However, we are not going to allow you to catch up with the costs of living. Instead, we are going to hold you about '1 percent short.I!thecosts of living

- contInueto rise—as the trend upward unfortunately continues—you are going to be left farther and farther behInd"? My friends, I, for one, cannot do this thing.I know that the more than 281,000 folks in WisconsIn depend, for • Sole Income, or Important supplements, on social-security benefits. Right now, the mInimum benefit is $30per month. 19581 CONGRESSIONALRECORD.— SENATE j79fi5

Thifik oft: $30 pet month. What willbtatkett 'Indeed, pension checks often - Some'loved .one Is gone.Children have this buy? How much food? Will it pay make the difference between utter desti-rowll up and established their own homes.. Life seems empty and barren.The future the rent?. Looking at the facts, we cantution and being able to eke out anseems to hold nothing but sitting and listen- only conclude that on any -oneof these,existence.But once a man or womanIng to radià or wat6ilng television and then, single basic items of necessity1, that $30has the financial wherewithal tO 5U1eventual death. is likely to fall short. vive, he or she sees that far more than iortunately, this grim picture does not by I am hopeful, therefore, that the Ben-money is needed. Man does not live byany means reflect what needs prevail 9r what ate will see its way t&llft the percentagebread alone, or pension checks alone, does always prevail. - - ofmnoreasé to '10 percent above present I send to the desk, therefore, a state- On the contrary, life is fuil of great put- levels of benefits.This Increase, I be-ment listing some of the other needs of pose for countless elderly citizens. lieve, Is absolutely justified.If provedour elderly citizens.I ask unanimous There are countless senior citizens wio, after ending one career, have wisely started to be actuarily not sound, that can beconsent that this statement be printeda whole new career; They have developed a remedied next year. in the body of the RECORD at this pOiflt,new skillor polishd an old one: They As we all appreciate, the bill, H. R.preceded by a fine little editorial entitledhave become interested in some commUnity 13549, contains a number of other tin-"Age and Opportunity," from the Chris-work and/or they have taken on the re- portant improvements under social se-tian Science Monitor of Wednesday,sponsibility of helping some friends, of help-

curity, Inoludiñg increased benefits forAugust 6. . Ingtheir children, and their, grandchildren. families, dependents of disabled work- There being no objection, the editorialThey work for some charity, or they bave ers, disabijfty insurance, survivor, andand statement were ordered to be printed,some particular hobbi which they tremen- many other desirable adjustments in the dously enjoy. . in the RECORD, as follows: Thisis what: is truly needed: a driving program. , AGEAND OPPORTUNnT As a matter of fact, it contains an purpose, a' motivation for long life. "Grow old along with me," wrote the' - Averagemen cannot pretend that they are' Important amendment which I proposedpoet Robert Browning, "The best is yet tocompletely like Konrad Adenauér or a Win- earlierthissession, and which wasbe ** *," stonChurchill or a Frank Lloyd Wright or a passed earlier In the' bill H. R. 11346. Chief Judge Archibald K. Gardner of theDouglas MacArthur,accomplishinggreat This measure would provide additional7-judge Upited States Circuit 'Court of Ap-things, long afteY7o. But so-called average, time 'for' members of. State and local ' pealáwhich is now formulating its decisionpeople can nonetheless achieve a great deal, retirement systems to choose, if theyon the significant Little Rock segregation,each in their own spheres. - ' . - - so desire, to be covered by social secu- caseis approaching his 91st bIrthday.(He With their purpose, there must be a faith is still known as a rugged outdoors man.)in that purpoaeThere must be a faith in rity. The other 6 justices grade youthward—84,themselves.Yes, countless individuals have There Is, of course, one supplemen-74,63,60, 58, to a boyish 52.Whateverfound they need faith in a power, higher tary amendment which I had hoped thetheir decision, they can hardly be accusedthan themselves, faith in in ai1-knowing measure would include.This proposalof haitbaked liberalism, aU-seeing, all-powerful Creator, a God of would allow the folks on social security. ' Dr.William F. Durand, known for a gen-love and ttuth. And it is their purpose to eration as the dean of American engineer-serve their Creator with love and truth, to increase their extra earnings frommg, has just passed away at 99.He had $1,200 to $1,800 annually, without suf-retired (from teaching at Stanford) at 65. THE NflID FOR ESTEEM - feringloss Of sOcial-security benefits,Thereafter he won 6 gold medals, including 2. Esteem. Elderly citizens need,' respect, Naw, we know. that it Is extremely diffi-the Guggenheim and the Wright BrothersThey need to be wanted, to be appreclatet cult for folks In the upper age bracketsTrophy, wrote a massive 6-volume work, . Ithas often been said that this has be. to find work; where a Job is available1Aerodynamic Theory, and headed the Gov-come a young man's civilization.Our cul- however, I believe that we should noternment's wartime effort to design and pro.ture honors youth, good looks, so-called -' jeopardizetheir opportunity to be duce jet-propulsion engines, glamor. ' "For age isopportunity, no 1e88 than it tends to play down the judgment or age. independentas possible; and to main-youth," wrote Longfellow, "though in an- tam as fair a standard of living as pos- While we stiil foilow the commandment1 other dress." ' "Honorthy father and thy mother," many.' sible. . . ' peopletend to take it far, less seriothly than I believe this legislation, too, would SUPPLEMENTARY STATEMENT DY 8ENATOR before.I refer to the days when Americana. have made it a stronger, better bill.In . WILEY by 'and large, lived in rural areas, when, o14 fact, I recall to my colleagues that, re- What do elderly citizens need? folks lived with their youngsters.Then, the cently, over 80 percent of the members This La a subject on which I have com Judgment of the preceding generation:waa Of the National Federation of Independ-mented on many occasions.For example, Iconstantly available and wassoughtso as ént Businessmen approved its objectives,referred to the review of this question by theto be of help to the present generation, The measure, of course, has the vast 'Wisconsin Conference on the Aging on Feb- The tempo of life has picked up rapidly. majority of support from our social e-ruary 20 of this year. There has been so much change that youth curity beneficiaries themselves. I have introduced legislation on old-agetends not to go by former standards. Youth ' problems.I have sent out special reportstends to feel that old folks have little to However,I am notofferingtheto Senior Citizens, including, most recently,contribute to them. "The old fogies don't amendment at this time. Why? Basi-a report on helpful Federal and other' pub-understand us or our problems," many young cally, I believe that the Finance Corn-lications available to Shem free or at nomi-people assert. mittee, withitstremendously heavynal cost. So, elderly citizens find aU too often a lack workload, has done a spendid Job in I have corresponded extensively with theof respect and appreciation. bringing this measure to the floor asold-age groups, with the Senior Citizens of But they need such esteem. And of course America, Golden Age Clubs, together withthey must earn it.They must try to under- quickly as possible.I do not, therefore,Federal,State, and local experts on thestand youth, just as youth must understand want to jeopardize the ultimate ap-.problem. ' age. proval of the overall bill, even though . I have stressed the Importance of sound ' THEPfl oa A JOB I am fully convinced of the merits ofplanning for the White House Conference on S. Fruitful activity. I have said that elder-. the measure, and hope that the Congressthe Aging in 1960, including planning forly citizens need a purpose. And they need will approve it next session. thevarious preceding Stateconferences.esteem.I know of no single way by which I do, however, hope that the SenateHere now, based on my previous work, is athey can have a purpose and gain esteem will find it in its heart to provide thelisting of a half-dozen of the top needs ofthan by earning their own way to the ex- 10-percent Increase in benefits which Iour elderly citizens, tent that this is feasible. believe is merited; though there is a NEED FOR A MISSION IN LIFE There is nothing like a job to keep a mans dispute as to whether itIs actuarily 1. A purpose. The most essential need ofor woman's self-respect.There is nothing sound. men and women 65 years or over, or, for thatlike a reeling that one can still put in an matter, at younger ages, is a purpose.Ihonest day's work and can stiU earn one's THE COMPREITSIVE NEEDS OF AMERICA'S mean a mission, a goal, something they candaily bread through one's skill. ELDERLY CITIZENS look forward to, something they can strive By contrast, there is nothing more damag- The social security legislation whichfor, ' , Ingthan to feel that one has lost one's skill. we are considering today Is Important. For too many elderly citizens find, so tothat one must live exclusively on pension speak, that the fire has gone out withinchecks, or on dotes, or on handouts. But it Is by no means the only answertheir heart,They find that they are only So elderly citizens need jobs.But at what to the needs of our elder citizens, dragging themselves through, day ater day,age does one become elderly?Some em Pension checks are helpful, particular- f existence.They find that they lack aployers, unfortunately, seem to think at the ly to senior citizens In the low-incomezest for living. ' ageof 50 or 45 or even earlier. CIV—1131 17966 CONGRESSIONAL RECORD —SENATE August 16

Seriousjob discrimination against elderlyin fixed yield form anI Thow much In flexiblemeans, a complete list, but at least, it does citizens still continues.Some women ap-yield investments? How should I set up mytouch upon the high spots. plying for work find that the employmentwill?" Elderly people want the opportunity to bars are lowered against anyone even at the Is it any wonder that these and similarwork on these needs themselves.They have age of 35, much less older.And there isquestions prove so perplexing, especially inpride.They do not want handouts.They many a company which looks askance at aa time such as this, with its dynamic finan-do not like to be treated like children. They male applicant over 40. cial changes? want neither our pity nor our charity. They Obviously, we need to reeducate American Obviously, despite the increasing avail-are willing to help themselves, but they do employers to the value of utilizing skills ofability of helpful financial advice, elderlyneed a helping hand by society, the society the, middle and later years. citizensneedmoreobjectivityinsuchwhich they, themselves, enriched through a advice, lifetime of endeavor. Can we do anything • THE NEED FOR ADEQUATE HOUSING less than give them that helping hand? 4. Housing: In recent years, we have made THE NEED FOR HEALTH AID AND RESEARCH Fortunately, progress is being made. Many great strides in housing, especially adapted 6. Research: The science of geriatrics isfine individuals and groups are hard at work to the elderly.I mean housing which theystill only in its Infancy. We must learn farin my own and other States on old age prob- can maintain relatively easily.It must bemore about the process of aging. We willlems.And they are pointing out that old housing which is not so big as to be beyondget more insight when we learn more aboutage does not begin arbitrarily at 65 or even their ability to keep neat, or not so smallthe process of growth itself, about the be-70 or 75. as to make them feel they are living in abavior of cells.In other words, basic re- The middle years must be happy and fruit- prison cubicle. search will teach us much. - fuland secure if one's later years are to be Imean housing withspecialfixtures, One of the ironic factsIs most of thehappy and fruitful and secure. housing with ramps, rather than steeplyprincipal research developments in recent "Added Years—For What?" That was the Inclined steps for those who might not beyears have enabled us to increase longevityprovocative title of the 1957 annual meeting able to walk up steps too easily.I meanby improvinglifeexpectancy in youngerof the National Committee on the Aging of housing with built-in fixtures, with hand-years, from birth on.Peculiarly enough,] athe National Social Welfare Assembly. Added rails, nonslip surfaces, easily operated win-person at the age of 65 today has only theyears—for lots of happiness, that must be dows and doors.It must usually be housingsame approximate life expectancy from now our goal. relatively near to needed public facilities. on as would tave a person at the age of 65 None of us has all the answers. We are And, of course, it might be housing theya century ago. all inquiring; we are learning new facjs in can pay for, on their existing level of in- As the late Dr. John Schindler, of Monroe,this trial-and-error kindergarten whièli we come. Wis., put it: call life. -Fortunately,Congress has taken action to "It is Importaflt to note that the group of encourage both private profit and nonprofitpeople over 65 is the only group whose life But this we do know—higher pension housing for the elderly.Private buildersexpectancy has not increased since 1900.Atchecks—as important as they are—do not have only, however, begun to utilize theseany age up to 65 you can expect te live longerprovide all the answers. provisions, both in individual homes and inthan an individual of the same age in 1900. There must be purpose and faith and rec- new developments. And the churches andBut after 65 you cannot expect to live longerreation.There must be Jobs and health and fraternal organizations of America have onlythan a person of the same age did a hundredsecurity and counseling.There must be aU begun to utilize the nonprofit provisions. years ago. this and more. So,too, nursing homes in America are "This holds in spite of the fact that prac- Mr. LONG.Mr. President, will the sadly lacking.They are too few in numbertically no old person today dies of pneumonia and usually too obsolescent and overcrowded.or other infection, and in spite of the factSenator from Texas yield 2 minutes to These are serious lacks indeed. that people even with some of the degenera-me? THE NEED FOR ADEQUATE COUNSELTNG, INCLtID-tive diseases, such as heart disease, can be Mr. YARBOROUGH. I yield ,2 min- ING FINANCIAL ADvICE - carried on for years longer than might haveutes to the distinguished Senator from 5.Counseling. We would not thinkofbeen possible even 20 years ago.It can meanLouisiana. only that degenerative disease has been ac- The PRESIDiNG OFFICER. The sending youngsters out from high school intocelerated in our time, and the cause of the the -world,withoutadequatevocational Senator from Louisiana isrecognized uidance. And yet, in far too few commu-accelerationisan increasein emotionalfor 2 minutes. nities, is there adequate counseling for seniorstress." citizens on all the diverse problems which Yet, surely, with more diligent effort, we Mr. LONG. I support the amendment. they face at another critical turning point incan find how to extend life for many yearsI have supported a similar concept on life. longer for our senior citizens.And, as I haveother occasions.It is my general feel- Too few welfare departments and organi-emphasized, -it is not simply the number ofing we would do well to adopt the con- zations have recognized their responsibili-years; it is the fullness of years, the happi-cept that we shall collect contributions ties for special guidance for our senior citi-ness of years, which counts. on an annual basis that will exceed pay- zens. Fortunately, a National Advisory Commit-ments from the fund, and that we "Where can I find part-time time work?tee on Chronic Illness arzd Health of theshould eventually depart from the con- Where can I find recreation?Where can IAged has been appointed by the Unitedcept of building-a fund of $285 million. get special instructions?"These are but aStates Surgeon General to review the com- few of hundreds of similar questions. plex medical, social, and economic problemsAs a matter of fact, under the existing To cite but one need, they need soundassociated with chronic illness and aginglaw, this fund can be held only in Gov- financialcounseling fromexperts.Timeand to advise on policy and programs inernment obligations and the Govern- after time, one reads in the newspapers thatthese fields. ment debt today is about $285 billion. gullible elderly citizens have been swindled In announcing the appointment, Surgeon The schedule as proposed in the House out of their life investments by some crookGeneral Leroy E. Burney stated: "Since 1900bill, and as reported in that fashion to who has promised them allegedly to doublethe number of people 45 and over has in-the Senate, would in a number of years their meager savings overnight. creased 31/2 times.Today, more than 40 Even more often than the case of havingmillion people—approximately 30percentrequire collections into the fund to be their money stolen are instances where oldofthe total population—are inthisage more than $3 billion in excess of the folks have unwisely put all their financialgroup.Moreover, 40 percent of the chron-payments from the fund. eggs In one unsound basket.They have,ically ill in this country are persons 65 years The actuary who made the estimates for example, put all their savings into someof age and over, of whom there are now 14on what the fund would be under the fixed income investment.Then, they findmillion in the United States. House bill, who is the chief actuary for that Inflation has completely robbed that There is one additional phase which mightthe Department of Health, Education, investment of purchasing power.Or, theybe mentioned now, health insurance. have allowed their investments to remain In I have referred in several instances to theand Welfare,estimatesthatifthe corporations which have long since been oneconomic side of elderly citizens' problems.amendment offered by the Senator from the skids, or have no real earning or grow-They need a Job.They need adequate oldTexas is adopted, we shall have $117 Ing possibilities. age and survivors' insurance.They needbillion in the fund in the year 2000, if Financialcounseling,therefore,shouldfinancial counseling.They also need to havewe take the approach of a 10-percent in- play a very important role for elderly citi-health insurance, especially ac1opted to theircrease at the existing rate. zens. needs. It is true that sometime after the year 'Where do United States savings bonds Only within the past few years, for exam- fit in? ple, have the insurance companies awakened2000 we. shall have to have another in- "How about stocks, bonds, mutual funds,to the fact that it is not fair to cancel healthcrease in the social-security tax.The real estate trusts, savings and loans, annui-Insurance contracts atageof65.Why?•fact of the matter is that there is going ties, variable annuities?Should I sell myBecause that Is precisely the age when suchto be an increase in the social-security old home and buy a new one or another oldInsurance is needed most of aU. tax after the year 2000 whether we adopt one?Should I buy a cooperative apart- These, then, are a few of the needs of ourthe amendment or not. But I think it is ment? How much of my savings should beelderlycitizens.Thisrepresents,bynoa mistake to take the attitude that the 1958 CONGRESSIONAL RECORD —SENATE situation is comparable to that of thefund, which was filed March 1 of this Trust fund disbursements, however, have Metropolitan Life Insurance Co., whichyear.They say the fund isactuarilyrisen even more sharjMy than contribution has to have enough money in the reservesound right now. income.Basic factors 'in this Increase are the long-term growth in the aged population to take care of accrued liabilities in the Mr. President, I ask unanimous con-and, more significantly, the lengthening pe- event no new policies are sold in the fu-sent tq have printed in the RECORD 3riod during which workers have had an op- ture. pages of the annual report of the Boardportunity to earn the quarters of coverage re- This Is a compulsory program.I amof Trustees, starting at page 30 and end- quired to be insured. More immediate causes not the only one who feels this waying at page 32. have been the amendments to the Social about it. The United States Chamber of There being no objection, the excerptSecurity Act during 1950-56, which have ex- Commerce has consistently advocatedwas ordered to be printed in the RECORD,tended the program's coverage, lowered the that this program should be on a pay- requirements for eligibility to benefits for as follows: persons who retire and for the survivors of as-you-go basis.Yet we do not have to The excess of the level-premium contribu-individuals who die in the early years of thè stay on a strict pay-as-you-go basis un-tion rate equivalent to the graded scheduleprogram, reduced the retirement age of wô- der the amendment of the Senator fromin the law over the level-premium cost ofmen from 65 to 62, increased the benefits Texas. A huge reserve can be carried.benefits and administrative expenses (afterpayable, and liberalized the retirement test. The schedule indicates there would grad-appropriate adjustment for the effect ofAs a result of the rapid rise in disbursements, ually be built up a reserve of $117 bil-interest earnings on the existing trust fund)the trust fund's receipts in fiscal year 1957 lion, under the proposed rates, if theis used to indicate the actuariai balance ofexceeded its disbursements by only $436 mil- the system. A negative figure indicates the lion. amendment is adopted. extent of lack of actuarial balance; a positive Long-range cost estimates show that for ThePRESIDINGOFFICER. Thefigure indicates more than sufficient financ-practical purposes the old-age and survivors time of the Senator from Louisiana hasing (according to the estimate). The follow-insurance program is In actuarial balance expired. ing table shows these figures for the old-ageaccording to the best available cost estimates. Mr. LONG. May I have 30 additionaland survivors insurance program and theThis concept means that for the long-range seconds? disability insurance program (computed asfuture, the system will have sufficient income Mr. YARBOROUGH. I yield 30 addi-of the beginning of 1958): from contrtbutions based on the tax schedule now in the jaw and from interest earned tional seconds tothe Senator from [Percent] on investments to meet all future payments Louisiana. for benefits and administrative expenses. Al- The PRESIDING OFFICER. The Item Low cost High cost Interme- diate cost though aggregate disbursements of the old- Senator from Louisiana is recognized for age and survivors insurance trust fund over 30 more seconds. the period of the next several years are esti- Mr. LONG.I submit the fund can • Old-age and survivors insurance mated to exceed aggregate receipts—a situa- support the proposal. We can gradu- tion which, however, will be only temporary— ally build up the fund. By building up Contributions-- - 7. 38 7.28 7.33 there will be ample funds on hand to meet Benefitcost' 6.97 a99 7.90 expenditures of the program during this the fund a little more slowly, we can do period. The trust fund Is intended to serve better for the retired people who find Net dfflerence.. .41 —L7i —.57 as a contingency fund as well as a source of that inflation has, in large degree, wiped investment income to supplement contribu- out the income on which they thought Disability Insurance tion receipts, and it is to be expected there- they could look forward to retirement. fore that the fund may be drawn upon front Mr. HUMPHREY. Mr. President, will Contributions.. --- 9.50 0.50 0.50 time to time.Temporary periods when the the Senator from Texas yield 30 seconds Benefitcost' .24 .49 .35 assets of the fund decline are not in them- to me so I may ask him a question? selves an indication of financial weakness Net digerence .26 .01 .iS and do riot change the fact that the program Mr. YARBOROUGH. I yield 30 sec- Is for practical purposes in actuarial balance. onds to the Senator from Minnesota. I Includingadjustments (a) to reflect lower contribution rate for sell-employed as compared with employer- Aggregate income of the disability thsur- Mr. HUMPHREY. Does the Senator employee rate, (b) for existing trust fund, and (c)forad, ance trust fund wiil be wholly sufficient from Texas have a report which indicates ministrative expenses. during the period immediately ahead to meet that a 10-percent increase in the schedule In view of the very long range nature ofaggregate disbursements and In fact wiil for old-age and survivors insurance bene-these projections, and the many variable fac-build up a substantial fund.Long-range fits would still provide an excess of newtors involved, the deficiency for the old-agecost estimates show that the disability in- income into the fund, on the basis of theand survivors insurance system under thesurance program Is more than in actuarial tax rate in the bill before the Senate?intermediate-costestimate is reiativelybalance. smali, and so the system may be said to be In its annual reports, the Board of Trustees Mr. YARBOROUGH. The answer isin approximate actuarial balance.Under thehs emphasized that the continued flnanciai 'EYes."The distinguished Senator fromintermediate-cost estimate the oid-age andsoundness of the old-age and survivors in- Oklahoma has stated he has statementssurvivors insurance trust fund would havesurance and disability insurance programs is from some actuaries who say— a balance of more than $55 billion in thea major concern both to the contributors and The PRESIDING OFFICER. The timeyear 2025 and thus thereis ample timeto the Nation as a whole. The 1956 amend- of the Senator from Minnesota has ex-in the future to make any adjustments whichments to the Social Security Act provided pired. might be needed in the light of further ex-for a carefUi review of both the short-range perience and of future estimates.The dis-and long-range financial aspects of the old- Mr. YARBOROUGH.I yield myselfability insurance program shows a small sur-age and survivors insurance program by. a 31/2minutes. plus according to the intermediate-cost esti-representative advisory council before each The PRESIDING OFFICER. The Sen- of the scheduled contribution rate increases. mate.However, considering the variabilityThe first Advisory Council on Social Security ator from Texas is recognized for 3 3'2of cost estimates for disability benefits, thisFinancing has now been appointed under minutes. program also may be considered in approxi-these provisions.This Council's study can Mr. YARBOROUGH. Thedistin-mate actuariai balance, and this smali actu-be expected to result in findings which will guished senior Senator from Oklahomaarial excess is certainly no more than a moderate safety factor. helptoassurethecontinuedfinancial has stated that some actuaries say this A discussionof the assumptions uponstrength of these programs and to maintain fund is actuarily unsound.I have re-which these tables have been calculated ispublic confidence in the economic security ports of actuaries who say it is soundpresented in appendix I. they provide. today, even without the new taxes. Who CONCLUsION Mr. YARBOROUGH. I wish to read are the ones on whom I rely?Secretary During the past 5 fiscal years, the contri-one paragraph from the report.The of the Treasury Robert Anderson, thebution income of the old-age and survivorsparagrat reads: major trustee of this fund; James P. Mit-insurance trust fund has increased substan- Long-rrige cost estimates show that for chell, Secretary of Labor; Marion B. Fol-tialiy for a number of reasons.In additionpracticai purposes the old-age and survivors som, Secretary of Health, Education, andto a rise in earnings ievels and the normalinsurance program is in actuarial balance ac- Welfare; Charles I. Schottland, Commis-growth of the labor force as the populationcording to the best available cost estimates. sioner of the Social Security Administra-becomes larger, contribution rates increasedThis concept means that for the long-range tion, and Secretary of the Board ofin 1954; moreover, coverage was extendedfuture, the system will have sufficient in- to additional employments by the 1954 andcome from contributions based on the tax Trustees. 1956 amendments and the maximum iimit onschedule now in the law and from interest I have In my hand the printed reporttaxable earnings was raised in 1955.Withearned on investments to meet all future of the Board of Trustees, who have thethe growth of the trust fund, interest re-payments for benefits and administrative sworn constitutional duty to preserve theceived on investments had also increased. expenses. 17968 CONGRESSIONAL RECORD —SENATE August 16 Mr. HUMPHREY. Mr. President, willmember a statement was made in the Mr. KNOWLAND. How much time do the Senator yield? newspapers to the effect that the Secre-the opponents have remaining? Mr. YARBOROUGH. I yield. tary of the Treasury said that the Presi- The PRESIDING OFFICER. The op- Mr. HUMPHREY. That is a referencedent would veto the bill if a whole lotponents have 9 minutes remaining. to the present law? of old age pension increases were put Mr. KNOWLAND. Mr. President, I Mr. YARBOROUGH. The Senator isin, because those persons did not pro-yield 5 minutes to the Senator from correct. vide money to pay for the expense. TheOklahoma. Mr. HUMPHREY. The bill before theamendment whichIhave offeredis Mr. KERR. Mr. President, I appre- Senate provides for an increase in thelimited solely to social security, and theciatewhatthe Senator from Texas said tax rate? money is to be raised as we go along.about my talking in circles.I want to Mr. YARBOROUGH. The Senator isEvery penny is to be raised under thesay that I talk in circles from a sound position to a sound position.The dif- correct. - terms of the bill which was reported by Mr.HUMPHREY. And the bill alsothe committee. ference is that the Senator from Texas provides for an increase in the base? I say to Senators, this is an anti-infla-talks in circules from an error to an Mr. YARBOROUGH. The bill pro-tion measure.This is a built-in anti-error. vides for an increase iE the tax rate andinflation measure and a built-in anti- The Senator says that his actuaries, in the base. deficit spending measure. It has a built-Mr. Robert Anderson and somebody else, Mr. HUMPHREY. Would those pro-in provision to protect us from deficithave told him the fund is sound.I did visions provide enough money, accord-financing, because my amendment isnot know that Robert Anderson was an ing to the report the Senator has fromoffered to a bill which contains a pro-actuary.If Mr. Anderson is, then he the Library of Congress, the Legislativevision for the raising of sufficient moneyought to get his chief to fire those who Reference Service, to properly fund theto pay the cost as we go along.Thehave been in the Department all of these 10 percent increase in benefits? President could not, under any justifiableyears under both administrations who Mr. YARBOROUGH.The tax in-excuse, veto the bill if the amendmenthave given the evidence to the commit- crease which has been voted by theis agreed to. tee that the proposal of the Senator House and agreed to and included in the Why do I make that statement?Ifrom Texas is unsound. Senate committee report will take caremake it because the vote in both the I wish to state what the report referred of the cost of my amendment, with..theHouse of Representatives and the Senateto says: 10-percent increase, and willprovidecommittee was for a bill which provides In view of the very long range of these money over that amount to go into thefor raising more money than my amend-projections and the many variable factors fund. There will be a surplus of moneyment would provide for disbursing. Theinvolved, the deficiency for the old-age and created by the tax increase. President would come out at the longsurvivors insurance system under the in- The distinguished senior Senator fromend of the horn, because he would havetermediate cost estimate is relatively small Oklahoma has argued in circles, whenmore money left in the fund, even afterand so the system may be said to be in he has said that without the tax wethe 10-percent increase.What excuseapproximate actuarial balance. would be wrecking the fund.The taxwould there be for any intelligent man That was what the trustee had to say. is provided in the bill, Mr. President,to veto the bill? He admits that thereisa deficiency, and an increase is provided.The tax ThePRESIDINGOFFICER. Thewhich he says is relatively small. provision was put in by the House oftime of the Senator from Texas has ex- Now, the Senator says that his pro- Representatives, and it was kept in bypired. posalisactuarially sound.The fact the Senate committee.I warn all Sen- Mr. YAREOROUGH. Mr. President,about the matter is that the additional atorswhowouldvoteagainstthe1 yield myself 15 seconds. benefits which are provided in the bill, amendment on the ground of actuarial Mr. JOHNSTON of South Carolina.plus the additional benefits which would unsoundness that they will be votingMr. President, will the Senator yield?be provided in the amendment, would upon a false premise.This report from Mr. YAREOROUGH.I yield. costatotalof1.05percent ofthe the trustees of the fund shows that to Mr. JOHNSTON of South Carolina.payroll.The amount to be added in be true.The report is being printed inMay I ask how many billions of dollarstaxes is nine-tenths of 1 percent of the the CONGRESSIONAL RECORD for today. would be left over? payroll.Therefore, instead of the fund The fund is actuarially sound, accord- Mr. YARBOROUGH. There aresobeing more actuarially sound, as it would Ing to Robert B. Anderson, the swornmany billions I do not know how manybe under the provisions of the committee trustee of the fund. there would be. bill, it would be even more actuarially The bill which was passed by the Mr. JOHNSTON of South Carolina.unsound than it now is if the amendment House and which was reported by theBillions, not millions. is agreed to, because the amendment Senate committee provides for raising Mr. YARBOROUGH. Mr. President, Iwoudcreateanadditionalfifteen the tax rate.Even if we pass a 10-per-ask unanimous consent that the nameone-hundredths of 1 percent deficjt. cent increase in benefits, all of the in-of the junior Senator from Idaho [Mr. Furthermore, since reference has been come the tax increase would provideCHURCH] be added as a cosponsor of themade to the statement of the actuaries— would not be used. amendment. The Senator sent that re-I think the Secretary of the Treasury The PRESIDING OFFICER. The timequest to me. ought to feel good about being promoted of the Senator from Texas has expired. The PRESIDING OFFICER. Withoutto the status of an actuary by his fellow Mr. YARBOROUGH.A parliamen-objection, it is so ordered. Texan—there was a reference to the tary inquiry, Mr. President. Mr. YARBOROUGH. Mr. President,fund and the benefits of the dependency The PRESIDING OFFICER. Thea parliamentary inquiry. feature, which we put into the law in Senator will state it. PRESIDING this body 2 years ago, which has been Mr. YARBOROUGH. How much time The OFFICER. Thecreating a surplus of fifteen one-hun- do the proponents have remaining? Senator will state it dredths of 1 percent. Under the pfovi- ThePRESIDINGOFFICER. The Mr. YARBOROUGH. How much timesions of the bill presently under con- Senator from Texas has 3 /2minutesdo I have left, Mr. President? sideration additional benefits are to be remaining. ThePRESIDING OFFICER. Theprovided to those who are found dis- Mr. YARBOROUGH.I yield myselfSenator from Texas has 2 minutes re-abled, and to their dependents, which 1½ minutes, Mr. President. maining. will utilize the surplus, which experience ThePRESIDING OFFICER. The Mr. YARBOROUGH. Mr. President, Ihas indicated has been accumulating Senator from Texas is recognized for 1 'kyield the floor. under the provisions of the disability minutes. Mr. KERR. Mr. President, I ask thesection of the law. Mr. YARBOROUGH. The argumentminority leader to yield me an additional Therefore, not only would the amend- has been made that if we pass the bill3 minutes. ment create an additional deficit, but a with the amendment I have proposed, Mr. KNOWLAND. A parliamentarypart of the fund, as it has been operat- the amendment would jeopardize theInquiry, Mr. President. ing, which has been keeping the defi- enactment of the bill into law, and that ThePRESIDING OFFrCER. Theciency down no longer will be available the President might veto the bill.I re-Senator will state it. for that purpose, because the additional 1958 CONGRESSIONAL RECORD —SENATE 17969 benefitsto be provided in the bill for theeffectsofadding$288 million werequested,ifthe junior Senator from disabled will take up the amount whichstressed.Those inflationary effects areSTexas wishes to reduce it.I thought, in has been permitted to accumulate In anot reduced by any factors we know of.fairness to the proponents of the.amed- small surplus as to the disability phaseA $12 billion deficit faces us In the fiscalment, as well as to the opposition, we of the bilL year 1959. should try to obtain as good an attend- Mr. President, I ask that 3 minutes be Under all the circumstances, I thinkance of Senators as possible.I renew yielded to the distinguished Senator from• the Firzance Committee did the sensiblemy request. New Mexico. and prudent thing, having regard for The PRESIDING OFFICER. Is there Mr. KNOWLAND. Mr. Preisdent, Ithe people who will participate in theobjection; to the request of the senior yield3 minutes to the distinguishedfund, when it voted to report the bill asSenator from Texas that there be a Senator from New Mexico. • it is now before the Senate, and voted toquorum call, without the time being The PRESIDING OFFICER. Thereject the amendment which iE now thecharged to either side, and that at the -Senator from—New Mexico Is recognizedpending amendment. conclusion thereof, 5 minutes additional for 3 minutes. I believe we would do the people ofbe allotted to each side?The Chair Mr. ANDERSON. Mr. President, nothe country serious injustice if we werehears none. one could have sat through the testi-to Jeopardize possible ains under the The clerk will call the roll. mony without being Impressed by thebillbyvotingforan amendment The legislative clerk called the roll, accuracy of the work done by the groupwhich might be too much forittoand the following Senators answered to which brought forward the figures.Thecarry. their names: witnesses from the Social Security Board Mr. HUMPHREY. Mr. President, willAiken Gore Morse who testified gave us what I regarded asthe Senator yield? Allott Green Morton Anderson Hayden Mundt being the soundest business and actu- Mr. ANDERSON.I yield. Barrett Hennings Murray arial judgment possible.They told us Mr. HUMPHREY.I wonder if it is Beau HickenlooperNeuberger that the deficit in the Old-Age and Sur-not true that one of the reasons for theBennett Hill 0 Mahoney vivors' Insurance Fund in the calendar Bible Hruska Pastore heavy burden on the social-security fundBridges Humphrey Potter year 1958 will be $730 million.We areat present is the large number of peo-Bush - Ives Proxmire told that the deficit in 1959, under theple who were blanketed in without mak-Byrd Johnson, Tex.Purtell rates we are using will be $1.2 billion. Carison Johnston, S. C. Revercom, ing payments into the fund over a longCarroll Jordan Robertson No one who has any concern or respectperiod of time.Yet they are receivingCase, N. J. Kefauver -. Russell for those whg are to participate in thisbenefits from the fund. Case, S. Dak. Kennedy Saltonstall fund can favor putting the fund in worse Chavez Kerr . Schoeppel Mr. ANDERSON. I think that is true;Church Knowland Smathers • and worse shape. but I think the tendency will be con- Clark •Kuchel Smith, Maine The proposal which has been madestantly to move in that direction. C3oper Langer Smithb N. J. was brought before the committee. The ThePRESIDINGO'FICER. TheCotton Lausche Sparkman Curtis Long . Stennis proposal was considered by the commit-tithe of. the Senator from New. MexicoDirkcen Manuson Symington • tee, and I believe carefully con.idered. has expired.' Douglas Malone Thurmond The amendment, if. adopted, would The opponents have 1 minute remain-Dworshak Maüefield . Tbye Eastland Martin, Iowa Watkins • result iii throwing the fund out of bai-ing, and the proponents have 2 minutes. Ellender Martin, Pa. Wiley ance.The taxes to be provided by the. Mr. JOHNSON of Texas.Mr. Presi-.Ervin McClellan Williams Senate bill would give us a little chancedent, I ask Unanimous consent that IFuibright MçNamara Yarborough to accumulate some additional moneymay suggest the absence of a quorumGoldwater Monroney . Young in the fund. There is today; in the so-.without the time being charged to either Mr. MANSFIELD.I announce that vial security fund, a balance of some $23side, and that each side may be grantedthe Senator from Delaware [Mr. FREAR], billion.That may sound like a lot of5 minutes additional. - the Senator from Florida [Mr. HOLLAND], money, but I say that under all the cir- ThePRESIDING OFFICER. Is thereand the Senator from Georgia[Mr. cunistances it is not an excessive sum.objection? TALMADGE] are absent on official busi-

It could be, with the passing of the years, Mr. YARBOROUGH. I object to ex-ness. - the fund will get larger.The fundtending the time.I think we should stay Mr.DIRKSEN.I announce that the should get larger as we deal with morewithin the limits of 1 minute for theSenator from Vermont [Mr. FLANDERs] and more customers and as we haveopponents and 2 minutes for the pro-is absent because of Illness In his family. more and more responsibilities for car-ponents.That is the oniy portion of The Senator from West Virginia [Mr. ing for more and more cases.The re-the request to which I object. HOBLITzELL] is absent because of death serve fund should be larger, and prop- Mr. JOHNSON of Texas.Does thein his family. erly so.I hope the Senate will not goSenator wish a shorter period of time? The Senator from New York [Mr. off the deep end to destroy what already Mr. YARBOROUGH. No. Under theJAvIT5] is absent by leave of the Senate • has been done. unanimous consent agreement, 1 minuteto attend the NATO parliamentary con- Mr. KERR. Mr. President, will theremains for the opponents, and 2 min-ference in London as chairman of the Senator yield for a question? utes for the proponents. I ask the Chaireconomic section of the General Affairs Mr. ANDERSON.I yield. if that is not correct. Committee. Mr. KERR. Does the Senator realize The PRESIDING OFFICER. That is The Senator from Ohio [Mr. BRICKER], that the amount now in the fund wouldcorrect. The proponents have 2 minutesthe Senator from MarylanC [Mr. BUT- carry the present load only 3 years, andremaining and the opponents 1 minute.LER], the Senators from Indiana [Mr. that the average expectancy of partici- The question is on agreeing to theCAPEHART and Mr. JENNER], and the Sen- pants is 10 years? amendment offered by the Senator fromator from Maine[Mr. PAYNE] are Mr. ANDERSON. Yes.I say we mustTexas [Mr. YARB0R0uGH]. necesarily absent. have a reserve and must build the fund Mr. JOHNSON of Texas.Mr. Presi- The PRESIDING OFFICER. A quo- to a larger sum, as we have more anddent, I withdraw my request. The rea-rum is present. more cases. son for the request was that the attend- The question is on agreeing to the With reference to my State, I realizeance of Senators thus far has been veryamendment offered by the junior Sena- that the average increase in old age as-small.I thought it would be to thetor from Texas [Mr. YARBOROUGH]. Each sistance under the bill as reported by theadvantage of the Junior Senator fromside has 5 additional minutes, under the Senate committee would be approxi-Texas to have a live quorum call, inunanimousconsentagreement. The mately $12 a month for the people whoorder that more Senators might beSenator from California[Mr. KNOW- are receiving old-age assistance. present. LAND] has control of the opposition time, I do not want to lose that.I do not Mr. YARaOROUGH. Mr. President,and the Senator from Texas [Mr. YAW- want to jeopardize it.The ImpositionI withdraw my objection to the unani-BORouGH] has control of the time of the of additional burdens would be danger-mous consent requestof theseniorproponents. ous to the bill. Senator from Texas. Mr. YAROROUGH. Mr. President, When the questton was presented to Mr. JOHNSON of Texas.I shall beI yield myself 2½ minutes.Since we the Finance Committee, the inflationaryglad to reduce the additional time re-will vote within a few minutes on the 17970 CONGRESSIONAL RECORD —SENATE August 16 pending amendment, I should like brieflybill and is approved by the Senate com-sound. The fund is not only tq be used to state what the amendment would do.mittee. to pay present retireeè, but benefits and First, I ask unanimous consent that the Our amendment does not apply to theliabilitiesare accumulating for those junior Senator from Massachusetts [Mr.old-age pensions, as stated by the Sena-now paying.The present retirees are KENNEDY] may be added as a cosponsortor from New Mexico. The tax raised innot paying. They are getting their anof the amendment. - the bill would be sufficient to pay fornual benefits out of the trust fund, plus ThePRESIDING OFFICER. Withoutthe increases and, in addition, have allthe accumulations from the taxes paid objection, it is so ordered. that money I mentioned left over to beby the present workers, who are ac- Mr. YARBOROTJGH. The amend-added to what the Secretary of thecumulating benefits to be paid to them ment would increase the raise in social-Treasury has already said is a fund inin the future. security benefits voted by the House andactuarial balance.So, therefore,itis The Senator from New Mexico did not approved by the Senate committee froma fiscally and actuarially and financiallysay that the old-age assistance people 7 percent to 10 percent.The averagesound amendment. were going to be paid out of this fund. amount of social-security benefits paid ThePRESIDINGOFFICER. TheHe called attention to the fact that to a retiree in the United States today,time of the Senator from Texas has ex-under the pending bill additional bene- so far as retired workers are concerned,pired. fits go to those now receiving assistance is $64.50.For a widow who has retired Mr. KNOWLAND. Mr. President, Iunder the old-age assistance programs. from work, it is $51. The average across-yield myself one-half minute. I am sorryHe said that he did not want the bill the-board payment to all social-securitythat all the Members of the Senate wereto be loaded down in such a way as to covered retired workers is $54.40. not able to be present when the distin-be vetoed, because if it is vetoed it not The amendment voted by the Houseguished Senator from Oklahoma [Mr.only will be vetoed with reference to and approved by the Senate committeeKERR], who is handling the bill on thesocial security but also with reference to would increase the average by $3.71 afloor of the Senate, the distinguishedthose who are now on the assistance month.My amendment would bringSenator from New Mexico [Mr. ANDER-rolls. that up to $5.44 a month, an increase ofsON], and the Senator from Pennsylvania I too, would like to give them more. $1.73 a month. [Mr. MARTIN], and other Senators, gaveHowever I am not going to kid them. The money has been voted by thetheir reasons for opposing the amend-I am not going to vote for benefits un- House and has been approved by thement.I believe the amendment shouldder this program, which is paid for out Senate committee to pay for the in-be defeated.I yield the balance of myof taxes assessed against employees and creases.They have raised the social-se-time to the Senator from Oklahoma. employers, when the benefits are not curity taxes from 2¼ to 21/2 percent. Mr. KERR. Mr. President, I yield tocovered by a tax sufficient to pay at least They have voted enough taxes to pay forno man in the Senate in the desire tofor the additional benefits.I am not the 7-percent raise and also to pay forincrease the benefits for the baneficiariesgoing to go home and tell my people, the 10-percent raise, and, in addition,of the retirement fund. However, I will"I voted you a lot of money, but you to have some money left over. The neednot go through the empty motion of vot-are not going to get it, because it has isdesperate, as Senators know.Theing it to them on the basis of actuarialbeen vetoed."I will vote for what I can only argument worthy of note that Isoundness, when the experts in the De-actually deliver to them. have heard advanced against the amend-partment, who have been there for years ThePRESIDINGOFFICER. The ment, and the only possible reason thatunder both administrations, tell us it istime of the Senator has expired. The could be advanced, is that itis actu-not sound. Senator from Texas has a minute and arially unsound. The junior Senator from Texas tells usa half remaining. I would remind Senators who were notthat the increase in the taxes provided Mr. YARBOROTJGH. Mr. President, present during the debate that in thein the bill will pay for all the benefits,I yield 30 seconds to the Senator from 18th Annual Report of the Board ofplus providing additional money for theLouisiana. Trustees of the Federa' Old Age and Sur-fund. The actuarial experts of the De- Mr. LONG. Mr. President, my im- vivors Insurance and Disability Insur-partment tell us that the increase in thepression is that the bill was not asked ance Trust Funds, there is a very sig-taxes would lack 15/100 of 1 percent do-for by the administration. The admin- nificant statement.The report was is-ing that.Therefore if we increase theistration was satisfied with the actuarial sued by Mr. Robert B. Anderson, Secre-tax and give the benefits provided, plus taryof the Treasury, Mr. -JamesP. balance in the fund, because the in- Mitchell, Secretary of Labor, Mr. Marionwhat the Senator is asking for, insteadcrease in rates in 1960 will take care of B. Folsom, Secretary of Health, Educa-of reducing the unsoundtiess of the fundthe deficit. tion, and Welfare, and Mr. Charles Lor improving the soundness ofit, we I thought we were trying to pass a Schottland, Commissioner of Social Se-would add to the unsoundness of the bill.bill to provide for retired people, who curity. This is the Board which is swornI ask Senators this question.If we addhave suffered by the rising cost of liv- to protect the fund.I shall read fromto the tax in the bill in order to provideing.At page 17800 of the RECORD there that report.In the previous debate Iactuarial soundness and then give addi-is shown the difference in the fund un- read from it, but many Senators presenttional benefits, as we have, would we notder either of the two approaches. now were not in the Chamber when Ibe silly to give benefits beyond that, In any event, the fund will grow read it.I therefore should like to readwhich would prevent actuarial soundnessrapidly and tremendously under whichfrom the report of the Board headed bybeing attained and add to the deficit?ever approach is taken. The only ques- the Secretary of the Treasury, as the The money has not been provided totion is whether during the next 4 years trustee of the fund, as follows: pay for the benefits the Senator fromwe want to provide a little more assist- Although aggregate disbursements of theTexas is requesting.The evidence be-ance for the aged and needy persons. old-ageandsurvivorsinsurancetrustfore the committee was as follows: On ThePRESIDINGOFFICER. The fund over the period of the next severalthe basis of present law there is a forty—time of the Senator from Louisiana has years are estimated to exceed aggregate re-two one-hundredth of 1 percent deficit.expired. ceipts—a situation which, however, will beThis fund this year ran behind $730 mil- Mr. YARBOROTJGH. Mr. President, only temporary—there will be ample fundslion.If it is not changed next year, itmy study of the actuarial soundness of on hand to meet expenditures of the pro-will run behind $1,100,000,000 more. gram during this period. The trust fund is the fund is based upon an official report intended to serve as a contingency fund as There are 12 million people on thefiled March 1 by the Secretary of the well as a source of investment income torolls, now retired.Approximately $2Treasury, the Secretary of Labor, the supplement contribution receipts, and it isbillion is in the trust fund.It is enoughSecretaryof Health, Education, and to be expected therefore that the fund mayto pay the present retirees at presentWelfare, and the Chairman of the So- be drawn upon from time to time.Tem-rates for 3 years. They have an averagecial Security Board. The computation porary periods when the assets of the fundexpectancy of 10 years.On the basiswas based on reports.The reports were decline are not in themselves an indicationof the present income, there is a billion of financial weakness and do not change the not compiled in the heat of argument in fact that the program is for practical pur-dollars more going out than there is5 minutes of debate on the floor.They poses in actuarial balance. coming in.Can anyone say that that ishave been carefully made.As I stated asound position? earlier, I have a report from the Educa- Itisin actuarial balance, and the The proposal of the junior Senatortion and Public Welfare Division of the present tax rate israisedby the Housefrom Texas would make it more un-Library of Congress which I again ask 1958 CONGRESSIONALRECORD —SENATE 17971 unanimous cOnsent to have printed In10-percent increase in social-security benefits I,for one, believe that our ecoIomy Ia the REcolu). rather than the 7-percent increase containeddynamic enough, and strong enough, to sup- There bemg no objection, the reportIn the bill as passed by the House of Repre-port such an increase.,, And I am certainly entatives. convInced that we owe it to our older men andstatement were ordered to be'printed Senators willrecallthat last Monday,and women to make the same 10-percent in the RECORD, as follows: August 11, the Senate passed a 10-percentIncrease In their payments which We5 have AaST 14, 1958. Increase for the Foreign Service retirement.'provided for other retired people In legis- To: The Honorable RALPH YARBOROGH. sytern which had the support of the admin-lation pased durIng this Bession. From: Education and Public WellareDivi-Istration and the Bureau of the Budget. sion. Similar cost-of-living increases have been Mr. YAREOROUGH. Mr. Président, Subject: Supplementary information whichmade by Congress and signed by Presidentthe reports represent days of work. may be of use to you in supporting theEisenhower, for employees of the FederalThey show that there will be, if my cost aspect ofyour amendment to H. R.civilservice,postalworkers, and retiredamendment isnotadopted, a 32 percent 13549. members of the Armed Forces.Is it equi-surplus. M indicated In the statement prepared fortable, therefore, to be content with a pared- you, the ftmendment you Intend to Introducedown 7-percent Increase for the people o If my amendment shall" be adopted,. -there providinga10-percentbenefitincreasethis country who are suffering the most from will be a surplus. would add 0.25 percent of taxablepayrollrising prices—the men and women receivIng The PRESIDING OFFICER. 11 to the cost of the bifl as approved by thebenefits under our social-security system? time has expired on the amendment. House.H. -R. 13549, with your amendment, Let us recognize first of all that the average'The yeas and 'nays have been ordered, would still be overfinanced th the extent of and the clerk will call the roll. 0.07 percent of payroll 8Ince the House billbenefit for a retired worker is now only $64.50 .waa overfinanced to the, extent o 0.32 per-per month—a few pennies over $2 per day— 'The legislative clerk called the roll. cent o payroll, a pitifully small amount. We must not, Mr. MANSFIELD.I announce that moreover, delude ourselves with the happythe Senator from Delaware [Mr. FREAR], One objective o the House-passed bill wasthought that these meager social-security to reduce the actuarial deficiency of thebenefits are only a supplementation to Otherthe Senator from Florida [Mr. HOL- old-age and 8urvivorsinsurance(OASI)'retirement income.The facts are otherwise.LAND], and the Senator from 'Georgia trust fund which, according to the 'latestFor millions of Americans social security is [Mr. TALMADGE] 'are absent on official estimate of the Chief Actuary of the Socia' business. Security Administration, stands at 0.57 per-the only retirement Income they receive.In cent of payroll.The House bill, In its pres-recommendIng an Increase in benefits at this .1 further announce that if present and' ent form, would reduce it to 0.25 percent oftime the House of Representatives cited avoting, the Senator from Delaware [Mr.

study conducted last December by the De- ' payroll. The House committee report states: FREAR] would vote "nay." - "Your committee has not been able to rec-partment of Health, Education, and Welfare Onthis vote the Senator from Florida ommend benefits at as high a level aa, inwhich made it perfectly clear that, for most[Mr. HOLLAND] has a pair with the Sen- our opinion, would be justified If one con-people on the rolls, social-security benefitsator from Georgia [Mr. TALMADGE].If sidered solely the need for this protection.constitute their major source of Income.present and voting the Senator fro9i The increase of approxImately 7 percent pro-This study showed that, aside from their vided by the bill is actually somewhat shortsocial-security benefits, one Out of five re-Florida [Mr. HOLLAND], would vote "yea" of .the rise. In the cost of living that hastired couples, more than one In every fourand the 'Senator from Georgia [Mr. taken place since 1954. We believe, how-single retired workers, and more than one InTALMADGE] would vote "nay." ever, that itis essential that a significantevery tbree aged widows had no additional Mr. DIRKSN. I announce that the part of the additional contributions to themoney income or had less than $75 in addi-Senator from Vermont [Mr. FLANDERS] system that we are recommending be usedtional income during the year. 'Of the totalis absent because of illness in his family. to strengthen the financing of the systemnumber who had some additional money in- rather than to improve benefit, protection."come, one-fourth of couples aid aged widows The Senator from West Virginia [Mr. (H. Rept. 2288, 85th Cong., p. 2.) and one-third of the single retired workersHOBLITZELL] is absent because ofdeath We are enclosing herewith the 18th An-derived such income from temporary sourcesin his family. nual Report of the Trustees of the OASI' such as part-time earnings or by supple- The Senator from New York [Mr. Trust Fund which was recently released.,mentary payments from the "needs test"JAVITS] is absent by leave of the Senate This publication shows the present condi- , public-assistanceprograms. to attend the NATO parliamentary con- tion of the trust fund and includes long- Mr. President, we owe it to the 11 millionference in London as chairman of the range estimates up to the year 2050.j..older Americans who are now receiving so- though it states that there is a long-rangecial-security benefits to examine this mattereconomic section of the General Affairs deficiency in the OASI trust fund of 0.57carefully.I need not remind the MembersCommittee. percent of payroll, the conclusion of the re-of the Senate that each rise in living costs The Senatorfrom Ohio [Mr. port declares: clUps away at the purchasing power of theseBRICKER], the Senator from Maryland "Long-range cost 'estimates show that forolder men and women living on a fixed'[Mr. BUTLER], the' Senators from mdi- practical purposes the old-age and survivorsretirement income.No increase has beenana [Mr.' CAPEHART and Mr. JENNER], insurance program is in actuarial balancemade, in the amount of benefits they are re-and theSenator from Maine[Mr. according to the best available cost esti-ceiving since the 1954 amendments. DuringPAYNE] are necessarily absent. mates.This concept means that for thethis period wages have increased by 12 per- long-range future, the system will have suM-.cent and the cost of living has gone up 8 If present and voting, the Senator cient income from contributions based on percent. from Indiana [Mr. CAPEHART] would vote the tax schedule now in the law and from My amendment will add a cost of only"nay." interest earned on investments to meet all0.25 percent of payroll to H. R. 13549. The On this vote the Senator from New future payments for benefits and adminis-. House bill, with a 7-percent increase, is, over-.York [Mr. JAvITS]is paired with the trative expenses.Although aggregate dis-financed to the extent of 0.32 percent ofSenator from Ohio [Mr. BRICKER].If bursements of the old-age and survivors in- payroll.Even with the additional cost 'ofpresent and voting; the Senator from surance trust fund over the period of thethe 10-percent increase provided by myNew York would vote "yea," and the next several years are estimated to exceedamendment, thebillwillstillbe over-S aggregate receipts—a situation which, how-financed to the extent of 0.07 percent ofSenator from Ohio would vote "nay." ever, will be only temporary—there will be payroll. On this vote the Senator from Maine ample funds on hand to 'meet expenditures It is, of course, true that one of the pur-[Mr. PAYNE] is paired with the Senator of the program during, this period.Theposes of the House bill—that of eliminatingfrom West Virginia [Mr. HOBLITzEu]. trust fund is intended' to serve as a contin-a possible long-range actuarial deficiency inIf present and voting, the Senator from gency fund as well as a source of investmentthe old-age and survivors insurance system—Maine would vote "yea," and the Senator income to supplement contribution receipts,will be qualified to some degree. But I amfrom West Virginia would vote "nay." and it is to be expected, therefore, that thenot persuaded by the argument that we The result was announced—yeas 32, fund may be drawn upon from time to time.should penalize our older citizens now on Temporary periods when the assets of thethe basis of a guess that the trust fund maynays 53, as follows: fund decline are not in themselves an mdi-be running in the red in the year 2032. YEAS—32 cation of financial weakness and do notMoreover, the Advisory Council on SocialCarroll Johnson, Tex.Neuberger change the fact that the program is,forSecurity Financing established by the 1956 Case. N. J. Johnston, 8.0. Pastore practical purposes, in actuarial balance."amendments has not yet made its report.Chavez Kefauver Potter (H. Doc. 401, 85th Cong., p. 31—32.) Church ' Kennedy Proxmire FRDEIucK B. ARNEP.. When tiis report appears, at the end of the Clark 'Langer Revercomb year, congress will have ample opportunity Douglaa Long Smith, Ma1rs SOCIAL SEctrarrY AMENDMENTS OF 1958 o evaluating the total situation and canGore Magnuson Sparkman Mr. President, my amendment to the so-make its decision as to appropriate financ-Hennins Manafleld Symlngton Hill McNama , Wiley cial-security bill, H. R. 13549, has the simpleIng o the old-age and survivors insuranceHumphrey Morse Yarborough but very important purpose of providing aplan. Jack2on Murray 17972 cONGRESSIONAL RECOI — SENATE August 16 NAYS—53 Alken Eflender Monroney Allott Ervin Morton Anderson Fuibright Mundt Barrett Goldwater 0 Mahoney Beau Green• Purtell Bennett Hayden Robertson Bible HickenlooperRussell Bridges Hruska Saltonstall Bush Ives Schoeppel Byrd Jordan Smathers Carisoit Kerr Smith, N.J. Case, S. flak. Knowland Stennis Cooper Kuchel Thurmond Cotton Lausche Thye Curtis Malone Watkins flirksen Martin, Iowa Williams fiworahak Martin, Pa. Young Eastland McClellan NOT VOTING—li Thicker Frear Jenner Butler HoblitzeIi Payne Capehart Holland Talmadge Flanders Javits So Mr. YARBOROUGH'S amendment was rejected. Mr. ANDERSON. Mr. President,I move that the vote by which the amendment was rejected be reconsidered. Mr. KNOWLAND. Mr. President, I move that the motion to reconsider be laid on the table. The PRESIDING OFFICER.The question is on agreeing to the motion to lay on the table the motion to reconsider. The motion to lay on the table was agreed to. 1958 CONGRESSIONALRECORD— SENATE 17973

SOCIALSECURITYAMENDMENTS OF1958 TheSenateresumed the consideration' of the bill (H. R. 13549) to increase bene— fits under the Federalold-age, survivors, and disability insurance system. to improve the actuarial status of the trust funds of such system, and otherwise improve such system; to amend the publicassistance and maternal and child health and welfare provisions of the Social Security Act; and for other purposes. Mr. KUCREL. Mr. President, on behalf of myself, my senior colleague (Mr. KNowI.], and the junior Senator from Minnesota [Mr. HUMPHREY], I submit the amendments which I send to 'the desk, and ask to have stated. ThePRESIDINGOFFICER. The • amendments will be stated.

• The LEGISLATIVE CLERK. On page 92. In line 19, it is proposed to strike out "$65" and insert in lieu thereof "$70." On page 93, line 3, strike out "$35" and Insert In lieu thereof "$40." On page 96. line 23, strike Out "$65" and insert in lieu thereof "$70." On page 97, line 7, strike out "$35" and insert in lieu thereof "$40." On page 99, line 3, strike out "$65' and insert in lieu thereof "70." On page 99, line 13, strike out "$35". and insert In lieu thereof '$40." The PRESIDING OFFICER. Does the Senator from California desire to have the amendments considered en bloc? Mr. KUCHEL. Yes. The PRESIDING OFFICER. Without objection it is so ordered. Mr. KTJCHEL. Mr. President, after all the mumbo-jumbo of the Involved so- called variable formula written into the bill is cleared away, one shocking, mcred- ible fact comes to light; namely, the gross, indefensible, inequitable, and mis- erable mariner in which aged citizens In some States of the American Union are treated by the bill, in contrast to the manner Inwhichsimilarlysituated elderly Americans in other States are treated.Thus, if the Senate approves what the Senate committee has proposed under this new complicated fOr- niula, an aged person in 1 or 2 States of the Nation will receive from the Federal Government an increase of more than $10 a month, whereas an aged person in California will receive an Increase of only 77 cents a month. That IS the unfair, unjust, and unholy result which this bill would produce. 17974 CONGRESSIONAL RECORD —SENATE August. 16 Thus, Mr. Ptesident, it should be verycan approve the action of a cOmmittee Mr. KUCHEL. No.For old-age as- clearthatthe pending amendments,which has resulted in such a perfectlyslstance, the increase would be: $5.32. which relate to the provisions of the billincredible mistreatment of elderly Amer- Mr. POTTER. What effect would the which would result in unequal treatment,icans in one American State as againstamendments have? should be agreed to. treatment of citizens similarly qualified Mr. KUCHEL. They would have the Mr. President, I recognize that in thefor assistance in another State? effect of increasing that amount slightly. United States, some States are better Mr. POnER. Mr. President, will the I nol yield to the able, genial, friendly able to take care of their responsibilitiesSenator yield? Senator from Oklahoma, with the hope in public assistance and other State Mr. KUCHEL. No; not yet.I want tothat in his courtesy and recognition of problems than are other States. say one more thing, Mr. President. Minethe principle of equity, he will accept The State from which I come spends,is4he example of a liberal State whichthe amendments. today, more money on public assistancehas its growing fiscal problems. Mine is Mr KERR.. Mr. President, I waht to than do any other three States in thean example of an American State withthank my esteemed friend from Cali- Nation• combined.The people of Cali-fairly high State tax laws.The peoplefornia for his kind remarks, and say I fornia are proud of their accomplish-of my State are going to have to face upshare his sentiments of affection and ments through their State government.to increased costs of State government torespect. In 1956, Congress authorized an in-solve many of their problems. As I understand the Senator's amend- crease of $4 for each recipient of old- I indicated on the floor ot the Senatements, they would raise at the upper age aid, subject to what each Stateyesterday when the Senate approvedlimits the percentages to be paid by the legislature would provide.The. Cali-some California reclamation bills thatFederal Government to be used as funds fornia Legislature immediately there-the people of California will be requiredto be dispersed in certain States for old- after approved that increase, and gaveto pay $11 billion—I want to repeat that,age assistance.Is that the purpose of that increased benefit to the recipientsbecause I do not want to be misunder-the Senator's amendments? Qf old-age assistance in our State. stood, $11 billion—to provide for a State Mr. KUCHEL. That is generally true. Last year, the California Legislaturewater system in order to bring water toI would answer the Senator's question approved a general increase in the old-the people who live in California and whoin this way: Under the formula which he age and blind assistance and, in addi-are coming into our State at the rate ofand his committee worked out, the $70 tion, appropriated the moneys necessarysoo,coo a year. figure would replacethe$65, *hich to take advantage of the medical pro- So there is not involved here -a ques-would be the maximum which would ap- gram which the Congress had adoptedtionofsaying, "Oh, Californiaisaply under the Senator's formula. in 1956. wealthy State.Let us, here in the Sen- Mr. KERR. The Federal Government Under this State legislation, the peo-ate, leave it alone.Let us make an ad-then would pay its percentage up to $70. ple of California contributed $17 millionditional contribution of 77 cents to thatIs that correct? more to the public-assistance programSenator's State, because the people of In California, plus $13 million more for Mr. KUCHEL. Rather than $65. that State are wealth and they can Mr. KERR. medical care, the latter to be matchedabsorb the difference."That simply is Rather than the $65. by the Federal Government in an equalnot so.So I am glad to inquire into thisDoes the Senator know how much addi- amount.So the people of California tional Federal revenue that would re- highly technical field and to offer anquire? increased by $30 million a year theiramendment which, as I say, would pro- èxpenditures in this field of State gov-vide that in such a State as mine about Mr. KUCHEL. Forty million dollars. eminent.I have mentioned these facts,$3.66 a month would be given to the Mr. KERR.Is the Senator prepared In order to demonstrate what I believerecipient of aged aid, without lesseningto tell the Senate that if the amend- should be abundantly clear—namely,by a single penny or, indeed, adding toments are adopted the bill will be signed that the people of my State have beenthe $12.16 whichan elderly citizen in atby the President of the United States? generous with the aged, and the blind,least one American State would receive Mr. KUCHEL. I am not.Neither am and with those other of our fellow citi-under the terms of the bill as reportedI prepared to tell the Senate it would be zens who need assistance. by the committee, in the interest of having this bill signed Mr. President, should the Senate pe- I ask that the Senate approve theseto see a disparity which the able Senator, nalize an American State for being fairamendments. I know, will acknowledge exists in the and just?Should the Senate of the Mr. KERR. Mr. President, will thebill as it relates to the treatment which United States now approve the actionSenator yield? the elderly will receive under it. recommended by the Senate Finance Mr. KUCHEL.I first yield to my dis- Mr. KERR. Would the Senator want Committee—which has written into thetinguished friend from Michigan. his amendments to prevail if,in suc- pendingbillprovisionsfor• such an Mr. POTTER.I came into the Cham- ceeding to have it prevail, they would amazing disparity of treatment that anber while the distinguished Senator was mean a veto of the bill? elderly person in one State will have hisexplaining his amendments, and I did Mr. KUCHEL. Let me ask the Senator old-age assistance payments automati-not hear how the formula, under hisfrom Oklahoma first if he suggests that, cally increased by $10.29, whereas suchamendments,wouldwork.Canthethe adoption of the amendments now be- a person in another State will have hisSenator briefly explain the formula?fore the Senate will incite or guarantee payments increased by the munificentAs I understand, adoption of the amend-a veto. sum of 77 cents.But that is what thements will mean an increase in cost of Mr. KERR.I can only say this to bill, as reported to the Senate, would do,about $40 million in the program, him: That the bill as it came to the Fi- and the Senate ought to remedy the Mr. KUCHEL.It will not touch thenance Committee carried an upper limit situation by adopting our amendments.formula, but by raising the maximumof $66 for the aged, and $33 for depend- Mr. President, the amendments whichamount on which the formula would op-ent children. have been drafted and which are nowerate to $70—translated into plain lan- We were told by the distinguished Sec- before the Senate do not close that dis-guage which the Senator and I can un-retary of Health, Education, and Wel- parity completely, but they do providederstand—.it would mean. no one wouldfare, Mr. Fiemming, that if the Senate for lessening the tremendous differencesbe given less than the schedule whichadopted such a provision in the bill he of treatment which the bill before thethe distinguished Senator from Okla-would recommend and urge the veto of Senate now unhappily provides.Thus,homa has provided, but some of us come—the bill; —Iwas advised that the dis- in a State such as mine, about $3.50 morefrom States whose eligiblerecipientstinguished senior Senator from Califor— a month would come to the individualwould be given, as I say, about $3.66, in-nia, the following day, after a visit to who is qualified for old-age aid, understead of 77 cents as this present billthe White House, made a public state- the provisions of the pending amend-provides. ment concerning the President's atti- ments. Mr. POTTER.I believe, under thetude on the matter. Rather than to have The cost to the Federal Governmentschedule of what the States will receivethe statement in any ay other than as would be about $40 million a year. Thereunder the pending bill,the State ofthe Senator gave it, I would appreciate is no question about that.But I askMichigan will receive about $3.82 for eachit if the Senator will tell the Senate what Lenators whether in good conscience werecipient.Is that correct? his statement was in that regard. 1958 CONGRESSIONAL RECORD —SENATE. 17975. Mr.iOWLAND. So many thingsHealth, Education, and Welfare, wouldout to provide an equitable formula for have happened I do notwant to be heldrecommend a veto. I think that was thethe large and the small States, with re- word for word to the exact statement. Istatement. spect to those which in some respects are do not recall making the statement the Mr. KERR.. Again! want to thank my,economically better off, which, perhaps Senator has referredto.I recallagood friend the senior Senator fromhave problems some other States do not White House meeting at which the ad-California. It is not my purpose, in any.-have, and which perhaps have standards ministration indicated the old-age andthing I say or in the questions which!higher than some other States. survivors insurance provisions were gen-ask, to start a discussion of who might be It seems to me the amendment offered erally acceptable, in the form they hadright or who might be wrong. I am onlyby my junior colleague from California, been passed by the House and as theyappealing to Members of the Senate—who is joined by the Senator from Min- apparently were being considered In thewho are as interested as I am in securingnesota, would at least partially remedy Senate. additional benefits not only for thosethe gross inequity which—I am sure in- As to the second section, with whichunder the old-age and survivors' insur-advertently and not by design of the we are now dealing, on the public assist-ance program and the other categoriescommittee—appears to be in the bill as. ance phase of the matter, I believe theof social security but also those who arepresently written. President was concerned that we mightnow on the public assistance rolls—to Mr. KERR. .1 thank the distinguished reverse the process and get away fromprovide an additional benefit for thoseSenator for his comments.I recognize 50—50 contributions when payments werewho, in view of their great need, shouldthe disparity which he suggests exists

above the first $30, as to which the Fed-have it., ' In the bill.It implements what has, eral 'Oo'vernment makes a contribution Mr.KNOWLAND. 1 will say to thebeen referred to before, the committee of 80 percent.When considering theSenator, speaking now only in my capac-:as the variable formula. secoid category, the general adniinls-• ity as a Senator fromCalifornia and not Mr.' KUCHEL. DoestheSenator tration' view was that payments shouldas the minority leader, I do not believemean "variable matching?" be on a 50—SO basis, or that we shouldthat either the addition or the nonaddi- Mr. KERR.As I recall, the expres- work toward the O—5O basis. tion of the amendment would make thesion is "the variable grant formula." I do not recall any statement as tobill veto proof or nonveto proof. 1 would -Letme say to the distinguished Sena- 1dollar. amount having been mentionednot say the addition or the lack of addi-.tor from California that the formula byrne, nor do I recall the dollar amount,tion of the amendment would change thewas recommended to the' committee by -assuch, having been mentioned at thestatus. of the .biU. . the administration.I asked the Sec- White House.I be'ieve the', discussion Iwill 'say to the distinguished Sen-retary of 'Health, Education, and' Wel- was concerned with the percentage, andator from 'Oklahoma, 'Ithink therefare this question: 'If the Congress ig getting back, as a nunber of theshould be equity and fairness to the peo-.to provide additional funds for the as-, grants to the States, to the percentagepie of California and to the people ofsistance program does' the administra- approach, so that we would approach, inother States of the Union." When theretion favor increasing 'the amount under, the second category, the dollar-for-dollarIs such a wide disparity as exists, be-the formula now in use, or under the new basis on the matching by the States andtween an addition of 76 cents comparedformula, referred to as the variable the Federal' Government, except for theto'. an addition of $10-plus, it is a dis-grant formula?" lower amounts, as to which the Fedetalcrepancy which is pretty hard to' justify, I'vir. EtJCHEL The variable match- Government pays the larger proportion.and In due time I think tt will be detri-ing formula. ' - Mr. KERR.I thank the distinguishedmental to our whole program.I do not Mr.KERR. The variable matching Senior Senator from California.I ap-think a State which has carried veryformula. preciated the Senator's announcing hisheavy burdens upon its own taxpayers The Secretary replied, "We very defi- Impression of what had been the discus-in order to bring up the level of thenitely favor the new formula.". sion at the White House.I am not say-assistance should be penalized. Mr. KNOWLAND. Mr. President, will ing anything now iii criticism of it.Al- I know the Senator from Oklahomathe Senator yield? though I am not in agreement, I recog-is one of the leading exponents of fair Mr. KERR.I wifi yield in just a nize it as a fact and not a. theory. and equitable treatment for the elderlymoment. It has been my purpose both in thepeople of the country.I do not think it Mr. KUCHEL. Do I not have the Committee on Finance, and on the flooris helpful to penalize a State which hasfloor? to secure,Ifpossible, the passage ofdone a great deal and which, despite the Mr. KERR. I shall be glad to take legislation which the President, in hisformula which may be written into themy seat if that, is what the Senator wisdom, will see fit to sign, and not feelbill because 'of State size—even thoughdesires. compelled to veto. I gathered; from whatunder the formula it is assumed to be a Mr. KNOWLAND.' There is quite an I read in the newspapers, that the dis-State which Is better off than others—angular colloquy going on. tinguished-seniorSenator from Cali-has very heavy obligations in the field Mr. KERR. The distinguished Com- fornia had, indicated 'the Secretary ofof education, In the field of highway de-missioner of Social Security, Mr. Schott— Health, Education,arid Welfare hadvelopment, and, as my junior colleagueland, who, I believe, is from California, spoken the attitude of the administra-'pointed out, In the field ,of providingappeared before the committee.He is tion 'with reference to the public assist-water for a vast number of additionalin charge of the program.He was asked ance section of the bill. people, over 500,000 a year, who comeabout the formula in the bill, as con-, Mr, KNOWLAND. I think the state-into the State.' The State does havetrasted with ,the formula now in effect. ment to which the Senator refers was notbudgetary problems not unlike the prob-'He stated that the position of the ad- one made at the White House, but waslems of the Federal Government andministration and of ,the Association of one made subsequent to a policy commit-other States of the Union. State Directors, without exception, is tee meeting,' when I was asked by the Again speaking In my capacity as afavorable to the new formula, in pref- press as to whether I had knowledge ofSenator from California, it does seem toerence to the one now in use. what the President would do with respectbe a gross discrepancy and inequity to' The commissioner from the State of tO the bill.I 'told the representatives ofhave a wide range of 76 cents addi-New York, who is in charge of the as- the press that during the period of timetional payment for the beneficiaries insistance program in New York, under I. had been in the Senate, the Presidentone State and as high as $10 or more ad-which I believe the average payment Is had never made a final decision as toditional payment for beneficiaries in an-nearly as high as that in the State Of What lie would do on a bill until the billother State. California—and I shall address myself arrived before him in the form he would I do not believe the Senator was sug-to that great State in a moment—said have to consider it.I stated also thatgesting that there should be a change,that although the benefits under the bill the Secretary of, Health, Education, andbecause I do not think one can rewritewould be correspondingly small on a per Welfare had indicated that if the billformulas on the floor of the Senate.capita basis, it was felt that from the arrived with the old-age assistance in theFollOwing Congresses must give thatstandpoint' of the application ofprin- form as it was provided in the House ofmatter consideration.I hope in the na-ciple 'throughout the Nation, the new Representatives, he, 'the Secretary oftional interest something will be workedformula should be recommended. 17976 CONGRESSIONAL RECORD —SENATE August 16 I, know that the State of California Mr. KUCHEL.I am speaking for my-, Oklahoma or Massachusetts or Califor- has a great burden.It also has greatseJi.That is. the reason we are able tonia, but the treatment lie receives from capacity.I was examining the figuresdo what we have done.It should notthe Federal Government, under the bill, showing the amount of old-age assist-be a principle of lawmaking that StatesIs vastly different. ance, received in California, New York,:which find it possible to deal at all gen- Mr. COOPER. Mr. President, will the and Pennsylvania.The great State oferously with some of these problemsSenator yield? Californiareceivesalmosttwiceasshould be penalized by action of the Mr. KUCHEL. Anyone who uses that much as New York and' PennsylvaniaCongress.I know that my able friendkind of yardstick may be able to justify combined. agrees with me. that kind of action.It is beyond my ca- Mr. KUCHF.L. Why is that? Mr. KERR.I would not be a partypacity to understand it.So far as I am Mr. KERR. Because the State has ato penalizing any State, especially theconcerned, there ought not to be any tremendous capacity. 'Itdraws younggreat State so well represented in theproblem as to whether this type of people from across the Nation—includ-Senate by the two distinguished Senatorsamendment should be adopted.I yield Ing'Oklahoma. from California. to the Senator from Kentucky. Mr. KTJCHEL.Should California be I thank the Senator for allowing me Mr. COOPER. So that the Senator's denounced, for that reason? - to participate in this colloquy with hum Mr.KERR. Oh, .no.I am for jt. and to share his time, proposal may be clear, will he take the Mr. ,KUCHEL. .Should that capacity The Finance Committee made twocases he has cited and add the Federal be used as a basis for beating us dowa?,reductions in the amount of money re-amounts for the various States to the Mr. KERR. No.Last year the Gov-quired under the assistance program. amounts a blind person receives in the ernment sent the State 'of Californiareduced the figure of $66 as a maximumvarious States? $127 million in connection with the as-for the aged and the $33 for dependent Mr. KUCHEL. The only thing I say is sistance program.California is a greatchildren to $65 and $30, respectively.Itthat a State which treats its blind people State.It Is on the way to becomingpostponed, the effective date of the addi-liberally, ought not to be penalized. the first in terms of population and pertional assistance grants 'from October 1 Mr. COOPER. Can the Senator give

capita Income. Some of the finest peo-of this year to January 1, 1959. ' thefigures he used? ple from Oklahoma have gone out there. Amendments will be offered on the Mr. KUCHEL. The State of Califor.- California siphons off our young peo-floor of the Senate to reduce the $65 innia give&$105 a month to a blind person. ple. the bill and to bring about another re- Mr. COOPER. .me point. I make is Th? Senator speaks about education;ductionin order to bring the amount forthis.The Senator's statement might We educate the young people in Okla-additional assistance below $200 million,give the impression, that the increases homa, and California lures them to thatin th hope that by so doing we may ob-stand alone. To give the full picture the tam State. When I was Governor of Okla- a signature by the President to this ' amountswould have to be added to the homa the war was In progress, and ra-bill, rather than what we feel may be aamount the blind persons receive in the tioning was in effect.It was difficultcertain veto of it if we keep the presentvarious States.' to obtain tires and gasoline. amount of assistance in it.On the basis ' Mr.KUCHEL.I have anawered with I made periodic trips to California.of what I have been able to learn andrespect to. my State. The great tovernor of that State atthe indications I have seen—and if there Mr. COOPER. The Senator has given that time, now Chief Justice, was veryare contrary .inctications, certainly the-three exanwles. Would he mind adding courteous to me. , Onone of my visitsdistinguished Senator from California he said to me, "You come out here quite[Mr. KN0wLAND] is in as good a posi-the amounts to the amounts a person often, do. you not?"it said, "Yes, I do."tion to learn of them as is anyone else— now receivesin those three States? He said, "You must like our State."Ithe additional amount would -notbe Mr. KUCHEL.I cannot do that, be- said, "Yes, but I come here because of aacceptable.If the additional amountcause it is an involved and new formula campaign pledge which I made. Whenwould be acceptable, I should like towhich Is used.I cannot answer that I was elected (jovernor of Oklahoma I.know it.But, failing that, I do not be-question.It may be that the Senator said twould stay with them for 4 years;lieve the Senator should press an amend-from Oklahoma can refer the questions and with as many ,Ok]lahomans as therement which, in my judgment—-and Ito one of the members of the staff of the are out here, how could I keep thatbelieve in the judgment of the commit-Department of Health, Education, and' pledgewithoutcomingouthere?"tee—would add to the probability of aWelfare, and get that answer for us.It [Laughter. I veto of the bill. may be true, and probably is, that in a So we congratulate the State of Cali- Mr.KUCHEL. I thank my friendState in which the additional payment fornia. We envy it.I know that thefrom Oklahoma. of $17 would be made to a blind person; source of the greatest pride in the hearts The amendment we have offered oper-that blind person may still be receiving of the Senators froth California is theates also Orf the programs 'for the- blind. -less'than a -blind person -receives in the tremendous surge of development andI think every Member of the Senate 'State of California. progress that has been achieved outshares the compassion I feel for one who Mr. KUCHEL. The amendment we there. . Weonly wish we could emulatecannot see.There is no-need to dwell onhave offered does not destroy the addl- the example ofCalifornia, from thethat.So we can be glad that under thetional $17 the blind person will receive standpoint of productivity, wealth, andpovisions of the bill before us, 1 Statein one of our States.However, it does ability. -- in the Union will receive $17 for eachincrease from' zero to a modest amount Mr.KUCHEL. Let me tell the Sen- atOr hew we accomplish that, in part.blind person receiving assistance. what a person would get if he lived in We have high State taxes, and it is gen- Others will receive $12 additional perCalifornia. erally conceded that taxes in Californiacapita; others, $10 additional per capita. Mr. COOPER. I appreciate the Sena- must be increased next year to keep ourWe ought to be glad, and we ought totor's argument.I understand what he government solvent, to keep our schoolssay that this is fine and that we recognizeis trying to do. •However, it may be help- open, and to provide the services ourthe very great dimculties of one who Isful to Senators to understand that the State laws require.The reason we haveblind. 'However, let us suppose that thepUrpose of the variable amounts is to been able to be just and fair and decentblind person lives in California: If hemake it possible for States to give a rea- • with those In need Is that we have takenlives in California ,under the bill beforesénable level of assistance to blind peo- a notch in our belts to enable us to helpus, we do not give him a penny, morepIe, to aged people who receive old-age

• our fellow citizens. from the Federal dovernnient. Supposeassistance, and to mothers having de- Mr. KERR. In whose belts? he lives in the State so ably representedpendent children. Mr. KUçHL. The belts of the peo-in part by my able friend from Massa- Mr. KUCHEL. I should like to ask my ple of California. chusetts. TheFederalGovernmentfriend from Massachusetts if he knows Mr. KERR. Is ,the Senator speak-would give him 70 cents from the Federalwhat a blind person in Massachusetts ing for himself or for his colleague?Treasury. The problems of a blind citi-receives. We can then add that amount [Laughter.] zen are no different whether. he. lives into the 70 cents, which this bill provides .1958 CONGRESSIONALRECORD—SENATE 17977 he shall receive additionally in Massa-phy behind thebill. It matters notgetadditional assistance from the Fed- chusetts arid find out what he would getwhether itis the position of the De-.eral Government, under the bill. partment of Health, Education, and Wel- Mr. KTYCHEL.I thank the Senator Mr. KENNEDY. I do not have thefare, or of the Committee on Finance.from Colorado 2or his excellent contribu- figures.However,Ibelieve that theI do not care who promulgated thattion to this discussion: thesis the Senator is developing is ex-formula.I cannot go along with that Mr. POTTER. Mr. President, will the tremely important. The bill in its pres-kind of thinking.Is it not correct toSenator. yield? ent form gives no incentive to the Statessay that under the bill the Senator's Mr. KUCHEL. I yield. which attempt to make an effort onState would get a monthly increase of Mr. POTTER. Th it not true that under their own and enforce a high tax level76 cents? the old formula of a 50 to 50 matching in order to pay these benefits.I would Mr. KUCREL. Seventy-seven cents.basis, all States were treated equitably, say that in a State like Massachusetts, Mr. ALLOTT. The report states 76according to the State's ability to fi- under the bill passed by the House,cents. nance its own program or its desire to. there would be provided $2.61 per recipi- Mr. KNOWLAND. That is a corn-finance its part in the program? ent. As reported by the Senate Financebination of all. Under the formula in the bill, some of Committee, that amount would be re- Mr. ALLOn. A combination of all?the States will receive a matching Fed- ducedto$1.81perrecipient. The Mr. KNOWLAND. Yes. eral contribution of 70 percent, while amendment of the Senator from Cali- Mr. ALLOTT. My own State, whichothers will receive a smaller athount, fornia would increase it to $4.61 per re-already taxes itself heavily, would getwhich will actually put a penalty on the cipient.It seems to me that the Fed-$2.72.Then I notice the amounts forStates which have tried to meet their eral Government, particularly with theother States.They range through $4,obligations, and give an advantage to emphasis which is placed today on States $7.9J3,$9.10, $10.29, $7.72, $7.85, $9,43, playing a larger part in meeting their$10.26, $8.65, and so on. the States which have not done so. responsibilities,oughttoenterinto Is it not correct to say that there is I know the Senator from California is a partnership arrangement with theno assurance that the increased tax willvery familiar with the problems con- States, and help them in that effort, in-raise the amount of the benefit that willfronting a State government and a State stead of, in effect, encouraging Statesbe paid?In other words, to some ex-legislature.I can well understand the to lessentheir own effort and rewardingtent the increase in Federal contributionreaction of a legislature in California or those States who for one reason or an-may be used by the States as a replace-ColoradO or Michigan, or other States other are reluctant to play their full role.ment of the State share, so that thewhich have been completely meeting the The Senator's point is extremely fin-amount received by the recipient needpressures, to build up their own State pbrtant. not be increased, necessarily, because aobligations in this field, to finding that Mr. KUCHEL.I thank the Senator.State may lower its own contribution.their very efforts have resulted in penal- He is completely right in his commentsCan the Senator answer that question?izing the States, rather than being an with respect to the question of whether Mr. KUCHEL.I certainly believe thatasset. . it should be the gocd faith policy of thea State may change its own laws with Iam fearful that In the future of the Government of the United States torespect to participation. in any of theseprogram, this formula could very well penalize those States which try them-formulas. In -additionto that,itisdestroy the worthwhile relationship of selves to do a better job in this field. true thit what we do here, as the Sen..the Federal Government to the States Mr. ALLOTT. Mr. President, will theator has so aptly put it, will go a longin meeting the needs of the aged, the de- tay to determine Just exactly the ac— • pendent children, and the blind. Senator yield? If I were a member of the California Mr. KUCHEL.I yield. . tionwhich States will take. Mr. ALL1OTT.As the distinguished Mr. ALLOTT.Is it not correct to sayLegislature, the next time an authori- Senator from California knows, my ownthat the States shown on page 41 ofzation bill for an increase in funds for State of Colorado is one of the leadingthe report, which receive the highestold-age assistance came before me, I States from thestandpointofthecontribution under the new formula, are,would ask, "Why should the State—oi amount of pension paid toitsagedoverall, the States which make the leastCalifornia tax itself more, when it can people: We tax ourselves heavily ineffort to take care of their aged peo-sit back and let the Federal Government order to provide for our aged people.Itple? contribute a greater percentage of the' is the philosophy of our people in Cob- Mr. KUCHEL. I cannot honestly an-program,asit'has doneforother rado that it is our duty to do so, in orderswer that question.I do not know. Cer-States?"I think it is very unfortunate to take care of our own people in thistainly a State so ably represented in partto get away from the principle of equality way. by my friend from Colorado, which hasof treatment for the individual States., I am referring to the report on thebeen in the vanguard in facing up to the 1 know it can be argued, on a national bill.I do not have the figures available,problem, would, as these statistics ofbasis, that the aged in certain States do but apparently they have come to themine demonstrate, be penalized for thenot receive as much money under this Senator's attention.As I understand,zeal which the Senator's State has shownprogram as do the aged in California, the matching 50—50 fund has now beenin this field.I may say that the figuresColorado, Michigan, and some of' the changed to 50 percent in some cases andI am using are the official figures of theother States.But, after all, the States' 70percentin othercases.Is thatDepartment of Health, Education, andhave responsibility in this matter, too. correct? Wélf are. Mr. KUCHEL. Of course, they do. Mr. KUCHEL. Thatis my under- Mr. ALLOTr.I should like to make Mr. POnER. If the States do not standing of the application of the so-one other statement with respect to thewish to accept that responsibility, the called variable formula. remarks of the Senator from Oklahoma.alternative is to make the program com- Mr. ALLOTT. In other words, the bill He quoted the rather large amountpletely a Federal program.But I feel takes those States which are above aver-which the State of California receives bycertain that none of us wants such a age income and divides the list of Statesway of assistance.That is true.It isprogram at this time. and Territories in half, and to thoselarge. But I think it is well to state for I commend the Senator from Cali- which are in the upper half the Fed-the record that the amounts he quotedfornia for raising this important issue eral Government will contribute only toare not based upon a per-capita basis,now.I am convinced that unless the the extent of 50 percent, and to thoseand that actually California, like Cob-formula is changed, irreparable damage which are in the lower half the Fed-rado, is not in any peculiar or favorablewill be done to a program which has eral Government will contribute up to 70position now, whereas the formula in thegreat merit. percent.Is that correct? bill certainly puts them at a disadvan- Mr. KUCHEL. I thank the Senator Mr. KUCHEL. That is my generaltage.In other words, the States whichfrom Michigan for his constructive and understanding of the formula, have struggled to help their aged arelogical -comments.Irespect him as Mr. ALLOTT.I cannot agree withplaced at a greater disadvantage and aredoes every Senator, and I salute his ef- that philosophy of Government in anyasked to pay more, while the Statesfective leadership in the problems of so- respect. I do not agree with the philoso-which have not struggled so hard willcial legislation. 17978 CONGRESSIONAL RECORD —SENATE August 16 Mr. ALLOTT. Mr. President, will the Under the bill, Minnesota will receive Mr. JOHNSON of Texas.I want to Senator yield for I more minute? $44.88. Also, 23.4 percent of Minnesota'sregister a strong objection to the state- Mr. KUCHEL. I yie]ld. recipients receive also OASI benefits. ment the Senator just made. Mr. ALLOTT. With respect to the In California, 42.9 percent of the re- Mr. KERR.I appreciate the state- remarks I made a few minutes ago, Icipientsalsoreceive OASI benefits.ment of my friend from Texas, but I want point out that as to Colorado the amountThat is not the highest percentage Into say to him that in his absence the of variance is very snia]II anyway. With-the Nation.Nevada happens to be theSenators from California and I got in in the last day, I have talked with theleading State in that respect. a very cozy attitude toward each other State director of Colorado and also with It is interesting to see how this pro-on the floor of the Senate.[Laughter.] the welfare director of the city andgram works out.In Nevada, 45.6 per- Mr. JOHNSON of Texas. Now that I county of Denver, which isourlargestcent of the recipients also get OASIam back I hope the Senator will modify city. benefits. his statement and include Texas along Colorado has established its plan pri- Mr. What impresses me in thewith Oklahoma and California. marily by its constitutional amendmentsamendment offered by the Senator from Mr. KERR. We will not exclude Cali- with supplemental 'laws.According toCalifornia, is tIe endeavor to equalizefornia. We will make 'this big enough how the respective States have passedthe amount which a recipient in each offor the three of us. their laws, all States will not follow thethe States will receive from the Federal I appreciate having the opportunity program alike.But, the bill before usGovernment. to make this matter clear.As I said will not and cannot mean an additional When I examined the record—I hada while ago. I would love to help Cali- dollar of old-age assistance to any per-asked for the information from the com-fornia nearly as much as I would love son n Colorado.Under our plan adth-mittee staff—I found that some Statesto help Oklahoma.If such were the tional money will go into the welfarereceive as little as $36, $38, $24, andlaw, Mr. President, before too long 'Ok- fund but benefits are limited so that any$38.70, as compared with those whichlahoma would become a beneficiary of it. increase will spill over into the generalwere receiving almost $100. But not even California can become the fund.Under our law as it is written, it The amendment proposes equalizingbeneficiary of a vetoed bill. cannot mean any additional assistancethe amount of Federal contribution paid I am looking at men on this floor who or any increase to any, person in Cob-to each of the recipients In the differenthelped pass 3 rivers and harbors bills rado. States. The national average was $66.55,before we finally had 1 bill signed. While So the people of Colorado will hearaccording to the information I obtainedthe part which Oklahoma got from the about a bill passed by Congress to raisefrom the staff.I believe I am correct msigned bill was about 30 percent of what the amount of their benefits, and theythat statement; am I not? It would have received had either of the will ask their Senator$, "Where is our Mr. CAELSON.That is correct.Iother bills been signed, I want to say share?" But under Colorado law,- theyhave raised the point simply to expresswhat Oklahoma got from the signed bifl will not get a cent of increase under thesympathy with the Senator from Cali-was a lot more substantial than what bill when it is passed.The net effectfornia.I should like to help in any wayOklahoma got from the vetoed bills. 'will only be for Coloradans to send anI can, but I am not certarn, as has beenThat is all I can say to my friend from additional amount to Washington andstated by the Senator from California.California. have a portion returned for the generalthat this is the amendment which should Mr. KUCHEL. Mr. President—. fund. be adopted to remedy that situation.I The PRESIDING OFFICER. Does Mr. KUCHEL.I thank the Senatordo not believe we can add $40 million—the Senator from Oklahoma yield? from Colorado, who has demonstratedI take the Senator's figures for that—to Mr. KERR.I will say sonething to a great understanding of the involvedthe bill. the rest of the Senators. problems in this important field. Mr. KUCHEL.I thank the Senator Mr. KUCHEL. Mr. President, will the Mr. CARLSON.Mr. President, willfrom liansas. Senator yield to me? the Senator yield? Mr. President, that is about all I can Mr. KERR. I yield. Mr. KUCHEL. I yield. do. I believe the incredible inequity Mr. KUCHEL. I want to very respect- Mr. CARLSON.First, I have somewhich exists in the committee bill is 100fully ask my able colleague, who has sympathy for the position which thepercent indefensible.I believe the adop-not been known as an ardent supporter Senator from California is in.I raisedton by the Senate of the amendment nowof this administration, when he sug- this question in committee. before us will at least to some degreegests with such finality that adoption If the Senator from California willameliorate a very bad situation. of my amendment would result in the look at the table on page 41 of the The PRESIDING OFFICER. Theveto of the bill,isit possible he has report, he will see that Mississippi is inquestion is on agreeing to the amend-some secretpipelineintothe inner even worse condition than is California.ment of the Senator from California. circles of the executive branch which Mr. KUCHEL. Yes, I see that. Mr. ANDERSON.I suggest the ab-he has not disclosed to his brothers in Mr. CARLSON. I remind the Senatorsence of a quorum. the Senate? that when we attempt to alter these for- The PRESIDING OFFICER. The Mr. KERR. I cannot tell whether the mulas, we get into difftcuity.itt pres-clerk will call the roll. Senator is talking from envy or fear. ent, California is not the leading State [Laughter.] But I am willing to answer in the amount of money which is paid to The legislative clerk proceeded to callthe question. recipients under old-age assistance. Thethe roll. Mr. KUCHEL.I am speaking from first State in that respect is Connecti- Mr. JOHNSON of Texas.Mr. Presi-envy. cut, which pays $107.32.The seconddent, I ask unanimous consent that the Mr. KERR.I do not have any pipe- State is Massachusetts, with $97.85. Theorder for the quorum caIR be rescinded.line except through the distinguished third State is New York, with $93.89. The PRESIDING OFFICER. WithoutSenator from California. Colorado is fourth, with $92.30.Cali-objection, itis so ordered. Mr. KUCHEL.Then how can the fornia is fifth, with $84.02. That is un- Mr. KERR. Mr. President,Isin-able Senator from Oklahoma inform his cler the present schedule of payments. cerely hope the Senate will not agreebrethren that the amendment will kill But under the system under which weto the amendment of the Senator fromthe bill if the Senate agrees to it? are operating, California has receivedCalifornia.In the first place, in my Mr. KERR..1 did not so inform them. tle highest Federal contribution of anyjudgment, it would insure—if action of Mr. KUCHEL.I gathered the Sena- State in the Union—$40.73. this Senate could do so—the veto of thetor did. Mr. THYE.Mr. President, will thebill. Mr. KERR. I express the opinion that Senator from Kansas permit me to ask Next to Oklahoma, there is no Statethe amendment would in my judgment the amount of the payments being madeI would rather help than California.Iincrease the probability of a veto. in Minnesota? want to say the amendment would help Since the Senator has asked, I am Mr.CARLSON. MinnesotapaysOklahoma. glad to tell' the Senator why I believe $79.54, and receives at present from the Mr. JOHNSON of Texas.Mr. Presi-so. The bill before the Committee on Federal Treasury $36.67 for every re-dent, will the Senator yieRd? Finance provided an assistance program cipient. Mr. KERR.I yield. which would cost an additional $288 1958 CONGRESSIONAL RECORD —SENATE 17979 millionper year. TheSecretaryof The reason the administration itself '(b) Section 202 (a)(3)or such act Is formulas,itamended by striking out 'the age of 65' and Health; Education, and Welfare saidsaid,as between the 2 inserting in lieu thereof 4retirement age? that he wanted the provision strickenwould recommend the one in the bill, is '(c) The last sentence of section 202 (a) of from the bill.The Secretary recom-that the average payment to the blindsuch act is amended by striking out 'Except mended it be stricken from thebifi.person In California is now $104.85. Theas provided in subsection (q), such' and in- There was a motion made In the Financeaverage payment to the blind person inBerting in lieu thereof 'Such.' Committee to strike the assistance pro-Oklahoma is now $84.58.The average '(d) Section 202 (b)(2)or such act is vision from the bill.The motion failedpayment to the blind person in some ofamended by Btriking out 4Except as provided in subsection. (q), such' and inserting in lien by 1 vote to carry. he States, as of now, is about $40 perthereof Such.' The Secretary of Health, Education,month. In some States the payment Is "(e) Section 202 (3) of such act is amended and Welfare said that his reason forbelow $40 per month. by striking out paragraph (3). wanting the provision stricken was that With reference to the blind person "(f) Section 202 (k)(3) of such act (as If the bill were passed with the assist-who is already receiving $104.85, thatamended by section 205 (h) of this act) Is ance provision in it he would recom-amount plus 75 cents would leave himamended by striking out 'any reduction un- mend the entire bill be vetoed, and hein 6.considerablybetter position than theder subsection (q)arid' and '(after reduc- did not want to recommend the vetoblind person who is now receiving $37tion under subsection (q)).' '(g)Section 202 (m)of such act(as of the old-age and survivors' insuranceper month, who might get an additionalamended by section 101 (e) of this act)is provisions. $7 per month, would have. amended by striking out and subsection I submit to the distinguished Sena- That is the reason why the Secretary(q)' each place it appears. tor that if a bill which carries $288of Health, Education, and Welfare said "(h) Subsections (q), (r), and (s) of sec- million for additional assistancewillthat if the administration were to accepttion 202 of such act are repealed; and sub- Invite a veto and bring about the cer-an additional amount of expenditure forsections(t)and (u)of such section are tainty of a recommendation of a veto byassistance, it would prefer that it be un-redesignated as subsections (q) and (r), re- the Secretary of Health, Education, and spectively. der the formula in the bill, rather than 44(i)Section .203 (b)(3)of such act is Welfare, does the Senator not conceivethe formula now in effect. amended to read as follows: of the possibility that the addition of ThePRESIDINGOFflCER. The "4(3) in which such individual, if a wife another $40 million to $50 million wouldquestion is on agreeing to the amend-under zetirement age entitled to a wife's in- Increase the probability of a veto? ments en bloc offered by the Senatorsurance benefit, did not have in her care Mr. KUCHEL. The Senator assumesfrom California (Mr. KUCHEL]. (Putting (individually or jointly with her husband) a there is a probability of a veto.I wantthe question.) child of her husband entitled to a child's in- to say to the Senator that I would not Mr. KUCHEL. Mr. President, I asksurance benefit; or'. have been successful with the authori- "(j) Section 216 (i)(2) of such act (as for a diyision. amendedbysec. 201ofthisact)is zation of some of the public works proj - On a division, the amendments wereamended by striking out the age of 65' each ectsIn California if it had not been forrejected. place it appears and inserting in lieu thereof the assistance the Senator from Okla- Mr. KUCHEL.I suggest the absenceretirement age'. homa gave me.We stood together. "(k) Section 233 (a)(1) (B) of such act Were we daunted by the threat of aof a quorum. Is amended by striking out the age of 65' veto? ThePRESIDINGOFFICER. Theand inserting in lieu thereof retirement age Mr. KERR. We were not daunted.clerk will call the roll. (defined in sec. 216 (a))'. Neither did we ever get more than 10 The legislative clerk proceeded to call "(1) Section 223(a)(1)of such act is the roll. amended by striking out 'he attains the age feet from where they told us not to go. of 65' and inserting in lieu thereof 'he at- [Laughter.] Mr. KERR. Mr. President, a parlia-tains retirement age'. I say to the Senator we are alreadymentary inquiry. (m) (1) The amendment made by sub- further out into space than our Govern- ThePRESIDINGOFflCER. Thesection (a) of this section shall apply only in ment has ever been able to put a satel-suggestion of the absence of a quorumthe case of lump-sum death payments under lite, with respect to the bill as it is writ-will have to be withdrawn in order tosection 202 (i)of the Social Security Act permit a parliamentary inquiry. with respect to deaths occurring after 1958, ten.Now the Senator is inviting the and in the case of monthly benefits under Senate to go off yonder into the realm. Mr. KUCHEL. Mr. President, I with-title II of such act for months after Decem- If we did so, the Defense Departmentdraw the suggestion of the absence of aber 1958. would not have to try to shoot a rocketquorum, arid ask for the yeas and nays. (2) For purposes of section 215 (b)(3) around the moon.All the Defense De- Mr. KERR. Mr. President, a point of(B) of the Social Security Act (but subject partment would have to do is wait untilorder. to par. (1) of this subsection)—.— we got back, and we could give them a ThePRESIDINGOFflCER. The "(A) a man who attains the age of 62 report on it. Chair informs the Senator that the re-prior to 1959 and who was not eligible for old-age insurance benefits under section 202 I hope the amendment will not besult of the vote had been announced. Itof such act (as in effect prior to the enact- agreed to. is not in order to request the yeas andment of this section) for any month prior Mr. KUCHEL. Mr. President, I shallnays when the result of a division hasto January 1959 shall be deemed to have at- take but a moment. already been announced. tained the age of 62 in 1958 or, if earlier, the I do not see how Senators can justify Mr. KUCHEL.I did not hear the an-year in which he died; voting for a bill which will give a blindnouncement; otherwise I would not have "(B) a man shall not, by reason of the person $17 more a month if he lives insuggested the absence of a quorum. amendment made by subsection (a) of this Oklahoma, but will give him only 70 The PRESIDING OFflCER. Theresection, be deemed to be a fully insured in- cents more a month if he lives in Mas- dividual before January 1959 or the thonth was coniderable confusion in the Cham-in which he died, whichever month is the sachusetts, and, if he happens to haveber. his domicile in California, will give him earlier; and Mr. REVERCOMB. Mr. President, I ' theamendment made by subsection nothing.I do not see how Senatorsoffer the amendments which I send to (a)of this section shall not be applicable can approve such an elastic yardstick.the desk and asked to have stated. in the case of any man who was eligible for I do not see how we can approve a bill old-age insurance benefits under such sec- giving a person who is receiving old-age The PRESIDINGOFFICER.Thetion 202 for any month prior to January assistance in the State of Oklahoma $12amendments offered by the Senator from 1959. a month more, but the person whoWest Virginia will be stated. A man shall, for purposes of this paragraph, lives in California only 77 cents more The LEGISLATIVE CLERK. On page 74,be deemed eligible for old-age insurance per month.That is the way the f or-between lines 7 and 8, it is proposed tobenefits under section 202 of the Social Secu- mula in the bill goes, up and down.insert the following new section: rity Act for any month if he was or would It simply does not seem to me proper. FULL RETIREMENT BENEFITS FOR MEN AND have been, upon filing application therefor We should not abuse States in this WOMEN AT AGE 62 In such month, entitled to such benefits for SEC. 316. (a) Section 216 (a) of the Socialsuch month. Union which have tried to be, and have (3)For purposes of section 209(1)of succeeded in being, a bit more fair andSecurity Act is amended to read as follows:the Social Security Act, the amendment just with their fellow citizens In need. 'RETfltEMENT AGE made by subsection (a) or this section shall Mr. KERR. Mr. President, I wish to "(a) The term 'retirement age' means ageapply only with respect to remuneration answer the Senator's one question. 62. paid after December 1958. 17980 CONGRESSIONAL RECORD —SENATE August 16 "(n)The amendments made by subsec-tary retirement at earlier ages or of com-the first step so taken since the social tons (b) through (1) of this section shallpulsory retirement or of any flexible retire-security plan was enacted. take effect January 1, 1959, and shaU be ap-ment program in relation to the disability plicable with respect to monthly benefttsof an individual. This, to my mind, is very vivid evi- under title II of the Social Security Act for dence of the fact that the retirement months after December 1958." Why, in the face of such evidence, wehabits of the American people are not On page 29, begInning with line 1, it iscontinued for almost 20 years to refusegoverned by the age specified in the proposed to strike out all through line 3,to make any change in the age 65 fig-Social Security Act, but rather by their page 27. ure, while we changed practically everyindividualcircumstances.Foritis On page 91, between lines 9 and 10, insertother feature of the system, is a ques—rather evident, I think, that no one n the following new section: t4on I have often asked myself.It wasgood health and gainfully employed is "STAND-BY PAY challenged in1948, when I sought togoing to rush into retirement to receive "SEc. 407. (a) Section 3121 (a)(9) of thehave the Senate reduce the retirementthe sum of $76 per month—the average Internal Revenue Code of 1954 Is amended toage from 65 to 60, but that proposalsocial-security benefit today. read as follows: was not accepted atthe time. My The facts of the matter, then, whether '(9) any payment (other than vacationpresent proposal, to reduce retjrementwe like them or not, are that many or sick pay) made to an employee after theage to 62, is a more modest one.I offerAmerican workers are forcibly retired month in which he attains the age of 62,it, however, because I believe that some if he did not work for the employer in the prior to age 65 either because of poor period for which such payment is made; or'.progress in this area must be made im-health or because they have been laid off. "(b) The amendment made by subsectionmediately. It is time that we recognize this fact in (a) shall be effective with respect to remu- 1 believe, Mr. President, that the an-our social security plan by lowering the neration paid after 1958." swer to our rigidity in this matter lieseligibility age to at least age 62 for both with• the persistence of another myth— Mr. President, men and women. Mr. REVERCOMB. the myth that if we lower the retire- Let me dwell for a moment on some- the purpose of these amendments is toment age to 62 for both men and women,thing which has grown up in the indus- reduce the retirement age from the pres-everyone will flock to retire at that age. çnt age of 65 to age 62, for both menBut all evidence shows that, even withtry of this country. Men beyond the age and women, for full retirement bene-the age 65 figure, most people continueof 45, if they find themselves out of work, fits. have great dimculty in obtaining new working if they are able to and if theywork.They are men in the very peak In 1956, in the amendments to thecan find work or are allowed to continueyears of their productive capacity. They Social Security Act, the first step wason their jobs.Surveys conducted byare findingitdifficultto find work. taken toward cracking the age barrierthe Social Security Administration haveThose men, plus those who have passed when women became eligible, with cer-established this fact.The most recentage 60, and certainly those who have tain reservations, at age 62, rather thanone, in 1951, showed that more thanpassed age 62, who are deprived of work beingrequiredtowaituntiltheyhalf the people who retired had lostand who cannot get any because of the reached age 65.While I welcomed thistheir jobs and had been forced to existsystem which has grown up in the indus- change because it challçnged the per-somehow for several years until they be-try of this country, of the nonemploy- sistent idea that the age 65 figure wascame eligible for social security.An-ment of older people, do not seek to re- somehow sacrosanct, I did not believeother 30 percent had been forced to quittire.They do not want to retire.If this then, and I do not believe now, that wetheir jobs prior to age 65 for healthgreat plan of ours, to look after the aged went far enough. reasons.Thus, more than four-fifths ofpeople and to look after those who have It seemed to me that it would be wisethe people who applied for benefits atbecome disabled through no fault of their to allow full benefits to wives and de-age 65 had been forced into retirementown—through illness or through the pas- pendent mothers when they reached agebefore that age either because of poorsage of years—is to be carried out—and 62, as provided in those amendments;health or because they had been laid1 certainly hope we will always have it but I did not feel that we should re-off. with us and that we will constantly tnt- quire wives and women workers to accept In this connection, let me quote from prove it—I feel we should now proceed an actuarially reduced benefit if they re-a news storythat appeared intheto take steps to make improvements in it. tired at age 62, as the law in existenceCharleston, W. Va., Daily Mail not long We must face these facts. Many peo- today requires. ago: ple, especially those who spend their The simplest and most equitable so- Our latestlocalfigures show that the lution, it seems to me, is to face up togreat majority of full-time workers retireworking life at hard physical labor, suffer the realities, and to lower the retire-because they are inill health or becauseinjury or a chronic illness during their they have lost their jobs.Few people inlater years.These people, as far as our ment age to 62 for all men and women,West Virginia are retiring from tull-timesocial security plan is concerned, are in a for fu1 benefits at that time to thosework just to collect their social securitytwilight zone. They are so handicapped who are qualified under theact. payments, Paul L.Jefferson, manager ofthat they cannot continue at the hard The concept that 65 is the magic agethe Charleston social security district officephysical labor to which they are accus- for retirement, which persisted for sosaid today. tomed, but they are not so totally and long under our social security plan, is, This conclusion Is further supportedpermanently disabledthatthey can I submit, a myth, based upon anotherby the fact that the average retirementqualify forsocialsecurity'sdisability myth.Thefirstmythisthattheage under social security today is notbenefits.I have been appalled by the founders of the social security system,age 65, but age 68 for men, and thatlarge number of older workers who have backin 1934 and 1935, carefullythere are about 2.3 million people 65 orwritten to me to point out that they are weighed the question of what should beover now in the Nation's working force.too disabled to compete in the labor field the most equitable retirement age, and Moreover, itis estimated that aboutwith their younger contemporaries; yet, then chose age 65.This isnot the60 percent of these elderly workers arethey cannot qualify, because of one rea- case, for, as I have pointed out on theeligible for social security benefits.Ison or another, for the cash disability floor of the Senate previously, one ofpoint this out to show that lowering thebenefits which were authorized by the the men who, as a member of the staff,age from 65 to 62 would not be an in-1956 amendments. participated in those decisions of thevitation to people and would not cause Moreover, their chances of finding an- 1930's, Professor Wilbur J. Cohen, of thepeople who could continue to work toother lighter job are very remote.For University of Michigan, recently wrote:stop working because of the loweringthey are bucking a growing reluctance to Although the committee studied manyof the age.I would point out that inhire older people which begins as early alternative financing proposals as a basis tor A recent 7-area study con- making the recommendations tor a contrib-many industries in this country todayas age 40. utory old-age insurance plan, every proposalmen and women are worn and tired be-ducted by the Department of Labor considered was based upon 65 as the retire-fore they reach 65. showed that people age 45 and over make ment age and upon retirement from work I hope that the day will come whenup 40 percent of those seeking a job, and as a condition for eligibility.The com-age 60 will be adopted.For that rea-the rate increases progressively as age mittee made no detailed studies of alter-son, and in that hope, I today urge theincreases.Moreover, this study showed native ages or of any proposals for volun-taking of this first step, which would beveryclearlythatunemployedolder 1958 CONGRESSIONAL RECORD —SENATE 17981 workershave less eha.n6e of finding em-higher duty upon all the citizens, throughWe required that if they chose that age ployment once they have been laid offtheir Government, than to make certainto retire, their benefits must be reduced than do younger workers. Older men ac-that their aged people are properly cared20 percent. counted for over two-fifths of the malefor, and to see to it that those who are Mr. REVERCOMB. They could make job seekers, but represented less thanafflictedreceive reasonable support ina choice as to the time of retirement. one-fourth of the total of those whowerethis life. Mr. BF.NNETT. That is the way the hired. I urge the adoption of my amendments.bill was passed. A sliding scale was In lowering the retirement age of ourI think it is time that such a proposal beprovided.If women retire at the age of sociai security plan we will not only re-acted upon.I do not think the cost is63, the amount of reduction in benefits lieve the distress of thousands of thesetoo burdensome.I urge the adoption ofis less.But there is a specific require- older men and women who are nowthe amendments to the amendment ofment. They may not retire at age 62 struggling to maintain themselves untilthe Committee on Finance. with the fullbenefits which will be they reach age 65, but we will bring the Mr. COOPER. Mr. President, will thereceived by those who retire at age 65. system into line with the realities of anSenator yield? Is it the purpose of the Senator from age of mechanization and automation. Mr. REVERCOMB.I yield. West Virginia to change the law and The increase in productivity per man- Mr. COOPER. Do I correctly under-to restore the figure of 20 percent, so hour of about 36 percent since Worldstand the Senator from West Virginia toas to permit women to retire at age 62 War II, means that American workerssay that the increase in the payroll taxwith the benefits they would have re- can retire earlier without impairing ouron the employee and the employer, ifceived at age 65? productive power as a Nation.Oneboth the committee amendment and the Mr. REVERCOMB. As the Senator worker today can produce as much as didamendments of the Senator from Westfrom Utah :khows, widows and elderly 3 workers 50 years ago.This steady in-Virginia are adopted, will be a total ofand dependent' persons do not have their crease in productive capacity means thatthree-quarters of 1 percent? benefits reduced under the statute he the worker who retires at age 63 will have Mr. REVERCOMB. That is correct. mentions.Ibelieve the benefitsof produced far more in his shorter working Mr. COOPER. So an employee whoseworking women are reduced. My plan life than did his father or grandfathermaximum salary is about $4,800 wouldwould absolutely make the provision ap- who retired at age 75. pay a tax, under the bill and the amend-ply tO working women. They could re- I realize that this change will costments of the Senator from West Vir-tire at age 62 with full benefits and some money.It would not be paid outginia, if they should be adopted, of aboutwithout any actuarial reduction. of the Treasury of the United Statts or$50 a year? Mr. BENNETT.Is not the Senator out of the public purse, but would be Mr. REVERCOMB.it is three-quar-from West Virginia concerned about laid on what we know as the payroll tax,ters of 1 percent of the amount of theadding 10 per'cent to the total cost Of contributed one-half by the employersalary.But I cannot think of any em-social security?He says the amount and one-hall by the employee. ployer who would object to paying thatis only one-hall of 1 percent.Actually, By reducing the age from 65 to 62, asfor his aged employees. in terms of the present cost, the increase I urge, the payroll tax of the employer Mr. COOPER.I was merely going tois 10 percent. and the employee would be increased bysay that that is not a very large increase. Mr. REVERCOMB.Itis based on one-half of 1 percent.Each would pay Mr. REVERCOMB.I thank the Sen-whatever the comparative costsare. that increase.That is S mills on theator for making that point.I think it isHowever the Senator desiresto ap- dollar.That is all the increase wouldtimely. proach the question, it does not seem amount to if we dropped the age from 65 Mr. COOPER.If the amendments ofto me that 5 mills on the dollar, or one- to 62. the Senator from West Virginia shall behalf of 1 percent. is very much. Under present law, the tax is alreadyadopted, an employer having a payroll Mr. BENNETT.It is 5 mills on the 21/4 percent, each, for the employer andof $100,000 will have his tax increaseddollar for employees and 5 mills on the the employee.Under the proposed com-by$500.Thatisnot a very largedollar for employers, a total of an ad- mittee amendment, which is before theincrease. ditional 1 cent on the dollar, added to Senate, the social-security tax would be Mr. REVERCOMB. No.I am gladthe 5 cents which will now be taken out increased by one-fourth of1 percent.the Senator from Kentucky has pointedunder the bill, thus making it 6 cents. In other words, if the committee amend-that out so succinctly and definitely.So it is not a 10-percent increase; it is ment were adopted, the tax would go toThe cost is not great. The cost to ana 20-percent increase in terms of the 21/2 percent, each, for the employer andemployer having a payroll of $100,000,total cost of the system and in terms the employee.If the' bill is passed withas has been pointed out, is approximatelyof money.It means that we are legis- my amendment added to it, reducing the$500 a year. I think that in itself is cheaplating to tax the working people and the age to 62, the total tax will be 3 percentinsurance for the employer to make cer-corporations which provide them with for the employer and 3 percent for thetain that his employees, when they reachtheir jobs an additional $1,800,000,000. employee.In other words, there wouldan age when they are no longer able to It is easy to talk about 5 mills; but be taken out of the employee's pay 3work, will have the benefits of the bill. when we talk in terms of $1,800,000,000 cents outof everydollar, and that I point out, further, that in most re-to be added to the tax—and this is a amount would be matched by the em-tirement plans today, the retirement agetax which is to be imposed—in the face ployer. is 60, 61, or 62 years.Seldom does theof the figures which the Senator from That is an increase, to be sure.I knowretirement age go above that, from theWest Virginia himself has given,it that people do not like to have deduc-information I have received.-It seemsshows that the people who voluntarily tions made from their pay, whether it beonly proper for Congress, after all theretire do so at an average of 3 years for payroll taxes or for any other pur-years in which this system has continuedabove 65, not 3 years below. pose.However, I urge that Congress—unchanged as to the aged, to meet the- Mr. REVERCOMB. That is a point and the Senate in particular—proceed atproblem fairly and to reduce the age limitI made. They would retire at 68. this time to meet this problem, so thatfor retirement by those who need to re- My amendments provide for reducing the elderly people may retire if they aretire, who are worn out, sick, and unablethe age to 62 for those who need to re- unable to continue to work.There areto continue with their work. tire, for those who cannot continue their many people, particularly those who I shall vote to reduce the age limit towork. They do not entitle anyone who work and toil In the rugged pursuits of62 years.Therefore, I urge the adop-is able to continue to stop working at life, who are tired and worn out at age 62.tion of the amendments. an early age. We quite rightfully appropriate money Mr. BENNETt Mr. President, will The Senator from Utah says that the for the defense and security of thisthe Senator yield? average age of retirement' is' 68.It will country. Mr. REVERCOMB.I yield. remain 68.But my áthendments pro- it is our most impartant problem and Mr. BENNEn. Does the Senatorvide for those who are broken down in our primary duty, because it means ourfrom West Virginia remember whenhealth and cannot work beyond the age very existence.But as we protect theCongress amended the law 2 years ago toof 62.They are the ones whom the law country and the people in it, there isnopermit women to retire at the age of 62?was intended to cover. CIV—1 132 17982 CONGRESSIONAL RECORD —SENATE August 16 Mr. BENNEfl. The Senator Is pena-proposal to increase by a total amounteven if the circumsfances I have enu- lizing every worklngman and woman inof $1,800,000,000 the taxes on the near-merated did not exist. the United States by adding anotherly 70 million employed persons and on Mr. ANDERSON. Yes. $1,800,000,000 to the taxwhichIs paid,the other millions who are self-em- Mr. President, when we are trying to so that a few people—and the Senatorployed. get the fund into the black, and to keep Insists they are comparatively few—wiU Mr. REVERCOMB.If the Senatorit in the black, obviously, it would be have the privilege of retiring 3 yearsfrom Utah thinks there is no interest inunwise to add to the law amendments earlier. the subject, I wish he would read somewhich would cost $1.8 billion. There- Mr. REVERCOMB. Will it penalizeof the mail I have received from my ownfore, I hope the pending amendments the working people and penalize the em-State, and I wish he would hear thewill be rejected. ployers?I doubt if they will considerstories of those who have-reached age 62 Mr. REVERCOMB. Mr. President, I it as a penalty upon them.I doubt thatand have to live on a mere existencesuggest the absence of a quorum. they will consider it a penalty to knowbasis until they reach age 65.Certainly ThePRESIDrNGOFFICER. The that they can retire 3 years earlier,, un-they are interested in these amendments.clerk will call the roll. der the law, in the event that illness orCertainly the people of the United States The Chief Clerk called the roll, and disability prevents them from continuingareinterestedinthese amendments.the following Senators answered to their to work.I dO not consider it a penalty;Accordingly, I believe that, in connec-names: I consider it as an opportunity to pro-tion with the pending biM, the Members Aiken Green Morton vide insurance against want in laterof the Senate must be interested in theAl!ott Hayden Mundt years. amendments. Anderson Hennings Murray Barrett Hickenlooper Neuberger Also, the self-employed would have Mr. President, I hope my amendments Beau Hill O'Mahoney to pay on their social-security tax thewill be agreed to. Bennett Hruska Pastore rate of Increase of three-fourths of1 Mr. ANDERSON. Mr. President,IBible Humphrey Payne Bridges Ives Potter percent, which is another 20 percent, onshall not speak long, because we must Bush Jackson Proxmire top of the tax they pay at present.move on. Byrd Johnson, Tex.Purtell They are paying 3% percent themselves The very able Senator from Utah [Mr.Carlson Johnston, S. C.Revercomb Carroll Jordan Robertson as against the 3 percent paid by the manBENNETT], who is an exceedingly fine Case, N. J. Kefauver Russell who works for someone else.The Sen-and able member of the Finance Com- Case, S. Dak. Kennedy Saltonstall ator's amendments would raise the ratemittee, has taken particular pains with Chavez Kerr Schoeppel to 41/2 percent on all the income up to Church Knowland Smathers the pending measure, and has presented Clark Kuchel Smith, Maine $4,800. the facts in regard to it. Cooper Langer Smith, N.J. However, much the Senator from Utah A few minutes ago, it was stated thatCotton Lausche Sparkman may dread it, and however bad a picture Curtis Long Stennis if the Yarborough amendment had beenDirksen Magnuson Symington he may paint,, I do not think it is tooagreed to, and if subsequently It hadDouglas Malone Thurmond much of a burden to meet the situationbeen enacted into law, it would haveDworshak Mansfteld Thye today, even if it does raise the tax. been inflationary in its effect.But theEastland Martin, Iowa Watkins Mr. BENNETT. Why did not the Sen- Ellender Martin, Pa. Wiley pending amendments would cost wellErvin McClellan Williams ator from West Virginia come beforeover $1 billion; in fact, I do not ques-Ftflbright McNamara Yarborough the Committee on Finance and give ustion at all the figure used by the Senator Goldwater Monroney Young an opportunity to study his proposal? from Utah, namely, $1,800 million. Gore Morse Mr. REVERCOMB.I am glad the Mr. BENNETT. Mr. President, will The PRESIDING OFFICER. A quo- Senator has asked that question.I didthe Senator from New Mexico yield torum is present. go before the Committee oil Financeme? Mr. REVERCOMB. Mr. President, I when Senators were invited to present The PRESIDING OFYICER(Mr.ask for the yeas and nays on the amend- their views.This very matter was pre-MORTON in the chair).Does the Sena-ments. sented to the Committee on Finance.tor from New Mexico yield to the Sen- But it was not presented in person, and The yeas and nays were not ordered. ator from Utah? ThePRESIDING was not considered by the Committee Mr. ANDERSON.I yield. OFFICER. The on Finance. Mr. BENNETT. The figure I used,question is on agreeing to the amend- If the Committee on Finance invites ments offered by the Senator from West namely, $1,800 million,istheofficialVirginia [Mr. REvERCOMB]. Senators to present their position infigure obtained from the Social Security writing, and makes that request special-Administration. The amendments were rejected. ly, as was done in this case, and then Mr. ANDERSON.I am sure the Sen- Mr. NEUBERGER subsequently said: does not read what was presented andator from Utah was correct in using theMr. President, I should like to have the does not consider what was presented,figure. RECORD show that I voted in favor of the I am rather surprised at the members The point is that a while ago we triedRevercomb amendment, to lower the of the Committee on Finance for in-to provide for a graduated application.social security qualifying age to 62.I viting statements from other Members Mr. LONG. Mr. President, will theask unanimous consent that a very brief of the Senate on this subject.WhenSenator from New Mexico yield to me? statement which I have prepared be one is invited to appear before a com- Mr. ANDERSON.I yield. printed in the RECORD at this point as a mittee and make a statement, often he Mr. LONG.Actually,ifa personpart of my remarks. has expressed a desire to submit a state-found it necessary to retire because of There being no objection, the statement to the committee, if he then findsphysical disability, under the provisionsment was ordered to be printed in the that, because of a lack of time, he isof the bill he would be able to receiveRECORD, as follows: unable to appear in person at the com-these payments; and the bill also pro- STATEMENT BY SENATOR NEUBERGER mittee hearing, and if, under those cir-vides for the making of payments in or- In my opinion, the reduction of the social cumstances, he submits in writing hisder to assist in the care of his depend-security retirement age to 62 is fully merited presentation, certainly he has a rightents. and justifted. to believe that his presentation will be For instance, in the case of a person After all, Members of Congress can qual- considered. who suffered from hypertension, andify for their pensions at 62. So it is surprising to me to hear thewho was unemployable, I believe that Why should there be a different retirement able Senator from Utah say that myperson would be able to retire and, un-age for social security annuitants? statement was not considered. I thoughtder the provisions of the bill, not only Mr. KENNEDY. Mr. President, I have it was considered. When I presented areceive benefit payments, but also bean amendment at the desk, offered by me statement in writing on this subject, cer-able to receive payments for his or herand the Senator from New Jersey [Mr. tainly I expected it to be considered. dependents, if there were such depend-CASE], identified as "8—8—58—F," which I Mr. BENNETr.I think the reasonents. ask be stated. why it was not considered is that there But the pending amendments, as I The PRESIDING OFFICER. The was no evidence that anyone else in theunderstand them, would enable a personamendment will be stated for the in- country was interested in the Senator'sto retire and to receive the payments,formation of the Senate. 1958 CONGRESSIONALRECORD —SENATE. 17983 The LEGISLATIVE CLERK.Beginning on page 3, after line2, itis proposed to strike out all up to line 1, page 4, and insert In lieu thereof the following: Table fordeterminingprimary insurance amount and maximum family benefits

I U - In iv v I II UI iv V (Pilnlary ynce(-PrimaryInsurance (Primary(Maximum (Primary Insnmnce(Primary insurance (Primary(Maximuni beueuit under 1939 amount under (Average Insurance family benefit under 1939 amount under (Average Insurance family act, as modified) 1954 act) monthly wage) amount benefits) a, as modlfled) 1954 act) monthly wage) amount payable) 'biefits) . payable) •

If an Individual's Or hispr1mry Or his average And the If an IndvIdnaI'8 Or his primary Or his average And the primary ins,irance Insurance amount monthly wage mBximum -primary insurance in&irance amountmonthly wage • maximum beneftt (as deter. (as determined (as determined amount of benefit (asdeter- (as determined (as determined 8mOmt o mined under under subsec. under subsee. The benefits mined under under subsec. under subsec. The benefits subsec. (d)) is— (c)) is— (b)) is— amount payable subsco. (d)) is— (c)) Is— (b)) is— amount payable refe,ned (as pro- . referred (as prO-

tomthe videdin . jointhe videdin precedingsee. 203 (a)) precedingsec. 203 (a)) paragraphson the basis paragraphson th basis But not • But not But not of this ofhis wages • Bnt not But not But not of this o his wages -At more At more At moresubsetlon and self- At more At more At moe8ubseetlon and self- least— than— least— than— least—tban—shall be— employ- least— then— least— than— least—thaa—sbali be— employ- . -mnt - ment - . . Income fncome sball be— shall be—

$10.00 $30.00 $54 $33 $53.00 $35.31 $35.80 $74.60 $75.40 $181 T84 $81 $146.00 $10. 01 10.48 $30. 10 31.00 $5 56 34 54.00 35.81 36.60 75. 50 76.30 185 189 82 149.60 10.49 11.00 31.10 32.00 57 58 35 55.00 36.61 37.) 76.40 77.80 .190 194 1.60 11.01 ]J.48 -32.10 33.00 59 60 36 56.00 37.21 37.70 77.40 78.20 195 19 84 157.20 11.49 12.00 33. 10 34.00 61 61 37 57.00 37. Ti 88.44 78. 31) 79. 10 199 203 85 160. 80 12.01 12.48 34.10 35.00 62 73 38 58.00 38.45 3. l 79.20 80.00 204 207 86 164.40 12.49 13.00 35. TO 36.00 64 65 39 59.00 39.13 39.76 10 .81.00 )8 I2 87 168.00 13.01 13.48 66 . 36.10 37.00 67 40 fjO.00 3).77 40.56 81.1G 81.90 213 217 88 72.00 13.49 14.00 37.10 38.00 68 69 41 6L50 40.57 41.12 82.00 82.80 -218 221 89 175.60 14.01 14.48 38.10 39.00 70 70 42 63.00 41. 1 41.76 82.90 83.70 222 226 90 179.20 14.49 15.00 3 10 40.00 71 72 43 64.50 41.77 4Z 68 83.80 84.70 227 23T 91 183. 15.01 15.60 40.10 41.00 73 74 44 66.00 42.9 43.20 84.80 8560 232 235 92 186.80 15.61 16.20 41. 10 42.00 75 76 45 67. 50 43.21 43.89 S5. 70 86. 50 236 240 93 UW 40 18.21 16.84 42. 10 43.00 77 78 46 69.00 43.90 44.63 86.60 87. 50 241 245 94 194. O 16.85 17.54 43.10 43.90 79 79 47 7O5O 44.69 44.88 87JO .4O 246 249 $ 198.00 17. 55 18.32 44. 00 44.90 80 81 48 72.00 44.89 45.60 50 89.30 250 254 (6 - 201.60 18. 33 82 . 19.08 45.00 45 80 83 49 73.50 89 40 90.20 25 2.$ 97 205.20 19.09 19.77 4&90 46.70 84 84 O 7500 90.30 91.20 259 23 g 208.80 19.79 20.40 46.80 47. 60 85 86 51 76. 50 91.30 92.10 264 268 90 . 212.80 - 20.41 21.04 47.70 48.60 87 88 52 - 78.00 W2.20 93.00 260 272 104) 2164O 21.05 21.59 48.70 49. &) 89 53 O 9. 50. 9t 10 9. 90 . 273 277 TOi 220.00 21.60 22.05 91 49.60 5O 40 91 54 81.00 • 94.00 94.90 278 282 102 224.00 22. O 22. 4, 50.50 L 30 92 93 55 82.50 95. OG 95.80 $3 286 1 227,60 22.46 22.88 51.40 52.30 94 95 56 84.00 95.00 96.70 287 291 104 231.20 22.89 23. 24 52. 40 53.20 96 96 57 85. 50 96.80 07.60 292 29 105 234.80 2. 25 23.60 53. 30 54. 10 97 98 58 87.00 - 97.70 98.60 29 300 106 238.40 23.61 23.96 54.20 55.00 99 100 59 88.50 98.70 99.50 301 305 Wi 42.4O. Z3.97 24.40 55.10 56(K) 101 101 60 90.00 09.60 100.40 3O 309 108 24&O0 24. 41 24.80 56. 10 5. 90 102 103 61 gj• 50 100. 50 101. 30 310 314 109 49. 60 24.81 25.20 57.00 7. 80 104 105 62 . 93.X) TOl. 40 102.30 315 319 110 253. 60 25. 21 25.64 106 7. 90 58.70 106 63 94.50 • 102.40 103.20 320 323 111 256.00 25. 65 26.16 58.80 59. 70 107 108 64 96.00 103.30 1)4. 10 324 328 112 256.00 26. 17 26. 64 9. 80 60. 60 109 110 65 97.50 1(}4. 20 105. 00 329 332 113 256.00 26.85 27.12 60.70 61.50 111 115 66 ¶9. 00 105.10 106.00 333 337 114 256.00 27. 13 27.73 61.60 62. 50 116 120 67 100. 50 106. 10 105.90 338 342 115 256,00 27.74 28.31 62.60 63.40 121 124 68 102.00 . 107. OG 107.80 343 346 - 116 56. 00 28.32 28.92 63.50 64.30 125 29 60 103.50 - 1O7.9) 108.50 347 3M 117 2.00 28.93 29.40 64.40 65.20 130 133 70 105.20 • 352 356 118 256.00 29.41 29.92 65.30 66. 20 134 138 71 1(. SO 357 3iO 119 256.00 29.93 30.52 66.30 67.10 139 143 72 112.80 361 365 120 256.00 30.53 31.08 67.20 68.00 144 147 73 US. 40 366 3O 121 256.00 31.09 31. 64 68. 10 68. 90 - 148 152 74 120. 00 371 374 122 256.00 31.65 32. 28 69.00 69.90 153 157 75 124. 00 375 379 123 256.00 32.29 32.80 70.00 70.80 158 161 76 127.60 380 383 124 56. 00 32.81 33.40 70.90 71.70 162 166 77 131.20 384 388 125 256.00 33.41 34.00 Ti.80 72.60 167 170 78 134.80 389 393 126 256.00 34.01 34. 68 72.70 73.60 171 175 79 138.40 394 397 127 256.00 - 34..69 35. 3G 73. 70 74. 50 176 180 80 142W 40 - 398 400 128 2.56. 00

Mr. KENNEDY. Mr President, the- — Thesecond argument in favor of thecent increase, but finally went to the 7- arguments for this amendment—or atamendment is that while the presentpercent increase because of strong pres- least most of them—have been madedeficit under which the bill would op-sure which was applied.It is my un- during the discussion of the amendmenterate is 0.57, the bill would reduce thederstanding of their feelings that an offered by the Senator from Texas [Mr.deficit to 0.25.If the amendment were8-percent increase would not be wholly YARB0R0ixGH]. accepted, the deficit would be 0.33. unsatisfactory to them. The amendment offered by the Sena- I tthnk the statement of Mx. Flemming Mr. CASE of New Jersey.Mr. Presi- tor from Texas would have provided forand others brings this matter within adent, will the Senator yield?

a 10-percent increase. The bill providesreasonable range.Although the per- . Mr.KENNEDY.I yield to the Sena-

for a 7-percent increase.The amend-centage increase is slight, nevertheletor from New Jersey. - mentnow before the Senate would pro-the reople involved are living on a mar- Mr. CASE of New Jersey.I thank the vide for an 8-percent increase.The jus-ginal standard of existence and $1 orSenator.I, of course, Join the Senator tification for the increase is twofold. $1.50 per month Increase could makefrom MassachusettsInofferingthe

some difference in their standard ofamendment. The arguments for - the First, the cost of living has gone upliving, amendment, as the Senator said, have since the last increase was provided, ac- For these reasons the Senator frombeen fully made in the discussion of the cording to the report of the Senate com-New Jersey [Mr. CASE] and I offer theamendment offered by the Senator from niittee, by an average of 8 percent.Theamendment. We hope the amendmentTexas [Mr. YARBOROiIGHJ to provide a report states that since the last benefitwill be agreed to by the Senate.It is10-percent increase in benefits, which increase was put into effect in 1954 wages my understanding that influentialmem- both the Senator from Massachusetts have increased about 12 perceit andbers of the House Committee on Waysand I cosponsored.The amendment s- prices have increased about 8 percent. and Means originally favored a 10-per-more than fiscally responsible. ______

17984 CONGRESSIONAL RECORD —SENATE Aitgust-16 Mr.President, I ask unanimous con- Under S. 4121, the increased net income to OASI trust fund sent that the data I have prepared inthe trust fund would be 0.02 percent of payroll. Underthepending Kennedy-Case Net Increase hi fund (hi millions) supportofthis amendment be printedamendment the increased net income to the in the RECORD at this point in my re- Calendar year trustfund would be 0.24 percent of payroll. Present lawB.R.13549 8. 4121 marks,and I shall not detain the SenateI recognize, of course, that under the 7-per- (Case bili); further. cent House bill, H. R. 13549, the increased There being no objection, the infor- netincome to the trust fund would be even larger, namely, 0.32 percent of payroll. 1958 $927 $980 $1,000 mation wasorderedto be printed in the 1959 1,420 RECORD, as follows: But I emphasize that even under my origi- 1960 605 366 nal 10-percent bill, the actuarial condition of 1961 - 139 765 503 STATEMENT OF 8ENAT0E CASE OF NEw JERSEYthe trust fund would be improved over what 1962 354 289 it would be under existing law. -And, despite 1963 520 2,246 144 I rise in support of the amendment offered 1964 . 620 2,859 L848 jointly by the Senator from Massachusettsconcern which has been expre3sed about a 1905 1,089 Z [Mr. KENNEDY I and myself. theoretic actuarial imbalance of the trust It would provide for an 8 percent increasefund,on a level premium baais calculated - in social-security benefits instead of the 7intoperpetuity, we have it on the highestBalance hi tbe fund beginning of this fiscal Billion percent increase provided for by the com-authority that for practical purposes the old- Year 20 Prcsnt law - $56. mittee bill. - age and survivors insuranceprogram is presently in aptuarial -balance according -to tile, .R. $2S5 OnJuly 9, on behalf of Senators PAYNE aseblfl(S.13549fi 4)_. $60 to $65 and JAVXT5, as well as myself, I introduced abest available cost estimates. bill, S. 4121, to increase &ocial-security bene- The 18th annual report of the board of While I-do not at the moment have the fits by 10 percent.My bill also providedtrustees of the Federal old-age and survi-exact figures a to increases in the fund for an increase from $4,200 to $4,800 in thevors insurance trust fund and the Federalwhich would result if the pending 8 percent amount of an individual's annual earningsdisability insurance trust fund states this inbenefits amendment is adopted, they would, on which social-security taxes and benefitsso many Words. The trustees are the Secre-of course,' be somewhat larger than tho8e are computed and for a moderate accelera-taries of Treasury, Labor, and Health, Edu-shown in the table for 8. 4121 azld some- tion in already scheduled increases in social-cation, and Welfare, with the 8cretary of thewhat smaller t1an those Shown for H. -R. security tax -rates. Treasury serving as managing trustee.- This13549., - - In my judgment, a 10 percent increase inreportstates: - So,it !s clear that under my origiial bill social-security benefits woukI be amply justi- "Long-range cost estimates show that foras well as under tile pending. Kennedy-Case fied in view of the increases in the cost ofpractical purposs the Sold-age and survivorsamendnent, the fiscal condition Of the 'trust living and in the general standard of livinginsurance program is in actuarial balance ac-fund would be actuarily improved over what which have occurred since social-securitycording to the best available cost estimateè.it is -under present law. That fund, already rates were last adjusted in 1954. This concept means that for the long-rangesound according to the best authority, would Since 1954, the cost of hYing has increasedfuture, the system will have sufficient incomebe made even sounder uncer either of these approximately -8 percent as shown by thefrom contributions-based on-the tax-'seheduIprOpO3a1S - Consumer Price Index.But In tile samenowin the law and from interest earned on It is my earnest hope that the -8enate will period wages generally have increased ap-investments to meet all future payments foradopt the pending -amendment in simple benefits and administrative expenses. - Al-justice to the millions a1zedy on' the.Bb- proximately 12 percent and, in. my Judgment,though aggregate disbursements of die Old-,olar 'securityrollsaá wellas -thosewho that increase should certainly be taken into age and survivors insurance trust funX over - willèome upon the rolls in the future. An account in considering social-security benç-the period of the -next several years are esti-8-percent Increa8e 'In 'benefits, -more -than fits.For, so far asitIs feasible, social—mated to exceed aggregate receipts—a Situa-adequzately financed, is the very least thl8 security beneficiaries should -be allowed totion which, however, will be only temporary—Congress should enact. - share in the rising standard of living enjoyedtherewill be ample funds on hand -to meet •Mr. POTTER: Mr. President, will the by Americans generally.People who retiredexpenditures of - theprogram during this in earlier years when wages were low workedperiod. The trust fund is intended to serveSenator yield? - just as hard to build a prosperous nation asas a contingency fund as well as a source of Mr.KENNEDY.Iyield. those who are still working today and theyinvestment income to supplement contribu- Mr. POTTER.I wish to join the Sen- tion receipts, and it is to be expected, thereare equally entitled to share in the increasedfore, that the fund may be drawn upon fromator from Massachusetts, and the Sen- productivity of the American economy. time to time. Temporary periods when theator from New Jersey In sponsoring this And so. Mr. President, I was a cosponsor of amendment, which is a compromise with the 10 percent amendment offered earlierassets of the fund decline are not in themselves an indication of financial weaknessthe Yarborough amendment.- -- today by the Senator from Texas [Mr. YAR-and do not change the fact, that the program wonder if the Senator from Massa- B0E0UGHJ. I But, though I believed, and still believe,is for practical purposes lii actuarial bal-chusetts has ever given consideration to a 10 percent increase in social-security bene-ance. - the possibility,, rather than having a so- fits is justified, I recognized that consider- "Inview of the very long-range nature ofcial security increase bill come up every ing, among other things, the action takentiese projections, and the many variable fac-2 years, of adopting an escalator clause by the House of Representatives, it wQuldtors involved, the deficiency for the old-agetied to the cost of living, -so that as the probably not be realistic to hope to secure aand survivors insurance systei ulTder thecost of living increases, rather than hav- 10 percent increase at this time.Accord- intermediate-cost estimate is relatively small,ing to wait 6 months or a year for Con- Ingly, I joined on August 8 with Senatorand so the system may be sEid to be ingress to act, the administration could KENNEDY in sponsoring an amendment toapproximate actuarial balance.Under the intermediate-cost estimate the old-age and-employ the built-in escalator clause In increase benefits by 8 percent and I join -survivors insurance trust fund would havethe social security program, so that, himnow in sponsoring the pending amend- \$55 billion without Congressional action, -thedif- ment for an 8 percent increase.This, Mr.a -balance of more than in theferential could be taken care of auto- President, I firmly believe is the very leastyear 2025 and thus there is ample time in the matically. - we should do. As I have already pointed out,future to make any adjustments which might - it would raise social-security benefits only beneeded in the light of further experience Mr.KENNEDY.I think that is a good to the extent of the Increase in the generaland of future estimates." suggestion. cost of living since 1954.It would take no 'And on June 16, 1958, Marion B. Folsom, Mr. POTrER.I - hopethe Finance account of the larger increase -whichhasformer Secretary -of Health, Education, andCommittee will consider that as a pos- taken place in the general living standardsWelfare, told the House. Ways and Meanssibility in its later deliberations. of the American people as measured by wageCommittee: - Mr. KENNEDY.I appreciate what increases during that period. "Myown conclusion from these figures isthe Senator has said. Both my original bill, S. 4121, and the Yar-that the system is in essentially sound finan- This amendment is tied to the Increase borough 10 percent amendment were, andcial condition for the foreseeable future andIn the cost of living, based upon the re-- the pending Kennedy-Case amendment is.there is no cauae for concern for the long-port, and I believe it would- give actuarial sound from the standpoint of fiscal responsi-range thiancial condition of the program." soundness to the program. bility.Under all these proposals the In- The following table shows the et increases creased income to the social security trustwhich would be made in the old-age and sur- I hope the Senate will accept the fund would be greater than th cost of thevivors !nsurance trust fund for the currentamendment. increase tn benefits.Each of them wouldcalendar year and the 7 succeeding calendar Mr. LONG. Mr. President, will the actually improve the actuarial condition ofyears under existing law, under H. R. 13549,Senator yield? the tiust fund. and under S. 411, my 10-percent bill. Mr. KENNEDY.I yield. 1958 CONGRESSIONAL RECORD SENATE 17985 Mr.LONG. The Senator refers to thecent.With the passage of this bilF, if Itroll,' an increase so negligible as to be fact that there is an actuarial deficit atIs passed as it is now before the Senate,meaningless in a 50-year actuarial pro- the moment; but I belleve, in additionwith the increase in taxes and the in-jection.Nevertheless,itwouldhelp to the increase in the bill, there will becrease In benefits provided in the bill,300,000 widows and orphans each year. an increase in 1960, 2 years from now,there will still be an actuarial deficit of In 1954, the average cost of funerals and every 3 years, until 1969.So, be-twenty-four one-hundredths of 1 per-was $578, aécording to the Social Secu- ginning in 1960, and every year there-cent.If this amendment were to berity Administration. In 1957 a study in aftel, the fund would continue to grow,adopted, it would increase the actuarialNew York showed the average cost of either under the Senator's amendmentdeficit to thirty-four one-hundredths offunerals to be $875. or the amendment of the Senator from1 percent, which would be more than I emphasize to the Senate that this Texas. halfway between the twenty-four one-amendment is an amendment which the Mr. KENNEDY. The Senator is cor-hundredths of 1 percent which the billSenate Finance 'Committee previously - rect.Evenifno amendments werewould result in, and the forty-two one-reported.It would restore a principle accepted, there would be an actuarialhundredths of 1 percent now in effect.which has been in our social seëurity deficitof0.57of 1 percent.If this The Senator states that the amend-laws for many years.It seems to me in amendment were accepted, the deficitment is modest in comparison with theaccordance with justice to provide that would be 0.3á percent, which I believe isamendment of the Senator from Texasthe 3-to-i ratio shall continue. within a reasonable zone. [Mr. YARBOROUGH]. I will not deny that. In effect, it will lift, the limitation of Mr. LONG.In 1960, when the nextI will never deny to any Senator the$255, which is now in effect, to $381, increase goes into effect, the contribu-right to describe modesty in his ownand thus provide a more substantial tion will well exceed the cost of thewords. death benefit at a vety trying time of program. However, I am reminded of the storyillness and death in the home of the Mr.NEUBERGER. Mr.President,of the boy who was confronted withsurvivor, either the widow 'or the wid-. will the Senator yield? what he thought was the necessity of cut-ower.It is therefore the hope of myself Mr. KENNEDY.I yield. ting off his dog's tail.He finally decidedand the Senator from Florida(Mr.. Mr. NEUBERGER.I believe that theto cut it off an inch at a time, so that itSMATHER5], a member of the Committee amendment of the Senator from Massa-would not hurt the dog so much.It ap-on Finance, that the Senate will see fit chusetts and his colleague from New Jer-,pears that the sponsors of the proposalto accept the amendment. sey is eminently justified.One reasonto increase the benefits without propor- Mr. KERR. Mr. President, I should which impels me to think it has greattionately increasing the taxes with whichlike to ask the Senator a question, if he merit is the fact that 'I noted recentlyto pay them would do so a llttle at awill yield: that in the soaring cost pf living, thetime rather than all at once. Mr. KENNEDY. I yield one item which has gone up more than In view of the fact that we are con- Mr. KERR. What would be the result any other single item is the cost of med-fronted with the realities as they are,of the amendment? ical care.This burden falls particu-and not as we would like them, I cer- Mr. KENNEDY.The result of ,the larly on elderly people.They becometainly hope that the amendment will notamendment would be to llft the limita- sick more, often, which is inevitable be-be agreed to. tion on the cost of a funeral.It is my cause they are reaching the end of their The PRESIDING OFFICER. Theunderstanding that at the present time lives and they have expensive, lingeringquestion is on agreeing to the amend-the law provides that the death benefit illnesses which dip most heavily intoment offered by the Senator from Mas-ratio shall be three times the monthly their meager savings. The cost of med-sachusetts, for himself and the Senatorpayments.However, there is a limita- ical care has increased more in pro-from New Jersey [Mr. CAsE]. tion imposed, existing from 1952,of portion than the cost of any other phase The amendment was rejected. $255.It is my further understanding involved in the cost of living. Mr. KENNEDY.Mr. President, onthat the Committee on Finance and the I believe that the amendment offeredbehalf of the Senator from Florida [Mr.Senate itself in 1954 lifted that limita- by the Senator from Massachusetts, SMATHER5] andmyself,Iofferthetion when it lifted the social security while more modest than the amendmentamendment which I send to the desk andmonthly payments. That provision was of the Senator from Texas [Mr. YAB-ask to have stated.Itisdesignatednotaccepted in conference.The BoRoUGH] has the same essential justi- amendment would raise the limitation. fication as the amendment voted on ThePRESIDINGOFFICER. TheThe 3-to-i principle would remain.The earlier today, although it does not goamendment offered by the Senator fromdeath benefit would be 3times the quite so far, and thus, perhaps, wouldMassachusetts will be stated. monthly benefit.To berealistic,it. obtain the votes of some of our col- The LEGIsLATIVE CLERK.On page 41,would raise that amount to $381, in ac- leagues who have• certain reservationsline 3, immediately after "by" it is pro-cordance with the rise' in the monthly regarding the amendment of the Sen-posed to insert "striking out',oranbenefits during the past 8 years. ator from Texas, although I do not be-amount equal to $255, whichever is the Mr. KERR. Mr. President, I hope the lieve such reservations are justified. smaller,' and by." amendment will not be agreed to.It is The PRESIDING OFFICER. The Mr. KENNEDY. Mr. President, thistrue that the cost of it is small.How- question is on agreeing to the amend-amendment is sponsored by the Senatorever, I have analyzed it as carefully as ment offered by the Senator from Massa-from Florida [Mr. SMATHER5] and myself.I can, and find in it no benefit for the, chusetts, for himself and the Senator The amendment would remove thebeneficiary under 'the old-age and sur- from New Jersey [Mr. CASE]. dollar ceiling of $255 which now limitsvivors' insurance program.The purpose Mr. KERR. Mr.President,thosethe lump sum payable upon death toof the bill is to meet the increased cost sponsoring the amendment have de-the survivor of a person under socialof living, not to meet any increased cost, scribed it accurately.It has the samesecurity.Congress intended the lumpactual or otherwise, of dying.I will say merit as the amendment of the Senatorsum payment to be 3 times the regularto the distinguished Senator from Mas- from Texas [Mr. YARBOROUGH]. By themonthly benefit, and it was, under thesachusetts that I have received about 10 same token, it has the same lack of justi- 1952 benefits,whenthemaximumletters asking that the amendment be fication. monthly payment was $85. adopted.Every one of them has been The Senator from Massachusetts was In 1954 the benefits were increased,from a funeral director.I have had no almost accurate In the figures he gavebut the maximum remained.If therequest for the adoption of the amend- the Senate with reference to the actu-ceiling is removed, the maximum ratement from any ofthebeneficiaries arial deficit as of the present time.Iwillbe increased to$381.Paymentsunder the old-age and survivors' insur- believe he stated that on the basis ofcould still be as low as $99, which wouldance program.I hope that the amend-' the present law it is a little over one-halfrestore the 3-to-i ratio. ment will not be enacted. of 1 percent.The statement given me The amendment was approved by the Mr.KENNEDY. Mr.President,I by the actuarial experts of the Depart-Senate Finance Committee in. 1954 andshall have to take a minute or two to ment is that the current actual deficitpassed the Senate.The cost would berespond to the Senator from 'Oklahoma. is forty-two one-hundredths of 1 per-two one-hundredths of 1 percent of pay-The amendment is not for the relief of 17986 CONGRESSIONAL RECORD —SENATE August 16 funeral dlrèctórs.In 1954 the average The PRESIDING OFFIC]R.. Withoutthat the two agencies work cooperatively cost of a funeral was $578. That was 4objection, it is so ordered. and toward the same general goals and years ago.The cost of dying, so far The amendment offered by Mr. PuR-that the work done by voluntary agencies as funeral expenses are concerned, has ordered to be printed in the Rcoiw,Is not taken over or restricted by the gone up substantially.Since 1954 theis as follows: public agencies.Certainly, we do not cost—and I admit I was as shocked as At the end of the bill add the followthgwish this new program to operate in any the Senator from Oklahoma, to learnnew section: way which would remotely indicate that this—lias gone up to $875. That is the °ADVISOET COUNCILON CHILDWELFARE the public agency is preempting this wel- average cost. SF2VICVS f are field. Mr. KERR. Mr. President. will the SEC. '705.(a) There is hereby established The entrance into urban areas of child Senator yield again? an Advisory Council on Child-Welfare Serv-welfare activities under title V of the Mr. KENNEDY.I yield. ices for the purpose of making recommenda-Social Security Act should be consid- tions and advising the Secretary of Health,ered—or should be directed—in those Mr. KERR. Was that for the bene-Education, and Welfare in connection with ficiaries of -theold-age and survivors'the effectuation of the provisions of part 3fields or In those areas not presently ade- insurance? of title -V of the Social Security Act, asquately covered by voluntary agencies Mr. KENNEDY. No.That Is whatamended by the Social Security Amendmentsand should definitely not be so employed the average cost of a Iuneral Is today. of 1958. as to supplant the existing voluntary The beneficiaries under this amend- "(b) The Comicil shall be appointed by theagencies. ment would include those who have ad-Secretary before January 1959, without re- Surely the adm}rable work being done gardtothe civil-service laws, and shall con-by voluntary organizations and associa- ditional sources of tncome, as well assist of 12 persons representative of public, those who do not have additional sourcesvoluntary, civic, religious, and professional.tions—wherever it properly can be en of income. The point I make is thatwelfare organizatlona and groups, or othercouraged—shouldbeencouragedto when we include the cost of. the funeralpersons with special knowledge, experience,meet the public need; should not only be and the cost of the lingering illness.or qualificationa with respect to child-wel-encouraged to continue, but to even ex- which usually leads up to the funeral Ifare services, and the public. pand In these fields.Duplication of ef- believe the limitation in the law of $255 "(c)(1) The Secretary shall make avail-fort could well result In waste of both able to the Councfl such secretarial, clerical,money and time to the detriment of all is much too small. An amendment sim-and other assistance and such other perti- ilar to this was adopted by the Senatenent data prepared by the Department ofagencies. In order to avert any such sit- 4 years ago. Health. Education, and Welfare as it mayuation arising, and to utilize to the full- I should think that the family of therequire to carry out such functions. est extent the existtn voluntary agen- deceased person would still have to make "(2) Members of the Council, while serv-cies and the public agencies now existing up a substantial amount of the cost -ofIng on business of the Council (inclusive ofor that might well be created or ex- the iuneral in order to meet the totaltravel time), shall receive compenaatlon atpanded by this program, I suggest that cost.Nevertheless, it does seem to merates fixed by the Secretary, but not exceed-we provide the machinery to help direct we would provide a more realistic figureing $50 per day; and shall be entitled toand assess the progress of the program receive actual and necessary traveling ex-initiated by the change In the law. In than the present limitation of $255.Itpenses and per diem in lieu of subsistence would permit a death benefit of thieewhile so serving away Irom thefr places ofthis regard, Mr. President, I offer an times the monthly payment, which Iresidence. amendment, the purpose of which Is to understand has been in the law from the °(d) The Council shall make a report ofestablish an advisory council to assist enactment of the social-security law. its findings and recommendations (Includingthe Social Security Commissioner In The ?RESIDING OFFICER. Therecommendations for changes In the provi-promulgating the necessary rules and question is on agreeing to the amend-.sions of part 3 of title V of th Social Secu..regulations to carry out this program In ment offered by the Senator from Mass-rity Act) to the Secretary and to the Con-the urban areas.My amendment, as gress on or before January 1,1980. afterstated, provides that this council shall achusetts [Mr. XENNEDY). which date such Council shall cease-to exist." The amendment was rejected. be composed of 12 members drawn from Mr. CURTIS. Mr. President, I send Mr. PURTELL. Mr. President, underrepresentativesofpublic,voluntary, an amendment to the desk and ask thatthe present social security law, fundscivic, religious, and professional welfare it be stated. allocatedforchild-welfareservicesorganizations and the public.I have The PRESIDING OFFICER. The"shall be expended for payment of partpurposely made the membership suffi- amendment will be stated. of the cost of district, county, or otherciently large In order that all the fine local child-welfare services in areas pre-groups which have given such excellent The LEGISLATIVE CLERK. On page 41,dominantly rural, for developing Stateand devoted service in this field may be line 15, after the word "died," it is pro-services for the encouragement and as-represented. posed to insert "or the date of enactmentsistance of adecjuate methods of com- I have used the arbitrary figure of I of this act." munity child-welfare organizations inyear for the duration of the life of the Mr. CURTIS. Mr.President,theareas predominantly rural and otherAdvisory Council, but it may well be that amendment merely refers to the dateareas of special need." this consulting group will prove so use- controlling the benefits in the case of H. R. 13549 would change this con-ful to this program and general activi- an adopted child where the primary in-.cept so as to allow the allocations forties in, tlis field that the Department will sured is deceased.I believe the distin-this program to be expended both inwish at some future date to recommend guished Senator from Oklahoma will ac-rural and urban areas. additional legislation making this Coun- cept the amendment. Since the inception of this programcil a permanent adjunct ofits child Mr. KERR. I will accept the amend-In 1935, the activities of voluntary agen-welfare activities. ment.I do not believe it will result incies have been mostly in the field of the I wish to inform my colleagues, Mr. any appreciable cost.I think it is aurbanarea,although notrestrictedPresident, that I have discussed with the worthy amendment, and insofar as I amthereto.These agencies have acceptedSocialSecurityCommissioner,Mr. concerned I am willing to accept it. this challenge readily and performed ad-Schottland, this proposed amendment, ThePRESIDINGOFFICER. Theniirably In this field.Their fine ac-both as to the Advisory Council and the cjuestion is on agreeing to the amend-complishments are evidenced by the factreporting of its activities.I am happy to ment offered by the Senator from Ne-that no change has been made in legisla-inform my colleagues that Commissioner braska. Without objectiori, the amend-tive form for a period of 23 years. Sehottland approves of the ideas incor- ment is agreed to. I do not rise in opposition to the pro-porated In my amendment and assures Mr. PURTELL. Mr. President, I callposedchange. On thecontrary,Ime that he and his department would up my amendment identified as 08_15...merely point out that this s a signifi-welcome such a Council and feels that it 58—K." cant change and its effect cannot ac-would be of not only much help to him The PRESIDING OFFICER. Does thecurately be predicted until some timeand the Department in initiating and Senator wish to have the amendmentafter this proposal becomes law. evaluating the program, but would obvi- stated? If we are to have public agenciesate much initial possible misunderstand- Mr. PURTELL. I ask unanimous con-working In an area in which the volun-ing amongst welfare agencies and be of sent that it may be printed in the REC-tary agencies have been most active,help in getting the new program on a ORD at this point. then I say it is important that we insureproper course. 195$ CONGRESSIONALRECORD.., SENATE 17987 I feel that we cannot overemphasizethe State of Maine until July 1, 1960, af-a State might otherwise be entitled under the great hnpórtance of child welfareter which it would expire. Precedentonthe provisions of title I, IV, IX, or XIV be- services and that the Advisory Councilthis was established by the provisioncause such State has made benefit payments for which my amendment provides willadopted for Oklahoma as part of theunder Its program of assistance established serve, in addition to the duties outlined,Social Security Amendments of 1956. by any such title to a person other than the a most useful purpose as a forum for all The 98th Maine Legislature enacteda Individual upon whose behalf such pay- these fine groups serving humanity tolaw—chapter '338, Public Laws of 1957—ments are made, if such person has been exchange ideas to meet the mounting duly appointed as guardian of such Indi- providing that employees of the politicilvidual for the purpose of receiving such pay- problems with which they are faced. subdivisions of the State are eligible forments under the law of the State in which To Insure the more effective use of thethe benefits of social security.This actsuch individual resides." expenditures provided for in this pro-specifically excluded teachers, policemen, gram, and in the interest of the childrenand firemen from its coverage if they Mr. LONG. Mr. President, the amend- to be served, as well as in the interestswere. under an existing pension or retire ment relates to a difficulty experienced of. all those groups who serve so unsel-ment plan.In Maine, teachers are coy-by the States of Louisiana and Texas, fishly, and further, in .the interest of theered by the Maine State Retirement Sys-and perhaps other States, where it is successful operation of this program, Item as a class and do not dependuponnecessary to appoint a guardian to re- -urge that my colleagues vote in favor ofthe municipalities membership to makeceive and to administer well arepay-S this amendment. them eligible.Consequently, those p0-ments made on behalf of aperson who • Mr. President, I understand the dis-litical subdivisions of the State of Maineis legally incompetent or who, forone tinguishedSenatorfromOklahomawhich joined the Maine retirementsys-. reason or another, is unable to handle. agrees with me that the amendment istem without first securing social-secirityhis own affairs. worthwhile, and has indicated a willing-coverage are precluded from such cover- Mr. KERR.Mr. President, will the nésE to accept it. age by the requirements of the SocialSenator yield? Mr. KERR. Mr. President, I am inSecurity Act.The purposeofthis Mr. LONG. I yield. accord with the purpose of the amend- amendment is to providea period dur- Mr. KERR. I desire to suggesta little ment.So jar as I am concerned, i aming which the State of Maine couldtreatchange in the language.I ask the Sen- perfectly wIlling to -acceptit. Underteachers in the same manner that theator to look at it and see if 'it is accept- existing law; an advisory couacil is atSocial Security Act treats policeandable to him. Perhaps the Senatormay workth-make wish to withdraw his amendment recommendatioüs . andfiremen, thatis,asa separate class. until suggestiôns with reference to the old-During this period the political subdivi-he can determine whether he willagree - age and survivors Insigance program.sions which belong to the Maine Retire-tothe language I have suggested.If Their report will be due to the last ofment System could bring their employeeshe is agreeable to it, I shall be happy to this year. ' : under the coverage of. the Social Securityaccept the amendment. The bill provides for a similar advisoryAct. Mr. LONG.I suggest that we adopt council to study a formula for the assist- The legislation was developed inclosethe amendment; and if the Senator from ance programs.The proposal of thecooperation with the Maine MunicipalOklahoma finds that the languagehe Senator from ConneëticUt concerns aAssociation and the executivesecretarysuggests is— child-welfare prOgram.I shall be happyof the Maine State retirementsystem. Mr. KERR. There is a remote possi- to have the SenateS agree to the' amend-It would eliminate, a great inequityinbility of our not having to havea con- ment. .Maine where the employees ofsome localference. / The PRESIDINGOFFICER. Thegovernments are now eligible forsocial Mr. LONG. Then I shall withdraw my question is on agreeing to 'the amend-security while the employees of.adjacentamendment until I have cönsicjered the ment of the Senator from Connecticut.coimnunities are not. modifications proposed by the Senator The amendment was agreed to. This amendment will not impairorfrom Oklahoma. Mrs. SMITH of Maine.•Mr. Président,affect section 218 (D)(5)(A), which Mr. REVERCOMB.Mr. President, I I offer an amendment for myself andexcludes policemen and firemenfromcallup my amendment coverage by the Social SecurityAct designated on behalf of my colleague [Mr. PAYNE], If "8—14—58—E," and ask that it be read. , it is desired, I shall be glad which I ask to have read. to dis- The PRESIDING OFFICER. The ThePRESrDINGOFFICER. Thecuss the amendment further, butI hopeamendment will be read for the infor- amendment will be stated for the infor-that the chairman of the SenateFinancemation of the Senate. mation of the Senate. Committee will accept it andtake it to conference. The LEGISLATIVE CLERK. On page 31, The LEGIsLATIvE CLERK. On page 70, between lines 4 and 5, it is proposed to between lines 3 and 4, insert the follow- Mr.KERR. Mr.President,theinsert the following new section: ing new section: amendment offered by the Senator from Maine is acceptable to me.It provides DEFINITION OF DISABILITY TEACHERS IN THE STATE OF MAINE only for a situation in the State of SEC. 208. Paragraph (2) of subsection (c) SEC. 318. For the purposes of any modifi- Maine which is similar to those which havebeenof section 223 of the Social Security Act is cation which might be made after the datetaken care of in other States which amended to read as follows: - of enactment of this act and prior to July have "(2)The term 'disability' means inability 1, 1960, by the State of Maine of its existingmade similarrequests.The amend-to engage in any substantial gainful activity agreement made under' sectIon 218 of thement is acceptable. by reason, of any medically determinable Social security Act; any retirement system The question is on agreeing to thephysical or mental impairment whichcan be or such State which coven positions of teach-- amendment of the Senator from :Maineexpected to result in death or to be of ers and positions or other employees shall, [Mrs. SMITRJ. long-continued and Indefinite duration. For If such State so desires, be deemed (not- The amendment was agreed Lo. purposes of the preceding sentence, an in- withstanding the provisions of subsection (d) Mr. LONG.Mr. President,. I offer andividual who has such a medically deter- of such section)to consist of a separate minablephysicalormentalimpairment retirement system with respect tothe posi amendment which I ask to have read. shall, in the absence of substantial evidence tions of such teachers and a separate retire'- The PRESIDING OFFICER. Theto the contrary, be deemed to be unable to ment system with respect to the positionsamendment will' be 'stated for the infor—engage in any substantial gainful aètivity if, of such other employees; a'nd ror thepur-mation of the Senate. - solely by reason of having such an impair- posesor this sentence, the term "teacher" The LEGIsLATIVE CLERK. On page 104,ment, he is unable, as a practical matter, to shall mean any teacher, principal, supervisor,between lines 4 and 5, it is Proposed toobtain employment. An individual shall not school nurse, school dietitian, schoolsecre-insert the following new section; be considered to be under a disability unless tary or superintendent employed inany pub- he furhishes proof of the existence of such lic school, Including teachers inunorgan- GENERAL PRovISIoNS disability." ized territory. SEC. 512. TItle XI of the Social Security Act(relatingtogeneralprovisions) is Mr. REVERCOMB. Mr. President, I Mrs. SMITH of Maine. Mr. President,amended by adding at the end thereof theshould very much like I have discussed the amendmentwithfollowing new section: to have the the chairman of the Committeeon Fi- amendment accepted, but I have no such nance. "PAYMENTS TO STATES UNDER PUBLIC hope.However, I wish to present it to It pràposés to facilitate theex- ' ASSISTANCE tension of social—securitycoverage to PROGRAMS the Senate this evening. employees of certain municipalities "SEC. 1111. The Secretary shall not refuse Astheamendment states in Its title, into certify for payment any amount to whichit deals with the definition of disability. 17988 CONGRESSIONAL RECORD —SENATE August 16 It elaborates on and more distinctly de-though it Is true that he cannot get workfind employment, and also the fact that, fines "disability" as itis used in thearound home, the Social Security Ad-because of his physical condition, there Social Security Act. ministration has concluded that he is notwas no employment for him. It Is true that H. R. 13549. as passedeligible because it might be possible to Another case which has come to my by the House and reported by the Com-f or him to get work as a janitor In Newattention is that of a man who had a mittee on Finance, provides a number ofYork City.I believe that the latest re-splendid Job in one of the plants in my port of the trustees of the disability fundState; but he suffered a severe heart improvements in the disability program. Thereafter, he could not con- First, dependents' benefits would beshows that I am not overstating my case.attack. In discussIng the probable increase intinue his work; and his doctor said he payable.Second, the offset provision, was unable to perform it.fle had made because of the receipt of other disabilitythe number of disability claims under apayments into the fund for years; the benefits, would be eliminated. low-employment assumption, the reportdeductions had been made regularJ.y Third, a s1iht modification in thestates: from his wages.Yet the ruling, was of service requirement imme- Most of these claims would be denied, length since- the determination of disability, whilethat although he had a heart condition, diately preceding the disability wouldconsidering euch factors as age, prior workit was likely that he could find some beeffectuated.Theseareallgoodexperience, education and training,restswork, somewhere. As a matter of fact, changes.Noneoftheseprovisions,'primarily on' a medical determination ofMr. President, he could not find any however, would change the very strictlylimitationIn functionalcapacity, ratherwork; and his doctor continued to tell phrased and even more strictly admims-than on the availability of gainful employ-him that he could not and should not tered deñnition of "disability" in thement. - continue his regular work; and he could Social Security Act. Ifthis is to be the Interpretation ofnot find some lighter type of work. The amendments which appear in thethe disability definition, I believe Con- So my amendment would add that one House passed bill will be of absolutelygress wifi have to amend the definitionsentence to the definition of "total and no help to the tens of thousands of dis-in the act, in order to protect the basicpermanent disability," as the definition abled workers who have been deniedpurpose which the program was to serve.Is found in the existing law. benefitsbecausethesocial-securityAs aclarificationof Congressional in- Not only would such a person have people have said that they did not-havetent, I suggest, therefore, the adoptionto show that he was totally and per- a disability äo severe that it made themof my amendment, which would add themanently disabled—and in that connec- unable to engage in any substantialfollowing sentence to the existing defi-tion, he would have to bear the burden gainful activity." nition: of showing that, by means of iedical According to the words of their own For the purposes of the preceding sen-testimony—but he would also have to publication, entitled "If You Are 'Dis-tence, an individual who has such a medi-prove that, as a matter of fact, he could abled," and the letters I have received'cally determinable physical or mental im-not—because of his physica1disability— Xrom many disabled workers in Westpairment shall, in the absence of substan-obtain employment, and that therefore Virginia, the administrators of the acttial evidence to the contrary, be deemed tohe was qualified to receive the payments. are interpreting this to mean that "yoube unable to engage in any substantial gain. I believe such procedure would be fair must have a disability which is so severeful activity if, solely by reason of havingand practical; and I believe it would be such an impairment, he Is unable, as a prac- - thatit prevents you from doing any kind in accordance with the Congressonal of work.Not only ha the word "sub-tical matter, to obtain employment. intent in enacting the law; and I believe stantial" gotten lost in the shuffle but it This qualification of present law re-Swe' must include in the statute a defini-. appears to be immaterial as to whethertains, I believe, the basic concept thattion which will result in the proper ad- the applicant for disability benefits hasthe disabling condition must be the soleministration of the act, in accordance any real chance of finding work at all inreason that prevents the worker fromwith the Congressional intent. his locality. findingsubstantial work.Itwould, According to estimates which have • The strict' definition of disability, inhowever, override the highly subjectivebeen furnished to me by the Chief Ac- my view, is directly responsible for theJudgment of some employee of the Socialtuary of the Social Security Administra- greatly reduced estimates in the numberSecurity Administration who, throughtion, the cost of the change I prQ- of workers who wifi qualify for benefits.some mysterious mental process, had de-pose would be between one-quarter and When the '1956 amendments were passedtermined that the worker might, underone-half of1 percent of the payroll. Is was stated that the program was over-certain economic conditions, and in cer-According to the actuary, the cost of the financed to the extent of 0.08 percent oftain parts of the country, be able to findamendment cannot be estimated with taxable payroll. The latest trustees' re-work.Moreover, this judgment, underany degree of definiteness. port, however, shows that this surpluspresent law, also requires the social se- Although I believe the estimate made has now grown to 0.15 percent of taxablecurity man to make a further determi-by the Social Security Administration is payroll. That is the surplus in the trustnation—namely, that the work the ap-too high—in line with the other over- fund -today.In other words, becauseplicant could theoretically pursue wouldestimates which have characterized this many disabled workers are being deniedbe substantial, taking into considera-program—I am willing to assume that benefits under the present definition,tion all sorts of factors in the applicant'sthe estimated cost might be reached, for benefit disbursements and administrativeeducation and employment history. the sake of preserving the principle of a costs are equal to onJ.y 0.30 percent while Such latitude of administrative dis-soundly financed social-security plan.I contributiQn Income and interest arecretion not only results in great varia-believe, however, that Americans would equal to 0.50 percent.This means thattion in determinations of disability, butbe willing to pay this relatively small in-. the disability trust fund will, under ex-means, for many workers, the denial ofcrease of one-fourth of 1 percent—which isting law, build up at a rapid rate be-benefits on one official's application ofwould amount to only $10.50 a year for a cause estimated benefits are 30 percentextremely vague standards. worker who was paying the tax on wages less than the amount of money which will I wish to call to the attention of theof $4,200, or to only $12 a year in the go into the fund.Moreover, there areSenate two cases, Mr. President—andcase of a worker paying the tax on indications that even these cost estimatesmany others have come to my notice.wages of $4,800 a year—in order to be are too high. The actunal section of theOne is that of a man wh lost both hisassured of having genuine disability in- house report on this legislation states;legs.He was over 50 years of age.Insurance.I believe there is not a worker The actual e,perience to date under theevery way he was qualified to receiveor an employer in the United States who very strict definition of disability in the lawthe payments—except for the ruling, bywill be unwilling to contribute that much, has been significantly lower in cost than thesomeone in the Social Security Admin-in order to make sure that the totally and intermediate-cost assumptions would ndt-istration, that, although he had lost bothpermanently disabled are, in fact, made cate, his legs, he still could perform somesecure under the law. It Is perhaps gratifying to some per-work.But that person in the Social Therefore, Mr. President, I hope the sons that the disability program is notSecurity Administration failed to takeamendment will receive the earnest con- costing as much money as originallyinto consideration the fact that, as asideration of the Senate, and will be estimated. But it Is of little solace to apractical matter, that disabled man hadagreed to. disabled coal miner in my State to betraveled from place to Place, seeking The PRESIDING OFFICER (Mr. told that this is a strict definition and,employment, but had not been able toMORTON in the chair), The question is 1958 CONGRESSIONAL RECORD —SENATE 17989 on agreeing to the amendment of thement, but I took the position, and take itto him there is no basis of actuarial e*- Senator from West Virginia. now, that it does not go far enough, par-perience for the administration of such Mr. KERR. Mr. President, much as Iticularly in defining what disability is.a program.It is a worthy effort, and regret it, I must rise in opposition to theThat is a practical question.I spoke ofno one would be happier to make such amendment submitted by the Senatortwoexamples—therearemany—ofbenefits available to workers than would from West Virginia. where men are declared medically to bethe Senator from Oklahoma. But there I understand he has predicated theable to work. A man without legs willis a disability provision in the law. Un- submission of his amendment on the as-be declared able to perform certain work.der it we have an obligation to those sumption that there is now a surplus inWhen he goes to find work, he learnswho are eligible.A program is set up the fund for the disability program ofthat nobody has a job for him, becauseon the basis of which it can be observed, our social security structure. he is a legless man. and under which experience can be ob- Mr. REVERCOMB. On that point, will The question of who is disabled be-tained. the Senator from Oklahoma yield to me?comes not only a medical question, but I do not believe it would be wise to Mr. KERR.I yield. very much a practical question.Suchlaunch into an expansion of it, the limits Mr. REVERCOMB.I was informeda man cannot find work because of hisof which are not known, and cannot be that there was a surplus, to the extent Idisability and affliction.It isto thatdetermined, and with reference to which have stated. type of case that I wanted a practicalthere is no actuarial experience avail- Mr. KERR. The Senator from Westtype of definition extended. able to enable us to determine exactly Virginia isentirely _correct; there has Mr. KERR.I may say to the Senatorwhat the cost might be. been a surplus. that I was one of those who sponsored I would think the Senator himself Mr. REVERCOMB. In fact, I wentdisability provisions which are in thewould believe that, if we are going to further; I pointed out that the amend-law in effect at this time.I did so onundertake such a tremendous expansion ment might cost an additional amount,the floor of the Senate in 1956, whenof the program, we would do well to in order to make the fund secure.Isuch a provision was adopted.I favoredhave extended hearings,sothat we stated that it is my information that theit then.I favor it now.I favo: suchwould have the best knowledge and the amendment would cost one-half of 1 an expansion.Itis expanded in thebest thoughts on the subject which are percent to one-quarter of 1 percent more.current bill.But I remind the Senator,available, and so there might be delib- But my point is that even if the amend-as he has indicated, that not even he,erations by whichever committee would ment were found to cost that much more,the authorofhis own amendment,have appropriate jurisdiction, in order adoption of the amendment is justified,knows how much the provision for itthat after such investigation, hearings, and that it is necessary that the amend-would cost. anddeliberations,theremightbe ment be adopted, in order to carry out Mr. REVERCOMB. Will the Senatorbrought before the Senate what the cost the intent of the act. yield further? would be, what the benefits would be, So I desire to point out that fact to Mr. KERR.Yes. and a provision for collecting the money the Senator from Oklahoma, particularly Mr. REVERCOMB. Usingfigureswith which to pay for the benefits. when he says that I premise my amend-given by the Chief Actuary of the Social I do not need to remind my good ment on a belief that there is a surplusSecurity Administration, as conveyed tofriend his amendment does not provide in the fund. me—and I used the figures in my state-the means for financing the benefits pro- Mr. KERR.I appreciate that. ment—on a $4,200 basis, at one-quartervided by his amendment.If it would However, the statement the Senatorof 1 percent, it would cost $10.50 a year acost one-half of 1 percent, and he has from West Virginia has just concludedperson. On the basis of the act pro-told us it might do so, and in view of indicatesthedifficultyin connectionposed to be enacted, which raises thethe fact that is the amount involved in with his amendment. He said that hisamount of the payroll tax to be laid, itthe bill providing for beneficiaries, and amendment, if adopted, might make itwould amount to $12 a year. assuming it would cost an additional necessary to raise the tax in one amount I make the argument, and have madeone-half of 1 percent, the Senator would or another; he said he does not knowthe argument, that is Lot an exètssfveconfront the Congress with the neces- which one would be required.I submitcost in order to carry out the purposessity of either doubling the payment for to him that neither do I know that. of the law and protect these people. the disability program or having it op- But with reference to the current sur- We may differ about it.Some mayerate on the basis of paying enough plus, I must say to him that the provi-say it is too much.I take the positionmoney to take care of only 50 percent sions, already in the bill, for increasedit is not. of the claims which would be made un- benefits for those who are disabled, and The Senator from Oklahoma hasder the law as it exists, or under the who arc eligible, under the provisions ofstated I do not know what it will cost.law as it would be if the amendment existing law, to receive these payments,My statement was based upon the figureswere adopted. will end the possibility of the further ex-of the Chief Actuary, wherein he stated Mr. REVERCOMB. Let me relieve the istence of a surplus under the currentthat, estimated actuarially, it would costworry of the Senator that no provision rate of taxation for this part of thebetween one-quarter of1 percent andis made for an increase in the payroll program. one-half of1 percent—$2,500,000 to $5tax in this particular amendment.If In other words, the pending bill con-million—which is not very much, in mythe Senator will accept the amendment, tains provisions for additional benefitsopinion. or if this body will adopt it, there will for the disabled, benefits in the form of Mr. KERR.I may say to the distin-immediately be offered an amendment to payments for dependents.The pendingguished Senator his response to my state-provide for an increase in the tax.I bill calls for requirements which will bement demonstrates that neither he norrealize the amendment does not carry easier to comply with.In the pendingthe actuarial authorities he is quotingwith it any provision for increasing the bill,therequirement that paymentsknow what it will cost.Therefore, itpayroll tax, but if the amendment is must be made during the 13 monthswould not be consistent with the modestyadoptedatthisstage,therewill prior to the certification of disability iswhich the Senator from Oklahoma haspromptly be offered, I assure the Sena- eliminated; and the pending bill is moreto try to tell the Senate what it wouldtor, an amendment to provide the neces- liberal in regard to the disability pro-cost.The Senator from West Virginia gram than is the existing law. has saidit would cost between one-sary increased payroll tax. The estimate is that if the bill, as itquarter and one-half of 1 percent or the Mr. KERR. In view of the fact that now stands, is enacted, its requirementspayroll tax.I say the present programthe Senator does not know now whether for the payment of benefits are suchin its entirety amounts to one-half of 1the amendment would mean a 50 per- that no surplus will be accumulated frompercent.So the Senator does not knowcent or a 100 percent inbrease in the the tax now provided for the program. whether it will increase the amount 50payroll tax at this moment, I do not Mr. REVERCOMB. Mr.President,percent or 100 percent. know what could transpire so that all will the Senator yield at that point? I say to the Senator from West Vir-of a sudden his mind would be illumined Mr. KERR.I yield. ginia, he cannot go to any insuranceand would become enlightened.The Mr. REVERCOMB.1 have not saidcompany on this earth and buy a policySenator does not know now, but if the there is no improvement made.In mycontaining the kind of provision he isamendment is adopted, eo instanti he statement I said there is an improve—attempLing to write into this bill.I saywill. 17990 CONGRESSIONAL RECORD —SENATE August 16 Mr. REVERCOMB. The Senator will The PRESIDING OFFICER. Withoutof wages paid and the• number of jobs know, because he is using the figures ofobjection, the amendment will be printedin the supergrades in the Social Security the Chief Actuary, which he has used in the RECORD. Administration.The statement is as several times.The figure is that the The amendment is as follows: follows: cost will be between one-fourth of1 On page 103, after line 6, Insert the follow— For many years this committee has worked IIng: with officials and technical staff of the Social percent and one-half of 1 perceht. Security Administration In connection with have spoken of those figures two or three "PAYMENTS TO LEGAL REPRESENTATIVES the analysis legislation and the development times this evening.The figures have "SEC. 511. (a) Title XI of the Social Secu-of proposals for such legislation.The com- been furnished by the official whom therity Act is amended by adding after sectionmittee has been impressed with the high Senator from Oklahoma is now defend-1110 the following new section: caliber and outstanding ability of the staff ing, the Chief Actuary of the Social Se- '"PUBLIC ASSISTANCE PAYMENTS TO LEGAL and with their diligence and devotion to curity Administration. REPRESENTATIVES the task which the committee has assigned Mr. KERR. I do not think an amend- 'SEC. 1111. For purposes of titles I, IV, X,to them. The committee is quite concerned ment could be offered which would pro-and XIV, payments on behalf of an individ-over the fact the Social Security Adminis- vide for either one-half or one-quarterual, made to another person who, has beentration, with over 23,000 employees, has one of 1 percent without specifically statingjudicially appointed, under the law of theof the lowest incidences of supergrades of State in which such Individual resides, asany comparable Federal agency.For ex- the amount. legal representative of such individual forample, the Bureau of Old-Age and Survivors the purpose of receiving and managing suchInsurance with over 22,000 employees has payments (whether or not he is such indi-only 3 supergrades.There are many agen- vidual's legal representative for other pur-cies in the Government with only a fraction poses), shall be regarded as money paymentsof this number of employees with more su- to such individual.' pergrades. "(b) The amcndment made by subsection (a) shall be applicable in the case of pay- Mr. President, I have discussed this ments to legal representatives by any Statematter with the chairman of the Com- made after June 30, 1958; and to such pay-mittee on Finance, and other members of ments by any State made after December 31,the committee.I have also spoken to 1955, and prior to July 1, 958, if certifica-the chairman of the Committee on Post tions for payment to such State have beenOffice and Civil Service, the distinguished made by the Secretary of Health, Education,Senator from South Carolina [Mr. JOHN- and Welfare with respect thereto, or suchSTON], and the minority member on the State has presented to the Secretary a claim (and such other data as the Secretary mayRepublican side, the Senator from Kan- require) with respect thereto, prior to July 1,sas [Mr. CARL50N].All concede that 1959." the divisions are understaffed in the On page 103, line 8, strike out "511" andhigher grades. insert in lieu thereof "512." It seems to me that while we are con- ThePRESIDINGOFFICER. Thesidering changes in the social-security question is on agreeing to the amend-law, this is the time to give consideration ment of the Senator from Louisiana. to an injustice with respect to the divi- Mr. KERR. Mr.President, thesion, and to provide the proper staffing amendment, as modified, is acceptable.to which the division is entitled, so that ThePRESIDINGOFFICER. Thethis agency will have the same kind of question is on agreeing to the amend-staff we have provided for every other ment offered by the Senator from Loui-agency of Government. siana. For that reason, Mr. President, I have prepared an amendment, which isas SOCIAL SECURITY AMENDMENTS OF The amendment was agreed to. Mr. CHURCH. Mr. President,thefollows: At the end of the bill add the 1958 Senate is soon to take another memo-following new section: The Senate resumed the considerationrable stride toward perfecting a great SEC. 705. Section 701 of the Social Security or the bill (H. R. 13549) to increase bene-social security system and keeping itAct is amended to read as follows: fits under the Federal old-age, survivors,abreast of the time. The bill before the "SEC. 701. The Secretary of Health, Edu- and disability insurance system, to im- cation, and Welfare is authorized, subject Senate will give adequate strength toto the procedures prescribed by section 505 prove the actuarial status of the trustthe social security system while increas-of the Classification Act of 1949 (5 U. S. C. funds of such system, and otherwiseing the size of each month's check to1105), to place a total of 18 positions In improve such system; to amend the pub-older citizens who are drawing retire-the Social Security Administration in grades lic assistance and maternal and childment benefits. 16, 17, and 18 of the general schedule.Not- health and welfare provisions of the So- While I do not believe a 7 percent in-withstanding any other provision of law, cial Security Act; and for other purposes.crease is large enough to compensate forsuch positions shall be in addition to the Mr. KERR.I yield the floor, Mr. number of positions authorized to be placed the rise in the cost of living which hasin such grades by subsection (b)of such President. occurred since the last adjustment wassection 505: Provided further, That the rate ThePRESIDING OFFICER.Themade in social security benefits, never-of basic compensation of the Commissioner question is on agreeing to the amend-theless the bill will help immensely to-of Social Security is hereby established at ment offered by the Senator from Westwardalleviatinghardshipsso many$20,000 per annum." Virginia. people who depend upon social security The amendment was rejected. checks for sustenance face. Mr. President, I could give a further Mr. LONG. Mr. President, I offer the I commend also the provisions of theexplanation of the need for this action, amendment at the desk, which is notbill which upgrade public assistance inbut I do not believe it is necessary. The printed but is typed.It is the amend-thevariousStates.These provisionscommittee recognizes the need.The ment which the Senator from Oklahomawill greatly benefit the needy, the feeble,committee has so stated in its report. said he was willing to accept as a substi-and the handicapped in Idaho, and willThe distinguished chairman of the Sen- tute for the amendment I previouslyimprove the maternal and child welfareate Committee on Post Office and Civil offered. programs as well. Service is on the floor, as is the distin- The PRESIDING OFFICER. The With the passage ofthishistoricguished minority member of the com- amendment will be stated for the infor-measure Congress will keep faith withmittee on the Republican side, the Sena- mation of the Senate. our senior citizens who in their more ac-tor from Kansas [Mr. CARL50N]. Mr. LONG. Mr.President,Iasktive and vigorous years contributed so Mr. President, I offer the amendment unanimous consent that the reading ofmuch to build and enrich our land. and ask that it be agreed to. the amendment be dispensed with, and Mr. THYE. Mr. President, on page 43 ThePRESIDINGOFFICER. The that the amendment be printed in theof the committee report on the bill, I findamendment will be stated for the in- RECORD at this point. a statement with respect to the questionformation of the Senate. 1958 CONGRESSIONAL RECORD—SENATE 11991 TheLEGISLAUvE CLERK.At the end ofthe low scale of supergrades in thesegrades available and unassigned, which the bill it is proposed to add the follow-important agencies.We have talkedmight be assigned to this agency, which, ing new section: about the matter in previous debate.according to the Finance Committee's Sw. 705. Section 701 of the Social SecurityThe committee itself has recognized thereport and the remarks of the distin— Act is amended to read as follows: inequity by writing the report.Theguished Senator from Minnesota, are so "SEc. 701. The Secretary of Health, Educa-committee statement is to be found inbadly needed.If they are not available, tion, and Welfare is authorized, subject tothe report on page 43. the procedures prescribed by section 505 of I shall cooperate in every way T can in the Classification Act of 1949 (5 U. 5. 0. If we have failed to act, I cannot un-the next Congress to see that they are 1i05), to place a total of 18 positions in thederstand who isresponsible.Ifthemade available. Social Security Administration in grades iG,Post Office and Civil Service Committee Mr. SMATHERS.Mr. President,I 17, and 18 of the General Schedule.Not-has not acted, then it certainly behooveshad intended, on behalf of the senior withstanding any other provision of law,me to seek action on the floor, when weSenator from Florida [Mr. HOLLAND] such positions shall be in addition to theare adding to the responsibilitiesofand several other Senators, including number of positions authorized to be placedthese divisions in a legislative enact-myself, to offer an amendment to pro- in such grades by subsection (b)of suchment which is before us.For that rea-vide that people drawing social security section 505: Provided further, That the rate son,I of basic compensation of the Commissioner offer the amendment and askbenefits would be able to work outside of Social Security Is hereby established atthat it be agreed to. and make up to $1,800 a year and still $20,000 per annum." I am now happy to yield to my friendbe eligible to draw their full social secu- from Kansas. rity benefits.The present limit as to Mr. JOHNSTON of South Carolina. Mr.CARLSON. Mr.President,Iwhat a recipient can earn and still draw Mr. President, will the Senator yield?brought this, question up in the Financesocial security is $1,200.The previous Mr. THYE.I am delighted to yield.Committee during the consideration oflimitation until 2 years ago was only Mr. JOHNSTON of South Carolina.the bill.The Senator's amendment has $900. We have handled this matter of super-great merit, but the committee and the Ithink thepresentlimitationof grades on an overall basis, as the pres-distinguishedchairman,theSenator$1,200 should be raised to $1,800, be- ent Presiding Officer, the Senator fromfrom Virginia [Mr. BYRD] convinced mecause many people—certainly in my Kentucky [Mr. MoRToN] knows.Thethat it should not be offered in connec-State, particularly, and in California administration comes before the com-tion with that bill, and therefore I with-and other States where there is a large mittee and asks for the total numberdrew it. proportion of elderly people—who would of supergrades needed for all depart- Anyone who studies the salaries in thelike to work, because they fInd it impos- ments.The provision is made in oneSocial Security Administration must ad—sible to enjoy a decent ilving on the pool, and the pool is then divided amongmit that there should be some increases.limited amount of social security pay- the various departments in accordanceThe Social Security Commissioner re-ments they now receive. These fine eld- with what isfelt to be the need forceives a salary of $17,500.I proposederly people are now unable to get full- supergrades. That is the way the mat- $20,000.I find that at the present timetime jobs, or even dignified part-time ter is handled at the present time. heisreceivinglesssalary than thejobs.It is my belief that our Nation If we start taking such action on theChairman of the Railroad Retirementactually needs the productive capacity floor, I fear it will not be long beforeBoard, who holds a very minor position,of these elderly people. We are not now every time a department requestisfrom the standpoint of the number ofproducing as we should.It is undigni- under consideration we will have to con-employees under his control and regula-fied and indecent when these elderly sider nothing but supergrades. tion.He receives less salary than thepeople cannot get sufficient benefit from Mr. President, under such a systemtwo other members of the Railroad Re-thesocialsecurity programtolive it would not be long until we would havetirement Board. in some dignity and they make itso more chiefs than we would have war- The Administrator of the social secu-they cannot get jobs worth anything as riors, squaws, and papooses. rity program has 75,000,000 beneficiariesregular employment in order to make Boiling it all down, wemust not leg-under the program, and 23,000 employ-up the difference. islate in this manner.If we do so, itees.There are three supergrade posi- I thought we would try to remedy will be the wrong approach and we willtions.I have urged that we provide 18that particular situation at this time, simply muddy up the supergrade situ-additional supergrade positions.At thebut I am advised that if such an amend- ation.Each agency should go to thebeginning of the next s&sion of Con-ment were adopted, it would cost the Commissionpoolforneededsuper-gress, when our committee begins to con-social security fund some $600 million. grades.I do not question that thissider salary increases, if this amendmentThe actuary has justtold me that agency needs the supergrades.I amis not approved today, I expect to takerather astounding fact.I have not had only questioning the method of obtain-action. a chance to study this conclusion, and ing them. Mr. THYE. Mr. President, in view ofso must for the time being accept it. The agency may well need some morethe objection voiced by the chairman of I know that this bill already faces supergrades at the present time.I havethe committee and the assurance I havea prospect of veto.Rather than pursue not looked into that matter thoroughly.that this question will be considered asour amendment at this particular time, I take for granted what the Senatorsoon as the new Congress convenes, I seeI have decided not to press it, for it from Minnesota says is correct.I havenothing to be accomplished by pressingwould increase the possibility of a veto, also been advised by the Commissionfor a vote on the amendment, because Ibut I will press it next year.I shall itself.The agency quite possibly maycan foresee that I might meet withnot press it now because I think it bet- need these positions.But the properfailure.I do not want to suffer failure.ter to make the forward step in social consideration of the matter is before theFor that reason I withdraw the amend-security, public assistance, and aid to group which allots the grades; the ap-ment. orphans and blind which we are making plication can be made to the Post Office in—the present bill, rather than to try to and Civil Service Committee, and we The PRESIDING OFFICER.Theget everything we would like to have, can provide the necessary positions inamendment is withdrawn. and have the bill finally vetoed, so that the proper way. Mr. MORTON. Mr. President, I amnothing would be gained this year. glad the Senator from Minnesota has The PRESIDING OFFICER. The bill Mr. CARLSON.Mr. President, willwithdrawn his amendment. As a mem-is open to further amendment. the Senator from Minnesota yield? ber of the Post Office and Civil Service Mr. KERR. Mr. The PRESIDING OFFICER.Does President,Ibe- Committee, I am most sympathetic withlieve the Senator from Florida[Mr. the Senator from Minnesota yield to thethe problem he has brought to our atten-SMATITER5] has a couple of amendments Senator from Kansas? tiontoday.The administration hasto offer. Mr. THYE.Before I yield to thecome forward in the past couple of years Mn MORSE. Mr. President, a par- Senator from Kansas, I should like toand asked for an increase in supergradesliamentary inquiry. comment on the remarks made by thein general.The Civil Service Commis- The distinguished chairman of the Post Of-sion can then assign super grades. PRESIDING OFFrCER. The fice and Civil Service Committee. We ISenator will state it. intend personally to look into the prob- Mr. MORSE.I have been waiting to have long recognized the inequity oflem to see if there are not some super—offer an amendment to the bill. 17992 CONGRESSIONAL RECORD —SENATE August 16 Mr. SMATHERS. Mr. President, I of-ment he will offer next.I ask that thementofferedbytheSenator from fer the amendment which I send to theSenate accept the amendment. Florida [Mr. SMATHER5]. desk and ask to have stated. ThePRESIDINGOFFICER. The The amendment was agreed to. ThePRESIDING OFFICER. Thequestion is on agreeing to the amend- Mr. MORSE. Mr. President, I send an amendment will be stated. ment offered by the Senator from flor-amendment to the desk and ask for its The LEGISLATIVE CLERIC. On page 100,ida. immediateconsideration. line 14, it is proposed to strike out "70 The amendment was agreed to. The PRESIDING OFFICER. Does the. Mr. SMATHERS.Mr. President, ISenator desire to have the amendment per centum" and insert in lieu thereofoffer the amendment which I send to the "65 per centum." printed in the RECORD? desk and ask to have stated. Mr. MORSE. Yes, but it is not neces- Mr. KERR. Mr. President, this state- The ment, if adopted, would reduce the as- The PRESIDING OFFICER. sary to read it.I shall discuss it. amendment will be stated. The PRESmING OFFICER. Without sistance program cost. The LEGISLtTIvE CLERIC. On page 94, Mr. SMATHERS. Mr. President,if objection, the amendment will be printed line 3, it is proposed to strike out "five- in the RECORD. the Senator will yield, I will state that.Isixths"andinsert"fourteen-seven- have been advised that it would reduceteenths"; on page 94, line 5, it is pro- The amendment offered by Mr. MORsE, the cost of the total bill from $288 mil- ordered to be printed in the RECORD, is posed to strike out "$18" and insertas follows: lion down to $217 million. "$17." Mr. KERR. That is correct. Mr. SMATHERS.Mr. President, I It is proposed tO strike out all after the Mr. SMATHERS. The reason for of-offer this amendment for exactly theenacting clause and to insert in lieu thereof fering the particular amendment is that the following: same reasons as I offered the previous "TITLE I—AMENDMENTS TO TITLE U OX? TUE I think we must be practical and sen-amendment. I think it is important that SOCIAL SECURITY ACT sible.Other Senators and I have beenwe take a step forward this year with rather reliably informed that the bill inrespect to improving the benefits of the "Increase in primary 1ns'Urace amount I "SEc. 101. (a) Subsection(a)of section itspresent form would be vetoed. social security program to the elderly215 of the Social Security Act is amended to know that there are some who wouldpeople and the needy people of the Na-read as follows: take the position that we ought to passtion.It serves no purpose for a dog to "'(a) Subject to the conditions specified the bill we wish to pass, and let it besit back and bay at the moon. Nor doesin subsections (b), (c), and (d) of this sec- vetoed. But that would avail our old andit accomplish anything for Senators totion, the primary insurance amount of an needy nothing.Even with this partic-hold glittering promises, or assurances,Insured individual shall be whichever of the - ular amendment, the present bill wouldbefore our elderly people—and then knowfollowtngis the largest: represent a sizable step forward for thosethey will be snatched away by veto. "'(1) The amount in column IV on the eligible and enjoying the benefits of so-That is cruel and hurtful.If the Senateline on which in column Ifl of the following is notable appears his average monthly wage (as cial security and the old-age assistanceaccepts this amendment, there determined under subsection (b)); program.I have always believed it isdoubt that the President will accept the "'(2) The amount in column IV on the better to get something rather thanbill and we shall have made a consider-line on which in column II of the following nothing.It is for that reason that I of-ablestepforward. Thisparticulartable appears his primary insurance amount fer this amendment, in the belief thatamendment would reduce the cost of the(as determined under subsection (c)); if adopted, the bill then would have bet-program to $197 million. "'(3) The amount in column IV on the ter prospects of becoming law, and tbe Mr. KERR. Mr. President, I feel theline on which in column I of the following old people of the country would thensame way about this amendment as Itable appears his primary insurance benefit receive some increased advantages overdid with respect to the previous amend-(as determined under subsection (d)); the present situation, beginning nextment.It is with deep regret that I con- "'(4) In the case of an individual who January. template it, but, sharing the feeling ofwas entitled to a disability insurance benefit Mr. KERR. Mr. President, I agreethe Senator from Florida, I agree to ac-for the month before the month in which he with what the Senator from F'orida hascept the amendment. became entitled to old-age insurance bene- said with reference to this amendment. The PRESIDING OFFICER. Thefits or died, the amount in column IV which The same thing applies to the amend-question is on agreeing to the amend-Is equal to his disability Insurance benefit. " 'Tablefor determining primary insurance amount and maximumfamily benefits

ILL LV V "'I H LU LV V "'I LI (Maximum (Primary(Maximum '(Primary insurance(Primary insurance (Primary '(Primary Instimnee(Primary insurance amount under (Average insurance family 1939 amountunder (Average insurance family benefit under 1939 benefit under act,asmodified) 1954act) monthlywage) amount beneftts) act,as modified) 1954 act) monthlywage) amount benefits) payable) payable) And the ° 'If Or his primary And the "'If an Individual's Or his primary an Individual's maximum primary insurance insurance amount maximum primary insurance insurance amount benefit (as deter- (as determined • amount of henefit (as deter- (as determined amount of The benefits under subsec. The benefits mined tinder under subsec. mined under payahle subsec. (c)) is— (c)) is— amount payable subsec. (c)) is— (c)) is— amount Or his average referred (as pro- Or his average referred (as pro- monthly wage to in the vided in monthly wage to in the vided in precedingsec. 203 (a)) (as determinedprecedingsec. 203 (a)) (as determined on the hasis under subsec.paragraphson the basis under subsec.paragraphs (h)) is— of this of his wages But not (b)) is— of this of his wages But not But not But not " 'At more At more subsection and self- "'At more At more subsection and self- shall he— employ- than— shall be— employ- least— than— least— than— least— that'— least— ment ment income income shall be— shall be—

$76 $52.30 $78.50 $40.00 $60.00 $15.77 $16.04 $41. 40 $41.80 Less than $10. 95 $31. 90 Less than $59 77 53.00 79.50 59 40.70 61. 10 16.05 16.44 41.90 42.40 "'$10.98 11.24 $32.00 32.50 78 53.70 80.60 60 41.30 62.00 16.45 16.80 42.50 42.90 11.26 11.48 32.60 33.00 43.50 79 54.40 81.60 61 42.00 63.00 16.81 17.23 43.00 11.49 11.80 83.10 33.60 80 55.00 82.50 62 64.10 17.24 17.60 43.60 44.00 11. 81 12.04 33.70 34.10 81 55.80 83.70 43.40 10 17. (U 18.08 44. 10 44.60 12. 05 12.35 34.20 34. 70 63 45.10 82 56.40 84.60 64 44.00 18.09 18.50 44.70 12. 36 12.60 34.80 35.20 45.70 83 57.20 85.80 65 44.80 67. 18.51 19.00 45.20 12. 61 12.88 35.30 35.80 46.20 84 57.80 86.70 66 45.40 68. 10 19.01 19. 36 45. 80 12. 89 13.15 35.90 36. 30 85 58.50 87.80 67 69.30 19.37 19.84 46.30 46.80 13. 16 13.44 80.40 36.90 88 59.20 88.80 68 46.80 70.20 19.85 20.20 46.90 47.30 13.45 13.68 37.00 37.40 47.90 87 59.90 89.90 69 47.50 71.30 20.21 20.60 47.40 13. 69 1400 37.50 38.00 4&40 88 650 9th80 38.50 70 48.20 72.30 20.61 20.92 48.00 14.01 14.24 38.10 21.28 48.50 49.00 89 61.30 92.00 39.10 71 48.90 20.93 14. 25 14.65 38.60 21.29 21.59 49.10 49.50 90 61.90 92.90 14.80 39.20 39.60 72 49.50 74.30 94.10 14. 58 76.50 21.60 21.88 49.60 solO 91 62.70 15.12 39.70 40.20 73 95.00 14.81 76.40 21.89 22.16 50.20 50.60 92 63.30 15.41 40.30 40.70 74 50.90 96.00 16. 13 51.70 77.60 22.17 22.40 50.70 51.20 93 64.00 15.42 15.76 40.80 41.30 75 1958 CONGRESSIONALRECORD —SENATE 17993 "'Table for determining primary insurance amount and maximum family benefits—Continued

d iI• m iv V •I II III IV V 0 (Primary Insurance(Primary insurance (Primary(Maximum"Primary insurance(Primary insurance (Primary(Maximum benefit under 1939 amount under (Average insurance family benefit under 1939 amount under (Average insurance family act, as modified) 1954 act) monthly wage) amount benefits) act, as modified) 1954 act) monthly wage) amount benefits) payable) payable)

'If an individual's Or his primary And the ' Ifan individual's Or his primary And the primary insurance insurance amount maximum primary insurance insurance amount maximum benefit (as deter- (as determined amount Of benefit (a deter- (as determined amount of mined under under subsec. The benefits mined under under subsec. The benefits subsec. (c)) Is— (c)) is— amount payable subsee. (c)) is— (c)) is— amount Or his average referred payable (as pro- - Or his average referred (as pro- monthly wage to in the vided in month!y wage to in the vided in (as determinedpreceding sec. 203 (a)) • (as determinedpreceding under subsec. paragraphs: on the basis sec. 203 (a)) But not under subsec.paragraphson the basis But not (b)) is— of this of his wages But not • Bu not (b)) is— of this of his wages "'At more At more subsection and lf- 'At more At more subsection and self- least— than— least— than— shall be— employ- least— than— least— than— - shall be— employ• ment ment income income shaH be— shall be—

$22. 41 $22.65 $51.30 $51. 70 Less than $94 $64.70 $97. 10 $35.01 • $35. 74. 20 $74. 30 22.66 22.88 Less than $179 $92. 90 $165.00 51.80 52. 30 95 65.40 98. 10 35.21 35.' 74.40 74. 50 180 93. 20 22.89 23. 08 52. 40 166.50 52. 80 96 66.00 99. 00 35.31 35. 74.60 74. 70 181 93. 40 167. 50 23.09 23.32 52.90 53. 40 97 66.80 100. 20 35. 49 3.' 74.80 74. 90 2333 182 93. 70 16S.40 23.52 53.50 53. 90 98 67.40 101. 10 35. 61 35. 75. 00 75. 10 183 93. 90 169. 30 23.53 23.76 54.00 54.50 99 68.20 102. 30 35. 71 3& 75.20 75.30 184 94.20 23.77 23.96 170.20 560 55.00 100 C8.80 103. 20 35. 81 36. 1 . 75.40 75. 50 185 94.40 171.20 23. 97 24.20 55.10 55.60 101 69.50 104. 30 36. 01 36.10 75.60 75.70 186 - 24.21 24.44 94.70. 172. 10 55.70 56. 10 102 70.20 105. 30 36. 11 36. 2S 75. 80 75. 90 187 94.90 173. 00 24. 5 24.70 56.20 6.70 103 70.00 106.40 3G.29 36. 40 76. 00 76. 10 188 24.71 95. 20 173. 90 24.96 56.80 57. 20 104 71. 50 107. 30 a41 36. 50 76.20 76. 30 189 95.40 174.90 24.96 25. 20 57. 30 57. 80 105 72.30 108. 50 36,51 36. 60 76. 40 76. 0 190 95. 70 17 5. 80 25.21 25. 44 57. 00 58. 30 106 72.90 109. 40 36. 61 36.80 76.60 76. 70 191 95. 90 176. 70 25.45 25.78 68.40 ,& 90 107 73.70 110. 60 36. 81 36.90 76.80 76.90 192 06.20 25.79 26.00 177.60 59.00 59.40 108 74.30 111.50 36. 91 37.08 77.00 .77. 10 193 96. 40 178. 60 26. 01 26. 28 59. 50 60. 00 109, 75.00 112.50 37. 09 37.20 77.20 -77. 30 194 96. 70 179. 50 26.29 26.60 60.10 60. 50 110. 75170 113. 60 37. 21 37.30 77.40 77. 0- 195 26.61 96. 90 180.40 26.70 60.60 60.70 111 75:90 113. 90 7. 31 37. 40 77. 60 77.70: 196 97. 20 181. 30 26.71 26. 76 60. 80 60.90 .112 . 7620 114.30 37.41- 37. 60 77. 80 77,90 197 97.40 182.30 26.77 26.88 61.00 61. 10 113 76.40 114. 60 37. 61 37. 70 78. 00 78. 10 19S 97.70 183.20 26. 89 27.00 61.20 61.30 114; 76. 70 115.10 37.71 37. 88 78. 20 78. 30 199 97. 90 27.12 184. 10 27.01 61.40 61. 50 115 76.90 115. 40 37. 89 38.00 78.40 78.50 200 98. 20 185. 00 27.13 27. 24 61. 60 61. 70 116 77.20 115.80 38.01 38.11 78.60 78. 70 201 98. 40 186. 00 27. 25 27. 32 61. 80 61. 90 117 77.40 116. 01 38. 12 38. 20 78. 80 78. 90 202 98. 70 186.90 27 33 27.46 62.00 62. 10 118 77.70 116. 60 38. 21 38.44 79.00 79. 10 203 08. 90 187. 80 27. 47 27.60 62.20 62. 30 119 77.90 116. 90 38. 45 38. 56 79. 20 79. 30 204 99. 20 188. 70 27.61 27. 73 62. 40 62. 50 120 78.20 117. 30 38. 57 38.76 79.40 70. 0 2fl5 90. 40 189. 70 27.74 27.80 62.64) 62. 70 121 78.40 117. 60 38.77 38.88 79.60 79. 70 206 99. 70 190. 60 27.81 27. 92 62. 80 62. 90 122 78.70 118. 10 38. 89 39. 00 79. 80 70. 90 207 09.90 191. 50 27.93 28.08 63.00 63.10 123 78.90 118. 40 39. 01 39. 12 80. 00 80. 10 208 100. 20 192. 40 28. 09 28.24 6&20 63. 30 124 79.20 118. 80 39. 13 39. 20 80. 20 80. 30 209 100. 40 193.40 28. 25 28.36 63.40 63.50 125 79.40 119. 10 39. 21 39. 44 80. 40 80. 50 210 100.70 194. 30 28.37 28.44 63.60 63.70 126 79.70 119. 60 39. 45 39.68 80.60 80. 70 211 100. 90 105. 20 28.45 28.61 63.80 63. 90 127 79.90 110. 00 39. 69 39.76 80.80 80.90 212 101. 20 196. 10 28. 62 28.76 64.00 64. 10 128 80.20 120. 30 39. 77 39. 89 81. 00 81. 10 213 101. 40 197. 10 28.77 28.92 64.20 64. 30 129 80.40 120. 60 39. 90 40. 00 81. 20 81. 30 214 101. 70 198. 00 28.93 29.00 64.40 64. 50 130 80.70 121. 10 40.01 40.20 81.40 81. 50 215 101.90 198. 90 29.01 29.16 64.60 64.70 131 80.90 121. 40 40. 21 .40.33 81.60 81.70 216 102. 20 199. 80 29.17 29.25 64.80 64.90 132 81.20 122. 10 40. 34 40.56 81.80 81. 90 217 102.40 200. 80 29.26 29.40 65.00 65. 10 133 81.40 123. 10 40. 57 40.68 82.00 82. 10 218 102. 70 201. 70 29. 41 29.48 65.20 65.30 134 81.70 124.00 40.69 40. 78 82. 20 82. 30 219 102. 90 202. 60 29.49 29.58 65.40 65.0 135 81.00 124. 90 40. 79 40. 88 82. 40 82. 0 220 103. 20 203. 50 29. 59 29.68 65.60 65. 70 136 -82.20 125. 80 40. 89 41.12 82.60 82. 70 221 103. 40 204. 4J 29. 69 29.84 65.80 65. 90 137 82.40 126. 80 41. 13 41. 22 82. 80 82.00 222 103. 70 205. 40 2g. 85 29.92 66.00 66. 10 138 82.70 127. 70 41. 23 41.44 83.00 83. 10 223 103. 90 206. 30 2g. 93 30.08 66.20 66.30 139 82.90 128. 60 41. 45 41.6 83.20 83. 30 224 104. 20 207. 20 30. 09 30.16 66.40 66. 50 140 83. 20 129. 50 41. 57 41.G7 83.40 83. 40 225 104.40 208 20 30. 17 30.27 6&60 66.70 141 8.40 130. 50 41. 68 41.76 8.60 8. 70 226 104. 70 200. 10 30. 28 30.36 66.80 66.90 142 8.70 131.40 41. 77 42.00 83.80 83.90 227 104. 90 210. 10 30.37 30.52 67.00 67. 10 143 8&O0 132.30 42. 00 42.11 84.00 84. 10 228 105. 20 210. 90 30. 53 30.64 67.20 67. 30 144 84.20 133. 20 42. 12 42.32 84.20 84.30 229 105.40 211. 90 30. 65 30. 80 67. 40 67. 50 145 84.40 134. 20 42. 33 42. 44 84. 40 84. 50 230 105. 70 212. 80 30. 81 30.92 67.60 67.70 146 84. 70 135.10 42.45 42.56 84.60 84.70 231 105.90 213. 70 30. 93 31.00 67.80 67.90 147 84.90 136.00 42. 57 42. 68 84. 80 84. 90 232 106. 20 214. 60 31. 01 31.08 68.00 68. 10 148 85.20 136. 90 42. 69 42.8 85.00 85. 10 233 10g. 40 215.60 31. 09 31.16 68.20 68.30 149 85.40 137. 90 42. 89 43.00 85.20 85.30 234 106. 70 216. 50 31. 17 31.36 68.40 68. 50 150 85.70 138. 80 43. 01 43. 20 85. 40 85. 50 235 106. 90 217. 40 31. 37 31.52 68.60 68.70 151 85.90 139. 70 43. 21 43.32 85.60 85.70 236 107. 20 218. 30 31. 53 31.64 68.80 68.90 152 8(.20 140. 60 43. 33 43. 44 85. 80 85.90 237 - 107.40 210. 30 31. 65 31.73 69.00 69. 10 153 86.40 141. 60 43. 45 43. 56 86. 00 86.10 238 107. 70 220. 20 31.74 31. 80 69. 20 69. 30 154 86.70 142. 50 43. 57 43. 76 8. 20 86. 30 239 107. 90 221. 10 31. 81 32.00 69.40 69. 50 155 85. 90 143.40 43. 77 43. 89 86. 40 86. 50 240 108. 20 222.00 32.01 32.10 69.60 69. 70 156 87.20 144. 30 43. 90 44.12 86.60 8(k70 241 108. 40 223. 00 32.11 32.28 69.80 69.00 157 87.40 145.30 44.13 44. 20 86. 80 86. 90 242 108. 70 22a90 32. 29 32.40 70.00 70. 10 158 87.70 146. 20 44. 21 44. 33 87. 00 87. 10 243 108. 00 224. 80 32. 41 32.50 70. 20 70. 30 159 87.90 147. 10 44.34 44. 44 87. 20 87. 30 244 109. 20 225. 70 32. 51 32.60 70.40 70. 50 160 88.20 148.00 44. 45 44. 68 87. 40 87. 50 245 100. 40 226. 70 32. 61 32.80 70.60 70. 70 161 88.40 140. 00 44. 69 44. 78 87. 60 87. 70 246 100. 70 227.60 32.81 32.90 70.80 70. 90 162 88.70 149. 00 44. 79 44.80 87.80 87. 00 247 100. 90 228. 0 32. 91 33. 08 71. 00 71. 10 163 88.90 150. 80 44.81 44. 84 88. 00 88. 10 248 110.20 229. 40 33. 09 33. 20 71. 20 71. 30 164 g9.2D 151.70 44. 85 44.88 88.20 88. 30 249 110.40 230.40 33. 21 33.30 71.40 71. 50 165 89.40 152.70 44. 89 45.60 8&40 88. 50 250 110.70 231. 30 33. 31 33.40 71.60 71. 70 166 89.70 153.60 8& 60 8& 70 251 110. 00 232. 20 33. 41 71. 90 33.60 71.80 167 89.90 154. 50 - 88.80 8&00 252 111.20 233. 10 33. 61 22. 70 72. 00 72. 10 168 00.20 155.40 89. 00 80. 10 253 111. 40 234. 10 33. 71 33.8 72.20 72. 30 169 90.40 156.40 89. 20 89. 30 254 111.70 235. 00 33. 89 34.00 72.40 72. 0 170 90. 70 157. 30 89.40 89. 50 255 111.90 235.90 34. 01 34. 10 72. 60 72.70 171 00.90 158. 20 89. 60 89. 70 256 112. 20 236. 80 34. 11 34.20 72.80 72. 90 172 91. 20 150. 10 89. 80 89. 90 257 112. 40 237. 80 34. 21 34.40 73.00 73. 10 173 91.40 160. 10 90.00 90. 10 258 112. 70 238. 70 34.41 34. 50 73. 20 73. 30 174 91.70 161.00 90.20 90. 30 259 112. 90 239.60 34. 51 34.68 73.40 73. 50 175 91.90 161. 90 90.40 90.50 260 113.20 240. 50 34. 69 34.80 73.60 73. 70 176 92.20 162. 80 90.60 90.70 261 113.40 241. 50 34.81 34. 90 73. 80 73. 90 177 92.40 163. 80 90.80 90. 90 262 113. 70 242. 40 34.91 35.00 74.00 74. 10 178 92. 70 164.70 91,00 91. 10 263 113.90 243.30 17994 CONGRESSIONAL RECORD SENATE August 16 'Tabe for determining primary insurance amount and maximum family benefils—Continued

n iii iv v "'I n in iv v

"(Prhnary Insurance (Primary insiranco • (Prtmar'(Maximum '(l'rimary insuranee (Primary insurance (Pdmary(Maximum benefit under 1939 amount nnder (Average insurance family benefit under 1039 amount under (Average insurance family act, as modified) 1954 act) monthly wage) amount benefits) act, as modified) 1954 act monthly wage) amount benefits) payable) payable)

"'If an Individual's Or his primary And the '"If an tndivldual's Or hisprimary And the primary insurance insurance amount ' maximum primaryInsurance insurance amount maximum benefit (as deter- as determined amount of benefit (as deter- (as determined amount of mined under under subsec. The benefits mined under under subsec. The benefits subsec. (c)) Is— (c)) Is— amount payable ubsec. (c)) Is— (c)) Is— amount payable Orhis average referred (as pro- Or his average referred (as pro- monthly wage to In the vided in monthly wage to In the vided in (as determinedprecedingsec. 203 (a)) (as determUiedprecedingsoc. 203 (a)) under subsec. paragraphson the basis under subsec. paragraphson the basis But not But not (b)) Is— of this of his wages But not But not (b)) Is— of this of his wages "'At more At more subsection and self- 'At more At more subsection and self- Jeast— than— least— than— shall be— employ- least— than— least— than— shall be— employment . ment income income shall bc— shall be—

91.2O $91.30Less than $264 $114.20 $244.20 $108.20 $1OS. 30 Less than $49 $135.40 $322.90 91.40 91.50 265 114. 40 245. 20 108.40 108.50 350 135. 70 323.80 91.60 91.70 266 114.70 246. 10 351 135.90 324. 70 91.80 1.90 267 114.90 247. 00 352 136.20 32& 60 92.00 92.10 268 115. 20 247. 90 353 136. 40 32tL 60 92.20 92.30 269 115.40 248.90 354 136.70 327. O 92.40 92. 50 270 115. 70 249. 80 355 136. 90 328.40 92.60 92.70 271 115. 90 250. 70 356 137. 20 329.30 92.80 92.90 272 116. 20 251.60 357 137. 40 330.30 93.00 3.10 273 116. 40 252. 60 358 137.70 331. 20 93.20 93.30 274 116. 70 253.O 359 137. 90 332. 10 93.40 3.5O 275 116.90 254.40 360 138.20 333.00 .60 3.70 276 117. 20 255.30 361 138.40 334.00 93.80 9390 277 117.40 256.30 362 138. 70 334.90 94.00 94.10 278 117. 70 27. 20 363 138. 90 335.80 .94.20 94.30 279 117. 90 258. 10 364 139. 20 336. 70 94.40 945O 280 118. 20 259. 00 365 139. 40 337. 70 94.60 94.70 118. 40 260.00 366 139. 70 338.60 9&80 94.90 118. 70 2O. 90 367 139.00 339. 50 95.00 95.10 118. 90 261.80 368 140.20 340. 40 95.20 95.30 119.20 2ô2.70 369 140.40 341.40 95.40 95.50 285 119. 40 263. 70 370 140.70 342.30 9.6O 95.70 286 119. 70 264. 60 371 140.90 343. 20 95.80 95.90 287 119.90 265. 50 372 141.20 344.10 96.00 96.10 288 12020 266.40 373 141. 40 345. 10 96.20 96.30 289 120 40 267. 40 374 141. 70 346. 00 9&40 96.50 290 120. 7G 268.30 375 141.90 346. 20 06.64) 1)6.70 291 120.90 269. 20 376 142.20 346. 20 96.80 96.90 292 121. 20 270. 10 377 142.40 346.20 97.00 97.10 293 121. 40 271. 10 378 142. 70 346. 20 07.20 07.30 294 121. 70 272. 00 379 142.90 346.20 07.40 D7.50 295 121.90 272.90 3S0 143.20 346. 20 07.60 97.70 296 122.20 273.80 381 143.40 346. 20 97:80 .97.90 297 122.40 274. 80 382 143. 70 346.20 98.00 98.10 298 122.70 275. 70 383 143. 90 346.20 98.20 98.30 299 122.90 276. 60 384 144.20 346. 20 98.40 98.50 300 123.20 277. 50 385 144.40 346. 20 98. 60 98. 70 301 123.40 278. 50 386 144. 70 346. 20 98.80 08.00 302 123.70 279. 40 387 144. 90 346. 20 09.00 99.10 303 12390 280.30 388 145.20 346. 20 99.20 99.30 304 124.20 281.20 389 145. 40 34& 20 99.40 99.5O 305 124.40 22. 20 390 145. 70 348. 20 90.60 99.70 306 124.70 283. 10 391 145. 90 346. 20 99.80 09.90 307 124.90 284.00 392 146. 20 346. 20 100.00 100.10 308 125. 20 284.90 393 148. 40 346. 20 10O.) 100.30 309 125.40 285.90 34 146. 70 346.20 100.40 100. 50 310 125.70 2S6. 80 395 146. 90 346. 20 100.60 100. 70 311 12590 287. 70 396 147. 20 346. 20 100.80 100.90 312 126.20 288.60 397 147.40 346. 20 101.00 101.10 313 126. 40 289.60 398 147. 70 346. 20 101.20 101.30 314 126. 70 290.50 399 147. 90 346. 20 101.40 101.50 315 12,. 90 291. 40 400 148. 20 346. 20 101.60 101.70 316 127.20 29 30 401 148. 40 346. 20 101.80 101.00 317 127.40 293.30 402 14S. 70 346. 20 102.00 102.10 318 127. 70 294.20 403 148.90 346. 20 102.20 102.30 319 127.90 295. 10 404 149. 20 346. 20 102. 40 102. 50 320 128.20 296.00 405 149.40 346. 20 102. 60 102. 70 321 12S. 40 297.00 406 149.70 346. 20 102.80 102.90 322 128. 70 297. 90 407 149.90 346. 20 103.00 103. 10 323 12& 90 298. 80 408 150. 20 346. 20 103.20 103.30 324 129.20 299. 70 409 150.40 346.20 103. 40 13. 50 325 129.40 300. 70 410 150.70 346.20 103. 60 13. 70 326 129. 70 301. 60 411 150. 90 346. 20 103.80 103.90 327 129. 90 302. 50 412 151.20 346. 20 104.00 104.10 32S 130. 20 303. 40 413 151. 40 346,20 10420 104.30 329 130. 40 304.40 414 151.70 346.20 104. 40 104. O 330 130. 70 305.30 415 151. 90 346. 20 104. 60 104. 70 331 130.90 306. 20 416 152. 20 346. 20 104. 80 104. go 332 131. 20 307. 10 417 152. 40 346. 20 105. 00 105. 10 333 131. 40 308. 10 418 152.70 346. 20 105.20 105.30 334 131. 70 309. 00 419 152.90 346.20 105.40 105.O 3&5 131.90 309.90 420 153. 20 346. 20 105.60 105.70 336 132. 20 310.80 421 153. 40 346. 20 105.80 105.90 337 132. 40 311. 80 422 153. 70 346. 20 106.00 106.10 338 132. 70 312. 70 423 153.90 346. 20 106.20 106.30 339 132. 90 313. 60 424 154. 20 346. 20 106.40 106.50 340 133.20 314. 50 425 154. 40 346. 20 106.60 106.70 341 133.40 315. 50 426 154. 70 346. 20 106.80 106.90 342 133.70 316.40 427 154.90 346. 20 107.00 107. 10 343 133.90 317.30 428 155. 20 346. 20 107.20 107.30 344 134. 20 318. 20 429 155.40 346. 20 107.40 107. O 345 134.40 319. 20 430 155.70 346. 20 107.60 107.70 346 134. 70 320. 10 431 155. 90 346. 20 107.80 107.90 347 134.90 321.00 432 156. 20 346. 20 108.00 108.10 348 135. 20 321.90 433 156.40 346. 20 1958 CONGRESSIONALRECORD SENATE 17995 "Table for determining primary insurance amount and maximum family benefits—Continued

"'I II III Iv V "'I II UI Iv V "'(Primary insurance (Primary insurance (Primary(Maximum"'Primary insurance(Primary insurance (Primary(Maximum benefit under 1939 amount under (Average insurance family benefit under 1939 amount under (Average insurance family - act, as modified) 1954 act) monthly wage) amount benefits) • act, as modified) 1954 act) monthly wage) amount benefits) -. payable) . payable) "'If an individual's Or his primary And the '"If an Individual's Or his primary And the primary insurance insurance amount maximum primary insurance benefit (as deter- insurance amount maximum (as determined amount of benefit (as deter- (as determined amount of mined under under subsec. The benefits mined under subsec. (c)) is— under subsec. • The benefits (c)) is— • amount payable subsec. (c)) is— (e)) is— amount payable Orhis average referred (as pro- Orhis average referred (as pro- monthly wage to in the vided in monthly wage to in the vided in (as determinedprecedingsec. 203 (a)) (as determinedprecedingsec. 203 (a)) under subsec.paragraphson the basis under subsec. But not But not (b)) Is— paragraphs on the basis of this of his wages • But not But not (b)) is—- of this of his wages '"At more At more subsection and self- " 'At more At more least— than— least— than— subsectionand self- shall be— employ- least— than— least— than— shall be— employ- , ment - ment income - Income shall be— shall be—

Less than $434 $156.70 • $346.20 . Less than $4M $165.20 435 $346.20 156. 90 346. 20 ' - 469 165. 40 348. 20 436 157. 20 346. 20 470 165.70 346. 20 437 157.40 346. 20 . 471 165. 90 346. 20 438 157.70 346. 20 472 166. 20 346. 20 439 157. 00 346. 20 473 166. 40 346. 20 440 158. 20 346. 20 • 474 166.70 346. 20 - 441 158.40 346.20 475 166.90 34620 442 158. 70 346.20 476 167. 20 443 346.20 158. 90 346. 20 477 167. 40 346. 20 444 159. 20 346.20 478 167.70 346.20 445 159.40 346.20 479 167.00 346.20 . 446 159.70 346.20 . '480 l6&20 346.20 447 159.00 346.20 481 l6&40 346.20 448 160.20 346.20 482 168.70 346. 20 449 160.40 346.20 483 168.90 346.20 450 160.70 346.20 484 169.20 346.20 451 160.00 346. 20 485 169. 40 346.20 452 161. 20 346. 20 486 169. 70 346. 20 453 161.40 346.20 • 487 169.00 348. 20 454 161.70 346.20 4S8 170.20 346.20 455 161. 00 346. 20 489 170.40 346. 20 456 162. 20 346.20 490 170. 70 346.20 457 162.40 346.20 491 170. 90 346. 20 45S 162.70 346.20 492 171.20 346.2L) 459 102.90 346.20 493 171.40 346.20 460 163.20 346. 20 494 17L 70 346. 20 - 461 163.40 346.20 495 171.00 346.20 462 163.70 346. 20 496 172. 20 346. 20 463 163. 90 346. 20 497 172. 40 346.20 . 484 164.20 346.20 . 498 172.70 346.20 ' 465 164.40 346. 20 490 172. 90 346.20 466 164. 70 346.20 • 500 173. 20 346.20'

. 467 164.00 346.20 • •

"Determinations /or computation 0/ primary '"(A) with respect to whom not less thansecond month following the month in which insurance amount six of the quarters elapsing after 1950 arethe Sqcial Security Amendments of1958 "(b)(1) The first word in subsection (b)quarters of coverage and were enacted, or (1) of section 215 of such act is deleted and "'(B) (i) who becomes entitled to benefits " diedprior to such second month the following words are substituted:Forunder section 202 (a)or section 228 afterand was not entitled to beneñts under such the purposes of column III of the table ap-the second month following the month insection 202 (a) or such section 22a.' • pearing in subsection (a) of this section an.'which the Social Security Amendments of "(d)Section215(d)of such actIs "(2) Paragraph 4 of such section 215 (b) 1958 are enacted, or (ii) who dies after suchamended to read as follows: of such act Is amended to read as follows: second month without being entitledto "'(d)(1) For the purposes of column I °'(4)In the case of any individual, thebenefits under such section 202 (a) or sectionof the table appearing in subsection (a) of Secretary shall determine the ñve or fewer223, or (iii) who files an application for athis section an individual's primary insur- full calendar years after his starting date andrecomputation under section 215 (f) (2) (A)ance benefits shall be computed as provided prior to his closing date which, if the monthsafter such second month and is (or would,in this title as in effect prior to the enact- of such years and his wages and self-employ-but for the provisions of section 215 (f)(6),ment of the Social Security Act Amendments ment income for such years were excludedbe) entitled to have his primary insuranceof 1950 except that— in computing hisaverage monthly wage,amount recomputed under such section, or "'(A) In the computation of such benefit, Would produce the highest primary insur-(iv) who dies after such second month andsuch individual's average monthly wage shall ance amount. Such months and such wageswhose survivors are (or would, but for the(in lieu of being determined under section and self-employment income shall be ex-provisions of section 215 (f) (6) ,be) entitled209 (f) of such title as in effect prior to the cluded for purposes of computing such in-to a recomputation of his primary insuranceenactment of such amendments) be deter- dividual's average monthly wage.In theamount under section 215 (f)(4) (A).' mined as provided in subsection (b) of this case of any individual who has not less than °(c) Section 215 (c)of the such act issection (but without regard to paragraph 28 quarters of coverage, the maximum num-amended to read as follows: (5)thereof), except that his starting date ber of full calendar years determined under "'(c)(1) For the purposes of column II• shall be December 31, 1936. the ñrst sentence of this paragraph shall beof the table appearing in subsection (a) of '(B) For, purposes of such .computation, increased by the numberequaltothethis section, an individual's primary insur-the date he became entitled to old-age in- quotient obtained by dividing the quartersance amount shall be computed as providedsurance beneñts shall be deemed to be the of coverage such individual has by 28, exceptin, and subject to the limitations speciñeddate he became enlfltled to primary insur- that LI the quotient so obtained is not ain, (A) this section as in effect prior to theance beneñts. - whole number, it shall be reduced to the nextenactment of the Social Security Amend- '(C)The 1 percent addition provided for lower whole number.' ments of 1958, and (B) the applicable pro-in section 209 (e)(2) of this act in effect "(3) Such section 215 (b) of such act isvisions of the Social Security Amendments•prior to the enactment of the Social Secu- of 1954. rity Act Amendmnts of 1950 8hall be appli- further amended by adding at the end there- °'(2) of the following paragraph: The provisions of this subsectioncable only with respect to calendar years shall be applicable only In the case of anprior to 1951, except that any wages paid in "'(5) The provisions of this subsectionindividual who— any year prior to such year any part of which shall be applicable only in the case of an °' becameentitled to benefits underwas included in a period of disability shall individual— section 202 (a) or section 223 prior to thenot be counted. 17996 CONGRflSSIONAL RECORD —SENATE August 16 s(fl)Theprovisions of subsection(e) such application;. and recomputed benefit "Maxintum benefits shall be applicable to such computation. payable for any month prior to the third "Stc.105.(a)Subsection (a)of section "'(2) Except as provided in paragraph (3)month following the month in which' this 203(a) of the Social Security Act is. aznehded of this subsection, the provisions of thisact is enacted on the basis of such applica-to read as follows: subsection shall be applicable only in thetion shall be determined as though this act "'(a) Whenever thetotalof monthly case of an individual— had not been enacted, or benefits •to which individuals are entitled "' withrespect to whom at teast one 4'(B) dies after such second month andunder section 202 for a month on the basis of the quarters elapsing prior to 1951 is awhose survivors are (or, but for the provisionof the wages and self-employment income of quarter of coverage, and of section 215 (f)(6) of the Social Securityan insured individual is greater than the (B) who meets the provisions of any ofAct, would be) entitled to a recomputationamount appearing in column V of the table the clauses in subparagraph (B)of para-.of his primary insurance amount under sec-in section 215 (a) (1) on the line on which graph (5) of subsection (b) of this section.tion 215 (f)(4) (A) of such act. appears, in column IV, such insured indi- 4(3) The provisions of this subsection4fleflnition o/wagesand sei/-empioymentvidual's primary insurance amount, such shall not apply In the case of an individual income total of benefits shall, after any deductions who attained age 22 after 1950 and with re- under this section,after any deductions • spect to whom not less than 6 of the quar- 'SEc. 102. (a)(1) Paragraph (2) of sec-under section 222 (b), and after any deduc- 1950arequarters oftion 209 (a) of the Social Security Act is terselapsingafter amended to read as follows: tion under section 224, be reduced to such coverage.' (2) That part of remuneration which,amount, except that when any of such indi- "Certain wages and sei/-empioyment income viduals so entitled would (but for the pro- after remuneration (other than remunera-visions of section 202 (k)(2)(A)) be en- not to be counted tion referred to in the succeeding subsectionstitled to child's insurance benefits on the "(e)(1)Section 215 (e)(1) of auch act of this section) equal to $4,2C0 with respectwages and self-employment income of one isamended to read as follows: to employment has been paid to an indi-or more other insured individuals, such total (1) in computing an individual's aver-vidual during any calendar year after 1954of benefits, after any deductions under this age monthly wage there shall not be countedand prior to 1959, is paid to such individualsection,after any deductions under section the excess over $3,600 in the case of anyduring such calendar year.' 222 (b), and after any reduction under sec- calendar year after 1950 and before 1955, the "(2) Section 209 (a) of such act is fur-tion 224, shall not be reduced to less than excess over $4,200 in the case of any calen-ther amended by adding at the end thereofthe smaller of:(A) the sum ofthemaxi- dar year after 1954 and before 1959, and thethe following new paragraph: mum amounts of benefits payable -onhe excess over $6,000 in the case of any calendar i(S)Thatpart of renuneration which;basis of the wages and selfLemployment inyear after 1958, of (A) the wages paid to himafter remuneration (other than remunera-come of all such insured individuals, or (B) in such year, plus (B) the self-employment - tionreferred to in the succeeding subsection $346.20.Whenever areductionis made income credited to such year (as determinedof this section) equal to $6,000 with respectunder this subsection, each benefit, except under section 212);' to employment has been paid to an indi-the old-age insurance benefit, be propor- '(2)Section215(e)ofsuchactisvidual during any calendar. year after 1958, istionately decreased.' amended by striking out '(d)(4)' eachpaid to such individual during such calendar "(b) The amendment made by tl2is section place it appears and inserting in lieu thereofyear;'. shall be applicable with resject to monthly 4'(b) Paragraph (1) of section 211 (b) ofbenefits under section 202 of the Social Se- '4Recomputation of benefits the Social Security Act is amended to readcurity Act for months after. the second "(f) Section 215 (f)(2)(B) of such actas follows: month following the month in which this is amended to read as follows: (1) That part of the net earnings fromact is enacted. "'(B) A recomputation pursuant to sub-self-employment which is in excess of— "SEC. 106. (a) Title U of the Social Secu- paragraph (A) shall be made as provided in '(A) For any taxable year ending priorrity Act i5 amended by adding after section subsection (a) of this section and as thoughto 1955, (i) $3,600 minus (ii) the amount of225 the following new section: the individual first became entitled to old-wages paid to such individual during the "'Hospitalization and surgicai insurance age insurance benefits in the month in whichtaxable year; and '"Eligibility for Insurance he filed the application for such recomputa- '(B) For any taxable year ending after 045Ec.226. (a) (1) The cost of hospital or tion, but only if the provisions of subsection1954 and prior to 1959, (i) $4,200, minus (ii) nursing home services furnished to any in- (b)(4), as amended by section 101 (b) othe amount of the wages paid to such indi-dividual during any month for which he is the Social Security Amendments of 1958 werevidual during the taxable year; and entitled to monthly benefits under section not applicable to the last previous computa- "'(C) For any taxable year ending after202 (whether or not such betefits are actu- tion of• his primary insurance amount.It1958,(i)$6,000. minus (U) the amount ofally paid to him) or is deemed entitled to the provisions of such subsection (b)(4) wages paid to such individual during thesuch benefits under the provisions of para- were applicable to such previous computa-taxable year. or.' - tion, the recomputation under subparagraph graph 2, or the cost of such services fur- (A) of this paragraph shall be made only as 44Quarterand qua rter o/coverage nished to him during the month of his provided in subsection (a) (other than the 'SEC. 103. Clauses (ii) and (iii) of sectiondeath where he ceases to be entitled by rea- provisions of paragraphs 2 and 3 of such213 (a)(2)(B) of the Social Security Actson of his death, and the cost of surgical subsection) and for such purposes his average are amended to read as follows: services which are not of an elective nature, monthly wage shall be determined as though 4(ii)if the wages paid to any individualshall, subject to the provisions of this sec- he became entitled to old-age insurancein any calendar year equal $3,600 in the casetion, be paid from the Federal Old-Age and benefits in the month in which he filed theof a calendar year after 1950 and beforeSurvivors Insurance Trust Fund to the hos- application for recomputation under sub-1955, or $4,200 in the case of a calendar yearpital, physician, and nursing home which paragraph (A), except that, of the provi-after 1954 and before 1959, or $6,000 in thefurnished him the services.Services to be sions of paragraph (3)of subsection (b),case of a calendar year after 1958, eachpaid for in accordance with the provisions of only the provisions of subparagraph (A)quarter of such year shall (subject to clausethis section include only services provided In thereof shall be applicable.' (1)) be a quarter of coverage. the United States. (iii)if an individual has self-employ- (2) For purposes of this section, (A) "Effective dates ment income for a taxable year, and if theany individual who would upon filing appli- '(g) (1) The amendments made by sub-sum of such inèome and the 'wages paid tocation therefore, beentitled to monthly sections(a),(b),(c), and(d)shall behim during such year equals $3,600 in thebenefits for any month under section 202 aSplicable, in the case of monthly benefitscase of a taxable year beginning after 1950shall, if he files application under this sec- under title U of the Social Security Act, forand ending before 1955, or $4,200 in thetion within the time limits prescribed in months after the second month following thecase of a taxable year endihg after 1954 an4section 202 (j) be deemed, for purposes of month in which this act is enacted, and inbefore 1959, or $6,000 in the case of a tax-this section only, to be entitled to benefits for the case of the lump-sum death paymentsable year ending after 1958, each quartersuch month,(B)such individualshall, under such title, with respect to deathsany part of which falls in such year shallwhether or not he files application under occurring after such second month. this section, .be deemed to be entitled to (2) The amendments made by subsection(subject to clause (i)) be a quarter of cov-benefits under section, 202 for such month (f) shall apply with respect to the wages anderage.' for purposes of determining whether the self-employment income of an individual '4Minimum survivors or dependents benefit wife,, husband, or child of such individual who— • '45Ec. 104.(a)Section 202 (m)of thecomes within the provisions of clause (A) files an application for a recomputa-Social Security Act is amended by strikinghereof, and (C) any individual shall, for tion under section 215 (f)(2)(A) of theout '$30' wherever it occurs and inserting Lupurposes of this section, be deemed entitled Social Security Act as amended by this act,lieu thereof '$40.' to benefits under section 202 if such individ- alter the second month tollowing the month 4(b) The amendment made by this sec-ual could have been deemed under clauses in which thisactis enacted and who is (or,tion shall be applicable with respect to(A) or (B) of this paragraph to have been but for the provision of section 215 (f) (6) ofmonthly benefits under section 202 of theso entitled had he not died during such such act, would be)entitled to have hisSocial Security Act for months after themonth. primary insurance amount recomputed un-second month following the month in which 4(3) For purposes of paragraph (2), an cter.such section 215 (f) (2) (A) pursuant tothis, act is enacted. Individual's application under this section 1958 CONGRESSIONAL RECORD —SENATE 17997 may,subject to regulations, be filed (wheth-has entered into an agreement under this'period during which suchservlces were fur- er such individual là legally competent orsection, which admits such individual andnished, written certification by such ini- incompetent) by any relative or -otherper-to which such individual has been- referredvidual'sattending physician during that son, including the hospital, physician, orby a physician or (in the case of hospital orperio1 that such services were medically nec- nursing home furnishing him hospital, sur-nursing home services furnished in conjunc-essary.. The amount of the payments Under gical, and nursing home services and, aftertion With oral surgery) dentist licensed byany such agreement shall be determined on such individual's death, his estate. the State in Which si'ch individual resides orthe basis of the reasonable cost incurred by

(4) Payments may be made for hospitalthe hospital or nursing home is located, upoithe hospital or nursing home for all. bed services furnished under this section to ana determination by the physician or dentistpatients, or, when use of such a basis is Im- individual during his first 60 days of hos-that hospitalization or nursing home carepracticaZor the hospital or nursing home pitalization in a 12-month period that be-for such individual is medically necessary;or inequitable to the institution or the Fed- gins with the first day of the first month inexcept that such referral shall not be re-eral Old-Age and Survivors Insurance Trust Which the individual received hospital serv-quiredin an emergency Situation whichPund, ona reasonablyequivalentbasis ices for which a payment is made under thismakes such a requirement impractical. which takes account of pertinent factors section, and during his first 60 days of hos- (2) Any individual referred to in para-with respect to services furnished to indi- pitalization in each succeeding 12-monthgraphs (1) and (2) of subsection (a) may,viduals referred to in paragraphs (1) and (2) period; and for nursing home services fur-with respect to the surgical services for whichofsubsection(a).Any such agreement nished under this section to an individual Ifpayment• is provided by this section, freelyshall preclude the hospital or nursing home the individual is translerred to the nursingselect the surgeon of his choice, providedwith which the agreement is made from re- home from the hospital, and if the servicesthat the surgeon is certified by the Americanquiring payments from individuals for serv- are for an illness oi condition -assóöiatdBoard of Surgery or is a member of the Amer-ices, payment of the cost of which is pro- with that for Which he received hospitalican College of Surgeons except that suchvided by this section; after it has been noti- services: Provided, That the number of dayscertification shall not be required in cases offied that the cost of such services is payable of nursing home services for which paymentsemergency Where the life01 the patientfrom the Federal Old-Age and Survivors n- may be made shall, in any 12-month periodwould be endangered by any delay, or in suchsurance Trust Fund, except that it may re- as described above, not exceed 120 less theother cases Where such certification is notquire payments from such individuals for number of days of hospital services (in thepracticable, and except that, in the case ofthe additional cost of accommodations occu- same 12-month period) for which paymentsoral surgery, such individual may select a.pied by them at their request which e more are made under this section. duly licensed dentist. expensive than semiprivate accommodations. 0(5)The provisions of section 205 rejat- "'(3) Regulations under this sectton shall "'(4) xcept as provided by regulation, no ing to the making and review of determina-provide for payments (in such amounts andagreement may provide for. paymente (A) tions shall be applicable to determinations• upon such conditions as may be prescribedto any Federal hospital, or to any other as to Whether the costs of hospital, nursingin such regulations) to (A) hospitals for hos-hospital for hospital services which it is obli- home, and surgical services furnished an in-pital 5ervices rendered in emergency situa-gated by contraót with the United States dividual may be paid for out of the Federaltions to individuals referred to in paragraphs(otherthan an agreement under this sec- Old-Age and Survivors Insurance Trust Fund (1) and (2) of subsection (a) by hospitalstion) to furnish at the expense of the United under this subsection, and the amount 01which have not entered into an agreementStates, or (B) to any hospital for hospital such payment. under this section, and (B) physicians forservices which it is required by law—or- obli- "'Description of HoEpital, Nursing Home,surgical services rendered by physicians, notgated by-contract wltha State or subdivtion and Surgical Services certified by the American Board of Surgerythereof to firnish-, at public expense except or not members oZ the American College ofWhere the eligibility of the individual for "'(b)(1) For purposes of this section, theSurgery. such services is determined by application term "hospital services" means the following of a means test. services, drugs, and appliances furnished by"'Agreements WithHospitals, Nursing "'(5) No supervision or control over the a hospital to any individual as a bed patient: Homes, and Providers of Surgical Services details of administration or operation, or bed and board and such nursing services, (d)(1) Any institution (other than aover the selection, tenure, or compensation laboratory services, ambulance services, usetuberculosis or mental hospital)shall beof personnel, shall be exercised under the of operating room, staff services, and othereligible to enter into an agreement for pay-authority of this section over any hospital services, drugs, and appliances as are cus-ment from the Federal Old-Age and Sur-or nursing home which has entered into an tomarily furnished by such hospital to itsvivors Insurance Trust Fund of the cost ofagreement under this section. bed patients either through its own em-hospital or nursing home serivces furnished "'(6) Agreements under this subsection ployees or through persons With whom it hasto individuals referred to in paragraphs (1)shall be made with the hOspital or nursing made arrangements for such services, drugs,and (2) of subsection (a) If it is licensed as ahome providing the services, but this para- or appliances; the term hospital services"hospital or nursing home pursuant to the lawgraph shall not preclude representation of includes such medical care as is generallyof the State in Which it is localzd. such institution by any individual, associa- furnished by hospitals as an essential part "'(2) Each agreement with a hospital un-tiôn, or organization authorized by the in- of hospital care for bed patients; such termder this section shall cover all hospital serv-stitution to act on its behalf. shall include care in hospitals described inices included under subsection (b)(which paragraph (1) of subsection (d); such termservices shall be listed in the agreement), "'(7) The Secretary shall enter into agree- shall not include care in any tuberculosis orshall provide that such service shall be fur-ments with qualified providers of surgical mental hospital. nished in semiprivate accommodations ifservices as defined in paragraph (2) of sub-. "'(2) The term "nursing home services"available unless other accommodations aresection (c).Such agreements shall stipu- means skilled nursing care, related medicalrequired for medical reasons, or are occupiedlate that the rates of payment agreed on and personal services and accompanying bedat the request of the patient, shall be madeShall constitute full payment for these serv- and board furnished by a facility Which isupon such other terms and conditions as areices.Such agreements may be made with equipped to provide such services, and (A)consistent with the efficient and economicalany qualified individual, or with any asso- Which is operated in connection with a hos-administration of this section, and shall con-ciation or organization. authorized by the pital, or (B) in Which such skilled nursingtinue in force for such period and be ter-surgeons, dentists, or physicians to act in care and medical services are prescribed by,minable upon such notice as may be agreedtheir behalf. or are performed under the general directionupon. "'(8) Nothing in such agreements or in of, persons licensed to practice medicine or "'(3) An agreement with a hospial orthis act shall be construed to give the Sec- surgery in the State. nursing home under this section shall pro-retary supervision or control over the prac- (3) The term "surgical services" meansvide for payment, under the conditions andtice of medicine or the manner in which surgical procedures (other than elective sur-to the extent provided in this section, of themedical services are provided. gery) provided in a hospital, or in case of ancost of hospital and nursing home services "'(9) Except to the extent the Secretary emergency or for minor surgery, provided inWhich are furnished individuals referred to inhas made provision pursuant to subsection the outpatient department of a hospital orparagraphs (1) and (2)of subsection (a):(h) for the making of paymeits to hospitals in a doctor's omce.Surgical services mayProvided, That no such payment shall beand nursing homes by a private nonprofit include oral surgery when provided in a hos- made for services for which the hospital oràrganization or for the making of payments pital.The term "elective surgery" meansnursing home has already been paid (exclud-to physicians, dentists, and surgeons by their surgery that is requested by the patient, buting payments by such individuals for whichdesignated representatives,heshall from which in the opinion of cognizant medicalreimbursement to them by the hospital hastime to time determine the amount to be authority is not medically required. been assured); but no such agreement shallpaid to such provider of service under aa provide for payment With respect to hospitalagreement with respect to services furnished, "'Free Choice by Patient or nursing home services furnished to anand shall certify such amount to the Man- "'(c)(1) Any individual referred to inindividual unless the hospital or nursingaging Trustee of the Federal Old-Age and paragraphs (1) and (2)of subsection (a)home obtains written certification by theSurvivors Insurance Trust Fund, except that may obtain the hospital or nursing homephysician (If any) who referred him pur-buch amount shall, prior to certification, be services for which payment to the hospitalsuant to subsection (c) that his hospitaliza-reduced or increased, as the case may be, or nursing home is provided by this sectiontion or care in thc nursing home was med-by any sum by which the Secretary flndø from any hospital or nursing home whichically necessary and, with respect to anythat the amount paid to the provider oX CIV—1133 17998 CONGRESSIONAL RECORD —SENATE August 16 servicesfor any prior period was greater or"'Regulations and Functions of Advisoryto any organization shall be made either in less than the amount which should have Council advance on the basis of estimates by the been paid to it for such period,The Man- '(g)All regulations specifically author-Secretary or as reimbursement, as may be aging Trustee prior to audit or settlementlzed by this section shall be prescribed by theagreed upon by the organization and the by the General Accounting Office, shall makeSecretary. In administering this section, theSecretary, and adjustments may be made in payment from the Federal Old-Age Surviv-Secretary shall consult with a National Ad-subsequent payments on account of over- ors Insurance Trust Fund at the time orvisory Health Council consisting of the Com-paymentsorunderpaymentspreviously times fixed by the Secretary, in accordancemissioner of Social Security, who shall servemade to the organization under this sub- with such certification. as Chairman ex officio, and 8 members ap-section.Such payments shall be made by "'Nondisclosure of Information pointed by the Secretary.Four of the eightthe Managing Trustee of the Trust Fund appointed members shall be persons who areon certification by the Secretary and at such "'(e) Information concerning an individ-outstanding in fields pertaining to hospitaltime or times as the Secretary may specify ual, obtained from him or from any physi-and health activities, and the other fourand shall be made prior to audit or settle- cian, dentist, nurse, hospital, nursing home,members shall be appointed to represent thement by the General Accounting Office. or dther person pursuant to or as a result ofconsumers of hospital, nursing-home, and ''(3) An agreement under paragraph (1) the administration of this section, shall besurgical services, and shall be persons famil-with any organization may require any of held confidential (except for statistical pur-iar with the need for such services by eligibleits officers or employees certifying payments poses) and shall not be disclosed or be opengroups. Each appointed member shall holdor disbursing funds pursuant to the agree- to public inspection in any manner revealingofficer for a term of 4 years, except that anyment, or otherwise participating in its per- the identity of the individual or other per-member appointed to fill a vacancy occurringformance, to give surety bond to the United son from whom the information was ob-prior to the expiration of the term for whichStates in such amount as the Secretary may tained or to whom the information pertains,his predecessor was appointed shall be ap-deem necessary, and may provide for the except as may -benecessary for the properpointed for the remainder of such term, andpayment of the cost of such bond from the administration of this section.Any personthe terms of office of the members first takingFederal Old-Age and Survivors Insurance who shall violate any provision of this sub-office shall expire, as described by the Secre-Trust Fund. section shall be deemed guilty of a mis-tary at the time of appointment, two at the "'Certifying and Disbursing Officers demeanor and, upon conviction thereof, shallend of the first year, two at the end of the be punished by a fine not exceeding $1,000second year, two at the end of the third year, "'(i) (1) No individual designated by the orby imprisonment not exceeding 1 year, or Secretary pursuant to an agreement under both. and two at the end of the fourth year afterthis section, as a certifying officer shall, in the dateof appointment. An appointedthe absence of gross negligence or intent to "'Medical and Hospital Services Under member shall not be eligible to serve contin-defraud the United States, be liable with Workmen's Compensation uously for more than two terms but shall berespect to any payments certified by him '(f) The provisionsofsubsection(a) eligiblefor reappointment ifhe has notunder this 8ection. shall not be applicable to any services whichserved immediately preceding his reappoint- '(2) No disbursing officer shall, in the an individual required by reason of any in-ment. The Council is authorized to appointabsence of gross negligence or intent to de- jury, disease, or disability on account ofsuch special advisory and technical commit-fraud the United States, be liable with re- which such services are being received or thetees as may be useful in carrying out itsspct to any payment by him under this cost thereof paid for, or upon applicationfunctions.Appointed Council members andsection if it was based upon a voucher signed therefor would be received or paid for, undermembers of advisory or technical commit-by a certifying officer designated as provided tees, while serving on business of the Coun-in paragraph (1). a workmen's compensation law or plan of thecil, shall receive compensation at rates fixed United States or of any State, unless equi- "'Adjustments in Cash Benefits table reimbursement to the Federal Old-Ageby the Secretary, but not exceeding $50 per and Survivors Insurance Fund for the pay-day, and shall also be entitled to receive an "'(j) For purposes of section 204, any payments hereunder with respect to such serv-allowance for actual and necessary travelment under this section to any hospital, ices have been made or assured pursuant toand subistence expenses while so servingnursing home, physician, or dentist, with agreements or working arrangements nego-away from their places of residence.Therespect to hospital, nursing home, or surgi- tiated between the Secretary and the appro-Council shall meet as frequently as the Sec-cal services furnished an individual shall be priate public agency.Notwithstanding theretary deems necessary, but not less thanregarded as a payment to such individual." above sentence, if(1) the individual's en-once each year.Upon request by three or '(b) The amendments made by subsec- titlement to receive such services (or to havemore'lnembers it shall be the duty of the Sec-tion (a) shall be effective on the first day of the cost thereof paid for) under such a work-retary to call a meeting of the Council. the 12th calendar month after the month in men's compensation law or plan is in doubt "Utilization of Private Nonprofit which this act is enacted. when such services are required, (2) the cost Organizations '(c) Notwithstanding the provisionsof section 226 (a)(2)of the Social Security of 8uch services is otherwise payable from "'(h) (1) The Secretary may utilize, to theAct, as amended by this act, and subsection the Federal Old-Age and Survivors Insuranceextent provided herein, the services of private(b) of this section, applications filed under Trust Fund pursuant to this section, and (3) nonprofit organizations exempt from Federalsuch section 226 which would otherwise be the individual makes an appropriate appli-income taxation under section 501 of thevalidshall, subject to regulations of the cation under such workmen's compensationInternal Revenue Code which (A) representsSecretary, be considered valid even though law or plan and agrees, in the event that hequalified provideds of hospital, nursing home,filed more than 3 months prior to the effec- i8 subsequently determined to be entitled toor surgical services, or (B) operate voluntarytive date of this act, but not if filed prior receive such services (or to have the costinsurance plans under which agreements,to the first day of the fourth calendar month thereof paid for) under such law, to reim-similar to those provided for under subsec- burse the Federal Old-Age and Survivorstion (d), are made with hospitals, nurstngafter the month in which this act is enacted. Insurance Trust Fund in the amount of anyhomes, and physicians for defraying the"TITLE Il—AMENDMENTS ToTHE INTERNAL loss it might suffer through its payment forcost of services. Such organizations shall be REVENUE CODE OF 1954 such services, then the cost of such servicesutilized by the Secretary to the extent that "Tax on self-employment income may be paid from such Trust Fund in ac-he can make satisfactory agreements with "SEC. 201. Section1401ofthe Internal cordance with this section.In any case inthem and to the extente determines thatRevenue Code of 1954 Is amended to read as which the cost of services is paid from thesuch utilization will contribute to the ef-follows: Federal Old-Age and Survivors Insurancefective and economical administration of this 'In addition to other taxes, there shall Trust Fund pursuant to the immediatelysection.Such agreements shall not dele-be imposed for each taxable year, on the preceding sentence, oris paid from suchgate (A) his functions relating to determina-self-employment income of every individual, Trust Fund with respect to any such injury,tions as to whether the costs of hospital,a tax as follows: disease, or disability for whch no reimburse-nursing home, and surgical services fur- "'(1) in the case of any taxable year bement to such Trust Fund has been made ornished an individual may be paid for outginning after December 31, 1958, and before assured pursuant to the first sentence of thisof the Federal Old-Age and Survivors Insur-January 1,1961, the tax shall be equal to subsection, the United States shall, unlessance Trust Fund under this section and the 51%percentof the amount of the self-em- not permitted under the law of the appli-amount of such payment, and (B) his func-ployment income for such taxable year; cable State (other than the District of Co-tions relating to the making of regulations. "'(2) in the case of any taxable year be- lumbia) be subrogated to fill rights of such "'(2) An agreement under paragraph (1)ginning after December 31, 1960, and before individual, or of the provider of services toshall provide for payment from the FederalJanuary 1, 1965, the tax shall be equal to which payments under this section with re-Old-Age andSurvivorsInsuranceTrust6 percent of the amount of the self-em- spect to such services are made, to be paidFund to the organization of the amountsployment income for such taxable year; or reimbursed pursuant to such workmen'spaid out by such organization to hospitals, "'(3) in the case of any taxable year be- compensation law or plan for such payments.nursing homes, physicians, and dentists, un-ginning after December 31, 1964, and before All amounts recovered pursuant to this sub-der this section and of the cost of adminis-January 1,1970, the tax shall be equal tb section shall be deposited in the Treasury oftration determined by the Secretary to be6% percent of the amount of the self-em- the United States to the creidt of the Fed-necesary and proper for carrying out suchployment income for such taxable year; eral Old-Age and Survivors Insurance Trustorganization's functions under its agreement "'(4) in the case of any taxable year be- Fund. pursuant to this subsection, Such paymentsginning after December 31,1969, and be- 1958 CONGRESSIONAL RECORD SENATE 17999 fore.Tanuary 1, 1G75, the taxshallbe equal 'IRe fund "'(2) A State shall be qualified to receive to 7 percent of the amount of the self- "Szc.206.(a) Paragraph (1)of sectionthe amount provided by paragraph (1) with employment Income for such taab1e year;6413 (c)of the Internal Revenue Code oXrespect to any quarter, beginning with the "(5) In the caae of any taxable year be-1954 is amended to read as follows: quarter commencing October 1, 1958— ginning after December ai,1974, the tax '"(1) In general: If by reason of an em- "'(A) if such State has filed with the Sec- shall be equal to 8/4 percent of the amountployee receiving wages from more than oneretary of Health, Education, and Welfare, at of the self -employment income for such tax-employer during a calendar year after thesuch time (prior to the beginning o such able year? calendar year 1950 and prior to the calendarquarter) and in such form as such Secretary "Definition of self-employment income year 1955, the wages received by him duringshall by regulations prescribe, a certificate 'SEC. 202. (a) Subparagraph (B) of sec-such year exceed $3,600, the employee shaHsta.ting that the average monthly expendi- tion 1402 (b)(1)of the Internal Revenuebe entitled (subject to the provisions of sec-ture. from State funds per recipient under Code of 1954 is amended to read as foflows:tion 31 (b)) to a credit or refund of anythe State plan for such quarter will not be "'(B) for any taxable year ending afteramount of tax, with respect to Such wages,less than the average monthly expenditure 1954 and' before 1959, (i) $4,200, minus (ii) Imposed by section 1400 of the Internal Rev-from State funds per recipient under such the amount of the wages paid to such mdi-enue Code of 1939 and deducted from theplan for the two quarters immediately pre- viduai during the taxable year; and' employee's wages (whether or not paid toceding the quarter commencing October 1 "(b) Paragraph 1 of section 1402 (b)oX the Secretary or his delegate), which exceeds1958; and 'the Internal Revenue Code of 1954 Is furtherthe tax with respect to the first $3,600 of "'(B) if, in the case of any quarter occur- amended by adding at the end thereof thesuch wages received; or if by reason of anring after the quarter commencing January !ollowlng new subparagraph: employeereceiving wages from more than 1,1958, the average monthly expenditure '••(C) for any taxable year ending afterone employer (A) during any calendar yearfrom State funds per recipient under the 1958, (i)$6,000,. minus (ii) the amount ofafter 1954 and prior to the calendar yearState plan for the second quarter immedi- wages paid to such Individual during the1959, the wages received by him during suchately preceding such quarter has not been taxable year; or year exceed $4,200, or (B) the wages received by him during any calendar year after 1958less than the average monthly expenditure "Taxonemploj,ees from State funds per recipient under such exceed $6,000, the employee shall be entitledplan Xbr the two quarters Immediately pre- 'SEC. 203. Section 3101 of the Internal Rev-'(subject to the provisions of section 31 (b) enue Code of 1954 Is amended to read asto a credit or refund of any amount of tax,ceding the quarter commencing October 1, !ollows: with respect to such wages, imposed by sec- 1958. "In addition to other taxes, there is herebytion 3101 and deducted from the employee's '"(3) Sucb amounts shall be computed Imposed on the income of every individualwages (whether or not paid to the Secretaryand paid in the manner provided by subsec- a tax equal to thefollowing percentages of theor his delegate), which exceeds the tax withtion (b) for the computing and paying of wages (as defined in section 3121 (a) )re- respect to the first $4,200 of such wages re-amounts provided for in subsection (a).' ceived by hIm with respect to employmentceived in such calendar year after 1954 and "SEC. 402. Section 403 of the Social Secu- (as defined in section 3121(b))— before 1959, or which exc'eds the tax Withrity Act (relating to payments to the States '"(1) with respect to wages received dur-respect to the first $6,000 of such wagesf or purposes of aid to dependent children) is ing the calendar years 1959 and 1960, the'received iii such calendar year after 1958.' amended by adding at the end thereof the rate shall be 3 ypercent; "(b) Subpaiagraph (A) of section 6413 (c)following new subsection: "'(2) with respect to wages received dur- (2)of such code Is amended to read as '(c)(1)From the àums appropriated ing the calendar years 1961 to 1964, bothfollows: theref or, the Secretary of the Treasury shall Inclusive, the rate shall be 4 percent; (A) Federal employees: In the case ofpay to each State which has an approved '"(3) with respect to wages received dur-remunerationreceivedfromtheUnitedplan for aid to dependent children and which ing the calendar years 1965 to 1969, both In-States or a wholly owned instrumentalityis qualified under this subsection, for each clusive, the rate shall be 4 percent; thereof during any calendar year, each headquarter, beginning with the quarter com- (4) with respect to wages received dur-of a Federal agency or instrumentality whomencing October 1, 1958, .inthe case of any ing the calendar years 1970 to 1974, bothmakes a return pursuant to section 3122 andState, an amount (in addition to the amount Inclusive, the rate shall be 5 percent; and each agent, designated by the head, of a Fed-paid to such State under the provisions of (5) with respect to wages received aftereral agency or instrumentality, who makes asubsection (a) Which siall be used exclu- December 31, 1974, the rate shall be 54 per-return pursuant to such section shall, forsively for aid to dependent children and cent.' purposes of this subsection, be deemed a sep-which shall be equal to 25 percent of the "Tax on employers arate employer, and the term "wages" in-total amounts Which would (except for the "S,c. 204. Section 3111 of the Internalclude for purposes of this subsection theprovisions of this subsection) be expended Revenue Cce of 1954 is amended to read asamount, not to exceed $3,600 for the calendarduring such quarter as aid to dependent year 1951, 1952, 1953, or 1954, $4,200 for thechildren in the form of money payments follows:. under the State plan. '1naddition to other taxes, there is here-calendar year 1955, 1956, 1957, or 1958, or by imposed on every employer an excise tax,$6,000 for any calendar year ater 1958, de- "'(2) A State shall be qualified to receive with respect to having individuals in histermined by each such, head or agent asthe amount provided by paragraph (1) With constituting wages paid to an employee.' respect to any quarter, beginning with the employ, equal to the following percentages quarter commencing October 1, 1958— of the wages (a8 defined in section 3121 (a)) "TITLE II "'(A)if such State has filed with the paid by him with respect to employment (as"Amendmentpreserving defined in section 3121 (b) )— relationshipbe-Secretary of Health, Education, and Welfare. tween railroad retirement and old-age, sur-at such time (prior to the beginning of such "'(1)with respect to wages paid during vors, and disability insurance the calendar years 1959 and 1960. the rate quarter) andin such form as such Secretary shall be 3½ percent; "SEc. 301. Section 1(q) of the Railroadshall by regulations prescribe, a certificate '"(2) with respect to wages patd duringRettreient Act of1937,as amended,Isstating that the average monthly expendi- the calendar years 1961 to 1964, both in-amended by striking out 1956' and insertingture from State funds per recipient under clusive, the rate shall be 4 percent; in lieu thereof 1958.' the State plan for such quarter will not be "'(3) with respect to wages paid during 'LE IV—PBLIC ASSISTANCE AMENDMENTS less than the average monthly expenditure from State funds per recipient under such the calendar years 1965 to 1969, both inclu- 'SEC. 401. Section 3 of the Social Securityplan for the two quarters immediately pre- sive, the rate shall be 4 percent; Act (relating to payments to the States for '"(4) with respect to wages paid duringpurposes of old-age assistance) ceding the quarter commencing October 1, the calendar years 1970 to 1974, both Inclu- is amended1958; and sive, the rate shall be 5 percent; by adding at the end thereof the following "(B) if. in the case of any quarter oc- "'(5) with respect to wages paid afternew subsection: curring after the quarter commencing Jan- "(c)(1)From the sums appropriateduary 1, 1958, the average monthly expendi- December 81,1974, the rate shall be 5theref or, the Secretary of the Treasury shall percent.' . - ture from State funds per recipient under the "Generalprovi3iOns pay to each State which has an approved planState plan for the second quarter immedi- for old-age assistance and which is qualifiedately preceding such quarter has not been SEC. 205. (a) Section 3121 (a) of the In-under this subsection, for each quarter, be-less than the average monthly expenditure ternal Revnue Code of 1954 (relating to theginning with the quarter commencing Octo- definition of wages) Is amended by strikingber 1,1958, in the case of any State, anfrom State funds per recipient under such out '$4,200' wherever it appears and insert-amount (In addition to the amount paid toplan for the two quarters immediately preceding in lieu thereof $6,000.' ing the quarter commencing October 1, 1958. ' such State under the provisions of subsection (b)Section 3122 of such Code (relating(a)) which shall be used exclusively for old.. ''(3) Such amounts shall be computed and to Federal service)Is amended by strikingage assistance and which shall be equal to 25paid in the manner provided by subsection out '$4,200' wherever it occurs and Insertingpercent of the total amounts which would(b)forthe computing and paying oX n lieu thereof $6,OO0. (except for the provisions of this subsection)amounts provided for in subsection (a) "(c) The' amencftnent8 made by subsec-be expended during such quarter as old-age SEC. 403. Section 1003 of the Social Se- tions (a) and (b) shall be applicable :qhlyassistance in the form of money paymentscurity Act (relating to payments to the with respect to remuneration paid after1958,under the State plan. States for purposes of aid to the blind)Is CONGRESSIONAL RECORD —SENATE August 16 amended by adding at the end thereof the "'(B)if, in the case of any quarter oc-nesota [Mr. HT.TMPHREY] made a brilliant following new subsection: curring after the quarter conunencing Jan-speech on the floor of the Senate re- ''(c)(1) From the sums appropriateduary 1, 1958, the average monthly expend!-garding the need for a hospital-care therefor, the Secretary of the Treasury shallture from State funds per reclipient under pay to each State which has an approvedthe State plan for the second quarter im-program. He restricted his remarks to plan for aid to the blind and which is quali-mediately preceding such quarter has nothis proposed amendment having to- do fied under this subsection, for each quarter,been less than the average monthly expendi-with hospitalizationbenefitsforthe beginning with the quarter commencing Oc-ture from State funds per recipient underaged. My substitute amendment goes tober 1, 1958, in the case of any State, ansuch plan for the two quarters Immediatelyfurther.Based upon the principle of amount (in addition to the amount paid topreceding the quarter commencing Octoberhealth insurance, it provides not only such State under the provisions of subsec-1, 1958. hospitalization, but also surgical care. tion (a)) which shall be used exclusively for (3) Such amounts shall te computed aid to the blind and which shall be equaland paid in the manner provided by sub-It transgresses not one iota on the pri- to 25 percent of the total amounts whichsection (b)for the computing and payingvate practice of medicine.I am aware would (except for the provisions of this sub-of amounts provided for in subsection (a).'"of the fact, of course, that the medical section) be expended during such quarter as Mr. MORSE. Mr. President, I am oneprofessionis opposed •to my type of aid to the blind in the form of money pay- amendment, becausedoctorsfearit ments under the State plan. in whose breast hope springs eternal.might lead—it might lead—to socialized 1'(2)A State shall be qualified to receiveI refuse to stop hoping that Congress,medicine. the amount provided by paragraph (1) withrepresenting the American people, will respect to any quarter, beginning with therecognize that one of its great moral re- However, I do not propose to fail to quarter commencing October 1, 1958— sponsibilities is to see to-. it that beforecarry out my obligation to the aged of "'(A) if such State has filed with the Sec-it adjourns, justice is done to the elderlytrying to have enacted some legislation retary of Health, Education, and Welfare, atpeople of this country. which will remove from them the con- such time (prior to the beginning of such stant lurking fear that they may be quarter) and in such form atsuch Secretary I hold to the view that the pendingconfronted with lingering disease with- shall by regulations prescribe, a certificatebill needs to be greatly expanded. There-out the wherewithal with which to alle- stating that the average monthly expendi-fore, I offer as a substitute the so-calledviate their suffering to the maximum ex- ture from State funds per recipient under theMorseomnibussocialsecuritybill, State plan for such quarter will not be leswhich has been pending before the Com-'tent that medical science is able to al- than the average monthly 'expenditure frommittee on Finance for some time.It in-leviate it. State funds per recipient under such plan forcludes not only improvements in provi- Our Government must have a social the two quarters immediately preceding thesions in the social security system as itconscience.I believe we can protect the quarter commencing October 1, 1958; and now exists, but it also includes a healthdoctors in their very important and jus- "'(B)if. in the case of any quarter oc-insurance program. tifiable right to the private practice of curring after the quarter commencing Jan- I wish briefly to discuss the provisionsmedicine. At the same timq the Govern- uary'l, 1958, the average monthly expendi- itsobligations ture froth State funds per recipient underof my bill, which I offer in the form ofment must carry out the State plan for the second quarter tin-an amendment, in substitution for thewhich go along with a governmental so- mediately preceding such quarter has notpending bill. cial conscience.Therefore, I shall not been less than the average monthly expendi- Mr. President, the bizarre economicbe deterred by the medical profession ture from State funds per recipient undersituation we are in today—a record highfrom continuing my fight in the Senate such plan for the two quarters immediatelyin the cost of living coupled with unem-for a health insurance program for the preceding the quarter commencing Octoberployment and distress throughout thepeople of this country, because I believe 1, 1958. the people are entitled to it.It is a test "'(3) Such amounts shall be computedcountry—points up the fact that no and paid in the manner provided by sub-change has been made in the amount ofof whether we are going to take ad-; section (b)for the computing and payingsocial security benefits since 1954. vantage of the modern advances of of amounts provided for in subsection (a).' Itis obvious that older Americans,science, particularly medical science, and "SEC. 404. Section 1403 of the Social Secu-largely people living on fixed incomes,see to it that all our people will be as- rity Act (relating to payments to the Stateshave steadily been victimized by thesured of an opportunity to benefit from for purposes of aid to the permanently andsharp rise in prices in these 4 years,those advances. totally disabled)is amended by adding at While the cost-of-living index has the end thereof the tollowing new subsec-which now stand at an alltime high. tion: It has become axiomatic that a grow-gone up generally by 20 percent in the '"(c)(1) From the sums appropriateding American economy over the decadeslast 10 years, the cost of medical care therefor, the Secretary of the Treasury shallwill be accomplished by a slowly risinghas gone up by about 40 percent and pay to each State which has an approvedprice level.If that is to be an inevitablehospital costs are up 75 percent. plan for aid to the permanently and totallyaccompaniment of full employment— Oh, Mr. President, I know that we took disabled and which is qualified under thisand right now we are seeing that it isa licking this morning on a proposal for subsection, for each quarter, beginning with a 10 percent increase in retirement bene- the quarter commencing October 1, 1958, ineven accompanying unemployment—so- the case of any State. an amount (in addi-ciety cannot permit those retired fromfits.The Yarborough amendment was tion to the amount paid to such State underthe labor force to pay the price in re-defeated.Therefore, it can be said—in the provisionsof subsection(a)) whichduced living standards they are now pay-fact, it has been said—"You do not have shall be used exclusively for aid to the per-ing. a ghost of a chance. The Yarborough manently and totally disabled and which amendment was defeated." shall be equal to 25 percent of the total This group is the first to be victimized payments which would (except for the pro-byourpresenteconomiccondition. The question presents itself: If some visions of this subsection) be expended dur-Higher costs of food and other necessitiesof us believe a piece of proposed legisla- ing such quarter as aid to the permanentlyhave shrunk their benefit dollars, andtion pending before the Senate is not and totally disabled in the form of moneyas employment opportunitiesdecline,adequate, and we are satisfied that we payments under the State plan. their possibilities of supplementing theirdo not have the votes to get more ade- (2) A State shall be qualified to receivemeager incomes decreases with everyquate legislation, should we let the rec- the amount provided by paragraph (1) withpassing day. ord close without a statement about a respect to any quarter, beginning with the proposal by us that would provide ade- quarter commencing. October 1, 1958— Inasmuch as the older worker is often "'(A)if such State has filed with thethe first to be laid off, many men andquate legislation? Secretary of Health, Education, and Wel-women have recently found it necessary It has been my position time and time fare, at such time (prior to the beginningto apply for their benefits.Almost halfagain that I have the duty, in represent- of such quarter) and in such form as sucha million more people are relying oning the people of my State, to fight to the Secretary shall by regulations prescribe, atheir social security benefits as a primaryvery last for what I think is appropriate certificate stating that the average monthlysource of income than were doing so 6legislation that ought to be passed. Fail- expenditure from State funds per recipient under the State plan for such quarter willmonths ago. ing in that, I should support the best not be less than the average monthly ex- I am also concerned with the factlegislation that can be obtained. But in penditure from State funds per recipientthat our social security system ignoresall cases, I should make clear what I beunder such plan for the two quarters im-what has often been called the greatestlieve the desirable legislation would be. mediately preceding the quarter Commenc-single unmet need of the aged—medical As I have said, the history of the Sen- ing October 1, 1958; and care.Yesterday the Senator from Mm-ate shows that it is that type of position, 1958 CONGRESSIONAL RECORD —SENATE 18001 taken in the Senate, which paves thefamilies to about 75 percent.At thatconttlbuted at a time when the value of way in future years for success. time, this would have required an in-thedollar was much higher be A,djusted, It Is the record made by those few mencrease of $800 a family a year—that is,so that they can receive the kind of inwho have been defeated time and timefrom $2,300 to $3,100 a year.This Iscome which they earned when they paid again on the floor of the Senate ononly a minimum program for the aged.into the fund. worthwhile social Improvement legisla-My proposal would be one important I think this is the least we can do.It tion which helps followers years later, asstep toward that goal. is the kind of thing which the Senator. they come to occupy the places In the Mr. PROXMIRE. Mr. President, willfrom Oregon Is asking the Senate to do Senate, to finally succeed.There are athe Senator yield? in the excellent speech he Is making and great many pieces of such legislation Mr. MORSE.I yield. In the thoroughly responsible prOposal now on the books which first went down Mr. PROXMIRE. First, I congratu-he is making. to defeat session after session before be-late the Senator from Oregon on his Is it the understanding of the Senator ing adopted. proposal.I think it is excellent.It isthat his proposal isactuariallysound? After, all, fighting for this type of leg-urgently needed.I am delighted that Mr. MORSE. Yes; I shall discuss that islation is a part of the political educa-he is proposing, as I understand, to in-feature at some length before I finish. tion process.In America, we all know,crease benefits to the 25-percent figure.My proposal which has been developed there is at least a 2- to 10-year lag be- Mr. MORSE. That is correct. on the basis of actuarially sound prin- tween the introduction and passage of Mr. PROXMIRE. The country shouldciples. worthy social legislation. We introducenotice that this proposal Is being made. Mr. PROXMIRE. Has the actuaiial measures one year and fight for themI think, as I am certain the Senator fromsoundness of the proposal been verified? the next year and the next year and theOregon thinks, that the increase should Mr. MORSE. I shall offer my authori- next year; then finally our number in-be more than 25 percent.I believe moreties. creases, and a minority eventually turnsthan 25 percent can be justified, and the Mr. PROXMIRE. When the Senator into a majority. old people would not live in anything• from Oregon reaches that point, I shall I am perfectly aware of that fact thislike luxury if the increase were 25 per-discuss the matter a little further. afternoon.I suppose I should apolo-cent.Ipoint out some statisticsto gize to my colleagues for taking the timesupport my contention. Mr. MORSE. The need for a substan- to argue in behalf of a proposal we all The average old couple receiving so-tial increase in benefits can hardly be know is doing down to certain defeat.cial-security benefits today receives in-questioned by anyone who has talked to However, I do not utter such apology,come of $108 a month.According topersons now trying to exist on fixed an- because my responsibility in the Senatefigures released on July 13 by the De-nuities, and certainly not by anyone who is far beyond my personal relationshippartment ofHealth, Education, andreads the mail coming into Congressional to my colleagues in the Senate. My re-Welfare, for single retired workers theoffices, as has just been referred to by the sponsibility in the Senate is to carryamount received today is $60 a month,Senator from Wisconsin [Mr. PR0xMIRE]. out what I consider to be my obligationsor less than $15 a week. An aged widowThis was brought out, vividly by a recent to the people of my State and of myreceives $51 a month on which to live, 9rstatistical survey in the Christian Sci- Nation. I am sure that all my colleaguesapproximately $12.25 a week. A youngence Monitor. This newspaper reported would like to go home almost Immedi-widow having 2 children receives $145on a survey made for urban renewal pur-. ately, or at least some of them would.a month. Poses in a district in downtown Portland However, even though they may disagree Mr. President, just think how totallyin my own State. with my position on this subject, I aminadequate the social-security payments It showed that a great number of per- sure they at least respect my right totoday are.The cost of living for asons in that district were 60 years of age carry out what I consider to be my dutycoUple in Milwaukee, Wis.,is$186 aor older and lived in small residential with regard to the proposal. month for the bare necessities of life.hotels,tumbledownapartments, and My substitute will increase social-se-That is a reasonably fair minimum in-converted dwellings. curity benefits by 25 percent across thecome.This means that a couple receiv- These elderly persons were subsisting board.It will raise by that percentageing the average old-age insurance checkson social security or State welfare allot- the benefits now received by retired per-would be $76 short in Milwaukee. ments which have changed little, if at sons, survivors, and those receiving dis- The souróe of my information is aall, in recent years of climbing prices. ability insurance payments. reliable economic almanac which hasAfter payment of rent, it was not at all It will raise future benefits by thatbeen adjusted for the cost-of-living in-uncommon for these people on social percentage. creases. security to be required to budget their The bill raises the minimum monthly I should like to make one other sug-food,transportation,entertainment, benefit from $30 to $40. gestioninconnection with thefineclothing, and incidentals—all taken to- It increases today's maximum retire-speech being made by the Senator fromgether—at least about $1 a day. ment or disability benefit from $108.50Oregon.I think many persons have the Such a budget obviously permits only to $135.70 and makes possible an even-idea that a social-security check is aa bare existence.The simplest fare—a tual maximum payment of $173.20. little additional money, but the OASIquart of milk at 23 cents, a pound loaf It will aiso institute new minimumsbenefits are less than $75 a year in addi-of bread at 23 cents, and a can of soup at and maximums on benefits paid to ational income.That fact was brought15 cents—takes a major share of the family, so the lowest will be $60 insteadout by the Senator from Texas thisday's dollar. of $50, and the highest $323.80 insteadmorning.I think the figure ought to be Malcolm Bauer, who wrote the story of $200.In the future, the maximumrepeated—$75 a year.It adds up to $5in the Monitor, commented: family benefit can be as high as $346.20,a month, or $1.25 a week to supplement Anyone who entertains the delusion that the traditional figure of twice the high-the social-security check. the march of inflation has not yet brought est individual benefit. One in every four single retired work-realpersonal hardship to many persons During my campaign 2 years ago, I should examine the resultsofthis sur- ers receives about the same amount; 1 Invey. *'* Onedoes not often have oppor- promised the people of Oregon that Ievery 3 aged widows.Half the retiredtunity for an intimate view of the financial would do something about the situationcouples had assured incomes of less thanproblems of his neighbor, such as that af- in which so many of our older people$15 a month with which to supplementforded by the Portland urban-renewal sur- find themselves.Last year, I met thesetheir social-security payments. vey. *** Thepicture of the devastating promises by sponsoring or cosponsoring I have received many letters on thiseffect of postwar inflation on the fortunes of bills dropping the age requirement forissue, and I have read every one of them.the fixed-income oldsters, many of whom disability and reducing the eligibility ageI have read them carefully.I have beenhad reason to hope for real security in socialfor women to 60 with full benefits. deeply moved by those letters.Theysecurity benefits, is a stark one. In that campaign, I also supported theare from persons who are not asking for Our challenge Is to distribute abun- positionof Adlal Stevenson thatitany kind of handout.They are toodance rather than to share scarcity. We should be our objective to raise the fam-proud.They would not think of askingmust find better ways to divide our out- ily income of the aged from about 55for a handout. What they are asking Isput of material goods equitably among percent of the national average for allthat the insurance system to which theyourselves.The trend over the decades 18002 CONGRESSIONAL RECORD -SENATE August 16 hasbeen not only toward higher real9467. I hope that by so doing, I can re.to cease when employment is termi- incomes, but also toward a broader die-inforce the chances that a health In-nated by retirement. tribution of goods. surance program will soon be adopted. And since the number of days of However, at present our older peopleOf course, both our measures are buthospital care per person age 65 and are not getting their fair share of thismodifications of the health-insuranceover is almost double that for younger tremendous output which the Nation isprograms long championed by the greatadults, Blue Cross plans vary in the capable of producing.That is becauseSenator from Montana [Mr. MURRAY).extent to which they attempt to con- they leave the labor force, thereby get- This new program has been attackedfine these added costs to groups con- ting off the escalator, so to speak, Inon the ground that it will socialize medi-taining a high proportion of older per- terms of income, while the price esca-cal care for our older people and dis-sons, or to pass along these costs to the lator continues to go up. courage thrift and initiative.But theentire membership of the plans. That is where the obligation of Gov-same charges were made back in 1935 According to a survey of Blue Cross ernmentcomesin.Retiredcitizenswhen our social-security system was es-provisions for persons 65 and over, 56 have earned alargerShare ofthe-tablished.One commentator, at thatplans increased premium charges for the Nation's goods because they played suchtime, called it a plan which would "killsame benefits when a member reached a vital part in the creation of this greatthe goose that lays the golden eggs."65, in amounts varying from less than productive capacity. We must see to itFrom other quarters came dire predic- $3to more than $15for a family. that they get it and are not bypassedtions that it would discourage thrift andTwenty-three plans reduced benefits be- simply because they have reached re-initiativeand regimentoursociety.low those available to group members, tirement age. The individual social-security numberswhen the member reached age 65. One economist has pointed out that awere described as "dog tags." Thus, the trend in private-insurance chart showing the distribution of in- Today, we know that none of thesecoverage is to increase costs or reduce comes in America looked like a pyramidpredictions have come true.The effec-services at the very time when purchas- a few decades ago, with a small numbertiveness of this method of social insur-ing power has sharply declined, but of persons at the top receiving large in-ance in a county such as ours has beenwhen the need for medical care has incomes and a very large number at theso clearly demonstrated that even thecreased. low-income base.Today, in contrast,RepublicanNationalCommitteehas Dr. Wilma Donohue, of the Division this same chart looks like a barrel, withclaimed that social security was reallyof Gerontology, of the Institute for Hu- a great bulge in the middle, where thetheir idea.For social security has be-man Adjustment, of the University of middle-income people are found, andcome so much a part of our way of lifeMichigan, says that many old people smaller numbers of people proportion-that the only points of difference todaysimply ignore or neglect chronicill- ately at the high and low ends of theare as to how realistic benefits should beness—thus increasing eventual costs— income scale. and how much real protection should bewhile others obtain medical care by Our older citizens, as a group, are theafforded. sacrificing other essentials of healthful ones who are scraping the bottom of this I subscribe to the philosophy expressedliving.She believes that the mounting economic barrel. As legislators, we haveby Justice Cardozo in the Supreme Courtnumber of admissions of older patients a special obligation to make certain,case upholding the constitutionality ofto mental hospitals is one evidence of through our social-security system, thatthe Social Security Act, which states:the effects of worry and lack of preven- older people are given the chance to live Nor is the concept of the general welfaretive and restorative medical care of out their lives in dignity and are not thestatic. Needs that were narrow or parochialthis group. forgotten men and women of our times.a century ago may be interwover in our day Many of our older people are beset My substitute not only increases bene-with the well-being oI the Nation. What Isby fears of becoming ill and not being fits for everyone by 25 percent, but itcritical or urgent changes with the times. able to pay for medical care. Under my also takes account of the fact that the The facts of our time are the urgentproposal, the American people would heavy costs of an illness may destroy theadvocates of this new program. Morebe buying health Insurance when they best-laid plans for a comfortable retire-than half of the clinical part of medicinecould pay for it—during their working ment. Under its provisions, the social-is now concerned with the health prob-lives, and its protection would be effec- security system will pay the costs of carelems of older persons. A recent nation-tive at retirement age, when they need in qualified hospitals and nursing homeswide survey of families and individuals,it most. in a manner similar to the Blue Crossas conducted by the Health Information The essence of the method of social plans.Surgical care wound also be pro-Foundation, showed that people 65 yearsinsurance has been to provide against vided and, in all instances, there wouldof age and over experience medical coststheexpensive and predictablerisks be free choice of doctors and patients. 57 percent greater than those for thewhich threaten the self-sufficiency and These health benefits would be avail-general population, and that althoughindependence of the individual. Sickness able to all persons eligible for social-this age group constitutes on'y 9 percentis certainly such a risk.Indeed, in most security benefits.Thus, the man whoof the population, it experiences 13 per-European countries, health insurance has has continued to work beyond age 65,cent of all medical costs. been the cornerstone of the social-insur- and has not applied for benefits, would ance plan. b eligible if illness struck.Each per- The same study showed that the total son would be insured against the costannual cost forallprivate personal Today, all the major industrial coun- of hospital and surgical care, includinghealth services is $65 a person, but thattries in Europe have long-established a semiprivate room and allhospitalfor those 65 years of age and over it isnational programs to provide health care services, medical care, drugs, and appli-$102 a person. for their working population, as well as ances which the hospital customarily How do the 14 million people In thisfor retirees.This is also increasingly furnishes its bed patients.The substi-country who are past 65 years of agetrue of our Latin American neighbors. tute provides for 60 days of hospital caremeet this cost of medical service? WeThe German plan, which was the model but, if nursing home care is also indi-know that a single illness can wipe outaround which other early plans were cated, it provides an additional 60 days,a lifetime's savings, or can place a se-built, was established as long ago as or up to 120 days of combined care. vere and unpredictable strain upon the1883. Austria followed in 1888, and Hun- This section of my substitute is iden-sons and daughters of our older people,gary in 1891.The growing knowledge tical to the health insurance provisionsat a time when their children's ownthat the health of the individual was im- of H. R. 9467, introduced in the Housefamily responsibilities are heaviest.As portant to the nation led to early action of Representatives by Congressman AIMEa result, part of these older people re-by other European countries.Luxem- FORAND, of Rhode Island. ceive public or charitable care.Butbourg established its compulsory insur- most of them must meet medical ex-ance plan in 1901; Norway, in 1909; Great I express my personal thanks and ap-penses out of a small fixed income. preciation to Representative FORAND for Britain and Russia, in 1911; Rumania, in Only one-third—andistressthis1912; and the Netherlands, in1913. his leadership in this matter.I ampoint because itis why I included aCompulsory health-insurance plans were happy to acknowledge that I have simplyhealth-insurance provision in the bill—established in Bulgaria In 1918; In Por- followed his lead by incorporating intoonly one-third of these 14 million peopletugal, In 1919; and In Greece, In 1922. my substitute the health-insurance pro-over 65 are covered by any kind of healthThe comprehensive French Insurance gram he had first introduced in H. R.Insurance. Group health coverage tendslaw of 1928 became operative In 1930. 1958 CONGRESSIONAL RECORD —SENATE 18003 In1943, Italy passed a law providing forveloped by the Social Security Adminis-I think the security and health benefits, the fusion of existing mutual funds fortration, upon my request, when I waseconomicbenefits,andpsychological workers in industry and commerce inworking on my omnibus bill.In con-benefits which will flow from a bill such order to bring about a national system.nection with this matter, I had the as-as mine are worth the price we shall One of the questions which Invariably issistance of the Library of Congress and,have to pay for them.Furthermore, I asked by Europeans who visit this coun-through the Library of Congress, thebelieve such a measure will set a great try is, "How can you say you have socialSocial Security Administration devel-example, around the world, of the ad- security, when you do not have healthoped the table I am now describing,vantages which a free-enterprise system insurance?" which first appeared in my bill when itsuch as ours, with a social conscience, The proposal I am sponsoring is cer-was introduced in the Senate last March.offers, over the conditions existing under tainly a very conservative approach, as Comparethisprovisionwith thatthetotalitarian systemof theslave compared to these foreign systems; butwhich exists in present law, whereby it isstates of Communist Russia. it is a step in the right direction. impossible for the average person—or, Social security under my plan would In the first place, the health insurancefor that matter, the average lawyer—toremain an insurance program for which provided by my bill is limited to personsascertain with any facility what he is en-employer and employee pay the pre- who receive retirement benefits and theirtitled to under the act.I hope simi-miums, so to speak.I hope the day will dependents, the totally disabled who arelar simplificationswill be effectuatedcome when every American who works 50 years of age or over, and the widowsthroughout the act, so that this law,for a living will be able to make this and children of insured wprkers whowhich affects 100 million Americans, willsound, businesslike investment for his have died—a relatively sma'll segmentbe understandable to all the people, andown retirement. ofourtotalpopulation. Currently,not to only a select few employees of the Finally, I have also sought my meas- around 12'/2million people would beBureau of Old Age and Survivors In-ure to increase public assistance by 25 eligible. surance. percent; and it is the kind of public as- In the second place, the proposal pro- This table now appears in House billsistance provisions in my bill for which vides only for hospital, surgical, and13549, although the increase in that billthe Senator from Louisiana [Mr. LONG] nursing-home care, following the patternis only 7 percent, whereas the increasehas been such an ardent advocate in the developed by many of our voluntary pre-in the table in my bill is 25 percent. TheSenate. payment plans.Thebillspecificallytable is contained, as I have already I appreciate that it is a difficult task states that the Secretary of Health, Edu-stated, in House bill 13549 as reportedto draft legislation that will assure that cation, and Welfare shall have no super-to us by our Finance Committee. an increase in the Federal contribution vision or control over, first, the practice Now we come to the matter of financ-to the States for public assistance will of medicine or the manner in whiching these benefits.In order to financebe passed on to those for whom itis services are provided; second, the detailsthese benefits in the social-security sys-intended. of the administration or operation oftem, my bill would increase the tax rate In order to avoid—I hope—the possi- hospitals or nursing homes; and, third,for both the employer and employee bybility that the States will simply reduce the selection, tenure, or compensation of1.25 percent of payroll, and would in-their own contribution to public assist- hospital or nursing home personnel. crease the earnings ceiling, for contribu-ance, I have said in this bill that what- One of the results of this proposedtion and benefit purposes, from $4,200 toever the combined Federal-State ex- legislation would be its salutary effect on$6,000 a year. The latter change will re-penditure is in a State, the Federal Gov- theNation's medical facilities whoseflect the steady increase in the earningsernment will match it with an additional financial burdens are due in part to ex-level that has occurred in the last few25 percent. penses they must bear in providing freeyears.It is estimated that this year, 60 This does not affect the present for- care for indigent patients.By providingpercent of those regularly employed willmula atall.Under present law the reasonable reimbursement for some ofearn more than the present ceiling ofFederal Government contributes $24 of these services, we shall not only be pro- $4,200.Under my proposed ceiling ofthe first $30 and $15 of the next $30 of viding better care for our older citizens,$6,000 a year, only 1 person in 4, or 25the State's minimum public-assistance but we shall also be improving the finan-percent, will have earnings above thosepayment.That formula would remain cial position of our hospitals and nursingcovered by social security. untouched by my proposal. homes, so that they can furnish better The increase in the social-security tax But after contributing $39 to the $60 care for all of us. will pay for the improvements in theminimum, my amendment would add 25 This proposal also will extend thesystem that are provided by the bill.Ipercent of that $60, or $15 more as a dropout provision, so that a worker, instrongly favor the insurance principleFederal bonus.If the State's minimum computing his average monthly wagewhich underlies social security, and Iis $100, the Federal bonus would be $25, for benefit purposes, can skip not only hisbelieve this principle should be preserved.again in addition to the $39 it contrib- 5 years of lowest earnings or no earnings, It assures every covered person anuted under the basic formula. as under existing law, but also an addi-equity in his retirement plan.I do not Thus, no State action is needed to tional year for each 7 years of coveragethink social security should become aobtain the 25 percent increase. he has under the system.This will beGovernment dole. The Federal Govern- In order to discourage the States from an advantage to all workers who havement should be the trustee of the money,decreasingtheir own contribution,I made substantial contributions to theand should adjust upward the benefits,have provided that a State will receive social-security system, and will be espe-and also the levies to pay for them, asno bonusatallifits own average cially helpful to workers nearing retire-the level of the economy requires. monthly payment drops from the pre- ment who wish to take full advantage But I agree with the Senator fromvious year. of the new $6,000 earnings base. Louisiana [Mr. LONG] that we should There is no certainty that my proposal I want to call attention to a new pro-not accumulate in this fund billions andwill work out as I intend that it should. vision in Senate bill 3508—a provisionbillions of dollars to be used 40, 60, 80, The junior Senator from Louisiana which I hope will be the start of a realor 100 years from now, while the old[Mr. LONG] has labored valiantly to per- attempt to simplify the Social Securitypeople of our generation continue to livefect language to assure that recipients Act.All the benefit computation for-in the misery in which they are now liv-will benefit from an increase in Federal mulas were consolidated in one table, soing.I think we should take advantagecontributions to public assistance, and that beneficiary, by applying his averageof the kind of actuarial program whichnot just State treasuries.I understand monthly wage or previous benefit amountmy substitute provides; and I believe wethat he has not been satisfied that any figure, can determine exactly what hisshould see to it that these old peopleof the proposals which have been offered new benefit amount and new maximumreceive reasonable benefits now. We canare certain to accomplish this. family benefit will be. increase current taxes to pay for future I realize that this proposal does not Mr. President, I wish to say that I ambenefits. give the most to those receiving the very pleased and very proud of the fact Therefore, I am not very much movedleast.It would revise benefits propor- that the Kerr bill, which now is beforeby the argument that proposals such astionately, instead of trying to equalize the Senate, contains this new benefitsthe one I am offering will cost too muchthem.Theequalizationprincipleis table.I say with some personal satis-and will impose an additional burden onfound in the basic formula, and I think faction that that form or table was de-the employers and the workers, becauseart across-the-board percentage increase 18004 CONGRESSIONAL RECORD —SENATE August 16 for all States would be salutary simplyhas worked so hard and made such alegislation, social security, and assist- in itself, and also in encouraging thegreat record, I want him to know that inance. States to improve and raise their ownpresenting it I show no lack of apprecia- Itis with great regret that I have tion for his work as chairman of thenot been able to help bring to the Sen- contributions. ate proposed legislation which would be Itisquite possible that the Statesubcommittee.The Senator from Okla- agencies which administer public assist-homa, against terrific odds—and I knowmore far reaching and of greater bene- ance will have some criticism ofthiswhat some of those odds have been—hasfit than that which is contained in the proposal. I invite then to come forwardpiloted through his committee the billbill before the Senate. with it.I hope hearings can be heldnow pending on the floor of the Senate. As the Senator from Oregon indicated, by appropriate committees on both sidesI shall vote for the bill. my action has been in accordance with of the Capitol on this matter. I think the Senator from Oklahoma,the judgment I had that the provisions If my proposal is not adopted thisand his remarks on the floor indicated itin the bill have seemed to be the best afternoon—and there is every indicationclearly, would be the first to say hewe could hope to have a chance of se- it will not be—I hope that by this speechwould like a better bill and wish we couldcuring the adoption and acceptance of. I may succeed in laying a foundationbe in a position to have better legislation Naturally, under those circumstances, of interest on the part of the Senateenacted.It is not my intention to com-I could not favor the substitution of the committee, so that next year we can havemit the Senator from Oklahoma in thebill proposed by the Senator from Ore- hearings on such a bill. future with regard to a single line of mygon as an amendment to the bill before Under this section, the Federal bonusbill; but I want him to know that in pre-us, but I certainly understand the great of 25 percent of the combined Federal-senting my bill as an amendment thisdesire the Senator has expressed, mani- State effort would apply to all public-afternoon, I make no reflection on hisfested, and made a living thing for bet- assistance programs to which the Fed-leadership on social security legislationter and more progressive legislation. in this session of Congress. Mr. PROXMIRE. Mr. President,I eral Government now contributes, in- wonder if the senior Senator from Ore- cluding aid to the blind and aid to de- I say to the elderly people of America,gon will permit me to ask 1 or 2 ques- pendent children. if we did not have in this body a man with the social conscience of the Sena-tions on the actuarial aspects of his Of course, this money would come out proposal. of general appropriations, since it is nottor from Oklahoma, they would not be It is my understanding that the so- a part of the old-age and survivors in-getting the bill which is going to pass the Aftcr all,itiscial-security segment of the amendment surance system. Senate this afternoon. proposed by the Senator from Oregon, I believe we must make these changesone thing for the senior Senator from in our social-security plan in order toOregon to stand up on the floor of theas distinct from the public assistance Senate and fight for the ideal bill; andaspects, the proposal is self-financing. keep it up to date and to keep it respon- Mr. MORSE.It would simply raise sive to the ideals of our country.TheI am going to continue to fight for therates enough to make it self-financing. goal for such a program has been wellideal in the hope we can get some of the Mr. PROXMIRE. The rates would be stated by one of its founders, the greatfruits of that ideal into a piece of legislation before the Senate. It is quite a dif-raised how much, roughly? Edwin E. Witte.Professor Witte was Mr. MORSE.I have set that forth in a former professor of mine in graduateferent thing for a chairman of a com-my manuscript.The rates would be study at the University of Wisconsin.mittee who has to consider, throughoutraised 21/2 percent. He is a man on whom I have heavilycommittee hearings, diverse points of Mr. PROXMIRE. Two and one-half leaned for parts of the material I haveview, and who has to iron out in com- used in the presentation this afternoon.mittee, on the anvilofconscionablepercent on each? compromise, the best bill he can get. Mr. MORSE.One and one-quarter I think it will be agreed by the Senator percent on each. from Illinois [Mr. DoUGLAs] that Prof. So when I offer my bill as an amend- Mr. PROXMIRE. One and one-quar- Edwin Witte, of the University of Wis-ment, I want the Senator from Okla- consin, is recognized as one of the out-homa to know I am offering an ideal.Iter percent on each. In other words, the hope it can be adopted, but I am fullyrate would be increased from 2V4 percent standing living authorities on social se- to 31/2percent. curity.Therefore, I am very proud toappreciative of the fact that his not quote from this old professor of mine,bringing my bill out of committee in no I should like to point out to the dis- from the University of Wisconsin, theseway subjects him to any deserved criti-tinguished senior Senator from Oregon cism; but, to the contrary, he is deservingwhat a modest proposal he is making. words: The fact is that every other large civilized Those who believe in social insurance asof high praise for the great leadership he I do, see In it a bulwark for a free economyhas given us on this bill. industrial country in the world pays and a democratic government.They regard I want him to know I am going to bebenefits which are more ample in rela- the increasing attention given social securityat his committee doorstep come nexttion to the national income and assesses a the world over as a necessary, perhaps anJanuary, pressing him again for furthersocial security tax which is more sub- tnevitable, consequence of an aging popula-consideration of those parts of my billstantial. tion, of industrialization and urbanization, I should like to cite the example of of technological progress and the advance ofwhich have not found their way into the science and medicine, of rising standards ofbill now before the Senate. West Germany, where employers pay a living and a growing concern for the unf or- Mr. President, there are other Sena-tax of 7 percent and employees pay a tunate and underprivileged.To them, socialtors who are supporting my bill in thetax of 7 percent, and of course benefits security means not a featherbed provided atform of an amendment, and who thinkare accordingly higher. public expense, but a net to catch those whoat least we ought to go through to a voice The bill as offered in the form of an fall, or rather a floor which will assure allvote.I want to say to the Senator fromamendment by the distinguished senior Americans in all contingencies of life a min- Senator from Oregon would provide a tax imum income sumcient for an existence inOklahoma, in their behalf and mine, I accordance with prevailing concepts of de-am going to let it go through to a voiceof 3 '/2percent.That is only one-half of cency.Anything above such a minimum,vote; but I think he should know thatthe tax paid in West Germany, which the citizens must still provide for themselves.come next January we will be back try-everybody recognizes now has a great ing to get some hearings on the bill, andfree-enterprise economy. I have presented the main features of Mr. MORSE. Mr. President, will the my bill this afternoon in order to makenext time we are going to do our best to a record, always, as I said at the begin-take the bill through to a yea-and-naySenator yield? ning, in the hope and expectation thatvote. Mr. PROXMIRE. I yield to the Sen- the time will come when the Senate and Mr. President, I offer the amendment.ator from Oregon. the Congress of the United States will Mr. KERR. Mr. President, I am very Mr. MORSE.I want the Senator to adopt it. appreciative of the kind remarks of theknow the manner in which I prepared Now, in my closing remarks, I shoulddistinguished Senator from Oregon.Ithe bill.I do not deserve any credit like to have the attention of the Senatoracknowledge the brilliant and able spon-for the preparation of the bill or of the from Oklahoma [Mr. KERR].Althoughsorship the Senator has ciways giventechnical material in the bill.I do not I am presenting my amendment as ato progressive legislation in many fieldswant to seem to take any credit. complete substitute for the bill on whichof great interest and merit to our peo- The bill was prepared with the assist- he, as chairman of the subcommittee,ple, and certainly in the field of socialance of experts from the Library of Con- 1958 CONGRESSIONAL RECORD —SENATE gressand from the Social Security Ad-clal-security bill passed by the Congress.mentofferedbytheSenatorfrom' ministration. -The Social Security Ad-However, we had a great champion onOregon. ministration made it very clear it was-the Finance Committee in the person of Mr. WILLIAMS. Mr. President, I ask simply supplying me with technical as-the senior Senator from Oklahoma, whofor the yeas anq nays on the amendment. sistance, at my request, and in no waywas ably assisted by a number of other Mr. President, I suggest the absence of was to be associated with the merits ofmembers of the committee, who foughta quorum. the proposal, but I want to thank, invery hard.I think the country owes the The PRESIDINGOFFICER.The the best manner I can, the people fromsenior Senator from Oklahoma a greatclerk will, call the roll. the Social Security Administration anddebt of gratitude for the fine job he has The legislative clerk proceeded to call the Library of Congress, for the wonder-done. the roll. ful techniôal and expert assistance ren- Mr. MORSE. Mr. President, will the Mr. JOHNSON of Texas.Mr. Presi- dered me. Senator yield? dent, I 'ask upanimous consent that the Mr. PROXMIRE. In France, in Italy, Mr. PROXMIRE.I yield to the Sen-order for 'the quorum call be rescinded. and in virtually every other country theator from Oregon. The PRESIDING OFFICER.With- social security tax In respect to earnings, Mr. MORSE. The Senator from Wis-out objection, it is so ordered. and therefore the benefits, are far higher.consin has been a great stimulus and Mr. JOHNSON of Texas.Mr. Presi- The tax is not 25 percent higher, as theinspiration to those of us who havedent, may we have a vote on the Morse senior Senator from Oregon has sug-fought for social-security legislation thisamendment? - gested, but 100percentor 200 percentyear.I hope we have been of sothe as- thePRESIDING OFFICER.The higher.The benefits are—in propor-sistance to the Senator from Oklahoma,question is on agreeing to the amend- tion—accordingly higher. if it has not been any more than to putment offered by the Senator from Ore- Mr. JOHNSON of Texas.Mr. Presi-him in a position to say, "You had bet-gon [Mr. MORSE]. dent, will the Senator yield to me so thatter go this far, because look at what these The amendment was rejected. I may ask for the yeas and nays onother fellows want." Mr. LONG. Mr. President, I offer the final passage of the bill, so that Senators When I say "these other fellows" Iamendments which I send to the desk who have been sitting around waitingmean the Proxmires, the Churches, theand ask to have stated. They are des- to vote on the bill will know we will haveYarboroughs, the McNamaras, and theignated, collectively, as "8—15—58—E." a yea-and-nay vote? whole group of us who week after week The PRESIDING OFFICER.The Mr. SMATHERS. Does the Senatorreminded the Senate of its obligation toamendments offeredby the Senator have ay idea as to the time for the vote?pass social-security legislation before thefromL.ouiziana will be stated. Mr. PROXMIRE.I yield to the Sent-session adjourned. The LEGIsLATIVE CLERK. On page 91, ator from Texas. I want to pay my high thanks to thelines 18 and 19, it is proposed to strike Mr. JOHNSON of Texas.Mr. resi-Senator from Wisconsin for the proddingout "January 1, 1959" and insert in lieu dent, I ask for the yeas and nays onhe has given me in seeing to it that I keptthereof "October 1, 1958." final passage. on the ball, so to speak, with respect to On page 93, line 21, it is proposed to Mr. SALTONSTALL. Mr. President,social-securitylegislation.I hope instrike out "January 1, 1959" and insert a parliamentary inquiry. turn this has been helpful to our greatin lieu thereof "October 1, 1958." Mr. JOHNSON of Texas.I am askingleader on this matter, the Senator from On page 95, lines 24 and 25, it is pro- for the yeas and nays on final passageOklahoma [Mr. KERR]. posed to strike out "January 1, 1959" of the bill, so that all Senators who are Mr. PROXMIRE. Mr. President, theand insert in lieu thereof "October 1, in the cloakrooms or at other places willsenior Senator from Oregon needs no 1958." be prepared for the vote. prodding from anyone on this kind of On page 98, line 1, it is proposed to The PRESIDING OFFICER.Is therelegislation. strike out "January 1, 1959" and insert a sufficient second? I should like to say, in conclusion, thatin lieu thereof "October 1, 1958." The yeas and nays were ordered. Wisconsin is a State in which people be- On page 101, line 5, it is proposed to Mr. PROXMIRE. Mr. President, inlieve deeply in social security. We arestrike out "ten" and insert in lieu there- conclusion I should like to say, as I be-very proud of the fact that two of theof "eleven." - lieve I said once before, the senior Sen-men who had the most to do with social Onpage 101, line 6, it is proposed to ator from Oregon deserves the greatestsecurity in all America came from Wis-strike out "January 1, 1959" and insert commendation for his proposal.I amconsin. One was Arthur Altmeyer, who isin lieu thereof "October 1, 1958." delighted to support it, and I shall voteconsidered to be the father of social se- On page 103, lines 14 and 15, it is pro- for it.I have no illusions about thecurity by many, and who was a Socialposed to strike out "December" and inamendment being agreed to, exactly asSecurity Commissioner for many years.sert in lieu thereof "September." the Senator from Oregon has no illu-The other was Edwin Witte, who was on On page 103, line19, itis proposed sions. the first Cabinet Commission, which setto strike out "December" and insert in Mr. President, if I may I should like toup the Social Security Administrationlieu thereof "September." and the basic social security law in this Mr. LONG. Mr. President, I with- have the attention of the senior Senator draw all portions of the printed amend- from Oklahoma [Mr. KERR] for just acountry and who has become recognizedments beginning with line 9 on page 2; moment. I should like to say to the sen-as the personification of the Wisconsinin other words, the amendment consists ior Senator from Oklahoma that I, too,idea. only. of page 1 and the first 8 lines on am very much aware of the great odds Wisconsin has contributed greatly topane 2. the Senator faced in getting a social-social-security legislation, and we are. The amendments would retain the ef- security bill through the Congress in thedeeply indebted to the Senator fromfective dates, as approved by the House, present session.I know as well as theOklahoma for making the present im-in connection with the public assistance Senator does the bill should contain moreprovement possible. program. In the committee the effective than a 7-percent increase if it had been Mr. President, I yield the floor. dates were changed, based upon the ef- possible to get that kind of a bill passed Mr. KERR. Mr. President, I wish tofective date of the act.The main rea- by the Senate, passed by the House, andexpress my appreciation to the distin-son for that was to pare down the cost signed by the President.However, theguished Senator from Wisconsin for hisof the bill.However, amendments have ultimate ideal—the Morse ideal or thekind words.I say to the Senator, I glorybeen adopted to reduce the cost of the Proxmire ideal—was notpossible. Iin the fact that he has been energetic,bill.Therefore, I believe it would be think the Senator has performed a greatdiligent, and vigorous in his support ofwell to allow the effective dates with service to the old people of Wisconsinthe general purposes of the bill. respect to the public assistance portion and the old people of America.All our I hope the time may come when I canto remain as they were in the House people should thank the senior Senatorjoin with the Senator in moving fasterbill.I believe the distinguished Senator from Oklahoma for a grand job. in the direction of a greater program andin charge of the bill is willing to accept I have talked with a number of Sen-a more complete program, as he has en-the amendments. They would make it ators who serve on the Committee onvisioned and worked for. possible for the aged people to receive Finance, and I felt a month ago there ThePRESIDINGOFFICER.Thetheir public assistance about 3 months was almost no chance of having a so-question is on agreeing to the amend-sooner than they otherwise would. The 18006 CONGRESSIONAL RECORD —SENATE August 16 amendmentswould be administrativelypetent) by any relative or other person, in- "(2) Regulations under this section shall cludingthehospitalornursinghomeprovide for payments (in such amounts and feasible.They would retain that por-furnishing him hospital or nursing home upon such conditions as may be prescribed in tion of the House bill as it was passedservices and, after such individuals death,such regulations) to hospitals for hospital by the House. There may not be a con-his estate. services rendered in emergency situations to ference on the bill.I would not like "(4) Payments may be made for hospitalindividuals referred to in paragraphs(1) to see the effect of not having a con-services furnished under this section to anand (2) of subsection (a) by hospitals which ference mean a substantial postpone-individual during his first 60 days of hos-have not entered into an agreement under ment oi the dates which Congress in-pitalization in a 12-month period that beginsthis section. tended. with the first day of the first month in which "Agreements with hospitals and nursing the individual received hospital services for homes - Mr. KERR. Mr. President, inasmuchwhich a payment is made under this section, Ibelievethe adoptionofother "(d)(1) Any institution (other than a as and during his first 60 days of hospitaliza-tuberculosis or mental hospital)shall be amendments has achieved the purposetion in each succeeding 12-month period;eligible to enter into an agreement for pay- of reducing the cost of the bill to theand for nursing home services furnished un-ment from the Federal old-age and sur- extent the Senate is willing to do so.der this section to an individual if the in-vivors insurance trust fund of the cost of If reductions would make it possible todividual is transferred to the nursing home from the hospital, and if the services are forhospital or nursing home services furnished have the bill enacted into law, theyan illness or condition associated with thatto individuals referred to in paragraphs (1) have already taken place.I ask that theforwhich hereceivedhospitaiservices: and (2) of subsection (a) if it is licensed as amendments of the Senator from Lou!- ahospital or nursing home pursuant to Provided, That the number of days of nursingthe law of the State in which it is located. siana be accepted. home services for which payments may be '(2) Each agrtement with a hospital un- ThePRESIDINGOFFICER. Themade shall, in any 12-month period as de-der this section shall cover all hospital serv- question is on agreeing to the amend-scribed above, not exceed 120 less the numberices included under subsection (b)(which ments offered by the Senator from Lou-of days of hospital services (in the same 12-services shall be listed in the agreement), Without objection,month period) for which payments are made isiana [Mr. LONG]. under this section. shall provide that such services shall be fur- they will be considered en bloc. "(5) The provisions of section 205 relatingnished insemiprivate accommodationsif The amendments were agreed to. available unless other accommodations are to the, making and review of determinationsrequired for medical reasons,. or are occu- Mr. HUMPHREY. Mr. President, Ishall be applicable to determinations as topied at the request of the patient, shall be offer the amendment which I send to thewhether the costs of hospital or nursingmade upon such other terms and conditions desk and ask to have printed in thehome services furnished an individual mayas are consistent with the efficient and eco- RECORD without reading. be paid for out of the Federal Old-Age andnomical administration of this section, and The PRESIDING OFFICER. With-Survivors Insurance Trust Fund under thisshall continue in force for such period and out objection, the amendment will besubsection, and the amount of such pay-be terminable upon such notice as may be ment. agreed upon. printed in the RECORD without reading. "Description of hospital and nursing home "(3) An agreement with a hospital or The amendment was, to add the fol- services nursing home under this section shall pro- lowing new title at the end of the bill: '(b) (1) For purposes of this section, thevide for payment, under the conditions and TITLE VIII—H0SPITALIzATI0N INSURANCE term 'hospital services' means the followingto the extent provided in this section, of the AMENDMENTS TO TITLE IIOFTHE SOCIAL services, drugs, and appliances furnished bycost of hospital and nursing home services a hospital to any individual as a bed patient:which are furnished individuals referred to SECURITY ACT bed and board and such nursing services,in paragraphs (1) and (2) of subsection (a) SEC. 801. (a) Title II of the Social Securitylaboratory services, ambulance services, useprovided that no such payment shall be Act is amended by adding after section 225of operating room, staff services, and othermade for services for which the hospital or the following new section: services, drugs, and appliances as are cus-nursing home has already been paid (exclud- "HOSPITAL INSURANCE tomarily furnished by such hospital to itsing payments by such individuals for which "Eligibility for Insurance bed patients either through its own em-reimbursement to them by the hospital has ployees or through persons with whom it hasbeen assured); but no such agreement shall "SEC. 226. (a)(1) The cost of hospital ormade arrangements for such services, drugs.provide for payment with respect to hospitals nursing home services furnished to any in-or appliances; the term 'hospital services'or nursing home services furnished to an dividual during any month for which heincludes such medical care as is generallyindividual unless the hospital or nursing is entitled to monthly benefits under sectionfurnished by hospitals as an essential parthome obtains written certification by the 202 (whether or not such benefits are actu-of hospital care for bed patients; such term physician(if any) who referred him pur- ally paid to him) or is deemed entitled toshall include care in hospitals described insuant to subsection (c) that his hospitaliza- such benefits under the provisions of para-paragraph (1) of subsection (d); such termtion or care in the nursing home was med- graph 2, Or the cost of such services furnishedshall not include care in any tuberculosis orically necessary and, with respect to any to him during the month of his death wheremental hospital. period during which such services were fur- he ceases to be entitled by reason of his nished, writtencertification by suchin- death, shall, subject to the provisions of this "(2)The term 'nursing home services'dividual's attending physician during that section, be paid from the Federal Old-Agemeans skilled nursing care, related medical and personal services and accompanying bedperiod that such services were medically and Survivors Insurance Trust Fund to the necessary.The amount of the payments hospital or nursing home which furnishedand board furnished by a facility which isunder any such agreement shall be deter- Services to be paid for inequipped to provide such services, and (A) him the services. which is operated in connection with a hos-mined on the basis of the reasonable cost accordance with the provisions of this sec-pital, or (B) in which such skilled nursingincurred by the hospital or nursing home tion include only services provided in thecare and medical services are prescribed by,for all bed patients, or, when use of such United States. or are performed under the general direc-a basisis impractical for the hospital or '(2) For purposes of this section, (A) anytion of, persons licensed to practice medicinenursing home or inequitable to the institu- individual who would upon filing applica-or surgery in the State. tion or the Federal old-age and survivors tion theref or, be entitled to monthly benefits insurancetrustfund,onareasonably for any month under section 202 shall, if he "Free choice by patient equivalent basis which takes account of files application under this section within "(c)(1)Any individual referred to inpertinent factors with respect to services the time limits prescribed in section 202 (j)paragraphs (1) and (2)of subsection (a)furnished to individuals referred to in para- be deemed, for purposes of this section only,may obtain the hospital or nursing homegraphs (1) and (2 of subsection (a).Any to be entitled to benefits for such month,services for which payment to the hospitalsuch agreement shall preclude the hospital (B) such individual shall, whether or notor nursing home is provided by this sectionor nursing home with which the agreement is he files application under this section, befrom any hospital or nursing home whichmade from requiring payments from in- deemed to be entitled to benefits under sec-has entered into an agreement under thisdividuals for services, payment of the cost tion 202 for such month for purposes ofsection, which admits such individual andof which is provided by this section, after determining whether the wife, husband, orto which such individual has been referredit has been notified that the cost of such child of such individual comes within theby a physician or (in the case of hospitalservicesis payable from the Federal old- provisions of clause (A) hereof, and (C) anyor nursing home services furnished in con-age and survivorsinsurance trust fund, Individual shall, for purposes of this sec-junction with oral surgery) dentist licensedexcept that it may require payments from tion, be deemed entitled to benefits underby the State in which such individual re-such individuals for the additional cost of section 202 if such individual could havesides or the hospital or nursing home isaccommodations occupied by them at their been deemed under clauses (A) or (B) of thislocated, upon a determination by the physi-request which are more expensive than semi- paragraph to have been so entitled had hecian or dentist that hospitalization or nurs-private accommodations. not died during such month. ing home care for such individual is medi- '(4) Except as provided by regulation, no "(3) For purposes of paragraph (2), an in-cally necessary; except that such referralagreement may provide for payments (A) to dividual's application under this section may,shall not be required in an emergency situa- any Federal hospital, or to any other hospital subject to regulations, be filed (whether suchtion which makes such a requirement Im-for hospital services which itis obligated individual islegally competent or incom-practical. by contract with the United States (other 1958 CONGRESSIONAL RECORD —SENATE 18007 thanan agreement under this Section) toor plan is In doubt when sUeh services areWtiUzat4on o/ private nonprofit organiza- furnish at the expense of the United States,required, (2)the cost of such services Ia tions or (B) to any hospital for hospital servicesotherwise payable from the Federal old-age (h)(1) The Secretary may utilize, to the which it Is required by law or obligated byand survivors insurance trust fund pur-extent provided herein, the services of pri- contract with a State or subdivision thereofsuant to this section, and (3) the individualvate nonprofit organizations exempt from to furnish at public expense except Wheremakes an appropriate application under suchFederal income taxation under section 501 of the eligibility of the individual for suchworkmen's compensation law or plan andthe Internal Revenue Code which (A) repre- services is determined by application of aagrees, in the event that he is subsequentlysent qualified providers of hospital or nurs- means test. determined to be entitled- to receive such ing home services, or (B) operate voluntary "(5) No supervision or control over theservices(or to have the cost thereof paidinsurance plans under which agreements, details of administration or operation, orfor) under such law, to reimburse the Fed-similar to those provided for under subsec- over the selection, tenure, or compensationeral old-age and survivors insurance trusttion (d), are made with hospitals and nurs- of personnel, shall be exercised under thefund in the amount of any loss it mighting homes for defraying the cost of services. authority of this section over any hospital orsuffer through its payment for such services,Such organizations shall be utilized by the nursing home which has entered into anthen the cost of such services may be paidSecretary to the extent that he can make agreement under this section. from such trust fund in accordance with8atisfactory agreements• with them and to "(6) Agreements underthissubsectionthis section.In any case in which the costthe extent he determines that such utiliza- shall be made with the hospital or nursingof services is paid from the Federal old-agetion will contribute to the eective and eco- home providing the services, but this para-and survivors Insurance trust fund pur-nomicaladministrationofthissection. graph shall not preclude representation ofsuant to the immediately preceding sen-Such agree1ents shall not delegate (A) hia such institution by any Individual, associa-tence, or is paid from such trust fund withfunctions relating to determinations usto tion, or organization authorized by the In-respect to any such injury, disease, or disa-whether the costs of hospital and nursing stitution to act on its behalf. bility for which no reimbursement to suchhome services furnished an individual may (7) Except to tne extent the Secretarytrust fund has been made or assured pur-be paid for out of the federal old-age and has made provision pursuant to subsectionsuant to the first sentence of this subsection,survivors insurance trust fund under this (h) for the making of payments to hospitalsthe United States shall, unless not permittedsection and the amount of such payment, and nursing homes by a private nonprofitunder the law of the applicable State (Otherand (B) his functions relating to the mak- organization, he shall from time to time de-than the District of Columbia) be subro-ing of regulations. termine the amount to be paid to any hos-gated to all rights of such individual, o of "(2) An agreement under paragraph (1) pital or nursing home under an agreementthe provider of services to which paymentsshall provide for payment from the Federal with respect to services furnished, and shallunder this section with respect to such serv-old-age and survivors insurance trust fund certify such amount to the managing trust-ices are made to be paid or reimbursed pur-to the organization of the amounts paid tee of the Federal old-age and survivorssuant to such workmen's compensation lawout by such organization to.hospitals and insurancetrustfund,except that suchor plan for such payments.All amountsnursing homes under this section and of theamount shall, prior to certification, be re-recovered pursuant to this subsection shall - cost of administration determined by the duced or Increased, as the case may be, by bedeposited in the Treasury of the UnitedSecretary to be necessary and proper for car- any sum by which the Secretary finds tiiatStates to the credit of the Federal old-agerying out such organization's functions un- the amount paid to the hospital or nursing and survivors insurance trust fund. der its agreement pursuant to this subsec- home for any prior period was greater or less "ReguLations and functions of advisory tion.Such payments to any organization than the amount which should have been council shall be made either in advance on the basis paid to it for such perio.The Managing of estimates by the Secretary or as reim- Trustee prior to audit or settlement by the "(g)All regulations specifically author-bursement, as may be agreed upon by the General Accounting Office, shall make pay-lzed by this section shall be prescribed byorganization and the Secretary, and adjustment from the Federal old-age and sur-the Secretary.In administering this sec-ments may be made in subsequent pay- vivors insurance trust fund, at the timetion, the Secretary shall consult with a Na-.ments on account oZ overpayments or under- or times fixed by the Secretary, in accord-tional Advisory Health Council consisting ofpayments previously made to the organiza- ance with such certification. the Commissioner of Social Security, whotion under this subsection.Such payments shall serve as chairman ex officio, and eightshall be made by the managing trustee of 'Nondisclosure of information members appointed by the Secretary.Fourthe trust fund on certification by the Secre- '(e) Information concerning an individ-of the eight appointed members shall betary and at such time or times as the Sec.- ual, obtained from him or from any physi-persons who are outstanding in fields per-retary may specify and shall be made prior cian, dentist, nurse, hospital, nursing home, taining to hospital and health activities, andto audit or settlement by the General Ac- or other person pursuant to or as a result ofthe other four members shall be appointedcounting Office. the administration of this section, shall beto represent the consumers of hospital and (3) An agreement under paragraph (1) held confidential (except for statistical pur-nursing-home services, and shall be personswith any organization may requfre any of poses) and shall not be disclosed or be openfamiliar with the need for such services byits omcers or employees certifying payments to public inspection in any manner revealingeligiblegroups.Each appointed memberor disbursing funds pursuant to the agree- the identity of the individual or other per-shall hold office for a term of 4 years, exceptment, or otherwise participating in its per— son from whom the information was ob-that any member appointed to fill a vacancyformnce, to give surety bond to the United tained or to whom the information pertains,occurring prior to the expiration of the termStates in such amount as the Secretary may except as may be necsesary for the properfor which his predecessor was appointeddeem necessary, and may provide for the administration of this section.Any personshall be appointed for the remainder of such.payment of the cost of such bond from the who shall violate any provision of this sub-term, and the terms of office of the membersFederalold-age andsurvivorsinsurance section shall be deemed guilty of a misde-first taking office shall expire, as describedtrust fund. meanor and, upon conviction thereof, shallby the Secretary at the time of appoint- "Certifying and disbursing officers be punished by a fine not exceeding $1,000 orrnent, 2 at the end of the first year, 2 at the by imprisonment not exceeding 1 year, orend of the second year, 2 at the end of the "(i)(1) No individual designated by the both. tI2Ird year, and 2 at the end of the fourthSecretary, pursuant to an agreement under year after the date of appointment.An this section, a certifying officer shall, in the "Hospital services under workmen's appointed mnieber shall not be eligible toabsence of gross negligence or intent to de- corn pensation serve continuously for more than two term8fraud the United States, be liable with re- "(f) The provisions of subsection (a) shallbut shall be eligible for reappointment ifspect to any payments certified by him under not be applicable to any hospital or nursinghe has not served Immediately preceding his this, section. - lome services which an individual requiredreappointment.The council is authorized "(2)No disbursing officer shall,in the by reaon of any injury, disease, or disability..to appoint such special advis6ry and techni-absence of gross negligence or intent to de- on account of which such services are beingcal committees as may be Useful in carryingfraud the United States, be liable with re- received or the cost thereof paid for, or uponout its functions.Appointed council mem-spect to any payment by him under thia application therefor would be received orbers and members of advisory or technical section If it was based upon, a voucher signed paid for, under a workmen'a compensationcommittees, while serving on business ofby a certifying omcer designated as provided law or plan of the United States or of anythe council, shall receive compensation atin paragraph (1). rates fixed by the Secretary, but not exceed- State, unless equitable rehnbursement to - "Adjustmentsin cash. benefits Lng $50 per day, and shall also be entitled the Federal old-age and survivors insurance • '(j) Por purposes of Section 204, any pay- fund for the payments hereunder with re-to receive an allowance for actual and nec-ment under this section to any hospital or spect to such services have been made oressarytravel,andsubsistenceexpensesnursing home, with respect to hospital or assured pursuant to agreements or workingwhile so serving away from their places ofnursing home services furnished an mdi-- arrangements negotiated between the Secre-residence.The council shall meet ae fre-vidual, shall be regarded as a payment to tary and the appropriate public agency. Not-quently ae the Secretary deems necessary,Buch individual." withstanding the above sentence, If (1) thebut not less than once each year. Upon re- (b) The amendments made by subsection individual's entitlement to receive such serv-quest by three or more members it shall be(a) shall be effective on the 1st day of the ices (or to have the cost thereof paid for)the duty of the Secretary to call a meeting12th calendar moflth after the month in under such a workmen's compensation lawof the council. which this act is enacted. 18008 CONGRESSIONAL RECORD —SENATE August 16 either to forego the desired treatment and (c)Notwithstandingtheprovisionsof Mr. President, I withdraw the amend-suffer, or apply for public assistance. U the section 226 (a)(2)of the Social Securityment. latter, the regular welfare funds are dimin- Act, as amended by this act, and subsection ThePRESIDINGOFFIcER. Theished or the overburdened hospitals are de- (b) of this section, applications filed underamendment is withdrawn. nied repayment for their services. such section 226 which would otherwise be Mr. HUMPHREY. Mr. President, I How much more logicalit would be to valid shall, subject to regulations of theask unanimous consent to have printedprovideahedgeagainsttheadditional Secretary, be considered valid even though hazards of hospital expense by incorporating filed more than 3 months prior to the effec-in the RECORD at this point a statementan insurance policy to take care of it into tive date of this act, but not if filed priorrelating to my amendment. our already operating national old-age and to the 1st day of the 4th calendar month There being no objection, the state-survivors program.This is not medical in- after the month in which this act Is enacted.ment was ordered to be printed in thesurance, it is limited only to hospitalization RECORD, as follows: - for those eligible to OASDI. Mr. HUMPHREY. Mr. President, this Under my amendments, the two changes amendment is not original with the Sen- STATEMENTBY SENATOR HUBERT H. Hus-I have proposed in the OASDI program— ator from Minnesota.It was long ago PHREY—IMPROvEMENTS XN Socia SECURITY higher benefit payments under the etisting incorporated into social-security bills ad- I have introduced amendments to theprogram and hospital insurance for persons vanced by the distinguished senior Sena-SocialSecurityActtoincreasebenefitseligible to receive those benefits—would be tor from Montana [Mr. MURRAY] under the old-age, survivors, and disabilityfinanced by a jnodest increase in payroll program; and to provide insurance againsttax—one-half percent—by employee a,nd em- It is not to be confused with what hasthe costs of hospital and nursing home serv-ployer, and an additional three-quarters per- been called socialized medicine, becauseice for persons eligible for benefits under thecent payment by the self-employed. it has nothing whatsoever to do withOASDI program. the selection of doctors, the payment of We must constantly be alert to keep our BENEFITS doctor bills, choice of doctors, or any-social insurance programs realistically up to First, let us look at the increased benefits date. Our present program is inadequate inproposed under the existing old-age and thing relating to healing, except so far survivors program.My amendment would as a hospital room would be concerned.two areas, which I am attempting to rem-increase monthly benefits about 10 percent The amendment is offered at this timeedy by this legislation.First, cash benefit payments under the old-age, survivors, and -on the average.The largest percentage In-, merely to initiate discussion on what Idisabilityprogram have not kept up withcreases, as in past amendments to this law, sincerely believe will be one of the im-rising living costs, or with earning levels.go to those in the bottom brackets.Thus, portant advances in the field of social itsretired individuals whose average monthly If this insurance program isto fulfill earnings were $50 would receive an increase security in the years to come. purpose, we must assist people to contribute of $5 a month in benefits, raising their total In talking with the Governor of myduring their working years so that theymonthly payment to $35.Under the pres- State I find that the largest single ex-might receive in retirement an amount atsent maximum coverage, anyone earning $350 pense in the entire welfare programinleast sufficient to maintain them at a mini-a month or over can receive only $108.50. the State of Minnesota is for hopitalmum income level proportionate to thatUnder my proposal those at $350 would get which they enjoyed during their working$118.80, and by raising the ceiling, those cate for the aged; not the doctor, but years. One problem—a benefit payment the hospital. Many of those people arethat is stmply too small—affects people inwho earned $500 a month could receive victims of diseases which keep them inthe lowest earning groups. This level needs$151.80, the top payment. My colleagues will the hospital for months. My amendmentto be raised.Another problem—a benefitnote that even with this substantial raise, payment ceiling that is reached too soon—the beneficiary still receives just over 30 per- would relieve the local district and State cent of his former monthly income. - governments from the responsibility foraffects people in higher earning brackets. Familybenefits are raised in a similar. such payments.If adopted it wouldUnder the present law, once earnings havemanner. The present $50 for a widow and cause the payments to come fromthereached $4,200 a year, no further increasestwo children in the lowest bracket is raised social-security fund, by reason of a taxfn retirement or survival benefits are pos-to $55. The present maximum family benefit sible.Yet the advance in incomes has en-of $200 would be raised to $305, or 61 percent on the income, which is provided, andabled 3 workers of every 5 with full-yearof previous monthly earnings. by reason of the base of the income.employment to surpass thislevel.Thus These provisions would go into effect for Presently the base is being raised fromwhen they reach the age where they arethe third month after enactment of the bil1. $4,200 to $4,800.I think it is fair to sayentitled to thaw benefits, or when the fam-The higher earnings base would be effective that if we included any kind of hospitalily provider can no longer provide, the jam- in 1959.For the people now on the benefit insurance we would have to raise theily unit suffers a drop in income that is toorolls, the bill provides for increases of from severe for it to absorb. An increase in maxi-$5 to $10.30. base to $5,500, at least, possibly adding amum earnings is justified. In order to allow the new higher earnings quarter of 1 percent or a half of 1 per- There is a further reason for raising theceiling to benefit people in the near future, cent to the tax. ceiling.In order to follow sound Ameri-the bill proposes to allow dropping out 1 ad- I do not intend to press this amend-can tradition, it has always been the intentditional year of low monthly earnings for ment to a vote.I intend to withdraw it.of Congress that the social insurance mea-each 7 years of coverage in addition to the The time is at hand when the Senatesures we adopt should not act so as to re-5 years now allowed to be eliminated.If duce incentives for self-advancement.In-this is not done, no one could reach the full Finance committee, along with the Sen-stead, they should, be proportional, withinmaximum payments, until 1997. U we do ate committee on Labor and Public Wel-limits,toearnings. An insured workerallow this new drop-out, one who has been fare, should be giving very serious at-should not be confronted with the situation covered since 1936 could reach the maximum tention to hospital costs for the aged. that anything he earns beyond $4,200 a year in 1961. Let me make it quite clear that thiswill not provide his survivors any better HOSPITALS AND NURSING HOMES amendment would not interfere with thecare or himself a more nearly adequate re- Turning to the proposal to add to our so-called Blue cross program or the vol-tirement. - present program against hospital expenses, .untary programs in which all of us have Thesecond inadequacy of our old-age, survtvors, and disability insurance programlet me first say that my bill makes people such faith, and in which so many Amer-which I seek to remedy by this bill is oureligible for benefits under this provision if icans have made their investments.Ipresent failure to provide for one of the majortheyareeligibleforold-ageinsurance, happen to believe in those voluntary pro-financial disasters threatening those who re-whether or not they have yet applied for it. grams.But everyone knows that it isceive benefits.I refer to the possible needCertainly it would be undesirable to compel Duringaged persons to stop working in order to be very difficult to obtain hospital insur-for hospital and nursing home care. ifthey ance for a person 65 years of age or over.the time a person is in his earning years, hecovered against hospital expenses, can often provide for such contingenciesfeel that continued work will be socially con- Such persons are not considered to bethrough voluntary organizations that providestructive and advantageous to them. the best of risks so far as a voluntaryhospital care on an insurance plan.The The hospital insurance program would en- insurance program is concerned; and ifwide group coverage at many places of em-title those eligible to up to 60 days of hos- many of them go into the voluntary pro-ployment may bring such a program withinpital care, with subsequent nursing home grams, the cost of the programs is in-his financial reach. Yet when he retires, orcare if necessary, up to a combined total of creased to the point where they arewhen his providing days come to an end, he120 days in any year.Benefits included are almost prohibitive for the younger group.or his survivors face the possibility of hos-hospital services, drugs, appliances, and care pital expenses with a dual handicap. On theordinarily furnished to patients in semi- This particular amendment has itsone hand their income is suddenly and sub-private accommodations.Persons certified genesis in long studies which have beenstantially reduced; on the other, their rightby a physician as needing the care could made over the past years of the needsto group coverage in hospital insurance plans -choose any hospital that admits them and of our aged people.I am hopeful that islost, and the cost of such insurance isthat had contracted with the Secretary of someday we shall be able to do some-probably beyond their reach. When sicknessHealth, Education, and Welfare to furnish thing about those needs. strikes, many are left with two alternatives—the services.Tuberculosis and mental hos- 1958 CONGRESSIONAL RECORD—SENATE 18009 pitals are not covered, nd hospital care re-vivors'insurancebeneficiaries. ceived under workmen's compensation stat- That The present law provides, in the case utes would not be reimbursed by thisin-amendment was rejected. of the aged, that the State agency shall, surance. I have an amendment lying on thein determining need, take mto account If a physician directed that nursing homedesk dealing with the same subject.Itthe entire mcome and resources of an care was needed for a condition that had re-isdesignated "8—15—58—I."Ijoinedindividual. This means, inpractice, quired hospitalization, this would also bewith the Senator from Texas, ratherthat every dollar a person on old age covered.Nursing home service would in-than to press my own amendment.Iassistance earns is deducted from the clude skilled nursing care, related medicalam very happy with the vote we ob- and personal services, and accompanying bed amount of aid which that person would and board provided by a licensed nursingtamed. We knew that it was an uphillget if he did not earn the money. home operated in connection with a hospitalfight, but I am still convmced that a 10- Let us suppose that a social worker or in which a medical doctor directs the care.percent increase would have been meri-approves a budget of $55 for an aged Positive prohibition of any direction oftorious, financially sound, and just forperson.If there are no earnings, that s hospital activities is specified in the amend-the recipients of old-age and survivors'the amount paid in the form of old-age ment. Insurance benefits. assistance.If the old man or old woman If effective and economical administration I regret that we were unable to obtainearns $15 a month, that amount is de- ofhospitalinsurancecanbeachieveda majority vote for it.However, I am through private, nonprofit insurance organ- ducted from the amount of the grant, izations, the Secretary is authorized to con-grateful for the faót that we have aand the payment Is only $40.In that tract with them to provide it. social security bill before the Senate.way, all inducement to earn money by Hospital insurance payments under theThe Senator from Oklahoma and his col-an aged person is completely discour- bill would begin in the twelfth month afterleagues are to be thanked and congratu-aged.Every dollar such a person earns the bill is enacted.It is estimated that 12lated on doing a very fine job m bring-is subtracted from the assistance which to 13 million persons would be eligible foring such a bill to us. he otherwise would get. A good deal of coverage. I regret that the Kuchel amendmentcriticism which has been directed at the I have outlined the provisionsof thefor old-age assistance, with its pensionold-age assistance program comes from amendnients I am suggesting in this bill toprogram, was not adopted. the old-age, survivors, and disability insur- I was a co-this very fact, when it is said that the ance program. The bill also, of course, in-sponsor of that amendment..1 knewpayment of these grants discourages cludes changes in the Internal Revenue Codethat when we had the first vote on theeffortandencouragesshiftlessness. to include the wage and payroll tax in-self-liquidating feature for the old-ageWhen one considers that the average creases that will finance the program. and survivors' insurance beneficiaries,age of tho$e on old age assistance is 75 The provisions of this bill are modest—and when that amendment was turnedyears, it can be seen clearly that the deliberately limited in scope to facilitate en-down, that the odds of obtaining a fa-present law really, stops the elderly from actment of this much-needed measure invorable vote on the Kuchel amendment,earning money from such eorts as baby. 1958.They deal with social insurance only.which was to increase the old-age as-sitting. I have had a bill for improvements in publicsistance payments, was remote. assistance pending in the Senate for several The same thing is true with reference months.Other bills I have introduced or Nevertheless, it was a good amend-to the provisions for dependent children. cosponsored would develop our welfare pro-ment and I supporte&it.I shall be backThe amount of money a dependent child grams further. to support it again. earns, by cutting lawns or delivering The distinguished former Director of the Mr. President, I withdraw my amend-.newspapers or sawing wood or running Division of Research and Statistics of thement. errands,isdeducted from the grant SocialSecurityAdniinistration,Professor The PRESIDINGOFFICER. Thewhich would otherwise be given to his Wilbur J. Cohen, now of the school of socialSenator from Minnesota withdraws hisparent or to his custodian. work at the University of Michigan, Annamendment. Arbor, Mich., recently testified before the One cannot imagine a better system House Committee on Government Operations Mr. DOUGLAS. Mr. President, I sendfor discouraging effort and encouraging on Federal-State programs and policies inmy amendment to the desk.It is iden-idleness than the grants which are now health,educationandwelfare.Nowheretified as 8—15—58—J.I ask that it beprovided. have I seen a more cogent and completestated. What the amendment would do would analysis of this whole subject. ThePRESIDINGOFFICER. Thebe to permit the parties to earn up to Since many of Professor Cohen's sugges-amendment will be stated. $20 without any deductions from the tions in regard to social insurance are in The CHIEF CLERK. On page 98, be- agreement with the provisions of my bill, I assistance or grant which would other- ask unanimous consent that the text of histween lines 20 and 21, it is proposed towise be given to them.It is therefore remarks be printed at this point in theinsert the following new section: an encouragement to thrift and it is an REcow. AMOUNTS DISREGARDED IN DETERMINING NEED encouragement to effort. In my opinion, the changes I have sug- FOR OLD-AGE ASSISTANCE AND AID TO DEPEND- Two years ago, in 1956, I proposed a gested today should be enacted this year.I ENT CHILDREN similar amendment, except that it pro- believe they are necessary to meet two of the SEC. 513. (a)Section 2(a)(7)of the vided for an exemption 'of $50 a month - major deficiencies in our welfare program.Social Security Act is amended to read asin I believe they are realistic in that they are follows: earned income, so that a person could modest effortsto handle these problems "(7) provide that the State agency shall,earn up to $50 a month and would not Within our presently established social se-in determining need, take into considerationhave the sum deducted from the old age curity system.I believe they are financiallyany other income and resources of an iudi-assistance which would otherwise be sound in that they will be financed by thevidual claiming old-age assistance; exceptgiven to him. earning power of those who stand to benefit.thatin making such determination the It is very interesting to note that the I trust that my colleagues will join in thisState agency may disregard not more thanvote on that amendment was 56 yeas and effort to meet the continuing challenge of$20 per month of net earned income." only 34 nays. In other words, it carried meaningful social security. (b) Section 402(a)(7)of the Social Security Act is amended to read as follows:in the Senate. However the conference Mr. HUMPHREy. Mr. President, I "(7) provide that the State agency shall,committee turned it down. The cost of want the RECORD to show that myin determining need, take into considerationthat amendment would not have ex- amendment relates to nursing home careany other income and resources of an indi-ceeded $12 million.I understand that as well.It provides for 60 days a yearvidual claiming aid to dependent children;the Social Security Administration fixes of nursing home care, and 60 days ofexcept that in making such determinationthe cost of $15 million on the present hospital care for those who are the ben-the State agency may disregard not moreamendment. I cannot conceive that the than $20 per month of net earned income." eficiaries of old-age and survivors'm- (c) The amendnient made by subsectionscost would be $15 milion for the pend- surance.It is Umited to that group.I(a) and (b) of this section shall be effectiveing amendment because whereas the am of the opinion that sometime in theon and after July 1, 1959. amendment of 2 years ago provided for not too distant future we shall find a a $50 exemption, this provides for only program before the Congress which will Mr. DOUGLAS. Mr. President, h1s isa $20 exemption, although it does ex- begin to meet this basic objective. a very simple amendment. What it doestend it to dependent children. is to permit the recipient of old-age as- Mr. KERR. Mr. President, will the Earlier today the Senator from Texassistance and of aid to dependent chil- [Mr. YARBOROUGH) discussed his amend.. Senator yield? dren to earn up to $20 a month without Mr. DOUGLAS.I yield.. ment for a 10-percent increase in socialhaving those earnings deducted from Mr. KERR. The Senator knows that security payments for old-age andsur-their subsistence amounts. I am just as strong for his amendment CONGRESSIONAL RECORD— SATh August 16 as he is, although I could not accept itdealwith.I exempt from that state- The PRESIDING OFFICER. Without on the pending bill'.As' 1 understand, thement the members of the Social Securityobjection, the amendments are agreed estimate of $15 million for the amend-Administration, because they are errandto. m.en.t is; as nearly accurate as we can get.boys in this case. They are fine people Mr. NEUBERGER.Mr. President, The reason there. Is a difference in the'themselves, but they have to take theirthree of the most Important. programs amount greater than it would seem itorders' f rosa others.I have helped theof our Government which have not re- should be, although the amendment callsadministration on a number of measuresceived adequate attention by the gen- for a $20 exemption, whereas the' otherand have taken a political risk to help it.eral public are the grants-in-aid. pro- called for a $50 exemption, is that theThe administration ought to do some-gram. of the Children's Bureau, dealing previous amendment applied only to thething for the people of the United States..with maternal and chIld health, child aged, and the pending amendment ag- The PRESIDING OFFICER. The billwelfare, and crippled children's serv- piles also to the other group. Is: open to. further amendmentIf thereices.Unfortunately, these activities do Mr. DOUGLAS.I can only say thatbe no further amendment to be; pro-not seem to have muchpolitical appeal, it would be impossible to have $15 millionposed, the question Is on the engross-and for that reason, perhaps, they re- invested to better advantage than byment of the amendments and the thildceivecomparativelylittleattention. permitting this group in. our populationreading: of the bill. Yet. they are urgently important,. par to earn something from effort.May I Mr. KERR. Mr. President, the Sen-ticularly toa group of people who often ask my good friend from Oklahoma, whoator' from Illinois has an amendment.are desperately in need of such assist- has rendered yeoman. service, whetherpending. ance—the Nation's children. the administrationis favorable to the' The PRESIDING OFFICER. The; I am especially pleased to call this The Chair wasmatter to the attention of the Senate proposal? - Chair stands corrected. MrKERR.I am compelled to tell mymisinformed.The question is on agree-tonight, because sitting beside me is the good friend front Illinois that I have in-ing to the amendment of the Senatordistinguished Senator from Alabama vestigated the matter and have beenfrom Illinois. (Putting the question.)[Mr. Hn,Ll, who has been a ieader in told that they could not favor it,. espe—' The Chair is' in doubtThose. in f a-the. establishment of. these services, par- daily on the pending bill.They have.vor of the amendment will please stand.ticularly- in the case of improved mater'. advised me, in fact—but of course so far The Senate proceeded to divide. nal and child health. as we are concerned it does not: change Mr. SaTONSTALL. Mr. President Mr. President, I desire to have printed our basic support of the principle—thatI suggest the absence of a quorum. in the RECORD while we are discussing It would be a substantive change with The PRESIDING OFFICER.Thethe urgent question of social-security clerk will call the roll. benefits an except from a letter dated reference to the basis of' assistance as it February18,. is now in the law. The legislative clErk proceeded to. call written to me by Dr. Mr. DOUGLAS. Does the administra-the roll. Martha M. Eliot, chairman. of the de- lion know that the proposed provision Mr. SALTONSTALL. Mr. President,partment of maternal and child health would not take effect until after the first:I ask unanimous consent that the orderat Harvard University, and .former Chief of next Zuly,, and would therefore notfor the quorum call may be rescinded. of the Children's Bureau;' correspond- The PRESIDING OFFICER With-ence I have had with an en4nent phy- apply to the current fiscal year? sicianin. my State, Dr. Richard L. Mr. KERR..I can only say that. I sub.-out objection, it is so ordered: mitted the amendment as' the Senator' Mr. DOUGLAS. Mr.President,aSleeter, associate professor of pediatrics had submitted it to me. I presumed thatparliamentary inquiry. and director of that division at the Uni- Theversity of Oregon Medical School;' cor- when they examined it, they thoroughly The PRESIDING OFFICER. respondence I have had with Mr. Stuart read its contents. Senator from Illinois will state it. R. Stimmel, State director of the Boys Mr. DOUGLAS.I must say that If Mr. DOUGLAS. What is the ques-and Girls Aid Society of Oregon, and that is true—and Lam. su;e that the Sen-tion before the Senate? with other leaders in this very vital ator from Oklahoma is a truth-telling The PRESIDING OFFICER.Thework; and letters I have written to the man and is: stating the exact truth—thatquestion is on agreeing to the amendment of the Senator from Illinois. distinguished senior Senator from Vir- this is a shameful act by the adminis- ginia[Mr.Bran], chairman of the tration.It is a shameful act'.It is an Mr. DOUGLAS.I ask for a division. On a division, the amendment was it-Committee on Finance; to the Honor- act which discourages effort and thrift. able Wilbur Mills, chairmanofthe No administration can stand up beforejected. House Committee on Ways and Means; the American people and pose as having The PRESIDING OFFICER. The billto Dr. Harold M. Erickson, able State any humanitarianism if it refuses to ac-Is open to further amendment.if therehealth officer of the Oregon State Board cept a provision costing only $15 million,be no further amendment to be pro-of Health; and to Mr. George J. Hecht,, and which *ould permit old people andposed, the question is on the engross-chairmanoftheAmerican Parents youngsters to work and to earn up to $20ment of the amendments and third read-Committee,. Inc.Mr. Hecht has been a a month without having it taken out ofing of the bill. foremost advocate of action in this field,, their hide.If that is. the attitude of the The amendments were ordered to bethrough Parents. Magazine,, which. he administration, they deserve to be ex-engrossed, and the bill to be read a thirdpublishes very effectively. posed to the. public' in this country. time. I ask unanimous consent that the let- Mr. KERR.Mr. President, will the The bill was read the third time. ters be printed at this point in the Senator yield? Mr. KERR. Mr.President,Iask RECORD. Mr. DOUGLAS.I yield. unanimous consent, notwithstanding the There being no objection, -the. cor- Mr. KERR I did not. report to thethird reading of the bill, that I mayrespondence was ordered to be printed Senator that I was informed that if' theoffer technical amendments and havein the RECORD, as follows: amendment. were added to the bill itthem acted upon; EXcERPT' or FEBRUARY 28, 1958, Lrrrn op Da. would be vetoed. I asked If they favored The PRESIDING OFFICER. Is there MARTHA M. ELIOT, CHAIRMAN OF THE DE- or disapproved the proposal. They ad-objection to the request of the Senator PARTMENT OP MATERNAL AND Csrn.zi HSALrE, vised me. that they could not favor it. infrom Oklahoma? The Chair hears none, KARVARD Umvsnsln, AND FORMER CHIEF OF' this bill.Therefore, that was the. extentand it is so ordered. THE; CHILDREN'S BUERAD of their statement.I know that is what The amendments will be' stated f Or the It Is most urgent at thistimethat more the Senator would wish to address hisinformation of the Senate. Federal funds be made available for these remarks to. The LEGI5LATIVEL CLERIC. On page 42, child health programs arid, In pasticular. for the program of services to crippled children. Mr. DOUGLAS. I know the very diffi-line 5, after "SEC. 303.", it is proposedQuite recently I learned that there are many cult task the Senator from Oklahomato insert "(a) ." children with congenital heart disease whose has had in negotiating with an adminis- Onpage 43, after line 3, insert theoperative care must be delayed because of tration which seems to be impervious tofollowing new subsection: the lack of funds in the State agencies the aged and the poor, and which pays (b), The paragraph(3)added to. suchresponsible for the care of crippled children. little attention to balancing the humansection 202 (g) by If. B.. 5411, 85th Congress,Likewise, many States are not able to do the budget and Is interested only in theIs hereby repealed' effective with respect towork that they would like, to d for chiLdren financial budget.He has .hada verybenefits payable for any month followingwith rheumatic heart disease, for ehlldten difficult set of customers downtown tothe month In whlch this act lh enacted. who are deaf anti require hearing akis, for 1958 CONGRESSIONAL RECORD —SENATE 18011 chtldrenwith cleft palate. One of the new-ice which will be of benefit regarding Senateof rising costs and Increased child population. et and most appealing program8 that Isbill 3504, please let me know. is hardly adequate to meet the needs of our limited because of fund8 Is the provisionOf Sincerely yours, children.Rather than go Into detail regard- artificial arms and legs for children who è.re RICHARD L. SLR, M. D., ing the financial needs of these programs, I born without an arm or a leg or children Associate Professor of Pediatrl.cs and am enclosing my most recent remarks in the who have been ilijured in accidents and lose Director. CONGIS5IONAL RECORD, which include an ex-- an extremity.Recently amazing advances cellent statement by Dr. Martha Eliot, chair- have been made in the manufacture of JUNE 5, 1958. man of the department of maternal an child small-sized arms and legs, even for infants RICHARD L. SLEETER, M. D., health at Harvard University and former of no more than 18 months of age, and AssociateProfessor,Universityof Chief of the Children's Bureau.I know that clinics are being organized with a staff of Oregon MedicaZ SchooZ, PortZand, you will give this your full consideration. doctors,nurses,socialworkers,physical Oreg. I would .be delighted, along with many therapists, and psychologists to help parents DEAR DR. SLEETEE: Thank you for your let. others who are concerned with the social and with these difficult problems.Senator POT-ter of May 22, 1958. health problems of our children, If the Sen- TEE of Michigan has taken a great interest in I appreciateL learning of your support ofate were to increase the House-passed figure. this program, which started in the Michiganmy bill to raise the stEtutory limit for ma-. With best wishes, I am, Commission for Crippled Children.It wasternal and child health and crippled chil- Sincerely, due to Senator P0TrER's influence that theciren services of the Children's Bureau and of -RICHARD L. NEUBERGEE. appropriations for grants to States for thesethe fine work which has been done at the medical services to crippled children, in 1955,University of Oregon in these fields. Ju 13, 1958. finally rached the cellixlg of $15 million. It is especially gratifying to know of Ore-Hon. WnBtm Mn,Ls, 1 am sure that Sidney 'arber could expandgon's farsighted approach to the crippled- Chairman, Hou,e Committee on Ways his good work for children with ôancer If hechfldren programs and of the success which and Mean,9, House Office Building, could be assure of mOre money from manyhas been enjoyed.Although hearings have Washington, D. C. State health departments to pay for thenot yet been scheduled on my bill, I feel cer- DEAR CONGRESSMAN MILLS: I have learned care of the most obvious cases. tam that I will-have an'opportunity to utilizefrom my good friend, Dr. Martha Eliot, of the information which you so kindly offeredyour decision to devote part of your very UNXVEB8ITT OF OREGON MEDICAL ScifooL, to furnl$h.Oregon's unique and successfulvaluable social security hearing time to Rep- CRIPPLED CHILDREN'S DIVISION; program is vivid testimony of the good use toresentative EUGENE MCCARTHY'S bill, H: R. Portland, Oreg., May 22, 1958. which these funds are put and of the need12834, to raise the statutory limit on mater- Ron. RICHARD L. NEJBERGER, for additional appropriations. nal and child health, crippled children, and United States Senate, Because of youi interest, I am enclosing achild welfare grants-in-aid programs of the Washington, D, C. tear sheet from the CONGRESSIONAL RECORD ofChildren's Bureau.As the sponsor of the DpAE SENATOR NEUBERGER: I have just read May 15, 1958, regarding the abandonment ofidentical legislation in the Senate which is Senate bill 3504 in which you seek an in-the heart operation projects at the Universitydependent on your action, I am delighted at crease in funds for the programs of maternalof Minnesota due to a lack of money. Youryour decision. and child health services and services forexperience will allow you to fully appreciate Because you will hear from experts, much crippled children provided for by title V ofthe problem of inadequate funds faced by themore qualified than I, I shall not cite the the Soôial'SeciArity Act. Minnesota program. many reasons for enactment of this long- It seems appropriate at this time to pre- If I can be of any assistance at any time,overdue legislation. However, I am enclosing sent or you a picture of the University ofplease do not hesitate to write. copies of my remarks when I introduced 8. Oregon Medical School, crippled children's With best, wishes, I am, 3504 and 5. 3925, which may be of interest to Sincerely, division.Consequently, I am enclosing a you. - brochure which, depicts some Of the services RICff&RD L. NEtIBERGER, Withbest wisheS, I-am, available through this division to the chil- United States Senator. Sincerely, dren with crippling diseases in our State. RICHARD L. NEUBERGER, In contrast to the majority of States, we THE Bogs AND GnLs United States Senator. feel quite fortunate that the Oregon pro- An S0CIE'rY OF OacON, gram, throuh the, farsighted State legisla- Portland, Oreg., April 1, 1958. MAY 8, 1958. tors, was placed under theaegisof the Senator RICHARD L. NEiJBERGER, Dr. HAROLD M. ERICKSON, medical school and the State board of higher United, States Senator, State HealthOfficer,Oregon State education.Itisquite unique from this Washington, D. C. Board of Health, Portland, Oreg. stRndpoint and now forms an integral part DEAR DICK: Thank you very much for send- DEAR DR. ERICKSON: I am pleased to learn of the medical school.The omce and out-ing me the material from the CONGRESSIONALof your interest in my bill, 5. 3504, to raise pEtient facilitiea are now housed in a build-RECORD regarding your bill to increase thethe statutory limit on funds for maternal ing built- for this organization in 1953 onfunds for maternal and child health.I hopeand child health and crippled children's the medical school campus. your effortsaresuccessful.Ithoroughlyservices.It is very satisfying to know of the The program Et present includes most ofagree with you regarding the importance ofprogress which has been made in Oregon the seivices offered to Crippled children bythis. with limited funds presently available and all crippled chi1dren's services throughout Please give our best to Maureen and toof your plans for the future. the United States and Territories.In addi-the Lindes. I will appreciate any information which tion, however, because of the medical school Cordially, you may send me on our State programs. amliation, it has several distinct advantages STUART R. STIMMEL, These will be especially valuable for com- in -thatthe organization is used to teach State Director. mittee hearings. medical, dental, nursing, occupational ther- In caae you have not seen it, I m enclos. apy, physical therapy, and speech therapy AUGUST 7, 1958. ing a copy of my article from the Progres- students, as well as interns and residents Hon. HARRY F. BYRD, sive magazine entitledThe Greatest Killer in the various departments.These indi- Chairman, Senate Finance Committee, of Kids," which oalls attention to the tragic viduals are taught the medical problems as Senate Office Building, Washington, number of children who are stricken by well as many of the social factors so vital D.C. cancer. to understanding the care of the handi- DEAR SENATOR BYRD: I was pleEsed to learn With best wishes, I am capped and crippled child. today that you have scheduled 2 days of your Sincerely, Another distinct advantage is that the or-committee's valuable time for the Social RICHARD L. NEUBERGER, ganization is in a position to participate inSecurity Amendments Act of 1958.I know United States Senator. research, seeking more factual data per-that this long-overdue legislation will receive tining to the crippled child, his care andfull consideration under your able chairman- MAY 22, 1958. treatment and when possible, data regardingship. Mr. GEORGE J. HECHT, prevention of handicapping conditions. You As you may know, I have sponsored legis- Chairman,theAmerioanParents are undoubtedly acquainted with the col-lation in the Senate to raise the statutory Committee, Inc., New York, N. Y. laborative cerebral palsy project of the NE-limit on maternal and child health, crippled DEAR MR. HECHT: Thank you for your let- tional Institute of Neurological Diseases andchildren, and child welfare services to $25ter of May 14, 1958, and the enclosed infor- Bllndnes8 in which 14 institutes and medicalmillion.After introducing this legislation, Imation regarding the status of the Nation's schoolsscatteredthroughout the Unitedwas gratified with the widespread supportchildren.This, together with the insight States are cooperatively participating.Atwhich arose on behalf of the increases. which I received from our conversation, will the University of Oregon Medical School, In' the House, similar bills were introducedbe of particular value to me. You may be the departments of obstetrics and gynecology,by members of both parties, and received theassured of my support of an increase for pediatrics, and the crippled children's divi-support of leading representatives of socialchild welfare services as well as that which sion form the nucleus of the project in thewelfare and parent organizations who testi-I have proposed for maternal and child localarea onthistremendous researchfied before the House Ways and Means Com-health and crippled children's services. project. mittee.However, the House committee rec- I am sure that you will be interested to If I can send you any pertinent informa-ommended only a $5 million increase in eachknow that I saw Miss Furman's moving arti- tion regarding the crippled children's serv-of the 3 programs; an increase which, in viewcle in the New York Times and subsequently 18012 CONGRESSIONAL RECORD— SENATE August 16 askedthat it he printed in the CoNcam-these purposes will be distributed to theand for improving the health and health BIONAL RECO$D.Itis my sincere hope thatStates upon the basis of per capita income.standards of man should be sought and this will encourage House action.I am en-It is designed to help the poorer States, andshared,, without regard to national bound- closing a copy of my remarks at the time theto bring benefit payments to. the aged, de-aries and divistons; and erticle was inserted. pendent children, blind, and the disabled Whereas advances in combating and abat- Please. do not hesitate to advise me of anyin the poccer States; to a level more nearlytrig di&ease and hi the positive promotion of ether matters regarding cblid welfare whichequal' to those paid in the richer States ofhuman health can be stimulated by ctp- are of concern, to you; the Union.For Kerxttrcky, it is estimated,porttng and encouraging cooperation among With heat wishes, I am that because of this new provision, averageseientsts, research workers, and teachers on Sincerel% payments for old-age assistance would in-an internationalbasis,with consequent Rxcffaan L. Nnncmin,. crease $5.87 per month, for dependent chil-benefit to the health of our people and of United States Senator. then $2.82 par month, for the blind $6.67 aall peoples; and month, and to the totally disabled, $5.33 per Whereas there already exist tested means Mr. KERR. Mr. President.I.askmonth. These are not large sums, but theyfor international cooperation in matters re- unanimousconsentthattechnicalwill be of help.I was glad to see this newlating to health, including the World Health changes in section numbers and crossformula, to help the lower Income States,Organization, the Pan American Sanitary references be made in the bill. adopted.rn 1947, when I was first a Mem-Bureau, and the United Nations Interna- The PRESIDING OmCER. Withoutber of the Senate, I introduced a bill fortionalChildren'sFund (UNIC), with objection, it Is so ordered. this purpose.I am glad that the principleswhich the United States is Identified and of my bill, introduced 11 years ago, will fi-associated, and itis highly desirable that Mr. COOPER. Mr. President, I asknally be adOpted by the Senate of the Unitedthe United States establish domestic ma- unanimous consent to have printed atStates. chinery for the maximum mobilization of this point in the REcoRD & statement I I know this is a brief summary of the billitshealthresearchresources,and more have prepared on the bill. and I have not attempted to cover all of theefficiently' to cooperate with and support There being no objection, the state-changes that it makes.I am attaching athe research, research-training, and research- ment was ordered to be printed in thestatement which summarizes many of theplanning endeavors of such international provisions.I believe that it will be of helporganizations: Therefore be it BZCoRD, as follows: to the millions of our workers who pay, with Resolved, etc., That thIs joint resolution BT4ThMEN'rST SswnoaCbom their employers, into the social-security aye'-does establish the domestic machinery tor I give my wholehearted support to H. R.tem.And I know that the increase insuch maximum mobilization of its health 13549, a bill which will increase henefitsmonthly payments to the aged, to the blindresearch resources, the more efficiently to znder the Social Security Act.i win voteto the disabled, and to dependent children,cooperate with and support. the research, for the bill on final passage.I make thiswill be of help.These benefits' will costresearch-training,andresearch-planning statement to inform the people of my state,employers and employees, and our taxpayersendeavors of the international organizations. now insured and who are receiving henefitgenerally, an increase in their payments. SEcT. 2. The purpose of this Soint resolu- payments under the soelal-security system,But I believe we all agree that it is a re-tion is: of the increases they will receive if this hiltsponsibility of those who are working, who (1) To encourage and support on an inter- becomes law.r also think it. fair to stateare healthy and physicallyfit,to makenational basis studies,) investigations, experi- that it will raise the ta,c contrihutions thatcontributions for the welfare of the aged,ments, and research, includin the. conduct employers and employees will make to thethe sick, the disabled, the blind, and thoseand planning thereof, relating to: trust fund from which benefits are paid.dependent upon them. (A) The causes, diagnosis, treatment, con- Seventy-five million people, employers and trol, and prevention of physical and mental employees,, now contributethroughthe Mr. JOHNSON of Texas.I suggestdiseases and other killing and cripplin im- social-security program to the henefits thatthe absence of a quorum. pairments of man. insured employees will need when they re- ThePRESiDINGOFFICER. The (B) The rehabilitation of the physically tite or are too disahled to work, and theirclerk will call the roll. handicapped, including the development and faniilies w111 need when they die.And con- The legislative clerk proceeded to calluse of appliances for the mitigation of the tributions by the Federal Government andthe roil. handicaps of such individuals. the States give neededassistance to the Mr. JOHNSON of Texas. (C) The origin, nature, and solution of aged, bllncr, dependent children and those Mr. Presi-health problems not identifiable in terms of totally disahled. There are 12 million peopledent, I ask unanimous consent that thedisease entities. who are now receiving henefit checks fromorder for the quorum call be rescinded. (D) Broad fields of science, including the the social-security system each month. ThePRESIDING OFFICER(Mr.natural and social sciences, important to or Since 1954, when the last henefit increasePROxMIRE in the chair).Without ob-underlying disease and health problems. was put into effect, and I was in the Senatetection, it is so ordered. (2) To encourage and support the rapid at that time and voted for the henefits, Mr. HILL.Mr. President, I ask unan-international interchange of knowledge and wages have increased hy about 12 percent informationconcerningdevelopmentsIn and prices hy 8 percent.This hill will in-imous consent to have printed at thisthose branches of science pertaining directly crease the average level of payments to per-point in the body of the RECORD, Senateor indirectly to the prevention, diagnosis, sons who have retired, are disahled, or,ifJoint Resolution 199, which I introducedtreatment, or mitigation of disease and dis- dead, to their survivors, ahout 7 percent andon August 13 last. ability and other health and rehabilitation help catch up with the increased cost of There being no objection, the resolu-problems. living.It is estimated that the average in-tion (S. J. Res. 199) to establish in the (3) To encourage and support, on an in- create per month for workers now retired ternational basis; the training of personnel will be about $4.75 a month and the totalDepartment of Health, Education, andin research and research training through benefits payable to a family will be raisedWelfare the National Advisory Councilinterchange of scientists, research workers, from $200 to $254. for International Medical Research, andresearch fellows, technicians, experts, and The officials who administer the social-to establish in the Public Health Serv-teachers in research specialties not otherwise security system have reported to the Con-ice the National Institute for Interna-or generally provided for in the programs gress that additional payroll taxes must betional Medical Research, in order to helpauthorized by section 32 of the Surplus Prop- levied if the trust fund from which benefitsmobilize the efforts of medical scientists,erty Act of 1944, as amended, and the United are paid, is to be maintained actuarily sound.research workers, technologists, teachers,States Information and Educational Ex- At the present rate of payments they esti- change Act of 1948, as amended. mate that $750 million additional must beand members of the hea}th professiona (4) To encourage and cooperate with re- paid into the fund each year to keep the fundgenerally,in the United States andsearch programs undertaken by the World sound. For this reason the bill provides thatabroad, for assault upon disease, dis-Health Organization and other international the pa3froll payments-of both employers andability and the impairments of man andbodfes engaged in, or concerned with, inter- for the improvement of the health ofnational endeavors in the health sciences, employees will be increased from the present and to support such programs in cases in rate of 2% to 2'/2 percent in 1959 up to aman through International cooperationwhich such international organizations can tqtal salary of $4,800.It is estimated thatin research, research training, and re-more effectively carry out activities author- the self-employed rate will increase fromsearch planning, introduced by Mr HiLL.ized by this joint resolution.. 3% to3% percent in 1959. an August 13, 2958, and referred to the' The bill makes an important change in (5) To advance the status of the health that part of the Social Security Act whichCommittee on Labor and Public Wel-sciences in the United States, the health provides for Federal contflbutions to thefare, was ordered to be printed in thestandards of' the American people, and those RECORD, as follows: oZ other countries and peoples, by coopera- States to make payments for old.age aaslst- tive endeavors with the scientists, research ance, aid to dependent children, aid to the Whereas it Is recognized that disease andwokers, technicians, expetts, teachers, and blind, and aidtothe psrmanently anddisability are the common enemies of allpractitioners of those countries In research totally dlsablecL This bin embodies. the so-nations and peoples, and that the means,and research training. called variable grants provision.It meansmethods, and techniques or combating and (6) To help mobilize the health sciences that a part of the Federal appropriation forabating the ravages of disease and disabilityin the United States as a force for peace, 1958 CONGRESSIONAL RECORD —SENATE 18013 progress, and good will among the variouswas appointed, shall be appointed either forconducted in the United States with related peoples and nations of the world. the balance of that term, or for a full 4-yearprograms conducted abroad, by facilitating SEC. 3. (a) The Secretary of Health, Edu-term at the discretion of the Chairman, andthe interchange of reáearch scientists and ex- cation, and Welfare (hereinafter referred to (2) the terms of the members first takingperts between the United States and foreign in this joint resolution as the "Secretary")office after September 30, 1958, shall expirecountries who are engaged in such experi- is authorized and directed to carry out theas follows: 4 shall expire 4 years after suchments and programs of research, including purposes of this joint resolution in con-date; 4 shall expire 3 years after such date; the payment of per diem compensation, sub- formity with its provisions. 4 shall expire 2 years after such date; and 4sistence, and travel for such scientists and (b) The Secretary may utilize,for theshall expire 1 year after such date, as desig-experts when away from their places of resi- performance of his duties authorized by thisnated by the Secretary at the time of ap-dence, as provided ror consultants in section joint resolution, the Public Health Service,pointment. None of the 16 appointed mem-5 (e) hereof. including the National Institute for Inter-bers shall be eligible for reappointment until (4) Make grants ror the improvement or national Medical Research established by thisa year elapses since the end of his precedingalteration of facilities needed for medical joint resolution and the other National In-term. research and research training, including the stitutes of Health, and, where appropriate, (e) Members of the Council, other thanprovision of equipment for research and the Office of Vocational Rehabilitation, theex officio members and members who aretraining purposes. Children's Bureau, and such other agenciesofficers or full-time employees of the Gov- (5) Establishandmaintainresearch and offices in the Department as he may deemernment, whileattending conferencesorfellowships within the National Institutes of desirable to carry out the functions author-meetings of their respective council or com-Health and elsewhere with such allowances ized herein. mittees thereof, or while otherwise engaged (including travel and subsistence expenses) (c) The duties and functions hereby au-in the work of the Council or of the commit-as may be deemed necessary to train United thorized shall be carried out in consultationtees thereof, upon the specific authorizationStates research workers, research teachers, and cooperation with the National Advisoryof the Chairman of the Council or the Sec-technicians, and expert$ in the laboratories Council for International Health Researchretary, shall be entitled to receive compen-of other countries, and to procure the assist- established by this joint resolution. sation at a rate to be fixed by the Secretary, anceoftalentedresearchfellowsfrom SEC. 4. There is hereby established, in thebut not exceeding $50 per diem, and shallabroad, and, in addition, to provide for such Public Health Service, as a part of the Na-also be entitled to receive an allowance for fellowshipsandotherresearchtraining tional Institutes of Health, the National In-actual and necessary traveling and subsist-through grants, upon recommendation of stitute for International Medical Research.ence expenses while so serving away fromthe Council, to public and other nonprofit This Institute, in cooperation with the othertheir places of residence. This authorizationinstitutions.This program of rellowships National Institutes, shallcarry out suchfor compensation and expenses shall also ex-and grants shall not duplicate or replace the major duties and functions of operation andtend to consultants and members of specialprograms authorized under section 32 of the administration in connection with this jointfield or other committees engaged or estab-Surplus Property Act of 1944, as amended, resolution, as may be assigned by the Sur-lished pursuant to section 6 of this jointand the United States Information and Edu- geon General, Including the support of re-resolution. cational Exchange Act of 1948, as amended. search and research training through grants, (f) The Council shall meet at the call of (6) Encourage and support broad surveys contracts and cooperative activities and thethe Chairman or on the request of a third ofof the incidence of the major diseases en- direct conduct of research in facilities out-its membership, but in no event less thandemic in various parts of the world and side the United States. three times during the year. initiate comprehensive plans for their eradi- SEc. 5.(a) There is hereby established, in (g) Provision shall be made by the Secre-cation ormitigation through cooperative the Department of Health, Education, andtary, through the Surgeon General, for co-programs of research and research training Welfare, the National Advisory Council forordination of the work of and consultationin regard to these diseases, including re- International Medical Research (hereinafterbetween the Council and the National Ad-search in pertinent phases of the science of referred to in this joint resolution as thevisory Health Council, and thenationalpublic health. 'Council"),toadvise,consult with, andadvisory councils of the National Institutes make recommendations to the Secretary orof Health, and through the Director of Voca- (7) Support and encourage international the Surgeon General or the Director of thetional Rehabilitation, the National Advisorycommunication in the medical and biologi- Office of Vocational Rehabilitation, or suchCouncil on Vocational Rehabilitation, withcal sciences, international scientific meet- other officers of the Department as may berespect to matters bearing on the purposesings, conferences, translation services and appropriate, on matters relating to the pur-and administration of this joint resolution.publications, including provision for travel poses and programs authorized by this joint SEC. 6. The Secretary is authorized to se-funds to permit participation in such con- resolution.The internal procedures of thecure, from time to time, and for such periods ferences. Council shall be governed by rules and regu-as he deems advisable, the assistance and SEC. 8. The Secretary shall keep the Secre- lations adopted by the Council and approvedadvice of consultants who are technicians,tary of State fully informed concerning the by the Secretary. experts,scholars,orotherwiseespecially projects and programs undertaken pursuant (b) The Council shall receive reports onqualified in fields related to research, re-to this joint resolution, and shall solicit and and review all research and research-trainingsearch training, or research planning, fromsecure from him policy guidance with re- projects or programs undertaken, or proposedthe United States or abroad. These experts,gard to such projects, programs, or other to be undertaken, pursuant to this joint res-individually or in groups, shall advise theactivities proposed to be undertaken under olution, and no grant, contract, or loan forSecretary or the Surgeon General or the Di-this joint resolution.No project, program, any such research project or program shallrector of Vocational Rehabilitation, or theor activity shall be undertaken which is con- be approved by the Surgeon General, theCouncil, on such matters as are appropriate.trary to or inconsistent with such policy Director of the Office of Vocational Rehabili- SEC. 7. The Secretary is hereby authorizedguidance. tation, or the Secretary except after reviewto engage in the following activities: Szc. 9. Programs authorized by this Joint and recommendation by the Council. (1) Encourage and support research, in-resolution shall not unnecessarily duplicate (c) The Council shall consist of the Sur-vestigations, and experiments by Individuals,those undertaken by other departments and geon General of the Public Health Service,universities, hospitals, laboratories, or otheragencies ofthe Government pursuant to who shall be Chairman, a duly designatedpublic or private agencies or institutions, inlaw, and the Secretary shall take proper representative of the Secretary of State, andcountries other than the United States, re-precaution to this end.Nothing contained 16 members appointed by the Secretary with-lating to the cause, prevention, and methodsin this joint resolution shall je applied or out regard to civil service laws. The Directorof diagnosis and treatment of physical andconstrued to diminish the authority or re- of Vocational Rehabilitation shall be a mem-mental diseases and impairments of man,sponsibility of other departments and agen- ber ex officio.The Secretary may appointreferred to in paragraph (1)of section 2,cies in the field of international cooperation additional ex officio members on either aby means of: the direct conduct of researchin medical or other scientific endeavors. permanent or temporary basis, as desirable,in countries other than the United States, Szc. 10. The activities authorized herein but the number of such additional ex officiofinancial grants, contracts, grants or loans ofshall not extend to the support of public members shall not be greater than two atequipment, and grants or loans of medical,health nor other programs of an operational any one time.The 16 appointed membersbiological, physical, or chemical substancesnature as contrasted with research, nor shall shall be leaders in the fields of medical re-or standards where required for research orany of the grants herein authorized include search, teaching and training, medical orresearch training, and furnishing expert per-grants for the improvement or extension of biological science, rehabilitation, education,sonnel from the United States (including thepublic health administration in other coun- or public and international affairs.Eight ofpayment of travel and subsistence for suchtries except for necessary research in the the sixteen shall be selected from amongexperts when away from their places of resi-science of public health and public health leading experts and authorities in the fieldsdence). administration. with which this joint resolutioniscon- (2) Encourage and support research, in- SEC.11. The Secretary shall prepare an cerned, with special emphasis on associationvestigations, and experiments conducted inannual report, which shall include a report with research and research training. countries other than the United States, re-from the Council, and submit ittothe (d) Each appointed member of the Coun-lated to the rehabilitation of the physicallyPresident, for transmittal to the Congress, cilshall hold office for a term of 4 years,handicapped, by the means referred to insummarizing the activities under this joint except that (1) any member appointed toparagraph 2 hereof. resolution, and making such recominenda- fill a vacancy occurring prior to the expira- (3) Encourage and support the coordina-tions as he, and the Council, may deem tion of the term for which his predecessortion of experiments and programs of researchappropriate. CIV—1134 18014 CONGRESSIONAL RECORD —SENATE August 16 St.12. The Secretary, or the SurgeonConference in London, as chairman of The motion was agreed to; and the General, or the Director of Vocational Re-the Economic Section of the General Af-Presiding Officer appointed Mr. BYRD, Mr. habilitation, is authorized to use the servicesfairs Committee. KERR, MIS. FREAR, Mr. LONG, Mr. MARTIN of any member or members of the Council, of Pennsylvania, Mr. WILLIAMS, and Mr. and where appropriate, any member or mem- The Senator from Ohio [Mr. bers of the other several national advisoryBRICKER], the Senator from MarylandFLANDERs conferees on the part of the councils, or study sections. or committees[Mr. BUTLER], the Senators from Indi-Senate. advisory thereto of the Public Health Serv-ana [Mr. CAPEHART and Mr. JENNER], and ice, or of the Office of Vocational Rehabilita-the Senator from Maine [Mr. PAYNE] tion, in connection with matters related toare necessarily absent. the administration of this Joint resolution, TheSenatorfromKansas[Mr. for such periodsas may be determinedSCHOEPPEL] Is detained on official busi- necessary. ness. SEC.13. Any alien whom the Secretary deems It desirable to come to the United If present and voting, the Senator States under the terms of paragraphs (4)from Maryland [Mr. BUTLER], the Sen- and (7) of section 7 of this Joint resolution,ator from Indiana [Mr. CAPEHART], the who is otherwise excluded from admissionSenator from West Virginia [Mr. H0B- into the United States by the provisions ofLITZELL], the Senator from New York section 212 of the Immigration and Na-[Mr. JAvns], and the Senator from tionality Act, may, upon certification by theMaine [Mr. PAYNE] would each vote Secretary,upon recommendationofthe Surgeon General or the Director of Voca-. tional Rehabilitation, as may be appropriate, The pair of the Senator from Ohio be paroled into the United States by the At-[Mr. BRICKER] has previously been an- torney General pursuant to the authoritynounced. contained in section 212 (d) (5) of such act. The result was announced—yeas 79, SEC. 14. There Is hereby authorized to benays 0, as follows: THE SOCIAL SECURITY BILL appropriated the sum of $50 million an- Mr. JOHNSON of Texas.Mr. Presi- nually, to carry out the provisions of this YEAS—79 Aiken Hayden Morse dent, I want to commend the very able joint resolution.Such amount isto beAllott Hennings Mortou senior Senator from Oklahoma [Mr. apportioned as the Congress may direct toAnderson Hickenlooper Mundt KERR] for his diligence and his dedica- the office of the Secretary, the Public HealthBarrett Hill Neuberger Service (including the National Institute for Beall Hruska Pastore tion and the masterful manner in which International Health and Medical Research),Bennett Humphrey Potter he handled this most complex bill.He the Office of Vocational Rehabilitation, andBible Ives Prosmire and the Senator from New Mexico [Mr. other agencies in the Department of Health, Bridges Jackson Purtell Bush Johnson, Tex.Revercomb ANDERSON] have piloted through one of Education, and Welfare as appropriate. Carlson Johnston. S. C.Robertson the most important pieces of legislation Carroll Jordan Russell this Congress will pass.It affects the The PRESIDING OFFICER.House Case, N.J. Kefauver Saltonstall lives and the futures of millions of our bill 13549 having been read the third Case, S. Dak. Kennedy Smathers time, the question now is, Shall it pass? Chavez Kerr Smith, Maine citizens. Church Knowland Smith, N.J. I have known for a long time that the On this question, the yeas and naysClark Kuchel Sparkman people of this country—the average citi- have been ordered; and the clerk willCooper Langer Stennis call the roll. Cotton Lausche Symington zen—had no better friends than the able Dirksen Long Thurmond Senator from Oklahoma [Mr. KERR] and The legislative clerk proceeded to callDouglas Magnuson Thye hisassociate, my friend from New the roll. Dworshak Malone Watkins Mexico [Mr. ANDERSON].But I would Mr. CURTIS (when his name wasEastland Man&field Wiley Ellender Martin, Iowa Williams not do my duty as I see it if I let this called).I have a pair with the distin-Ervin Martin, Pa. Yarborough opportunity pass without telling them guished senior Senator from Ohio [Mr. Goldwater McCtellan Young I am grateful for their untiring efforts, BRICKER]. If the Senator from Ohio Gore McNamara the long hours they spent in connection [Mr. BRICKER] were present and voting, Green Monroney NAYS—0 with this bill and their work with the he would vote "yea."If I were at lib- Senator from Illinois[Mr. DOUGLAS], erty to vote, I would vote "nay."I with- NOT VOTING—17 who offeredmeritorious amendments hold my vote. Bricker Frear Murray Butler Fulbright O'Mahoney which prehaps should have been in the The rollcall was concluded. Byrd Hoblltzell Payne bill, and perhaps will be some day.In Mr. MANSFIELD.I announce thatCapehart Holland Schoeppel legislation I am a patient man.I real- the Senatov from Virginia [Mr. BYRD],Curtis Javits Talmadge ize that we must proceed a step at a the Senator from Delaware [Mr. FREAR],Flanders Jenrier time and that progress rarely comes in the Senator from Arkansas [Mr. FUL- So the bill (H. R. 13549) was passed. one leap. BRIGHT], the Senator from Florida [Mr. Mr. KERR. Mr. President, I move I want also to thank the members of HOLLAND], the Senator from Montanathat the vote by which the bill was passedthe minority on the committee, who con- [Mr. MUImAY], the Senator from Wyom-be reconsidered. tributed to bringing about the unani- ing [Mr. O'MAHONEY], and the Senator Mr. MANSFIELD. Mr. President, Imous result that obtained tonight.I from Georgia [Mr. TALMADGE] are absentmove to lay that motion on the table. think it is a credit to the Senate, and on official business. ThePRESIDING OFFICER. Thecertainly to the Finance Committee. I further announce that, if present andquestion is on agreeing to the motion That committee has carried one of the voting, the Senator from Delaware [Mr.of the Senator from Montana to lay onheaviest burdens of work that any com- FREAR], the Senator from Arkansas [Mr.the table the motion to reconsider. mittee of the Congress has.It has car- FULBRIGHT], the Senator from Florida The motion to lay on the table wasried it efficiently, and it is deserving of [Mr. HOLLAND], the Senator from Mon-agreed to. the statement, "A job well done." tana [Mr. MURRAY], the Senator from Mr. KERR. Mr.President,Iask I want to commend and applaud each Wyoming [Mr. O'MAHONEY], and theunanimous consent that the bill H. R.member of the committee, both on the Senator from Georgia [Mr. TALMADGE] 13549, which has just been passed, bemajority and minority sides, for the re- would each vote "yea." printed as it passed the Senate, withsults which have been obtained.Under Mr. DIRESEN.I announce that thethe Senate amendments numbered. the leadership of the Senator from Vir- Senator from Vermont [Mr. FLANDERs] The PRESIDING OFFICER. Withoutginia [Mr. BYRD], with the cooperation is absent because of illness in his f am-objection, it is so ordered. of the Senator from Oklahoma [Mr. ily. Mr. KERR.I move that the SenateKERR], the Senator from Delaware [Mr. The Senator from West Virginia [Mr.insist upon its amendments, ask for aFREAR],theSenator from Louisiana HOBLITZELL] is absent because of deathconference with the House of Represen-[Mr. LONG], the Senator from Florida in his family. tatives on the disagreeing votes of the [Mr. SMATHER5] •theSenator from New The Senator from New York [Mr.two Houses thereon, and that the ChairMexico[Mr. ANDERSON], the Senator JAvITS] is absent, by leave of the Sen-appoint the conferees on the part of thefrom Illinois[Mr. DOUGLAS] •andthe ate, to attend the NATO ParliamentarySenate. Senator from Tennessee[Mr. GORE], 1958 CONGRESSIONALRECORD—SENATE 18015 this committee has carried a heavy load with honor and distinction.The members deserve the thanks of the country; Mr. KERR. Mr. President, I am very grateful to the distinguished majority leader for his kind remarks.I want to say the bill was brought to the Senate by the Finance Committee in its entirety. That could not have been done without thecooperationofitsdistinguished chairman [Mr. BYRD] and every member of the committee on both sides of the aisle. There was not complete agreement in the committee as to all provisions in the bill, but there was complete agreement that we would work together and bring out of the committee the best bill we could, and it was brought out by the membership of the entire committee. I want to observe, with deep regret, that our distinguished chairman [Mr. BYRD] is not present.As many of us know, he has been needed at the bedside of his fine wife, who has been seriously ill within the last few days.He has attended the Senate inspiteof that fact, and his absence at this time was caused only by reason of that fact. Mr. KEFAUVER. Mr. President, will the Senator yield? Mr. KERR.I yield. Mr. KEFAUVER.I wish to join in congratulating the Senator from Okla- homa and the Senator from New Mexico and other Senators who, through their foresight, brought to the Senate the social security bill and got it passed. We all appreciate the fact that it provides only for a minimum increase in social securitybenefits.Much more might have been done, especially in view of conditions in the country. I think the Senator from Oklahoma has exhibited real statesmanship in getting a bill passed which at least provided fqr moderate increases in benefits.I commend him and his associates who joined him in his efforts.

85n CONGRESS 2D SessIoN

IN THE SENATE OF THE UNITED STATES

AUGUST 16, 1958 Ordered to be printed with the amendments of the Senate numbered

1 Be it enacted by the Senate and HQuse of Represent a.

2tives of the United States of America in CongreBs assembled,

3That this Act may be cited as the "Social Security Amend.. 4 mentsof 1958". I 2

1TITLE I—INCREASE IN BENEFITS UNDER TITLE

2 U OF THESOCIALSECURITY ACT

3 INCREA8EINBENEFITAMOUNTS

4 Primary Insurance Amount

5 So.101.(a)Subsection(a)of section 215 of the

6.Social Security Act is amended to read as follows:

7 "Primary Insurance Amount

8 "(a) Subject to the conditions specified in subsections

9 (b), (c), and (d)of this section, the primary insurance 10 amount of an insured individual shall be whichever of the

11following is the largest:

12 "(1) The amount in column IV on the line on

13 which in column III of the following table appears his 14 average monthly wage (asdetermined under subsection 15 (b)); 16 "(2) The amount in column IV on the line on 17 'which in column II of the following table appears his 18 primary insurance amount '(as determined under sub- 19 section (c)) 20 "(3) The. amount in column IV on the line on 21 which in column I of the following table appears his 22 primary insurance benefit(as determined under sub- 23 section (d) );or 24 "(4) In the case of an individual who was entitled 25 to a disability insurance benefit for the month beforethe 3

1 month in which he became entitled to old-age insurance

2 benefits or died, the amount in column IV which is equal

3 to his disability insurance benefit.

"TABLZ FOBDETERMINING '1 PRIMARY INSIJEANCE AMOUNT AND MAXIMUM FAMUX' BENEFITS

01 II II! IV V "(Primary Insurance (Primary Insurance (Average monthl7 (Primary Insur.. (Maximum beneftt under 1939 amount under 1954 wage) ance amount) family Act, as modified) Act) benefits)

"If an Individual's Or his primary Insur-Or his avcrage monthly And the maxi- primary insurance anee amount (as deter- wage (as determined The amount re-mum amount of benefit (as determined mined under subsec. under subsec. (b)) Is— ferred to In the benefits payable under subsec. (d)) Is— (c)) Is— preceding para- (as provided In

• graphs of this sec. 203 (a)) on subsection the basis of his But not But not But not shall be— wages and seif. 'EAt ieast— more At 'east— more At least— more employment than— than— than— Income shall be—

$10.00 $30.00 $54 $33 $53.00 "$10. 01 10. 48 $30. 10 31. 00 $55 56 34 54. 00 10.49 11.00 31.10 32.00 57 58 35 55.00 11.01 11.48 32. 10 33.00 59 60 36 56.00 11. 49 12. 00 33. 10 34.00 61 61 37 57. 00 12. 01 12. 48 34. 10 35. 00 62 63 38 58. 00 12. 49 13. 00 35. 10 36. 00 64 65 39 59. 00 13. 01 13. 48 36. 10 37. 00 66 67 40 60. 00 13. 49 14. 00 37. 10 38. 00 68 69 41 61. 50 14. 01 14. 48 38. 10 39. 00 70 70 42 63. 00 14. 49 15. 00 39. 10 40. 00 71 72 43 64. 50 15.01 15. 60 40. 10 41. 00 73 74 44 66. 00 15. 61 16. 20 41. 10 42. 00 75 76 45 67. 50 16. 21 16. 84 42. 10 43. 00 77 78 46 69. 00 16. 85 17. 60 43. 10 44. 00 79 80 47 70. 50 17. 61 18.40 44. 10 45.00 81 81 48 72. 00 18. 41 19. 24 45. 10 46. 00 82 83 49 73. 50 19. 25 20. 00 46. 10 47. 00 84 85 50 75. 00 20.01 20. 64 47. 10 48. 00 86 87 51 76. 50 20. 65 21. 28 48. 10 49. 00 88 89 52 78. 00 21. 29 21. 88 49. 10 50. 00 90 90 53 79. 50 21. 89 22. 28 50. 10 50. 90 91 92 54 81. 00 22. 29 22, 68 51. 00 51. 80 93 94 55 82. 50 22. 69 23. 08 51. 90 52. 80 95 96 56 84.00 23. 09 23. 44 52. 90 53. 70 97 97 57 85. 50 23. 45 23. 76 53. 80 54. 60 98 99 58 87. 00 23. 77 24. 20 54. 70 55. 60 100 101 59 88. 50 24. 21 24. 60 55. 70 56. 50 102 102 60 90. 00 24. 61 25. 00 56. -60 57. 40 103 104 61 91. 50 25. 01 25. 48 57. 50 58. 40 105 106 62 93. 00 25. 49 25. 92 58. 50 59. 30 107 107 63 94. 50 25. 93 26. 40 59. 40 60. 20 108 109 64 96. 00 26. 41 26. 94 60. 30 61. 20 110 113 65 97. 50 26. 95 27. 46 61. 30 62. 10 114 118 66 99.00 27. 47 28. 00 62. 20 63. 00 119 122 67 100. 50 28. 01 28. 68 63. 10 64. 00 123 127 68 102. 00 28. 69 29. 25 64. 10 64. 90 128 132 69 104. 00 29. 26 29. 68 65. 00 65. 80 133 136 70 107. 60 29. 69 30. 36 65. 90 66. 80 137 141 71 111. 20 30. 37 30. 92 66. 90 67. 70 142 146 72 115. 0 30.93 31.52 67.80 68.70 147 151 .73 119.20 31. 53 32. 00 68. 80 69. 60 152 155 74 122. 80 32. 01 32. 60 69. 70 70. 50 156 160 75 126. 40 32. 61 33. 40 70. 60 71. 50 161 165 76 130. 40 33. 41 33. 88 71. 60 72. 40 166 169 77 134. 00 33. 89 34. 50 72. 50 73. 30 170 174 78 137. 60 34. 51 35. 20 73. 40 74. 30 175 179 79 141. 60 35. 21 35. 80 74. 0 75. 20 180 183 80 145. 20 35. 81 36. 40 75. 30 76. 10 184 188 81 148.80 36. 41 37. 08 76. 20 77. 10 189 193 82 152. 80 87. 09 37. 60 77. 20 78.00 194 197 83 156. 40 37. 61 38. 20 78.10 78. 90 198 202 84 160. 00 38.21 39. 12 79. 00 79. 90 203' 207 85 164. 00 39. 13 39. 68 80. 00 80. 80 208 211 86 167. 60 4

FORDETRM1NIG PRIMARY INSURANCE AMOUNT ND MxxMvM FAMILY BENEFzTB—CoItinued

'1 U III IV V "(Primary Insurance (Primary Insurance (Average month1' (Prlmaq Insur- (Mazimum benefit under 1939 amountunder1954 wage) anoo amount) famfty Act, as modified) Act) benets)

"If an Individual's Or his primary Insur-Or his average monthly And the maxt- primary Insurance ance amount (as deter- wage (as determined The amount re.mum amount of benefit (as determined mined under subsec. under subsec. (b)) Is— ferred to In thebendlits payable under subsec. (d)) Is— (c)) is— preceding para- (as provided In graphs of this sec. 203 (a)) on subsection the bast8 of his But not But not But not shall be— wages and self- "At least-- more At least— more At least— more employment than— than— than— Income shall be—

"$39. 69$40. 33 $80. 90 $81. 70 $212 $216 $87 $171. 20 40. 34 41. 12 81. 80 82. 70 217 221 88 175. 20 41. 13 41. 76 82. 80 83. 60 222 225 89 178. 80 41. 77 42. 44 83. 70 84. 50 226 230 90 182. 40 42. 45 43. 20 84. 60 85. 50 231 235 91 186. 40 43. 21 43. 78 85. 60 86. 40 236 239 92 190. 00 43. 77 44.44 86. 50 87. 30 240 244 93 193. 60 44. 45 44.88 87. 40 8& 30 245 249 94 197. 60 44. 89 45. 60 88. 40 89. 20 250 253 95 201. 20 89. 30 90. 10 254 258 96 204.80 90. 20 91. 10 259 263 97 20&80 91. 20 92. 00 264 267 98 212. 40 92. 10 92. 90 268 272 99 216. 00 93. 00 93. 90 273 277 100 220. 00 4. 00 94.80 278 281 101 223. 60 94.90 95. 80 282 286 102 227. 20 95. 90 96. 70 287 291 103 231. 20 98. 80 97. 60 292 295 104 234. 80 97. 70 98. 60 296 300 105 238. 40 98. 70 99. 50 301 305 106 242. 40 99. 60 100. 40 306 309 107 246. 00 100. 50 101. 40 310 314 108 249. 60 101. 50 102. 30 315 319 109 253. 60 102. 40 103. 20 320 323 110 254. 00 103. 30 104. 20 324 328 111 254. 00 104. 30 105. 10 329 333 112 254. 00 105. 20 106. 00 334 337 113 254. 00 106. 10 107. 00 338 342 114 254. 00 107. 10 107. 90 343 347 115 254. 00 108. 00 108. 50 348 351 116 254. 00 352 356 117 254. 00 357 361 118 254. 00 362 365 119 254.00 366 370 120 254. 00 371 375 121 254.00 376 379 122 254. 00 380 384 123 254. 00 385 389 124 254. 00 390 393 125 254. 00 394 398 126 254. 00 399 400 127 254. 00" A 5

"TABLEFO DETERMiNiNG PRiMARY INSURANCE AMOUNT AND MAxzMrmc FAMiLY BENEFITS

"I II III IV V "(P1mari.i insurance (Pflmar insurance (Average monthi (P1mori.i in,ur. (Maximum benefit unaer 1939 amount under 1954 wage) once amount) fomU Act, as modified) Act) benefits)

If on inditiduai's Or h18 primorU inur- 0r Mi ot'erage monlhlV And the maxi- primarjl in8urance once amount (a8 deter- wage (a8 determined The omotnt re• mum amount of benejU (oo determined mined under s'ub8ec. under 8ubsec. (b)) f8— ferred to in the benefits paVoble Under 8ub8ec.(d))is— (c)) i8— preceding para- (as provided in graphs of this sec. £03 (a)) on 8tLbieCtiOn the bails of his Bu no Bnt not Bunot *haU be— wages and 8eif. "41 least— more Al icast— more At least— more employment than— than— than— income shall be—

$10. 00 $30. 00 $54 $33 $53. 00 "$10. 01 10. 48 $30. 10 81. 00 $55 56 34 54. 00 10. 49 11. 00 31. 10 32. 00 57 58 35 55. 00 11. 01 11. 48 32. 10 33. 00 59 60 36 56. 00 11. 49 1& 00 33.10 34. 00 61 61 37 57. 00 12. 01 12. 48 34. 10 35. 00 62 68 38 58. 00 12. 49 13. 00 35. 10 36. 00 64 65 39 59. 00 13. 01 13. 48 86. 10 37. 00 66 67 40 60. 00 13. 49 14. 00 37. 10 38. 00 68 69 41 61. 50 14. 01 14. 48 38. 10 39.. 00 70 70 42 63. 00 14. 49 15. 00 39. 10 40. 00 71 7d 43 64. 50 15. 01 15. 60 40. 10 41. 00 73 74 44 66. 00 15. 61 16. 20 41. 10 42. 00 75 76 45 67. 50 16. 21 16. 84 42. 10 43. 00 77 78 46 69. 00 16. 85 17. 60 43. 10 44. 00 79 80 47 70. 50 17. 61 18. 40 44. 10 45. 00 81 81 48 72. 00 18. 41 19. 24 45. 10 46. 00 82 83 49 73. 50 19. 25 20. 00 46. 10 47. 00 84 85 50 75. 00 20. 01 20. 64 47. 10 48. 00 86 87 51 76. 50 .20. 65 21. 28 48. 10 49. 00 88 89 52 78. 00 21. 29 21. 88 49. 10 50. 00 90 90 53 79. 50 21. 89 22. 28 50. 10 50. 90 91 92 54 81. 00 22. 29 22. 68 51. 00 51. 80 93 94 55 82. 50 22. 69 23. 08 51. 90 52. 80 95 96 56 84. 00 23. 09 23. 44 52. 90 53. 70 97 97 57 85. 50 23. 45 L3. 76 53. 80 54. 60 98 99 58 87. 00 23. 7? 24. 20 54. 70 55. 60 100 101 59 88. 50 24. 21 24. 60 55. 70 56. 50 10 102 60 90. 00 24. 61 25. 00 56. 60 57. 40 103 104 61 91. 50 25. 01 25. 48 57. 50 58. 40 105 106 62 93. 00 25. 49 25. 92 58. 50 59. 30 107 107 63 94. 50 5. 93 6. 40 59. 40 60. 0 108 109 64 96. 00 26. 41 26. 94 60. 30 61. 20 110 113 65 97. 50 26. 95 27. 46 61. 30 62. 10 114 118 66 99. 00 27. 47 28. 00 6. 20 63. 00 119 122 67 100. 50 28. 01 8. 68 63. 10 64. 00 123 127 68 102. 00 28. 69 29. 25 64. 10 64. 90 128 132 69 105. 60 29. 26 29. 68 65. 00 65. 80 133 136 70 108. 80 29. 69 30.36 65. 90 66. 80 137 141 71 11g. 80 30. 37 30. 92 66. 90 67. 70 142 146 72 116. 80 30. 93 31. 36 67.80 68. 60 147 150 73 120. 00 31. 37 32. 00 68. 70 69. 60 151 155 74 124. 00 32. 01 32. 60 69. 70 70. 50 156 160 75 128. 00 32. 61 33. 20 70. 60 71. 40 161 164 76 131. 20 83. 21 33. 88 71. 50 72. 40 165 169 77 135. 20 33. 89 34. 50 72. 50 73. 30 170 174 78 139. 20 34. 51 35. 00 73. 40 74. 20 175 178 79 142. 40 35. 01 35. 80 74. 30 75. 20 179 183 80 146. 40 35. 81 36. 40 75. 30 76. 10 184 188 81 150. 40 36. 41 37. 08 76. 20 77. 10 189 193 82 154. 40 37. 09 37. 60 77. 0 78. 00 194 197 83 157. 70 6

"TABLE FORDETERMININGPRIMAr hi AJL4NCE AMouz MAXIMUM FAMILY BBNEPITS—Coniiflued

"I II III IV V "(Prins4ry fwrs (Thfwiiwtranee (Averag* mo,s$*y (Prlmer (Maximum benefittindm 192 amounttiiida,i954 oqe) snee .mount) famiZv Act, a modffied) Act) benejU8)

'1/ annd(vdua'. OT hisp?marv Msur- Or Ms uerag. wst*Z And themzx. pthiartjnaur.w ance amow (u detev- wq (dter,ined• The amount ye- mum amountof brssfit (a, dderm4nd mMedV414e7 aubiec. under subsec. (b)) 1.— ferr.dtofn ifs. benefta payable tdnaub.ec.(d))f.— (c)) ii— ptecedMgpare- (asptovfded in graphsof this sec.bJ5(a)) on aubaed.ion thebaaa of his That n( But nc .But no ahaU be— wagesandself- "At kzd— mo?e At lead— no?g At leaa— moi. mpkjmen* than— than—' than— nco,neshallbe—

"$S7. 61 $88. SO $78. 10 $78. 90 $198 uO $84 $161. 60 88. 1 89. 1 79. 00 79. 90 O3 O7 85 165. 60 89. 15 89. 68 80. 00 8 80 O8 1 I 86 168. 80 89. 69 40. 83 80. 90 81. 70 218 87 17g. 80 40. 54 41. 1 81. 80 8L 70 17 131 88 176. 80 41. 18 41. 76 8. 80 88. 60 95 89 180. (10 41. 77 444 88. 70 84.50 26 8O 90 184.00 445 48. 0 84. 60 85. 50 81 I85 91 188. 00 43. 1 43.76 85. 60 88. 40 286 289 9 191. O 43.77 44.44 86. 50 87. 80 4O 44 93. 195. PO 44.45 44. 88 87. 40 8& 80 45 p4.9 94 199. 0 44. 89 45.60 88. 40 89. O 250 p358 95 PO& 40 89. 80 90. 10 54 58 96 £O6. 40 90. 0 91. 10 59 p368 97 210. 40 91. 0 9. 00 64 67 98 218. 60 9. 10 9P. 90 68 99 p17. 60 93. 00 98. 90 78 77 100 1. 60 94.00 94.80 78 281 101 4.80 94.90 95. 80 86 1O 8. 80 95. 90 96. 70 87 £191 108 £8& 80 96. 80 97. 60 95 104 p86. 00 97. 70 98. 60 96 800 105 4O. 00 98. 70 99. 50 801 806 106 P44. 00 99. 60 100. 40 806 809 107 P47. PO 100. 50101. 40 810 814 108 p51. O 101. 50 1O. 80 815 819 109 54. 00 1O. 40 108. 20 5O 88 110 p54. 00 103. 80 10.4. O 324 8P8 111 £54. 00 104.80 105. 10 89 885 I 1 54. 00 105. 20 106. 00 834 887 118 54. 00 106. 10 107. 00 888 842 114 54. 00 107. 10 107. 90 43 847 115 54. 00 108. 00 108. 50 348 851 116 254. 00 85 856 117 54. 00 857 3.61 118 N4. 00 36 865 119 254. 00 366 370 1O £54. 00 371 375 11 54. 00 378 879 12 t54. 00 880 84 15 254. 00 385 389 14 5400 890 395 125 254. 00 894 898 16 254. 00 899 400 17 254. 00"

:1. Average Monthly Wage 2 (b)(2)(1) Section 215(b)(1)of such Act is 3amended by striking out "An" and inserting in lieu thereof 4the following: "For the purposes of column III of the table appearing in subsection (a) of this section, an". 7

1 (2) Such section 215 (b) is further amended by adding

2at the end thereof the following paragraph:

3 "(5) The provisions of this subsection sh*ü1 be appli

4cable only in the case of an individual with respect to whom

5not less than six of the quarters elapsing after 1950 are

6quarters of coverage, and—

7 "(A) who becomes entitled to benefits under sec-

S tion 202 (a) or section 223 after (3)the on4 month

9 ollewing he month h which he Social Seeafi4y

10 Amcndmcnt e4 1958 ae eneetcL December 1958, or

11 "(B) who dies after such (4)iceond month with-

12 out being entitled to benefits under such section 202

13 (a) or section 223, or

14 "(C) who files an application for a recomputation

15 under section 215 (f)(2)(A) after such (5)ccoud

16 month and is(or would, but for the provisions of see-

17 tion 215 (f)(6), be) entitled to have his primary in-

18, surance amount recomputed under such section, or

19 "(D) who dies after (6)ccond month and whose

20 survivors are (or would, but for the provisions of section

21 215. ('f)(6), be)entitled to a recomputation of his 22 primaryinsurance' amount undersection215(f) 23 (7)(4)." (4); or 24 (8)" (E) who files an application for a recomputation

25 under subparagraph (B) of section 102 (f)(2)of the 8

1 Social Security Amendments of 1954 after such month

2 andis (orwould, but for the fact that such recomputa-

3 tion would not result in a higher primary insurance

4 amount for such individual, be)entitled to have his

5 primary insurance amount recomputed under such sub-

6 paragraph."

7 Primary Insurance Amount Under 1954 Act

8 (0)SectiOn215 (0)ofsuch Act is amended to read

.9 as follows:

10 'Primary Insurance Amount Under 1954 Act (1) For the purposes of column II of the table

12appearing in subsection (a)of this section, an individual's

13primary insurance amount shall be computed as provided in,

14 andsubjectto the limitations specified in, (A) this 8eotiofl

15as in effect prior to the enactment of the Social SecurIty 16 Amendments of 1958, and (B) the applicable provisions

17of the Social Security Amendments of 1954.

18 '(2)The provisions of this subsection shall be appil-

19cable only in the case of an individual (9)who—

20 "(A) (1Q)who became entitled to benefits under

21 section 202 (a) or section 223 (11)prior e he third

22 month following the month in which he Social Sccurity

23 Amcndmcnft ef 1958 'cvcre enactcd, oi or died prior to 24 January 1959, and 25 "(B) (12)€lied prior o such. third month to whom 9

1 the provisions of paragraph (5) of subsection (b) are not

2 applicable."

3 Primary Insurance Benefit Under 1939 Act

4 (d) Section 215 (d)of such Act is amended to read

5as follows:

6 'Primary Insurance Benefit Under 1939 Act

7 "(d)(1) For the purposes of column I of the table

S appearingin subsection (a)of this section, an indlividuai's

9primaryinsurance benefit shall be computed as provided in

10this title as in effect prior to the enactment of the Social

11Security Act Amendments of 1950, except thatr—

12 "(A) In the computation of such benefit, such in-

13 dividual's average monthly wage shall (in lieu of being

14 determined under section 209(f)of such title as in

15 effect prior to the enactment of such amendments) be

16 determined as provided in subsection (b) of this section 17 (but without regard to paragraph (5) thereof), except 18 that his starting date shall be December 31, 1936. 19 "(B) For purposes of such computation, the date 20 he became entitled to old-age insurance benefits shall 21 be deemed to be the date he became entitled to pri- 22 mary insurance benefits. 23 "(0) The 1 per centum addition provided for in 24 section 209 (e)(2) of this Act as in effect prior to the 25 enactment of the Social Security Act Amendments of 10

1 1950 shall be applicable only with respect to calendar

2 years prior to 1951, except that any wagespaid in any

3 year prior to such year any partof which was included

4 ina period of disability shall notbe counted.Notwith-

5 standing the preceding sentence, the wages paid in the

6 year in which such period of disabilitybegan shnil be

7 countedif the counting of such wages would result in a

S higher primary insurance amount.

9 "(D) The provisions of subsection (e) shall be ap-

10 plicable to such computation.

11 "(2) The provisions of this subsection shall be appli-

12cable only in the case of an individual—

13 "(A) with respect to whom at least one of the 14 quarters elapsing prior to 1951 is a quarter of coverage;

"(B) whomeetsthe requirements of any of the 16 subparagraphs of paiagraph (5)of subsection (b)of 17 this section; and 18 "(C) who attained age 22 after 1950 and with 19 respect to whom less than six of the quarters elapsing 20 after 1950 are quarters of coverage, or who attained 21 such age before 1951." 22 Minimum Survivors or Dependents Benefit 23 (e) Section 202 (m)of the Social Security Act is 24 amended by strikingout "$30" wherever it occurs and 11

1inserting in lieu thereof "the first figure in column IV of

2the table in section 215 (a)".

3 Mximum Benefits 4 (f) Subsection (a)of section 203 of the Social Secu- 5rity Act is amended to read as follows:

6 "Maximum Benefits 7 "(a) Whenever the total of monthly benefits to which 8individuals are entitled under sections 202 and 223 for a 9 month on the basis of thewages and self-employment income 10of an insured individual is greater than the amount appearing iiin column V of the table in section 215 (a) on the line 12on which appears in column IV such insured ihdividual's 13primary insurance amount, such total of benefits shall be 14reduced to such amount; except that—

15 "(1) when any of such individualssoentitled 16 would (but for the provisions of section, 202 (k)(2) 17 (A)) be entitled to child's insurance benefits on the 18 basis of the wages and sell-employment income of one 19 or more other insured individuals, such total of benefits 20 shall not be reduced to less than the smaller of:(A)

21 the sum of the maximum amounts of benefits payableon 22 the basis of the wages and self-employment income of 23 all such insured individuals, or (B) the last figure in

24 column V of the table appearing in section 215 (a),or 12

1 "(2) when anyof8uch individuals was entitled

2 (without theapplicationofsection 202(j) (1)

3 (13)ánd $ectwn 223 (b))to monthly benefits uncr

4 section 202 or section 223 for (14)the second fflOfi

5 follewing the month n which he Social Seeuy

6 Amcndmontu o4 1958 wcrc enacted December 1958

7 and the primary insurance amount of the insured

S dividual on the basis of whose wages and se1f-emp1oy

9 ment income such monthly benefits arepayable is de

10 terrnined under the provisions of section 215 (a)(2), then such total benefits shall not be reduced to less than

12 the larger of—

13 "(A) the amount determined under this sub-

14 section without regard to thi8 paragraph, Or

15 "(B) the amount determined under this

16 section as in effect prior; to the enactment of the

17 Social Security Amendments of 1958 or the amoint

18 determined under section 102(h)of the Social

19 Security Amendments of 1954, as the case xniy b,

20 plus the excess of—

21 "(1) the primary insurance amount of steh

22 insured individual in coluixin IV of the table

23 appearing in section 215(a),over

24 "(ii) his primaryinsuranceamount det

25 mined under section 215 (c), or 13

1 "(3) whenany of such individualsisent&tled 2 (without the application of section202 (j)(1)(15)and 3 section 223 (b)) to monthlybenefits based on. thewages 4 and self-employment income ofan insured individual with 5 respect to whom a period of disabifity(as deftued in 6 section 216 (1)) began priorto (16) the third month

7. followinghe monthi which I±e Social SccurityAmend 8 menteef 198 were cnactc January1959 and con- 9 tinued (1 7)anintcrraptcdlyuntil— 10 "(A) he became entitledto benefits under see- 11 tioii 202 or 223,or 12 "(B) he died, whichever first occurred, 13 and the primary insuranceamount of such insured hull-

vidual is determined under theprovisions of 8ection 215 (a)(1) or (3) and is not les8 than$68, then such 16 total of benefits shall not be reducedto less than the 17 smaller of— 18 "(0) the last figure in column Vof the table 19 appearing in section 215 (a),or 20 "(D) the amount in columnV of such tableon 21 the same lineon which, in column IV, appears his 22 primary insuranceamount, plus the excess of— 23 "(i) such primary insuranceamount, over "(II) the (18)smalkoi smalleramount in 14

1 column II of the table on the line on which

2 appears such primary insurance amount.

3Inany case in whichbenefits are reduced pursuant to the

4precedingprovisions of this subsection, such reduction shall

5be made after any deductions under this section and after

.6any deductions undersection 222 (b).Whenever a reduc-

7tion. is made under this subsection, each benefit, except the

8old-age or disability insurance benefit, shall be proportion-

9ately decreased."

10 Effective Date ii (g) The amendments made by this section shall be

12applicable in the caseofmonthly benefits under title II of the

13Social Security Act, for months after (19)he occond month

14followinghemonth i which h4e i enacted December

151958, and in the case of the lump-sum death payments under

16suchtitle,withrespecttodeaths occurringaftersuch

17(20)sccond month.

18Primary Insurance Amount for Certain Disability Insurance

19 Beneficiaries

20 (h) If an individual was entitled to a disability insur-

21ance benefit under section 223of the Social Security Act

22for (21)the ccond month aftcr he month i+ which his Aeti

231s cnactcdDecember1958, and became entitled to old-age.

24insurance benefits under section 202 (a)of such Act, or

25died, in (22)the third month aftcr he month iiiwb44iiI4s 15

1 s Onactod January 1959, then, for purposes ofpara-

2graph (4) of section 215 (a) of the Social Security Act,as

3amended by this Act, the amount in column IV of the table

4appearing in such section 215 (a) for such individual shall

5be the amount in such column on the lineon which in column

6II appears his primary insurance amount (as determined

7under subsection(c)of such. section 215) instead of the

8amount in column IV equal to his disability insurance benefit.

9 Saving Provision

10(23>(4)- With rcpcot e monthly bcncfis under 1e II ii he Social Sccurity 4e payable pursuant e cction 2O

12-(-j3- -(4)- of such Ae fei any moith prior o the third month

13following he month e4 cnactmcnt of this Aet ke primary 14insurance amount of the individuale 1e basis e whose 15wages a4 ocif cmploymciit incomc fiuch monthly bcncfits ae

16payablc thou be dekrmincd as though th4s Aet ha4 bccn 17cnwtcd; ueh primary insurance amount 3hall be such mdi 18vidua1' primary inuranco amount foi'purposc ef icction 19 24 ef such Ae months after he ccond month follow 20 hg the month kiwhichth4s Ae ie cnactcd if it largcr 21than he primary insurance amount dctcrmincd undef cction 2224-b e4 he Social Security Ae as amcndcd 1y Ms Aet an4

23 @hallbe roundedo the ncxt higher 4olhirif i4 is a 24multiplc e4 a, dollar. 25 (i) In the case of any individual to whom the provisions 16

1of subsection (b) (5) of section 215 ofthe Social Security

2Act, as amended by this Act, areapplicable and on the basis

3of whose wages and self-employmentincome benefits are pay-

4able for month3 prior to January 1959,his primary insur-

5ance amount for purposesof benefits for such prior mont/lB

6shall, if based on an application for suchbenefits or for a

7recomputation of such amount, as the case maybe,filed

8after December 1958, be determinedunder such section 215,

9as in effect prior tothe enactment of this Act, and, ifsuch

10individual's primary insurance amount as sodetermined is

11larger than the primary insurance amountdetermined for

12him under section 215 as amended bythi3 Act, such larger

13primary insurance amount (increased to the nexthigher dol-

14lar if it i8nota multiple of adollar) shall, for months after 15December 1958, be his primary insurance amount for pur- 16poses of such section 215(and of the other provisions) of 17the Social Security Act as amended by thi3 Act inlieu of 18the amount determined without regard to this subsection.

19 INOREASE IN EARNINGS BASB FROM $4,200 TO $4,800 20 Definition of Wages 21 SEc. 102. (a)(1) Paragraph (2) of section 209 (a) 22of the Social Security Act is amended to read as follows: 23 "(2) That part of remuneration which, after re- 24 muneration (other than remuneration referred to in the 17

1 succeeding subsections of this section) equal to $4,200

2 with respect to employment has been paid to an in-

3 dilvidual during any calendar year after 1954 and prior

4 to 1959, is paid to such individual during such calendar

5 year;".

6 (2) Section 209 (a) of such Actis further amended by

7adding at the end thereof the following new paragraph:

8 "(3) That part of remuneration which, after re-

9 muneration (other than remuneration referred to in the

10 succeeding subsections of this section) equai to $4,800

11 with respect to employment has been paid to an in-

12 dividual during any calendar year after 1958, is paid

13 to such in(lividual during such calendar year;".

14 Definition of Self-Employment Income

15 (b) Paragraph (1)of section 211 (b)of the Social

16Security Act is amended to read as follows:

17 "(1) That part Of the net earnings from self-

18 employment which is in excess of—

19 "(A) For any taxable year ending prior to

20 1955,(i) $3,600, minus(ii)the amount of the.

21 wages paid to such individual daring the taxable

22 year; and

23 "(B) For any taxable year ending after 1954

11.11.13549 2 18 (ii)the 1 andpriorto 1959,(i)$4,200, minus individuid during 2 amount of the wages paid to such

3 the taxable year; and

4 "(0) For any taxable year ending after 1958,

5 (i)$4,800, minus(II)the amount of the wage3 or". 6 paid to such individual during the taxable year; Definitions of Quarter and Quarter of Coverage

8 (c)Clauses(ii)and(iii)of section 213 (a)(2)

9 (B)of the Social Security Act are amended toread as

10follows:

11 "(ii) if the wages paid to anyindividual in any

12 calendar year equal $3,G00 in the case of a calendar

13 year after 1950 and before1955, or $4,200 in the

14 case of a calendar year after1954 and before 1959,

15 or $4,800 in the caseof a calendar year after 1958,

16 each quarter of such year shall(subject to clause

17 (1)) be a quarter of coverage;

18 "(iii)if an individual has self-employment in-

19 come for a taxable year,and if the sum of such

20 income and the wages paid to him during such year

21 equals $3,600 in the case of a taxable year begin-

22 ningafter1950 and ending before 1955, or $4,200

23 in the case of a taxable year ending after 1954

24 and before 1959, or $4,800 in the case of a taxable 19

1 year ending after 1958, each quarter anypart of

2 which falls in such year shall(subject to clause

3 (i) )bea quarter of coverage;". 4 Average Monthly Wage

5 (d)(1) Paragraph (1)of section 215 (e)of such

6Act is amended to read as follows:

7 "(1) in computing an individual's average monthly

8 wage there shall not be counted the excess over $3,600 in

9 the case of anycalendaryear after 1950 and before 1955,

10 the excess over $4,200 in the case of any caiend&r year

11 alter 1954 and before 1959, and the excess over $4,800

12 in the caseofanycalendaryear after 1958, of (A) the

13 wages paid to him in such year, plus (B) the self-em- 14 ployment income credited to such year (as determined 15 under section 212) ;". 16 (2) Section 215 (e) of such Act is further amended by 17striking out "(d) (4)" each place it appears and inserting 18in lieu thereof "(d) ". 19TITLE IT—AMENDMENTS RELATING TO DIS- 20 ABILITY FREEZE AND DISABILITY INSIJR- 21 ANCE BENEFITS

22 APPLICATTON FOR DISABILITY DETERMINATION 23 SEc. 201. Section 216 (i)(2) of the Social Security 24Act is amended— 20

1 (1) by striking out "while under a disability," in

2 the second sentence and inserting in lieu thereof "while

3 under such disability,"; and

4 (2) by striking out "one-year" in clause(ii)of

5 subparagraph (A) and inserting in lieu thereof "eight-

6 een-month".

7 •RETROACTrVE PAYMENT OF DISABILITY INSURáLNCE

8 BENEFITS

9 SEc. 202. (a) Section 223 (b) of such Act is amended 10 by adding at the. end thereof thefollowing new sentence: U "An individual who would have beenentitled to a disability

12insurance benefit for any month after June 1957 had he

13filed application theref or prior to the end of such month

14shall be entitled to such benefit for such month if he files

15application th'eref or prior to the end of the twelfth month.

16immediately succeeding such month."

17 (b) The first sentenoe of section 223 (c)(.3)of such 18 Act (defining the term "waiting period" for purposes of.

19applications for disability insurance benefits) is amended to

20read as follows:

21 "(3) The term 'waiting period' means, in the case

22 of any application for disability insurance benefits, the

23 earliest period of six consecutive calendar months—

24 "(A) throughout which the individual who

25 files such application has been under a disability 21

1 which continues (24)without intcrruptien until such

2 application is filed, and

3 "(B)(i) which begins not earlier than with 4 the first day of the eighteenth month before the

5 month in which such application is ified if such in-

6 dividual is insured for disabifity insurance benefits

7 in such eighteenth month, or(ii)if he is not so

8 insured in such month, which begins not earlier

9 than with the first day of the first month after such

10 eighteenth month in which he is so insured."

11 RETROACTrVE EFFECT OF APPLICATIONS FOR DISABILITY

12 DFTERMINATION

13 SEC. 203. Paragraph (4)of section 216 (i)of such

14Act is amended by striking out "July 1957" and inserting

15in lieu thereof. "July 1960", by striking out "July 1958"

16and inserting in lieu thereof "July 1961", and by striking

17out ",ifsuch individual does not die prior to July 1, 1955,".

18 INSURED STATUS REQUIREMENTS

19 Disability Freeze

20 SEC. 204. (a) Paragraph (3)of section 216 (i)of

21such Act is amended to read as follows: 22 "(3) The requirements referred to in clauses (A) and

23 (B) of paragraphs (2) and (4)are satisfied by an individual 24 with respect to any quarter only if— 25 "(A)he would have been a fully insured in- 22

1 dividual(asdefined in section 214) had he attained

2 retirement age and filed application for benefits under

3 section 202 (a) on the first day of such quarter; and

4 "(B) he had not less than twenty quarters of

5 coverage during the forty-quarterperiod which ends

6 with such quarter, not counting as part of. such forty-

7 quarter period any quarter any part of which was in-

8 eluded in a prior period of disability unless such quarter

9 was a quarter of(25)coveragc." coverage;

10except that the provi3ions of subparagraph (A) of thi3 para-

11graph shall not apply in the case of any individual with re-

12spect to whom a period of disability would, but for such sub-

13paragraph, begin prior to 1951."

14 Disability Insurance Benefits

15 (b) Section 223 (c)(1) (A) of such Act is amended 16by striking out "fully and currently insured" and inserting

17in lieu thereof "fully insured".

18 BENEFITS FOR TUE DEPENDENTS OF DISABILITY INSUBANCE

19 BENEFICIA1UES 20 Payments from Disability Insurance Trust Fund 21 SEc. 205. (a) The first sentence of section 201 (h) of

22such Act is amended by inserting ",andbenefit payments 23required to be made under subsection (b).,(c), or (d) of 23

1section 202 to individuals entitled to benefits on the basis 2of the wages and sell-employment income of an individual

3entitled to disability insurance benefits," after "section 223".

4 Wife's Insurance Benefits

5 (b)(1) Subsection (b)of section 202 of such Act is 6 amended by inserting "or disability" after "old-age" where-

7 everit appears therein.

8 (2) So much of paragraph (1)of such subsection as

9follows the colon is amended by striking out "or" the first

10time it appears and inserting immediately before the period

11at the end of such paragraph ",orher husband (26)ccaes,

12prior e be month whieh 1e attains retircmcnt age be

13cntitlcd t,o 14tibility inuralleebenefith"is not entitled to dis- 14ability insurance benefits and is not entitled to old-age insur-

15ancebenefits". 16 Husband's Insurance Benefits 17 (c)(1) Subparagraph (0) of subsection (c)(1) of 18such section 202 is amended to read as follows: 19 "(0) was receiving at least one-half of his support, 20 as determined in accordance with regulations prescribed 21 by the Secretary, from such individual— 22 "(i) if she had a period of disability which did 23 not end prior to the month in which she became 24 i entitled to old-age, or disability iisurance benefits,

12 at, the, beginning of such period or at the time she

• became entitled to such benefits, or

4 "(ii)if she did not have such a period of disa-

5 bility, at the time she became entitled to such bene-

.6 fits,

7 and filed proof of such support within two years after the

:8 'month in which she filed application with respect to such period of disabifity or after the month in which. she

10' became' entitled to such benefits, as the case may be, or, ii if she dId not have such a period, two years after the•

12' month in which she became entitled to such benefits,

13 and" 14 (2) The remainder of such subsection(c)(1)is

15amended by inserting "or disability" after "old-age" wher-

16ever it appears therein.

17 (3) So much of such subsection(c)(1)as . follows

18the colon is further amended by striking out "or" the first

19time it appears and inserting immediately before the period

20at the end thereof ",orhis wife (27)co&ix, prior e he 21month i which he bccome cntitlod e o44 age inuranoo 22: bcncfit, o be cntitlcd e disability inurancc cnthth i.s not

23entitled to disability insrance benefits and, is not entitled to

24old-age in$urance benefits". 25

1 Child's Insurance Benefits

2 (d) Section 202 (d)(1) of such Act is amended to

3readasfollows:

4 "(d)(1) Every child (as defined insection 216 (e) )

5of an individual entitled to old-age or disability insurance

6benefits, or of an individual who dies a fully or currently in-

7sured individual after 1939, if such child—

8 "(A) has filed application for child's insurance

9 benefits,

10 "(B) at the time such application was filed was

11 unmarried and either(1) had not attained the age of

12 eighteen or(ii) was under a disability (as defined in section 223 (c)) which began before he attained the

14 age of eighteen, and

15 "(0) was dependent upon such inifividual—

16 "(i) if such individual had a period of dis-

17 abilitywhich did not end prior to the month in

18 which he became entitled to old-age or disability

19 insurance benefits or(if he has died) prior to the

20 month in which he died, at the beginning of such

21 period or at the time he became entitled to such

22 benefitsor died,

23 "(ii)if such individual did not have such a 26

1 period and, is living, at the time such application

2 was filed, or

3 "(ill)if such individual did not have such a

4 period and has died, at the time of such death,

5shall be entitled to a child's insurance benefit for each month,

6beginning with the first month after August 1950 in which

7such child becomes so entitled to such insurance benefits and

8ending with the month preceding the first month in which

9any of the following occurs: such child dies, marries, is

10adopted (except for adoption by a stepparent, grandparent,

11aunt, or uncle subsequent to the death of such fully or cur-

12rently insured individual), attains the age of eighteen and

13is not under a disability(as defined in section 223 (c))

14which began before he attained such age, or ceases to be'

15under a disability(as so defined) on or after the day on

16which he attains age eighteen.Entitlement of any child

17to benefits under this subsection on the basis of the wages and

18self-employment income of an imlividual entitled to disability

19insurance benefits shall also end with the month before the

20 month iiwb4ehsuch hdividua1 ccascs e be cntitlcd e ucb

21bcncfits un1cs such individual i for the month i which he '22. ccac e be cntitlcd (28)first month for which such mdi- 23vidual is not entitled to such benefits unless such individual is,

24for such later month, entitled to old-age insurance benefits or

25uiiless he dies in such month." 27

1 Widower's Insurance Benefits

2 (e) Subparagraph (D) of section 202 (f)(1) of such

3Act is amended to read as follows: 4 "(D) (i) was receiving at least one-half of his sup

5 port, as determined in accordance with regulations pro-

6 scribed by the Secretary, from such individual at the

7 time of her death or, if such individual had a period of

8 disability which did not end prior to the month in which 9 she died, at the time such period began or at the time 10 of her death, and filed proof of such support within 11 two years after the date of such death, or, if she had 12 such a period of disability, 'within two years after the 13 month in which she ified application with respect to 14. such period of disability or two years after the date of 15 such death, as the case may be, or (II) was receiving at 16 lease one-hall of his support, as determined in accordance 17 withregulations prescribed by the Secretary, from such 18 individual, and she was a currently insured individual, 19 at the time she became entitled to old-age or disability 20 insurance benefits or, if such individual had a period 21 of disability which did not end prior to the month in 22 which she became so entitled, at the time such period 23 began or at the time she became entitledto such benefits, and filed proof of such support within two 25 years after the month in which she became entitled to 28

1 such benefits, or, if she had such a period of disability,

2 within two years after the month in which she filed

3 application with respect to such period of disabifity or

4 two years after the month in which she became entitled

5 to such benefits, as the case may be, an".

6 Mother's Insurance Benefits

7 (f) Section 202 (g)(1)(F) of such Act is amended

8by inserting "or, if such individual had a period of disability

9which did not end prior to the month in which he died, at

10the time such period began or at the time of such death"

11after "death".

12 Parent's Insurance Benefits

13 (g)Subparagraph (B)of section 202(h)(1)of

14such Act is amended to read as follows:

15 "(B)(i)was receiving at least one-hall of his

16 support from such individual at the time of such inch-

17 vidual's death or,if such individual had a period of 18 disability which did not end prior to the month in 19 which he died, at the time such period began or at the

20 time of such death, and (ii)filed proof of such support

21 within two years after the date of such death, or, if such 22 individual had such a period of disability, within two 23 years after the month in which such individual filed ap-' 24 plicatin with respect to such period of chisabifity or 29

1 two years after the date of such death, as the case may

L. 2 LIe,.

3 Simultaneous Entitlement to Benefits (h) Section 202 (k)of such Act is amended by in. serting "or disability" after "old-age" each time it appears

.6 therein.

7 Adjustment of Benefits of Female Beneficiaries

8 (i)(1) Subparagraph (B) of paragraph (5)of sec-

9tion 202 (q) of such Act is amended to read as follows:

10 "(B) the number equal to the number of months for which the wife's insurance benefit was reduced under

12 such paragraph (2), but for which such benefit was

13 subject to deductions under paragraph (1)or (2)of

14- section 203(b), under section 203(c), or under

15 section 222 (b) ,".

16 (2) Such paragraph is further amended by striking out 17 'the period at the end of subparagraph (0) and inserting in

18lieu thereof ",and",by striking out "(A), (B), and (0)"

19in the material following subparagraph (0) and inserting

20in lieu thereof "(A), (B), (0), and (B) ",andby adding

21after subparagraph (0) the following new subparagraph:

22 "(B) the number equal to the number of months

23 for which such wife's insurance benefit was reduced un-

24 der such paragraph (2), but in or after which her en- 30

1 titlement to wife's insurance benefits was terminated be-

2 cause her husband ceases to beunder a disability, not

3 including in such number of months any month after

4 such termination in which she was entitled to wile's

5 insurance benefits.".

6 (3) Subparagraph (A) of paragraph (6) of such sec-

7tion 202 (q) is amended to read as follows:

8 "(A) the number equal to the number of months

9 forwhich such benefit was reduced under such para-

10 graph, but for which such benefit was subject to deduc-

11 tions under (29) paragraph -(4-)- -(-2)-escction 2Ø (b),

12 under sccláon 2 (c), wdei cction 224. (b), and".

13 (4) Such paragraph is further amcndcd by ttriidng eut 14the pcrio at he e4 of subparagraph -f43- a4 inoerting 15left thcrcof iand",by strikinget1-(A)- -(B), an4 (C)" 16 i e matcrial following subparagraph -(-G3- 4 inficrting

17i lieu thcrcof 1-(A)- (B), (C),aii4 (D)",a4by adding 18aftcr ubparigraph -fG)- he following new subparagraph: 19 "(D) he number equal e #he number ef month8 20 which such wifc' inurancc section 203 (b) (1) or 21 (2), under section 203 (c), or under section 222 (b),". 22 (4) Such paragraph is further amended by striking out 23"(A), (B), and (C)" in the material following subpara- 24 graph (C) and inserting in lieu thereof "(A), (B), (C), 25and (D)", by redesignating subparagraph (C) as sub para- 31

1graph (D), by inserting "and" at the end of subparagraph

2 (B) and by adding after such subparagraph (B) the fol-

3lowing new 8ubparagraph:

4 "(C) the number equal to the number of months for

5 which such benefit was reduced under such paragraph,

6 but in or after which her entitlement to wife's insurance

7 benefits wasterminatedbecause her husband ceased to

8 be under a disability, not including in such number of

9 months anymonthafter such termination in which she

10 was entitled to wife's insurance benefits.".

11 Deduction Provision

12 (j)Section203 (c) of such Act is amended by insert-

13ing(30)acomma and "based on the wages and self-employ- 14 ment income of an individual entitled to old-age insurance

15(31)bcncfith benefits," after "child's insurance benefit" the

16first time it appears therein.

17. Circumstances Under Which Deductions Not Required

18 (k) Section 203 (h) of such Act is amended to read

19as follows:

20 "Circumstances Under Which Deductions Not Required

21 "(h) In the case of any individual, deductions by reason 22of the provisions of subsection (b), (f), or (g) of this sec- 23tion, or the provisions of section 222 (b), shall, notwith- 24standing such provisions, be made from the benefits to which 25such individual is entitled only to the extent that such de- 32

1ductions reduce the total amount which would: otherwise be

2paid, on the basis of the same wages and self-employment

3income, to such individual and the other individuals living

4in the same household."

5 Currently Insured Individual

6 (1) Section 214(b)of such Act is amended by

7(32)inserting -oi diuability' irncdiatc1y after "old ago"

8striking out "or" immediately preceding "(3)" andbyin-

9serting "or (4) in the case of any individual entitled to di8-

10ability insurance benefits, the quarter in which he most recently

11became entitled to disability insurance benefits," immediately

12after "section,"

13 Rounding of Benefits

14 (m) Section 215 (g) of such Act is amended by strik-

15ing out "sections 203 (a) and 224" and inserting in lieu

16thereof "section 203 (a) ".

17Deductions on Account of Refusal To Accept Rehabilitation

18 Services

19 (n) Section 222 (b) of such Act is amended by insert- 20ing after paragraph (2)(added by section 307 (g) of this

21Act) the following new paragraph: 22 "(3) Deductions shall be made from any wife's, has-

23band's, or child's insurance (33)bcnefit benefit, based on the

24wages and self-employment incomeof an individual entitled 25to disability insurance (34)bcncfith benefits, to which a wife, 83

1husband, or child is (35)cntitlcd entitled, until the total of

2 such deductions equal such wife's, husband's, or child's insur-

3 ance benefit or benefits under section 202 for anymonthin 4which the individui1, on the basis of whose wages and self-

5 employment income such benefit was payable, refuses to

6accept rehabilitation services and deductions, on account of

7such refusal, are imposed under paragraph (1) ."

8 Suspension of Benefits Based on Disability

9 (o) Section 225 of such Act is amended by adding at 10the end thereof the following new sentence: "Whenever the 11benefits of an individual entitled to a disability insurance 12benefit are suspended for any month, the benefits of any 13individual entitled. thereto under subsection (b), (c), or (d) 14of section (36)202 202, on the basis of the wages and self-

15employment income of such individual, shall be suspended fo! 16such month."

17REPEAL OF REDUCTION OF BENEFITS BASED ON DISABILITY 18 SEC. 206. Section 224 of such Act is hereby repealed.

19 EFFECTIVEDATES 20 SEC. 207. (a) The amendments made by. section 201 21shall apply with respect to applications for a disability deter- 22mination under section 216 (i)of the Social Security Act 23 filed after June 1961.The amendments made by section 24202 shall apply with respect to applications for disability

H. IL 13549 3 34

1insurance benefits under section 223 of such Act filed after

2December 1957.The amendments made by section 203

3shall apply with respect to applications for a disability deter-

4miriation under such section 216 (i)filed after June 1958.

5The amendments made by section 204 shall apply with

6respect to(1) applications for disability insurance benefits

7under such section 223 or for a disability determination under

8such section 216 (i)ified on or after the date of enactment

9of this Act, and (2)applications for such benefits or for

10such adeterminationfiled after 1957 and prior to such date of

11enactment if the applicant has not died prior to suchdate of

12enactnent and if notice to the applicant of theSecretary's

13decision with respect thereto has not been given to him on or

14prior to such date, except that (A) no benefits under titleII

15of the Social Security Act for the month in which this Act is

16enacted or any prior month shall be payable or increased by

17reason of the amendmentsmade by section 204 of this Act,

18and (B) the provisions of section 215 (f)(1) of the Social

19Security Act shall not prevent recomputation of monthly

20benefits under section 202 of such Act (but no such recompu-

21tation shall be regarded as a recomputation for purposes of 22section 215 (f)of such Act).The amendments made by 23section 205 (other than by (37)subscction 4k)- subsections 24(k) and (m)) shall apply with respect to monthly benefits 25under title II of the Social Security Act for months after the 35

1month in which this Act is enacted, but only if an application

2for such benefits is filed on or after the date of enactment of

3this Act.The amendments made by section 206 and by 4(38)ubsection -(43- subsections (k) and (m) of section 205

5shall apply with respect to monthly benefits under title II of

6the Social Security Act for the month in which this Act is

7enactedand succeeding months.

8 (b) In the case of any husband, widower, or parent 9 who would not be entitled to benefits under section 202 (c),

10section 202 (f), and section 202 (h), respectively, of the

11Social Security Act except for the enactment of section 205

12of this Act, the requirement in such section 202 (c), sec-

13tion 202 (f), or section 202 (h), as the case may be, tha.t 14proof of support be ified within a two-year period shall not 15apply if such proof is filed within two years after the month 16in which this Act is enacted. 17TITLE111—PRO VISIONS RELATING TO ELIGI- 18 BILITY OF CLAIMANTS FOR SOCIAL SECU- 19 RITY BENEFITS, AND MISCELLANEOUS PRO- 20 VISIONS

21ELIGIBILITy OF SPOUSE FOR DEPENDENTS OR SUE VI VOBS

22 BENEYITS 23 Husband's Insurance Benefits

24 SEo. 301.(a)(1) Section 202(c)of the Social 25Security Act is amended by redesignating paragraph (2) 86

1as paragraph(3)and adding after paragraph(1)the

2following new paragraph:

3 "(2) The requirement in paragraph (1) that the mdi-

4vidual entitled to old-age or disability insurance benefits be

5a curirently insured individual, and theprovisions of sub-

6paragraph (C) of such paragraph, shall not be applicable in

7the case of any husband who—

8 "(A) in the month prior to the month of his mar-

9 riage to such individual was entitled to, or on application

10 t1ierefor and attainment of retirement age in such prior

11 month would have been entitled to, benefits under sub-

12 section (f) or (h) ;or

13 "(B) in the month prior to the month of his mar-

14 riage to such individual had attained age eighteen and

15 was entitled to, or on application therefor would have

16 been entitled to, benefits under subsection (d) ."

17 (2) Section 216 (f) of such Act is amended to read as

18follows:

19 "(f)The term 'husband' means the husband of an

20individual, but only if(1) he is the father of her son or

21daughter,(2) he was married to her for a period of not

22less than three years immediately preceding the day on

23which his application is filed, or (3) in the month prior to

24the month of his marriage to her (A) he was entitled to,

25or on application therefor and attaimnent of retirement age 37

1in such prior month would have been entitled to, benefits

2 under subsection (f) or (h) of section 202, or (B) he had

3attained age eighteen and was entitled to, or on application

4therefor would have been entitled to, benefits under subsec-

5tion (d) of such section."

6 Widow's Insurance Benefits

7 (b)(1) Subparagraph (B,)of section 202 (e)(3)

8of such Act is amended by striking out "but she is not 9his. widow (as defined in section 216 (c))" and inserting

10in lieu thereof "which occurs within one year after such

11marriage and he did not die a fully insured individual".

12 (2) Section 216 (c) of such Act is amended to read as

13follows: 14 "(c) The term 'widow' (except when used in section 15 202 (i)) means the surviving wife of an individual, but 16 only if(1) she is the mother of his son or daughter, (2) 17 she legally adopted his son or daughter while she was married 18to him and while such son or daughter was under the ago 19 of eighteen,(3)11e legally adopted her son or daughter 20while she was married to him and while such son or daughter 21was under the age of eighteen, (4) she was married to him 22 at the time both of them legally adopted a child under the 23 age of eighteen, (5) she was married to him for a period of 24not less than one year immediately prior to the day on 25which he died, or (6) in the month prior to the month of 38

1 her marriage to him (A) she was entitled to, or on applica-

.2 tion therefor and attainment of retirement age in such prior

3monthwould have been entitled to, benefits under subsection

4 (e)or (h)of section 202, or (B) she had attained age

5eighteen and was entitled to,or on application therefor

6would have been entitled to, benefits under subsection (d)

7of such section."

8 Widower's Insurance Benefits

9 (c)(1) Section 202 (f)of such Act is amended by

10redesignating paragraph(2)as paragraph(3)and by

11adding after paragraph (1) the following new paragraph: 12 "(2)The requirement in paragraph(1)that the 13deceased fully insured individual also be a currently insured 14individual, and the provisions of subparagraph (D) of such 15paragraph, shall not be applicable in the case of any mdi- 16vidual who— 17 "(A) in the month prior to the month of his 18 marriage to such individual was entitled to, or on ap- 19 plication therefor and attainment of retirement age in 20 such prior month would have been entitled to, benefits

21 under this subsection or subsection (h); or 22 "(B)in the month prior to the month of hismar- 23 riage to such individual had attained age eighteen and 24 was entitled to, or on application therefor would have 25 been entitled to, benefits under subsection (d) ." 89 1 (2) Section 216 (g) of such Act is amended to read 2as follows: 3 "(g) The term 'widower' (except when used in section 4202 (i)) means the surviving husba.nd ofan individual, 5but only if (1) he is the father of her son or daughter, (2)

6he legally adopted her son or daughter while hewas married

7to her and while such son or daughter was under theage 8of eighteen,(3)she legally adopted his son or daughter 9while he was married to her and while suchson or daughter 10was under the age of eighteen, (4) he was married to her 11at the time both of them legally adopted a child under the 12age of eighteen, (5) he was married to her for a period of

13not less than one year immediately prior to the dayon which 14she died, or(6)in the month before the month of his 15marriage to her (A) hewas entitled tO, or on application 16therefor and attainment of retirementage in such prior 17 month would have been entitled to, benefits under subsec- 18tion (f) or (h) of section 202,or (B) he had attained age 19eighteen and was entitledto,or on application therefor 20would have been entitled to, benefits under subsection (d) 21of such section."

22 Definition of Wife 23 (d) Section 216 (b) of such Act is amended by striking 24out "or" at the end of the clause (1), and by inserting before

25the period at the end thereof: ",or(3) in the month prior 40

1to the month of her marriage to him (A) was entitled to,

2or on application therefor and attainment of retirement age

3in such prior month would have been entitled to, benefits

4under subsection(e)or(h)of section 202, or (B) had

5attained age eighteen and was entitled to, or on application

6therefor would have been entitled to, benefits under subsection

7 (d) of such section".

8 Definition of Former Wife Divorced

9 (e)Section 216 (d)of such Act is amended to read

10as follows:

11 "(d) The term 'former wife divorced' means a woman

12divorced from an individual, but only if (1) she is the mother

13of his son or daughter, (2) she legally adopted his son or 14daughter while she was married to him and while such soi' 15or daughter was under the age of eighteen, (3) he legally

16adopted her son or daughter while she was married to him

17and while such son or daughter was under the age of eighteen, 18or(4) she was married to him at the time both of them 19legally adopted a child under the age of eighteen." 20 Effective Date 21 (f) The amendments made by this section shall apply 22with respect to monthly benefits under section 202 of the

23SocialSecurity Act for months beginning after the date of 41

1enactment of this Act, but only if an application for such

2 benefits is filed on or after such date.

3ELIOrBILITY OF CETLD FOR DEPENDENTS OR SURVIVORS

4 BENEFITS

5 Definition of Child

6 SEc. 302. (a) Section 216 (e) of such Act is amended

7to read as follows:

8 "(e) The term 'child' means (1) the childor legally 9adopted child of an individual, and (2)in the case of a

10. living individual, a stepchild who has been such stepchild ii.for not less than three years immediately preceding the

12day on which application for child's benefits is filed, and

:1.3 (3) in the case of a deceased individual, a stepchild who 14has been such stepchild for not less, than one year immedi- 15ately preceding the day on which such individual died.For 16purposes of clause(1), a person shall be deemed, as of

17the date of death of an individual, to be the legally adopted 18child of such individual if'uch person was at the time of

19such individual's death living in such individual's household 20and was legally adopted by such individual's surviving spouse 21after such individual's death but before the end of two 22years after the day on which such individual died (39)or 23the date of enactment of this Act; except that this sentence 42

1shall not apply if at the time of such individual's death such

2person was receiving regular contributions toward his support

3fromsomeone other than such individual or his spouse, or 4 from any public or private welfare organizatiOn which fur-

5nishes services or assistance for children."

6 Effective Date

7 (b) The amenchnent made by this section shall apply

8with respect to monthly benefits under section 202 of the

9Social Security Act for months beginning after the date of 10 enactment of this Act, but only if an application for such

11benefits is ified on or after such date.

12 ELIGIBILITYOFREMARRIEDWIDOWS FORMOTHER'S

13 N81IEANEBENEFITS 14 SEc. 303. (40)(a) Section 202 (g) of the Social Secu- 15rity Act is amended by adding at the end thereof the follow- 16ing new paragraph: 17 "(3) In the case of any widow or former wife divorced

18of an individual— 19 "(A) who marries another individual, and 20 "(B) whose marriage to the individual referred to 21 in subparagraph (A) is terminated by his death but she 22 (41)s h4 widow as 4e4iie4 i Gection 24-6 -(-e3- is 23 not, upon filing application there for in the month in which he died would not be, entitled to benefits for such 43 1 month on the basi8 of hi8 wages and self-employment

2 income,

3the marriage to the individual referred to in clause(A) 4shail, for the purpose of paragraph (1), be deemed not to 5have occurred. No benefits shall be payable under thi sub- 6section by reason of the preceding sentence forany month 7prior to whichever of the following is the latest:(i)the 8 month in which the death referred to in subparagraph (B)

9of the preceding sentence occurs,(II)the twelfth month. 10before the month in which such widow or former wife

11divorced files application for purposes of this paragraph,

12or (iii) the month following the month in which this para-

13graph is enacted." 14(42)(b) The paragraph (3) added to such section 202 (g) 15by H. B. 5411, Eighty-fifth Congress, is hereby repealed

16effective with respecttobenefits payable for any month 17following the month in which this Act is enacted.

18 ELIGIBILITYFORPARENT'S INSUBANCF) BENEFITS 19 Provisions Relating to Eligibility 20 SEc,. 304. (a)(1) So much of section 202 (h)(1) of 21the Social Security Act as precedes subparagraph (A) is 22&mended to read as follows:

23 "(1) Every parent (as defined in this subsection) ofan 24individual who died a fully insured individual after 1939 25if such parent—". 44

1. (2) The amendment made by this subsection shall apply

2with respect to monthly benefits under section 202 of the

3Social Security Act for months beginning after the date. of

4enactment of this Act, but only if an application for such

5benefits is ified on or after such date.

6 Deaths Before Effective Date

7 (b) Whero—

8 (1) one or more persons were entitled (without

9 the application of . section202(j)(1)'of the Social

10 Security Act) to monthly benefits under section 202 of such Act for the month in which this Act is enacted on

12 the basis of the wages and self-employment income of an

13 individual; and

14 (2) a person isentitled to a parent's insurance

15 benefit under section 202(h)of the Social Security

16 Act for any subsequent month on the basis of such wages

17 and self-employment income and such person would 18 not be entitled to such benefit but for the enactment of 19 this section; and 20 (3) the total of the benefits to which all persons are

21 entitled under section 202 of the Social Security Acton 22 the basis of such wages and self-employment income for 23 such subsequent month are reduced by reason of the ap- 24 plication of section 203 (a) of such Act, 25then the amount of the benefit to which each such person 45

1 referred to in paragraph (1)of this subsection is entitled

2 for such subsequent month shall be increased, after the appli-

3 cation of such section 203(a), to the amount it would

4have been if no person referred to in paragraph (2) of this

5 subsection was entitled to a parent's insurance benefit for

6such subsequent month on the basis of such wages and self-

7employment income.

8Proof of Support in Cases of Deaths Before Effective Date

9 (c) In the case of any parent who would not be entitled

10to parent's benefits under section 202 (h) of the Social Secu-

11rity Act except for the enactment of this section, the require-

12ment in such section 202 (h) that proof of support be filed

13within two years of the date of death of the insured individual 14referred to therein shall not apply if such proof is filed withii 15the two-year period beginning with the first day of the month 16after the month in which this Act is enacted.

17 ELIGIBILITY FOB LUMP-StTM DEATH PAYMENTS 18 Requirement That Surviving Spouse Bea Member of 19 Deceased's Household

20 SEO. 305. (a) The first sentence of section 202(1) 21of the Social Security Act is amended by inserting "in the 22same household" after "living". 23 Provisions Relating to Widows and Widowers 24 (b) Section 216(h)of such Act is amended by 25striking out paragraph (3). 46 1 Effective Date 2 (c) The amendments made by this section shall apply 3in the case of lump-sum deathpayments under such section 4 202(i)on the basis of the wages and self-employment

5income of any individual who dies after the monthin which

6this Act is enacted.

7ELIGIBILITY OF DISABLED PERSONS FOB CHILD'SINSURANCE

8 BENEFITS

9 Provisions Relating to Dependency

10 SEc. 306. (a) Section 202 (d) of the SocialSecurity 11 Act is amended by striking out "who has not attained the 12age of eighteen" each place it appears in paragraphs (3), 13 (4), and (5) thereof, and by strikingout paragraph (6). 14 Effective Date

15 (b) The amendments made by thissection shall apply 16with respect to monthly benefitsunder section 202 of the 17Social Security Act for months beginningafter the date of 18enactment of this Act, but ouly ifan application for such 19benefits is ifiedon or after such date.

20 ELIMINATION OFMARRTAGE AS BASISFOETERMINATING

21 CERTAIN SURVIVORS BENEFITS 22 Child's Insurance Benefits

23 SEc. 307. (a) Section 202 (d) ofthe Social Security 24Act is amended by inserting immediatelyafter paragraph 25 (5) thereof the follOwingnew paragraph: 4?

1 "(6) In the case of a child who has attained the age of

2eighteen and who marries—

3 "(A)an individual entitled to benefits under sub- 4 section (a), (e),(f),(g), or (h)of this section or

5 under section 223 (a), or

6 "(B) another individual who has attained the age

7 of eighteen and is entitled to benefits under this sub-

8 section,

9such child's entitlement to benefits under this subsection 10shall, notwithstanding the provisions of paragraph (1), not 11be terminated by reason of such marriage; except that, in

12the case of such a marriage to a male individual entitled to

13benefits under section 223 (a) or this subsection, thepre-

14ceding provisions of this paragraph shallnotapply with 15respect to benefits for months alter the last month for which 16such individual is entitled to such benefits under section 223 17 (a) or this subsection unless (1) he ceases to beso entitled 18by reason of his (43)dcath death, or (II)in the case of an 19individual who was entitled tG benefits under section 223 20 (a), he is entitled, for the month following such last month, 21to benefits under subsection (a) of this section." 22 Widow's Insurance Benefits 23 (b) Section 202 (e) of such Act is amended by.insert- 24ing at the end thereof the following new paragraph: 25 "(4) In the case of a widow who marries— 48

1 "(A) an individual entitled to benefits under sub-

2 section (f) or (h) of this section, or

3 "(B) an individual who has attained the age of

4 eighteenand is entitled to benefits under subsection Id),

5such widow's entitlement to benefits under this subsection

6shall, notwithstandin'g the provisions of paragraph (1), not

7be terminated by reason of such marriage; except that, in

8the case of such a marriage to an individual entitled to

9benefits under subsection (d), the preceding provisions of 10this paragraph shall not apply with respect to benefits for 11months after the last month for which such individual is

12entitled to such benefits under subsection(d)unless he 13ceases to be so entitled by reason of his death." 14 Widower's Insurance Benefits 15 (c) Section 202 (f) of such Act is amended by adding 16at the end thereof the following new paragraph: 17 "(4) hi the case of a widower who marries— 18 "(A) an individual entitled to benefits under sub- 19 section (e), (g), or (h), or 20 "(B) an individual who has attained the age of 21 eighteen and is entitled to benefits under subsection (d), 22such widower's entitlement to benefits under this subsection 23shall, notwithstanding the provisions of paragraph(1), 24not be terminated by reason of such marriage." 49

1 Mother's Insurance Benefits

2 (d) Section 202 (g)ofsuch Act is amended by addhg 3after paragraph (3)(added by section 303 of this Act) 4the following new paragraph:

5 "(4) In the case of a widow or former wife divorced 6 who marries—

7 "(A) an individual entitled to benefits under sub-

8 section (a), (f), or (h), or under section 223 (a),or 9 "(B) an individual who has attained the age of 10 eighteen and is entitled to benefits under subsection (d), 11the entitlement of suóh widow or former wife divorced to

12benefits under this subsection shall, notwithstanding thepro- 13visiOns of paragraph (1), not be terminated byreason of 14such marriage; except that, in the case of sucha marriage 15to an individual entitled to benefits under section 223 (a) or 16subsection (d)of this section, the preceding provisions of 17this paragraph shall not apply with respect to benefits for 18months after the last month for which such individual is 19entitled to such benefits under section 223 (a) or subsection 20 (d)of this section unless (i) he ceases to be so entitled by

21reasonof his (44)deathdeath,or (ii)in the case of an in 22dividualwho was entitled to benefits under section 223 (a),

H. R. i.3549 4 50

1he is entitled, for the month following such last month, to

2benefits under subsection(a)of this section."

3 Parent's Insurance Benefits 4 (e) Section 202 (h) of such Act is amended by add-

5hag at the end thereof the following new paragraph:

6 "(4) In the case of a parent who marries—

7 "(A) an individual entitled to benefits under this

8 subsection or subsection (e), (f), or (g), or 9 "(B) an individual who has attained the age of

1.0 eighteen and is entitled to benefits under subsection

11. (d),

12such parent's entitlement to benefits under this subsection

13shall, notwithstanding the provisions of paragraph (1), not 14be terminated by reason of such marriage; except that, in 15the case of such a marriage to a male individual entitled 16to benefits under subsection (d), the preceding provisions 17of this paragraph shall not apply with respect to benefits 18for months after the last month for which such individual 19is entitled to such benefits under subsection (d) unless he 20ceases to be so entitled by reason of his death."

21. Deduction Provisions 22 (f)Subsection(c)of section 203 of such Act is 23amended by inserting "(1)" after "(c) ",byredesignating 24subparagraphs(1) and (2)as subparagraphs (A) and 25 (B),respectively, by striking out "paragraph (1)" and 51

1 'inserting in lieu thereof "subparagraph (A) ",andby add- 2ing at the end of such subsection the followingnew para- 3graph: 4 "(2) Deductions shall be m&Ie from any child's insur- 5ance benefit to which a child who has attained the age of 6eighteen is entitled or from any mother's insurance benefit 7to which a person is (45)entitlcd entitled, until the total of

8such deductions equals such child's insurance benefitor bene- 9fits or mother's insurance benefit or benefits under section 102029for any month— 11 "(A) in which such childor person entitled to

12 mother's insurancebenefitismarriedtoan mdi-

13 vidual entitled to old-age insurance benefits undersec.. 14, tion 202 (a) who is under theage of seventy-two and 15 for which month such individual is charged withany 16 earnings under the provisions of subsection (e)of this 17 section, or 18 "(B) in which such childor person entitled to 19 mother's insurance benefitsismarried to the mdi- 20 vidualreferred to in subparagraph (A) andon seven 21 or more different calendar days of which such mdi- 22 vidualengaged in noncovered remunerative activity out-

23 sidethe United States." 52

1Deductions on Account of Refusal To Accept Rehabilitation

2 Services

3 (g) Section 222 (b) of such Act is amended by insert-

4lug "(1)" after "(b)", and by adding at the end thereof

5the following new paragraph:

6 "(2) Deductions shall be made from any child's in

7surance benefit to which a child who has attained the age of

8eighteen is entitled or from any mother's insurance benefit

9to which a person is (46)cntitlcd entitled, until the total of

10such deductions equals such child's insurance benefit or:bené- iifits or (47) such mother's insurance benefit or benefits under

12section 202 for any month. in which such child or person en-

13titled to mother's insurance benefits is married to an individual 14 who is entitledto disability insurance benefits and in which 15such individual refuses to accept rehabilitation services and a 16deduction, On account of such refusal,is imposed under 17paragraph (1).If both this paragraph and paragraph (3) 18are applicable to a child's insurance benefit for any month, .19only an amount equal to such benefit shall be deducted." 2(1 Effective Date .21 (h)(1) The amendments made by this section (other 22than by subsections(f) and (g)) shall apply 'with respect 23to monthly benefits under section 202 .of the Social Security 24Act for months following the month in which this Act is 25enacted; except that in any case in which benefits were ter- 5.3

1minated with the close of the month in which this. Act is 2 enacted or any prior month and, if the amendments made by 3this section had been in effect for such month, such benefits 4 would not have been terminated, the amendments made by

5this section shall apply with respect to monthly benefits 6under section 202 of the Social Security Act for months 7beginning after the date of enactment of this Act, but only 8if an application for such benefits is filed after such date.

9 (2) The amendment made by subsection(f)shall ap- 10ply with respect to monthly benefits under (48)icction 2

11 -(-43-ehe Social Security 4e oi months iy taxable ycarj 12. ef 4he inilividualoithe basis e whoc wagcta4o1f cm

13ploymcnt income such benefits aie payabIesubsection(d) Or 14(g) of section 202 of the Social Security Act for mont/is in 15any taxable year, of the individual to whom the person en- 16titled to such benefits is married, beginning after the month 17in which this Act is enacted.

18 (3) The amendments made by subsection (g)shall 19apply with respect to monthly benefits under section 202 of 20the Social Security Act for months, occurring after the month

21in which this Act is enacted, in whicha deduction is incurred 22under paragraph (1) of section 222 (b) of the Social Se- 23curity Act. 54.

1 AMOUNT wmCU MAY BE EARNED WITif OUT LOSS OF

2 BENEFITS

3 So. 308. (a)Section 203(e)(2)of such Act is 4 amended by striking out"last month" and "preceding 5 month" wherever they appear and substituting in lieu thereof

6"first month" and "succeeding month", respectively.

7 (b) Section 203 (e)(3)(A) of such Act is amended

8by striking out "the term 'last month of such taxable year'

9means. the latest month" and substituting in lieu thereof 10"the term .'first month of such taxable year' means the

11earliest month".

12 (c) Subsections (e)(2)(D) and (e)(3)(B)(ii)

13of section 203 of such Act areeachamended by striking 14out "$80" and inserting in lieu thereof "$100". 15 (d) Section 203 (g)(1)of such Act is amended to 16read as follows: 17 "(g)(1)(A)If an individual isentitled to any 18monthly insurance benefit under section 202 duringany 19taxable year in which he has earningsor wages, as com- 20puted pursuant to paragraph(4)of subsection(e), in 21excess of the product of $100 times the number of months 22in such year, such individual (or the individualwho is in 23receipt of such benefit on his behalf) shall makea report to 24the Secretary of his earnings (or wages) for such taxable 25year.Such report shall be madeon or before the fifteenth 55

1day of the fourth month following the close of such year,

2and shall contain such information and be made in such

3manner as the Secretary may by regulations prescribe.Such

4report need not be made for any taxable year (i) beginning

5with or after the month in which such individual attained

6the age of 72, or (II)if benefit payments for all months (in

7such taxable year) in which such individual is under age 72

8have been suspended (49)4ei a14 such months e such year

9under the provisions of the first sentence of paragraph (3)

10of this subsection. U "(B) If the benefit payments of an individual have

12been suspended for all months in any taxable year under

13the provisions of the first sentence of paragraph (3) of sub- 14section(g), no benefit payment shall be made to such 15individual for any such month in such taxable year after the 16expiration of the period of three years, three months, and 17fifteen days following the close of such taxable year unless 18within such period the individiml, or some other person 19entitled to benefits under this title on the basis of the same 20wages and self-employment income, files with the Secretary 21information showing that a benefit for such month is payable 22to such individual."

23 (e) Section 203 (1) of such Act is amended by striking 24out "(g)" and inserting in lieu thereof "(g)(1)(A)". 25 (f) The amendlnent3 made by this section shall be 56

.1 applicable with respect to taxable years beginning after the

2month in which this Act is enacted.

3 REPRESENTATION OF OLAIMANTS BEFORE SECRETARY OF

4 FFF1ATkTH, EDUOATION, AND WELFARE

5 SEc. 309. The second sentence of section 206 of the

6Social Security Act is amended by striking out "upon filing

7with the Administrator a certificate of his right to so practice sfromthe presiding judge or clerk of any Such court".

9. OFFENSES 1ThtDER TITLE II or THE SOOIAL SEOUIUTY ACT Sic. 310. Section 208 of the Social Security Act is

jjamendedto read as follows:

12 "PENALTIES "SEc. 208. Whoever—

14 "(a) for the purpose of causingan increase in any 15 payment authorized to be made under this title, or for

16 the purpose of causing any payment to be made where

17 no payment is authorized under this title, shall make or 18 cause to be made any false statement or representation

19 (including any false statement or representation incon- 20 nection with any matter arising under subchapter E of 21 chapter 1, or subchapter A or E of chapter 9 of the 22 Internal Revenue Code of 1939, or chapter 2or 21 or

23 subtitle F of the Internal Revenue Code of 1954)as to— 24 "(1) whether wages were paidor received for 25 employment (as said terms are defined in this title• 57

.1 and the Internal Revenue Code), or the amount of

2 wages or the period during which paid or the person

3 to whom paid; or

4 "(2) whether net earnings from self-employ-

5 ment (as such term is definedin this title and in the

6 internal Revenue Code) were derived, or as to

7 the amount of such net earnings or the period dur-

8 ing which or the person by whom derived; or

9 "(3) whether a person entitledtobenefits

10 under this title had earnings in. or for a particular

11 period(as determined under section• 203(e)of

12 this title for purposes of deductions from benefits),

13 or as to the anóunt thereof; or 14 "(b) makes or causes to be made any false state- 15 ment or representation of a mathriai fact in any appli- 16 cation for any payment or for a disability determination

17 underthis title; or "(c) at any time makes or causes to be made any 19 false statement or representation of a material fact for 20 use in determining rights to payment under this title; or 21 "(d) having knowledge of the occurrence ofany 22 event affecting (1) his initial or continued right to any 23 payment under this title, or (2) the initial or continued 24 right to any payment of any other individual in whose 25 behalf he has applied for or is reèeiving such payment, 58

1 conceals or fails to disclose such event with an intent

2 fraudulently tosecure payment either in a greater

3 amount than is due or when no payment is authorized; 4 or

5 "(e) having made application to receive payment

6 under this title for the use and benefit of another and

7 having received such a payment, knowingly and willfully.

8 converts such a payment, or any part thereof, to a use

9 other than for the use and benefit of such other person;

10shall be guilty of a misdemeanor and upon conviction thereof IIshall be fined not more than $1,000 or imprisoned for not

12more than one year, or both."

13 (50)810K LEAVEPAY STAT]3 AND LOCAL EMPLOYBE

14 SiOT 311. -(-a-)- S bseetiei -ofsection 2O of the Social 15Seeurity Aet is amended by inserting immediately before 16the ocmicolon a pcriod afid the following: As used in this 17subscction, the term 'sick pay ineludcs cmuncration fe 18eervice in the cmploy of a State, ei a political subdivision 19-(-as defined in section .24 -(.133-(2))of a State, ei fi 20instrumentality of two o more States, paid to a employee 21thereof fer a period during which he was absent from work 22because of sickncs' 23 -fh)- !1he amendment made by subsection -(a)- shall be 24applicable to remuneratiea paid after the enactment of this 25Act,. except that, in the ease of fifi coverage group which 59

1is included under the agreement of a State under section 24S

2of the Social Security Act, the amcndmcnt made by subsection

3-(-a3- shall also be applicable to remuneration fe any member

4of such covcragc group with respect to services performed

5 alterthe eflcctive date specified in such agrccmcnt, fei' such

6coverage group, if such State has paid Of agrees, prior to Jan

7uary 4 1959, to pay, prior to such date, the amounts which

8under section 2-1-8 -(-e3- would have been payable with respect

9to remuneration of all members of such coverage group had

10the amendment made by subsection -(4beenin effect en and

11after January 1- 105i- Failure by a State to make such 12 payments prior to January 1- 1959k shall be treated the same

13as £aihwe to make payments when 4ne under section 2-1-8 (e).

14EXTENSIONOF COVERAGE IN CONNECTION WITH GUM RESLN

15 PRODUCTS

16 SEC. (51)312 311.(a) Section 210 (a)(1)of the

17Social Security Act is amended to read as follows:

18 "(1)Service performed by foreign agricultural

19 workers(A) under contracts entered into in accord-

20 ance with title V of the Agricultural Act of 1949, as

21 amended, or (B) lawfully admitted to the United States

22 from the Bahamas, Jamaica, and the other British

23 West Indies, or from any other foreign country or

24 possession thereof, on a temporary basis to perform

25 agricultural labor;". 60

1 (b) The amendment made by subsection (a) shall apply

2 with respect to service performed after 1958.

3 EMPLOYMENT FOR NONPROFIT OROANIZATION

4 SEC.(52)313 312.(a)Section 210 (a)(8)(B) of

5 title II of the Social Security Act is amended to read as

6follows:

7 "(B) Service performed in the employ of a reli-

8 gious, charitable, educational, or other organization de-

9 scribed in section 501 (c)(3) of the Internal Revenue

10 Code of 1954, which is exempt from income tax under

11 section 501(a).of such Code, but this subparagraph

12 shall not apply to . erviceperformed during the period

13 for which a certificate, filed pursuant to section 3121 14 (k) of the Internal Revenue Code of 1954, is in effect 15 if such service is performed by an employee— 16. "(i) whose signature appears on the list filed

17 by such organization under such section 8121 (k), 18 "(II) who became an employee of such organi- 19 zation after the calendar quarter in which the cer- 20 tificate (other than a certificate referred to in clause

21 (iii)) was filed, or 22 "(iii) who, alter the calendar quarter in which 23 the certificate was ified with respect to a group 24 described in paragraph(1)(E) of such section 2 3121 (k), became a member of such group, 61

1 except that this subparagraph shall apply with respect

2 to service performed by an employee as a member of 3 a group described in such paragraph (1)(E) with 4 respect to which no certificate is in effect;".

5 (b) The amendment nmde by subsection(a)shall

6apply with respect to certificates ified under section 3121

7 (k)(1) of the Internal Revenue Code of 1954 after the

8date of enactment of this Act.

9PARTNER'S TAXABLE YEAR ENDING AS RESULT OF DEATH

10 SEc. (53)314 313.(a)Section 211 of the Social

11Security Act is amended by adding at the end thereof the

12following new subsection:

13 "Partner's Taxable Year Ending as Result of Death 14 "(1) In computing a partner's net earnings from self- 15employment for his taxable year which ends as a result of his 16death (but only if such taxable year ends within, and not 17with, the taxable year of the partnership), there shall be in 18cluded so much of the deceased partner's distributive share

19ot the partnership's ordinary income or loss for the partner- 20ship taxable year as .is not attributable to an interest in the 21partnership during any period beginning on or. after the first 22day of the first calendar month following the month in which 23such partner died. For purposes of this subsection— 24 "(1) in determining the portion of the distributive 25 share which is attributable to any period specified in the 62

1 preceding sentence, the ordinary income or loss of the

2 partnership shall be treated as having been realized or

3 sustained ratably over thepartnershiptaxable year; and

4 "(2)the term 'deceasedpartner'sdistributive

5 share' includes the share of his estate or of any other

6 person succeeding, by reason of his death, to rights with

7 respecb to his partnership interest."

8 (b) The amendment made by subsection(a)shall 9 apply—

10 (1) with respect to individuals who die after the ii. date of the enactment of this Act, and

12 (2) with respect to any individual who died after

13 1955 and on or before the date of the enactment of this

14 Act, but only if the requirements of section 403 (b) (2)

15 of this Act are met.

16 GRATUITOUS WAGE CREDITS FOB AMERICAN CITIZENS WHO

17 SERVED IN THEARMED FORCESOP ALLIEDCOUNTRIES

18 General Rule 19 SEc. (54)315 314.(a)Section 217 of such Act is

20amended by adding at the end thereof the followingnew 21subsection: 22 "(h)(1) For the purposes of this section (55)and

23rcction 24-5-(-cl),any individual who the Secretary finds— 24 "(A) served during World War II (as defined in 25 subsection(d)(1))in the active military or naval 63

1 service of a country which was on September 16, 1940,

2 at war with a country with which the United States

3 wasatwar during World War II;

4 "(B) entered into such active service on or before

5 December 8,1941;

6 "(0) was a citizen of the United States through-

7 out such period of service or lost his United States

8 citizenship solely because of his entrance into such

9 service;

10 "(D) had resided in the United States for a period ii. or periods aggregating four years during the five-year

12 period ending on the day of, and was domiciled in the

13 United States on the day of, such entrance into such

14 active service; and

15 "(E)(i)was discharged or released from such

16 service under conditions other than dishonorable after

17 active service of ninety days or more or by reason of a

18 disability or injury incurred or aggravated in service in

19 llneofduty,or.

20 "(ii) died while in such service,

21shall be considered a World War II veteran (as defined in

22subsection (d)(2)) and such service shall be considered

23to have been performed in the active military or naval serv-

24ice of the United States.

25 "(2) In the case of any individual to whom paragraph 64

1 (1)applies, proof of support required under section 202

2(56)(f) or (h) may be filed (57)y &parentat any time

3prior to the expiration of two years after the date of such 4individual's death or the date of the enactment of this sub-

5section, whichever is the later."

6 Reimbuisment to Disability Insurance Trust Fund

7 (b)(1) Section217 (g) (1)of the Social Security 8 Act is amended by deleting "Trust Fund" and inserting in

9lieuthereof "Trust Funds". 10 (2) Section 217 (g)(2) of the Social Security Act is 11 amended by deleting "the Trust Fund" each time it appears

12therein and inserting in lieu thereof "the Federal Old-Age 13 and Survivors Insurance Trust Fund" the first time and 14"such Trust Fund" the other times. 15 Effective Date 16 (c)(1)The amendment made by subsection(a) 17shall apply only with respect to(A) monthly benefits 18under sections 202 and 223 of the Social Security Act for 19months after the month in which this Act is enacted, (B) 20lump-sum death payments under such section 202 in the 21case of deaths occurring after the month in which this Act 22is enacted, and (0) periods of disability under section 216 23 (i) in the case, of applications for a disability determination 24filed after the month in which this Act is enacted. 65

1 (2) In the case of any individual—

2 (A) who is a World War II veteran (as defined in section 217 (d)(2)of the Social Security Act)

4 wholly or partly by reason of service described in section 217 (h)(1)(A) of suchAct; and

6 (B) who (i) became entitled to old-age insurance

7 benefits under section 202 (a)of the Social Security Act or to disability insurance benefits under section 223

of such Act prior to the first dayothe month follow-

10 ingthe month in which this Act is enacted,or(ii) died prior to such first day, and whose widow, former

12 wifedivorced, widower, child, or parent is entitled for

13 the month in which this Act is enacted,on the basis of 14 his wages and self-employment income, toa monthly

15 benefit under section 202 of such Act; and

16 (C)any part of whose service described in sectiOn

17 217(Ii)(1)(A) of the Social Security Actwas not

18 includedin the computation of his primary insurance

19 amountunder section 215 of such Act but would have

20 been included in such computation if the amendment

21 madeby subsection (a) of this section had been effective

22 prior to the date of such computation,

23the Secretary of Health, Education, and Welfare shall,not-

H. R. 13549 5 66

1 withstanding the provisions of section 215 (f)(1)of the

2SocialSecurity Act, recompute the primary insurance

3amount of such individuai upon the filing of an application,

4after the month in which this Act isenacted, by him

5or(if he has died without filing such an application) by

6any person entitled to monthly benefits undersection 202

7of the Social Security Act on the basis of his wages and

8self-employment income. Such recomputation shall be made

9only in the manner provided in title II of the Social Security 10 Act as in effect at the time of the last previous computation

1.1. or recomputation of such individual's primaryinsurance

1.2 amount, and as though application therefor was ified in the.

1.3 month in which application for such last previous computar

1.4 tion or recomputation was filed.No recomputation made

15under this subsection shall be regarded as a recomputation

1.6 under section 215 (f) of the Social Security Act. Anysuch

1.7 recomputation shall be effective for and after the twelfth

1.8 month before the month in which the application is filed, but

1.9 in no case for the month in which this Act is enacted or

20any prior month.

21POSITIONS COVERED BY STATE AND LOCAL RETIREMBNT

22 SYSTEMS

23 Division of Retirement Systems

24 SEc...(58)316 315.(a)(1) Section 218 (d)(6) of

25the Social Security Act is amended to read as follows: 67

1 "(6)(A) If a retirement system covers positions of 2 employees of the State and positions of employees ofone o 3more political subdivisions of the State, or covers positions 4of employees of two or more political subdivisions of the

5State, then, for purposes of the preceding paragraphs of this

6subsection, there shall, if the Stateso desires, be deemed to 7be a separate retirement system with respect toany one or

8more of the pollticiil subdivisions concerned and, where the

9retirement system covers positionsof employees of the

10State, a separate retirement system with respect to the State

11or with respect to the State and any one or more of the

12political subdivisions concerned.

13 "(B) If a retirement systemcovers positions of em- 14ployees of one or more institutions of higher learning, then, 15for purposes of such preceding paragraphs there shall, if the

16State so desires, be deemed to be a separate retirementsys- 17tem for the employees of each such institution of higher 18leariiing.For the purposes of this subparagraph, the term 19'institutions of higher learning' includes junior colleges and 20teachers colleges.

21 "(0)Forthepurposesofthissubsection,any 22retirement system established by the State of California. 23Connecticut, Florida, Georgia, Massachusetts, Minnesota,

24 New York, North Dakota., Pennsylvania, Rhode Island,Ten- 25nessee (59)Vermont, Washington, Wisconsin, or the Tern- 68

1 tory of Hawaii, or any political subdivision of any such State

2or Territory, which, on, before, or after the date of enactment

3of this (6O)subparagraph subparagraph, is divided into two

4divisions or parts, one of which is composed of positions of

5members of such system who desire coverage under an agree-

6ment under this section and the other of which is composed of

7positions of members of such system who do not desire such

8coverage, shall, if the State or Territory so desires and if it is

9provided that there shall be included in such division or part

10composed of members desiring such coverage the positions of 11individuals who become members of such system after such 12coverage is extended, be deemed to be a separate retirement

13system with respect to each such division or part. 14 "(D) The position of any individual which is covered by 15any retirement system to which subparagraph (C) is appli- 16cable shall, if such individual is ineligible to become a mem- 17ber of such system on August 1, 1956, or, if later, the day 18he first occupies such position, be deemed to be covered 19by the separate retirement system consisting of the positions 20of members of the division or part, who do not desire cover- 21age under the insurance system established under this title. 22 "(E) An individual who is in a position covered by a. 23retirement system to which subparagraph (0) is applicable 24and who is not a member of such system but is eligible to 69

1become a member thereof shall, for purposes of this subsec-

2tion (other than paragraph (61)(8)-)- (8)),beregarded as a

3member of such system; except that, in the case of anyretire- 4. ment system a division or part of which is covered under the 5agreement (either in the original agreement or by a modi-

6fication thereof), whichcoverageis agreed to prior to 1960,

7the preceding provisions of this subparagraph shall apply

8only if the State so requests and any such individualre-

9ferred to in such preceding provisions shall, if the StateSO 10requests, be treated, after division of the retirement system 11pursuant to such subparagraph (0), the same as individuals 12in positions referred to in subparagraph (F).

13 "(F) In the case of any retirement system dividedpur- 14suant to subparagraph (0), the position of any member of 15the division or part composed of positions of members who 16do not desire coverage may be transferred to the separate 17retirement system composed of positions of members who 18desire such coverage if it is so provided in a modification of 19such agreement which ismailed, or delivered by other 20means, to the Secretary prior to 1960 or, if later, the expira—

21tion of one year after the date on which such agreement,or 22the modification thereof making the agreement applicable to 23such separate retirement system,as the case may be, is 24agreed to, but only if, prior to such modification or such 70

1later modification, as the case may be, the individual occu-

2pying such position files with the State a written request

3for such transfer. 4 "(G) For the purposes of this subsection, in the case

öof any retirement system of the State of Florida, Georgia,

6Minnesota, North Dakota, Pennsylvania, Washington, or

7the Territory of Hawaii which covers positions of employees

8of such State or Territory who are compensated in whole

9or in part from grants made to such State or Territory under

10title III, there shall be deemed to be, if such Stateor Tern-

11tory so desires, a separate retirement system with respect to

12any of the following:

13 "(i) the positions of such employees; 14 "(ii) the positions of all employees of such State 15 or Territory covered by such retirement system who are 16 employed in the ãepartment of such Stateor Territory

17 in which the employees referred to in clause(i)are 18 employed; or 19 "(lii) employees of such Stateor Territory coy- 20 ered by such retirement system whoare employed in 21 such department of such State Or Territory in positions 22 other than those referred to in clause(i) ." 23 (2) Paragraph (7) of section 218 (d) of suchAct is

24aniended by striking out "(created under the fourthsentence 25of paragraph (6))" and inserting in lieuthereof "(created 71

1under subparagraph (C)of paragraph (6)or the corre-

2 sponding provision of prior law) ";andby striking out "the

3fourth and fifth sentences of paragraph (6)" and inserting

4in lieu thereof "subparagraphs (0) and (D) of paragraph

5 (6) (62)or the corresponding provision of prior law".

6 (3) The second sentence of paragraph (2)of section

7218 (k)of such Act is amended by strikingout"the pro-

8ceding sentence" and inserting in lieu thereof "the first sen-

9tence of this paragraph".The last sentence of such para- 10 graph is. amended by striking out "the fourth sentence of

11subsection(d)(6)" and inserting in lieu thereof "sub- 12paragraph (C)of subsection(d)(6) (63)or the corre-

13sponding provisionofpriorlaw".Such paragraphis 14further amended by inserting after the first sentence the 15following new sentence: "An individual who is in a position 16covered by a retirement system divided pursuant to the 17preceding sentence and who is not a member of such system 18but is eligible to become a member thereof shall, for purposes 19of this subsection, be regarded as a member of such system. 20Coverage under the agreement of a.ny such individual shall 21be provided under the same conditions, to the extent prac- 22ticable, as are applicable in the case of the States to which 23the provisions of subsection (d)(6)(C) apply."

24 Oovera.geUnder Other Retirement Systems 72

1 (b) Section 218 (d) of such Act is amended by adding

2at the end thereof the following new paragraph: "(8) (A) Notwithstanding paragraph (1), if under the

4provisions of this subsection an agreement is, after December 31, 1958, made applicable to service performed in positions

6covered by a retirement system, service performed by. an individual in a position covered by such a system may not be

8excluded from the agreement because suth position is also covered under another retirement system.

10 "(B) Subparagraph (A)shAll not apply to service performed by an individual in a position covered under a

12retirement system if such individual, on the day the agree-

13ment is made applicable to service performed in positions coy-

14eredby such retirement system, is not a. member of such

15systemand is a. member of another system.

16 "(0) If an agreement is made applicable, prior to 1959,

17to service in positions covered by any retirement system, the

18preceding provisions of this paragraph shall be applicable

19in the case of such system if the agreement is modified to so

20provide.

21 "(D) Except in the case of agreements with the States

22namedin subsection(p)Sand agreements with interstate

23instrumentaiities,nothing in this paragraph shall authorize 73

1 the application of an agreement to service in any policeman's

2or fireman's position."

3 Retroactive Coverage

4 (c)(1)Section 218(f)of such Act is amended

5 by inserting "(1)" immediately after "(f) ",byredesignat-

6ing clauses (1), (2), (3), and (4) thereof as clauses (A),

7 (B), (C), and (D), respectively, and by adding at the

8end thereof the following new paragraph:

9 "(2) in the case of service performed by members

10of any coiverage group—-

11 "(A) to which an agreement under this section

12 is made applicable, and

13 "(B) with respect to which the agreement, or

14 modification thereof making the agreement so applicable,

15 specifiesan effectivedate earlier than the date of execu-

16 ionofsuch agreement and such modification,re-

17 spectively,

18the agreement shall, if so requested by the State, be ap-

19plicable to such services(to the extent the agreement was

20not a.1ready applicable) performed before such date of execu-

21tion and after such effective date by any individual as a 22 member of such coverage group if he is such a member on

23a date, specified by the State, which is earlier than such date 74

1of execution, except that in no case may the date so specified 2be earlier than the date such agreement or such modification,

3as the case may be, is mailed, or delivered by other means, 4to the Secretary."

5 (2) The amendment made by this subsection shallap-

6ply' in the case of any agreement, or modification ofan 7agreement, under section 218 of the Social Security Act, 8which is executed after the date of enactment of this Act.

9 (64)TEACHERS IN THE STATE OF MAINE 10 SEC. 316. For the purposes of any modification which 11miqht be made after the date of enactment of this Act and

12.prior to July 1, 1960, by the State of Maine of its existing 13agreement made under section 218 of the Social Security

14Act, any retirement system of such State whichcovers posi- 15tionsof teachers and positions of other employees shall, if

16such State so desires, be deemed (notwithstanding thepro- 17visions of subsection (d) of such section)to consist of a 18separate retirement system with respect to the positions 0f

19such teachers and a separate retirement system withrespect

20to the positions of such other employees; and for thepurposes 21of this sentence, the term "teacher" shallmean any teacher, 22principal, supervisor, schoolnurse, school dietitian, school 75

1secretary or superintendent employed in any public school,

2including teachers in unorganized territory.

3(65)roLIci]mnNADFIREMEN OI' TNTEItTATB INTllU

4 MENTALITIES

5 SEO317.Subscction -Ek)-esection 2-18 ef .the Social

6Security Are is amended by adding at 1±e end thcrcof he

7Tollowingewparagraph:

8 "(3)Anyagrccmcntwith aiy instrurncntality e wo 9 o more States etcrcd ii4e pursuant o hs Ae may,

10notwithstanding he provisions e ubscc -(4)- -f&)-(A) and he rcfcrcncc thereto iii subsections -(-4)- -(4-)- aii4 -(4)-

12(3), apply e ocrvice pcrformcd by cmployccs e such -

13trumcntality iii ay policeman's 6ffircman'sposition covcrcd 14 by a rctircmcnt system b* e4y upon compliance, o the

15cxtcnt practieablc, withthe rcguircmdntef subscetion -(43-

16 (3). Fo the purposc of he prccedigscntcnee rctirc

17mcnt sytcm which covers positions of policemen e fircmcn,

18Ofbethi4 other positiei shall i4 the instrumdntality eon-

19ccrncd desires, be decmcd o be a separate rctircmcnt 20t3ytcm with rcspcet e .the positions of such policcmcn Of

21fircmcn, oi both, as the ease may be 76

1TITLE IV—AMENDMENTS TO THE INTERNAL

2 REVENUE CODE OF 1954

3 CHANGES IN TAX SCHEDULES

4 Self-Employment Income Tax

5 SEC. 401.(a)Section 1401 of the Internal Revenue

6Code of 1954 (relating to rate of tax on self-employment

7income) is amended to read as follows:

8"SEC. 1401. RATE OF TAX.

9 "In addition to other taxes, there shall be imposed for

10each taxable year, ou the self-employment income ofevery

11individual, a tax as follows:

12 "(1) in the case of any taxableyear beginning

13 after December 31, 1958, and before January 1, 1960,

14 the tax shall be equal to 3* percent of theamount of 15 the self-employment income for such taxableyear; 16 "(2) in the case of any taxableyear beginning after 17 December 31, 1959, and before January 1, 1963, the 18 tax shall be equal to 4+ percent of the amount of the 19 self-employment income for such taxableyear; 20 "(3) in the case of any taxableyear beginning

21 after December 31, 1962, and before January 1,1966, 22 the tax shall be equal to 5+ percent of. theamount of 23 the self-employment income for such taxableyear; 24 "(4) in the case of any taxableyear beginning

after December 31, 1965, and before January 1,1969, 77

1 the tax shall be equal to 6 percent of the amount of 2 the self-employment income for such taxableyear; and 3 "(5) in the case of any taxable year beginning 4 after December 31, 1968, the tax shall be equal to

5 6-i- percent of the amount of the self-employment income

6 for such taxable year."

7 Tax on Employees 8 (b) Section 3101 of such Code (relating to rate of tax 9on employees under the Federal Insurance Oontribntion 10Act) is amended to read as follows:

11"SEC. 3101. RATE OF TAX.

12 "In additioii to other taxes, there is hereby imposed 13.on the income of every individuai a tax equal to the follow- 14ing percentages of the wages (as defined in section 3121

15 (a))received by huin with respect to employment(as 16defined in section 3121 (b) )— 17 "(1) with respect to wages received during the 18 calendar year 1959, the rate shall be 2+ percent; 19 "(2) with respect to wages received during the

20 calendar years 1960 to 1962, both inclusive, therate 21 shall be 3 percent; 22 "(3) with respect to wages received during the 23 calendar years 1963 to 1965, both inclusive, the rate 24 shall be 3f percent; 25 "(4) with respect towages received during the 78

1 calendar years 1966 to 1968, both inclusive, the rate

2 shall be 4 percent; and

3 "(5) with respect to wages received after Decem-

4 ber 31, 1968, the rate shall be 4+ percent."

5 Tax on Employers

6 (c) Section 3111 of such Code (relating to rate of tax

7on employers under the Federal InsuranceContributions

8Act) is amended to read as follows:

9"SEC. 3111. RATE OF TAX.

10 "In addition to other taxes, there is hereby imposed on

11every employer an excise tax, with respect to having mdi-

12viduals in his employ, equal to the following percentages of

13the wages (as defined in section 3121 (a.))paid by him

14with respect to employment (as defined in section 3121

15 (b))—

16 "(1) with respect to wages paid during the calen-

17 dar year 1959, the rate shall be 2f percent;

18 "(2) with respect to wages paid during the calen-

19 dar years 1960 to 1962, both inclusive, the rate shall be

20 3 percent;

21 "(3) with respect to wages paid during the calen-

22 dar years 1963 to 1965, both inclusive, the rate shall be

23 3+ percent;

24 "(4) with respect to wages paid during the calen- 79

1 dar years 1966 to 1968, both inclusive, therate shall be 2 4 percent; and

3 "(5) with respect towages paid after December 4 31, 1968, the rate shall be4+ percent." 5 Effective Dates

6 (d)The amenthnent made, by subsection(a)shall 7apply with respect to taxableyears beginning after Decem- 8ber 31, 1958.The amendments made by sub8ections (b) 9and (c) shall apply with respectto remuneration paid after 10 December 31, 1958.

11 INCREASE IN TAXBASE 12 Definition of Self-Employment Income

13 Sro. 402. (a) (1) Subparagraph (B)of section 1402 14 (b)(1) of the Internal Revenue Code of1954 is amended 15to read as follows:

16 "(B) for any taxableyear ending alter 1954 17 and before1959,(i)$4,200, minus(ii)the 18 amount of the wages paid to such individual during 19 the taxable year; and".

20 (2) Paragraph (1) of section 1402 (b)of such Code 21is further amended by addingat the endthereofthe following 22new subparagraph:

23 "(C) for any taxableyear ending after 1958, 80

1 (i)$4,800, minus (II)the amount of the wages

2 paid to such individual during the taxable year; or".

.3 Definition of Wages

4 (b) Section 3121 (a)of such Code (relating to the

5definition of wages) is amended by striking out "$4,200"

6wherever it appears and inserting in lieu thereof "$4,800".

7 Federal Service

8 (0)Section3122 of such Code (relating to Federal

9service)is amended by striking out "$4,200" wherever it

10appears and inserting in lieu thereof "$4,800".

11 Refunds

12 (d)(1) Paragraph (1)of section 6413 (c)of such

13Code is amended to read as follows:

14 "(1) I GENERAL.—Ifbyreason of an emplpyee

15 receiving wages from more than one employer during a

16 caiendar year after the oaiendM year 1950 and prior to

17 the calendar year 1955, the wages received by him du.ring

18 such year exceed $3,600, the employee shall be entitled

19 (subject to the provisions of section 31 (b)) to a credit

20 or refund of any amount of tax, with respect to such

21 wages, imposed by section 1400 of the Internal Revenue

22 Code of 1939 1and deducted from the employee's wages

23 (whether or not paid to the Secretary or his delegate),

24 which exceeds the tax with respect to the first $3,600

25 of such wages received; or if by reason of an employee 1 receiving wages from more thanone employer (A)

2 during any calendar year after the calendaryear 1954 and prior to the calendar year 1959, thewages received by him during such year exceed $4,200, or (B) during

5 anycalendar year after the calendar year 1958, the

6 wages received by him duringsuchyear exceed

7 (4343)$4,800, the employee shall be entitled (subject to the

8 provisions of section 31 (b)) to a creditor refund of

9 any amount of tax, with respect to such wages, imposed

10 by section 3101 and deducted from the employee's wages (whether or not paid to the Secretary or his

12 delegate), which exceeds the tax with respect to the

13 first $4,200 of such wages received in such calendar 14 year after 1954 and before 1959, or which exceeds the

15 tax with respect to the first $4,800 of suchwages

16 received in such calendar year after 1958."

17 (2) Subparagraph (A)of section 6413 (c)(2)of

18such Oode is amended to read as follows:

19 "(A) FEDERAL EMPLOYEES.—In thecase of 20 remuneration received from the United Statesor a 21 wholly owned instrumentality thereof duringany 22 calendar year, each head of a Federalagency or 23 instrumentality who makes a return pursuant to

24 section 3122 and each agent, designated by the head

H. R. 13549 6 82 I of a Federal agency or instrumentality, who makes

2 a return pursuant to such sectionshall, for purposes

3 of this subsection, be deemed a separate employer,

4 and the term 'wages' includes for purposes of this subsection the amount, not to exceed $3,600 for the

6. calendar year 1951, 1952, 1953, or 1954, $4,200 for the calendar year 1955, 1956, 1957, or 1958,

8 or $4,800 for any calendar year after 1958,dter-

9. mined by each such head or agent as constituting

10 wages paid to an employee,"

11 Effective Date

12 (e) The amendments made by subsections (b) and (c)

13..shall be applicable only with respect to remuneration paid

14after 1958.

15PARTNER'S TAARLE YEAR ENDING AS RESULT OF DEATH

16 General Rule

17 SEc. '403.(a)Section 1402 of the Internal Revenue

18Oode of 1954 is amended by adding at the end thereof the

19'following new subsection: 20 "(.f)PARTNER'S TAXABLE YEA1. ENDING AS THE

21RESULT OF DEATH—In computing a partner's net earnings

22,fromself-employmentfor his taxable year which ends as a 23resuilt of his death (but only i such taxable year ends within, 24and not with, the taxable rear of the partnership), there 25shall be included so much of the deceased partner's distribu- 83

1tive share of the partnership's ordinary income or loss for

2 the partnership taxable year as isiot attributable to an

3interest in the partnership during any period beginningon

4or after the first day of the first calendar month following

5the month in which such partner died.1or purposes of this

6subsection—

7 "(1) in determining the portion of the distributive

8 -sharewhich is attributable to any period specified in the

9 preceding sentence, the ordinary income or loss of the

10 partnership shall be treated as having been realized or

11 sustained ratably over the partnership taxable year; and

12 "(2) theterm'deceasedpartner'sdistributive

13 share' includes the share of his estate or ofany other 14 person succeeding, by reason of his death, to rights with 15 respect to his partnership interest." 16 Effective Date 17 (b)(1) Except as provided in paragraph(2), the 18 amendment made by subsection(a)shall apply only with 19respect to individuals who die after the date of the enact- 20 ment of thisAct. 21 (2) In the case of an individual who died after 1955 and 22on or before the date of the enactment of this Act, the amend- 23 ment made by subsection (a)shall apply only if— 24 (A) before January 1, 1960, there is filed a return 25 (or amended return)of the tax imposed by chapter 2 84

1 of the Internal Revenue Code of 1954 for the taxable

2 year ending as a result of his death, and

3 (B) in any case where the return is filed solely

4 for the purpose of reporting net earnings from self-em-

5 ployment resulting from the amendment made by sub-

6 section (a), the return is accompanied by the amowit

7 of tax attributable to such net earnings.

8In any case described in the preceding sentence, no interest

9orpenalty° shall be assessed or collected on the amount of

10any tax due under chapter 2 of such Codesolely by reason

11of the operation of section 1402 (f) of such Oode.

12 SERVICE IN CONNECTION WITHGUMRESIN PRODUCTS

13 SEc. 404.(a)Section 3121 (b)(1) of theInternal 14Revenue Code of 1954 (relating to definition of employ- 15ment) is amended to read as follows: 16 "(1)service performed by foreign agricultural 17 workers (A) under contracts entered into in accord- 18 ance with title V of the Agricultural Act of 1949, a 19 amended (65 Stat. 119; 7 U. S. 0. 1461—1468), or 20 (B) lawfully admitted to the United States from the 21 Bahamas, Jamaica, and the other British West Indies, 22 or from any other foreign country or possession thereof, 23 on a temporary basis to perform agricultural labor;". 24 (b) The amendment made by subsection(a)shall 25apply with respect to service performed after 1958. 85

I NO1PBOFLT OBGANIZATION'S WAIVERCERTIFICATES

2 SEC. 405. (a) Section 3121 (k)(1) of the Internal

3Revenue Code of 1954 is amended to readas follows:

4 "(1) WAIVEB 0]?EXEMPTIONBYORGANIZA-

5 TION.—

6 "(A)An organization described in section501

7 (a)(3) which is exempt from income tax under

8 section 501 (a) may fflea certificate (in such form

9 and manner, and with such official, asmay be pro-

10 scribecl by regulations made under this chapter)

ii. certifying that it desires to have the insurancesys-

12 tem established by title II of the Social Security

13 Act extended to service performed by its employees

14 and that at least two-thirds of its employeesconcur 15 in the filing of the certificate.Such certificate may 16 be filed only if it is accompanied bya list contain-

17 ing the signature, address, and socia1 securityac- 18 count number(if any)of each employee who 19 concurs in the filing of the certificate.Such list 20 may be amended at any time prior to the expira- 21 tion of the twenty-fourth month following the .caien- 22 dar quarter in which the certificate is filed, by filing 23 with the prescribed officiala supplemental list or 24 lists containing the signature, address, and sociai 25 security account number (if any) of each additional 86

1 employee who concurs in the filing of the certificate.

2 The listandany supplemental listshall be filed in

3 such form and manner as may be prescribed by

4 regulations made under this chapter.

5 "(B) The certificate shall be in effect(for

6 purposes of subsection (b)(8)(B) and for pur-

7 poses of section 210 (a)(8)(B)of the Social

8 SecurIty Act) for the period beginning with which-

9 ever of the following maybe designated by the

10 organization:

11 "(i) the first day of the caIendar quarter

12 in which the certificate is ified,

13 "(ii) the first day of the calendar quarter 14 succeeding such quarter, or

15 "(ill) the first day of any calendar quarter

16 precedhig the calendar quarter in which the

17 certificateisified,except that,in the case

18 of a certificate filed prior to January 1, 1960,

19 such date may not be earlier than January 1,

20 1956, arid in the case of a certificate ified after

21 1959, such date mny not be earlier than the

22 first day of the fourth ca1ndfir quarter preced-

23 ing the quarter in which such certificate is ified.

24 "(C) In the case of service performed by an

25 employee whose name appears on a supplemental 87

1 listfiledafterthefirstmonth followingthe

2 calendar quarter in which the certificate is ified, the

3 certificate shall be in effect (for purposes of subsec-

4 tion (b)(8)(B) and for purposes of section 210

5 (a)(8) (B) of the Social Security Act) only with

6 respect to service performed by such indlividual for

7 the period beginning with the first day of the calen-

8 dar quarter in which such supplemental list is ified.

9 "(D) The period for which a certificate ified 10 pursuant to this subsection or the corresponding sub-

11 section of prior law is effective may be terminated

12 by the organization, effective at the end ofa calen-

13 dar quarter, upon giving 2 years' advance notice in 14 writing, but only if, at the time of the receipt of 15 such notice, the certificate has been in effect fora 16 period of not less than 8 years.The notice of ter- 17 mination may be revoked by the organization by 18 giving, prior to the. close of the calendar quarter 19 specified in the notice of termination, a written 20 notice of such revocation.Notice of termination or 21 revocation thereof shall be filed in, such form and 22. manner, and with such official, as may be prescribed 23 by regulations made under this chapter. 24 "(E) If an organization described in subpara- 25 graph (A) employs both indiviua1a whoare in 88 I positions covered by a pension, annuity, retirement,

2 orsimilar fund or system established by a State or

3 by a political subdivision thereof and individuals

4 who are not in such positions, the organization shall

5 divide its employees into two separate groups. One

6 group shall consist of all employees who are in

.7 positions covered by such a fund or system and (i)

8 are members of such fund or system, or(ii)are

9 not members of such fund or system but are

10 eligible to become members thereof; and the other

11 group shall consist of all remaining employees. An

12 organization which has so divided its employees

13 into two groups may file a certificate pursuant to

14 subparagraph (A) with respect to the employees

15 in one of the groups if at least two-thirds of the

16 employees in such group concur in the filing of the

17 certificate.The organization may also. file such a

18 certificate with respect to the employees in the

19 other group if at least two-thirds of the employees

20 in such other group concur in the 1ing of such

21 Ce]tffiCate.

22 "(F) An organization which fileda certificate 23. under this subsection after 1955 but prior to the

24. enactment of this subparagraph may file a request

25 at any time before 1960 to have such certificate 89

1 effective, with respect to the service of individuals

2 who concurred in the filingof suchcertificate

3 (initially or through the filing ofa supplemental

4 list). prior to enactment of this subparagraph and

5 who concur in the filing of such new request, for

6 the period beginning with the first day ofany

7 calendar quarter preQeding the first calendar quarter

8 for which it was effective and following the last

9 calendar quarter of 1955.Such request shall be 10 filed with such official and in such form andmanner 11 as may be prescribed by regulations made under 12 this chapter.If a request is filed pursuant to this

13 subparagraph— 14 "(i) for purposes of computing interest 15 and for purposes of section 6651 (relating to 16 addition to tax for failure to file tax return), 17 the due date for the return and payment of the 18 tax for any calendar quarter resulting from the 19 filing of such request shall be the last day of the 20 calendar month following the ca:lendar quarter 21 in which the request is filed; and

22 "(ii) the statutory perioi for theassess- 23 ment of such tax shall not expire before the 24 expiration of 3 years from such due date. 25 "((1) If a certificate filed pursuant to thispara- 90

1 graph is effective for one or more calendar quarters

2 prior to the quarter in which the certificate is ftled,

3 then—

4 "(1) for purposes of computing interest

5 and for purposes of section 6651 (relating to

6 addition to tax for failure to file tax return), the

7 due ditte for the return and payment of the tax

8 for such prior calendar quarters resalting from

9 the filingofsuch certificate shall be the last

10 day of the calendar month following the calen-

11 dar quarter in which the certificate is filed; and

12 "(ii) the statutory period for the assess-

13 ment of such tax shall not expire before the 14 expiration of 3 years from such due date." 15 (b) Section 3121 (b)(8)(B) of the Internal Reve- 16nue Code of 1954 is amended to read as follows:

17 "(B) service performed in the employ of a

18 religious, charitable, educational, or other organiza-

19 tion described in section 501(c)(3) which is 20 exempt from income tax under section 501(a),

21 but this subparagraph shall not apply to service per-

22 formed during the period for which a certificate, filed 23 pursuant to subsection (k)(or the corresponding 24 subsection of prior law), is in effect if such service

25 is performed by an employee— 91

1 "(1) whose signature appears on the list

2 filed by such organization under subsection (k)

3 (or the corresponding subsection of prior law),

4 "(II) who became an employee of such

5 organization after the calendar quarter in which

6 the certificate (other than a certificate referred

7 to in clause (iii)) was filed, or

8 "(iii) who, after the calendar quarter in

9 which the certificate was ified with respect to a

10 group describedin section 3121 (k)(1)(E),

11 became a member of such group,

12 except that this subparagraph shall apply with re-

13 spect to service performed by an employee as a

14 member of a group described in section 3121 (k)

15 (1). (E) with respect to which no certificate is in

16 effect;".

17 (c) The amendments made by subsections (a) and (b)

18shall apply with respect to certificates filed under section

193121 (k)(1) of the Internal Revenue Oode of 1954 after

20the date of enactment of this Act (67)and requests filed

21under subparagraph (F) of such section after such date.

22 EXEMPTIONOFUNEMPLOYMENT BENEFITS FROM LEVY

23 5E0. 406. Section 6334 (a)of the Internal Revenue

24Code of 1954 (relating to enumeration of property exempt 92

1from levy)is amended by adding at the end thereof the

2following new paragraph:

3 "(4)UNEMPLOYMENTBENEFITS.—Any amount

4 payableto an individual with respect to his unemploy-

5 ment (including any portion thereof payable with re-

6 spect to dependents) under an unemployment compensa-

7 tionlaw of the United States, of any State or Territory,

8 or of the District of Columbia or of the Commonwealth

9 ofPuerto Rico." 10 TITLEW—AMENDMENTSRELATING TO PUBLIC

11 ASSISTANCE

12 OLD-AGE ASSISTANCE

13 Sic,. 501. Subsection(a)of section 3 of the Social

14Security Act is amended to read as follows:

15 "(a) From the sums appropriated theref or, the Secre-

16tary of the Treasury shall pay to each State which has an

17approved plan for old-age assistance, for each quarter, be-

18ginning with the quarter commencing October 1,1958,

19 (1)in the caseof any State other than Puerto Rico,

20the Virgin Islands, and Guam, an amount equal to the

21sum of the following proportions of the total amounts ex-

22pended during such quarter as old-age assistance under the

23State plan (including expenditures for insurance premiums

24for medical or any other type of remedial care or the cost

25thereof) — 93

1 "(A) four-fifths of such expenditures, not counting 2 so much of any expenditure with respect to any month

3 as exceeds the product of $30 multiplied by the total 4 number of recipientsof old-age assistance for such

5 month(whichtotalnumber,forpurposesofthis

6 (68)c1aue an4 clausc (B) a134 foi purpotca o clanso

7 -f23-subsection,means(i)the number of individuals

8 who received old-age assistance in the form ofmoney

9 payments for such month, plus (ii) the number of other

10 individuals with respect to whom expenditureswere 11 made in such month as old-age assistance in the form of

12 medical or any other type of remedial care);plus 13 "(B) the Federal percentage of the amount by 14 which such expenditures exceed the maTimum which 15 may be counted under clause (A), b not counting 16 so much of any expenditure with respect to any month 17 as exceeds the product of (69)$66 $65 multiplied by 18 the total number of such recipients of old-age assist- 19 ance for such month; 20and (2) in the case of Puerto Rico, the Virgin Islands, and

21.Guam, an amount equal to one-half of the total of thesums 22expended during such quarter as old-age assistance under

23the State plan(including expenditures for insurancepre- 24 miums for medicalor any other type of remedial care or 25the cost thereof), not counting so much of any expenditure 94

1with respect to any month as exceeds (70$36 $35multiplied

2 by the total number of recipients of old-age assistance for such

3month; and (3) in the case of any State, an amount equal

4to one-half of the total of the sums expended during such

5quarter as found necessary by the Secretary of Hea1th, Edu-

6cation, and Welfare for the proper and efficient administra-

7tion of the State plan, including services which are provided

8by the staff of the State agency (or of the local agency

9administering the State plan in the political subdivision)

10to applicants for and recipients of old-age assistance to help

11them attain self-care."

12 AID TO DEPENDENT CHILDREN

13 SEC. 502. Subsection (a)of section 403 of the Social

14Security Act is amended to read as follows:

15 "(a) From the sums appropriated therefor, the Secre-

16tary of the Treasury shall pay to each State which has an

17approved plan for aid to dependent children, for each quarter, 18beginning with the quarter commencing October 1, 1958, 19 (1)in the case of any State other than Puerto Rico,

20theVirginIslands,and Guam, an amount equalto 21the sum of the following proportions of the total amounts 22expended during such quarter as aid to dependent children 23under the State plan (including expenditures for insurance 24 premiums for medicalor any other type of remedial care or

25the cost thereof)— 95 1 "(A) (71)fivc ixth fourteen-seventeenths of such 2 expenditures, not counting so much ofany expenditure 3 with respect to any monthas exceeds the product of 4 (72)$18 $17 multiplied by the total number of recipients 5 of aid to dependent children for such month (which 6 total number, for purposes of this (73)eIaus 4 c1auo 7 -(B) a4 purposes e clause -(-2-)- subsection, means 8 (i)the number of individuals with respect to whom 9 aidtodependentchildreninthe formof money 10 payments is paid for such month, plus (II) the number 11 of other individuals with respect to whom expenditures 12 were made in such month as aid to dependent children 13 in the form of medicalor any other type of remedial 14 care) ; plus

15 "(B) the Federal percentage of theamount by 16 which such expenditures exceed the maximum which 17 may be counted under clause (A), (74)bi± not counting 18 so much of any expenditure with respect to any month 19 as exceeds the product of (75)$33 $30 multiplied by 20 the total number of recipients •ofaid to dependent 21 children for such month;

22 and (2)in the case of Puerto Rico, the VirginIslands, 23and Guam, an amount equal to one-half of the totalof the 24sums, expended during such quarter as aid to dependent

25children under the State plan (including expendituresfor 9f

1insurance premiums for medical or any other type of remedial care or the cost thereof), not counting so much

3ofany expenditure with respect to anymonth as exceeds

4$18 multiplied by the total number of recipients of aid to

5dependent children, for such month; and (3) in the case

6of any State, an amount equal to one-hall of the total of the

7sums expended during such quarter asfound necessary by

8the Secretary of Health, Education, and Wellare for the

9proper and efficient administrationof the State plait, in-

10cluding services which are provided by the staff of the State

11agency (or of the local agencyadministering the State plan

12in the political subdiviion)to relatives with whom such

13children(applying for or receiving such aid)are living, 14in order to help such relatives attain sell-support or sell- 15.care, or which are provided tomaintain and strengthen

16family lifeforsuch children."

17 AIDTOTUEBLIND

18 SEc. 503. Subsection (a) of section 1003 of the Socia1 19Security Act is amended to read as follows: 20 "(a) From the sums appropriated therefor, the Secre- 21tary of the Treasury shall pay to each State which has an 22approved plan for aid to the blind, for each quarter, begin- 23ning with the quarter commencing October 1, 1958, (1) 24in the case of any State other than Puerto Rico, the Virgin 25Islands, and Guam, an amount equal to the sum of the fol- 97

1 lowing proportions of the total amounts expended during such

2quarter as an aid to the blind under the State plan (including

3expenditures for insurance premiums for medical or any other 4type of remedial care or the cost thereof) —

5 "(A) four-fifths of such expenditures, not counting

6 so much of any expenditure with respect to any month

7 as exceeds the product of $30 multiplied by the total

8 number of recipients of aid to the blind for such moath

9 (which total number, for purposes of this (76)c1auc a*1

10 clause (B) a4 f purposes of eliLusc -f.)-subsection,

11 means (i) the number of individuals who received aid to

12 the. blind in the form of money payments for such month,

13 plus(II)the number of other individuals with respect 14 to whom expenditures were made in such month as 15 aid to the blind in the form of medical or any other 16 type of remedial care) ; plus 17 "(B) the Federal percentage of the amount by 18 which such expenditures exceed the maximum which

19 may be counted under clause (A), (77)biinotcounting 20 so much of any expenditure with respect to any month 21 as exceeds the product of (78)$66 $65multiplied by the 22 total number of such recipients of aid to the blind for such

23 month; 24and (2) in the case of Puerto Rico, the Virgin Islands, and

g.It. 13549 7 98

1 Guam, an amount equal to one-half of the total of the sums

2 expended during .such quarter as aid to the blind under the

3State plan (including expenditures for insurance premiums

4for medical or any other type of remedial care or the cost

5thereof),not counting so much of any expenditure with re-

6 spect to any month as exceeds (79)$36 35multipliedby the

7 total number of recipients of aid to the blind for such month;

8and (3) in the case of any State, an amount equal to one-half

9of the total of the sums expended during such quarter as

10found necessary by the Secretary of Health, Education, and

11Welfare for the proper and. efficient administration of the

12State plan, including services which are provided by the staff

13of the State agency (or of the local agency administering the

14State plan in the political subdivision) to applicants for and

15recipients of aid to the blind to help them attain self-support

16or self-care."

17 AIDTOTEEPERMANENTLYAND TOTALLY DISABLED

18 SEe. 504. Subsection (a) of section 1403 of the Social

19Security Act is amended to read as follows:

20 "(a) From the sums appropriated therefor, the Secre-

21tary of the Treasury shall pay to each State which has an

22approved plan for aid to the permanently and totally dis-

23abled, for each quarter, beginning with the quartercorn-

24mencing October 1, 1958, (1) in the case of any State other 99

1than Puerto Rico, the Virgin Islands, and Guam, an amount

2equal to the sum of the following proportions of the total

3amounts expended during such quarter as aid to the per-

4manently and totally disabled under the State plan (including

5 expenditures for insurance premiums for medical or any other

6type of remedial care or the cost thereof)—

7 "(A) four-fifths of such expenditures, not counting

8 so much of any expenditure with respect to any month as

9 exceeds the product of $30 multiplied by thetotal 10 number of recipients of aid to the permanently and

11 totally disabled for such month (which total number, for

12 purposes of this (80)c1auc €nd clause (B) andOf ptir-

13 porc o c1auo-(2-)-subsection, means (i) the number of

14 individuals who received aid to the permanently and to-

15 tally disabled in the form of money payments for such

16 month, plus(ii)the number of other individuals with

17 respect to whom expenditures were made in such month

18 as aid to the permanently and totally disabled in the

19 form of medical or any other type of remedial care)

20 plus

21 "(B) the Federal percentage of the amount by 22 which sucI expenditures exceed the maximum which 23 may be coinated under clause (A), (81)1*i not counting 24 so much of any expenditure with respect to any month 100

1 as exceeds the product of (82)$ $65multipliedby the

2 total number of such recipients of aid to the permanently

3 and totally disabled for such month;

4and (2) in the case of Puerto Rico, the Virgin Islands, and

5Guam, an amount equal to one-hall of the total of the sums

6expended during such quarter as aid to the permanently

7and totally disabled under the State plan(including ex-

8penditures for insurance premiums for medical or any other

9type of remedial care or the cost thereof), not counting

10so much of any expenditure with respect to any month as ex-

11ceeds (83)$36 $35mtiltipliedby the total number of recipi-

12ents of aid to the permanently and totally disabled for such

13month; and (3) in the case of any State, an amount equal to 14one-half of the total of the sums expended during such 15quarter as found necessary by the Secretary of Health, 16Education, and Welfare for the proper and efficient admin-

17istration of the State plan, including services whichare 18provided by the staff of the State agency (or of the local 19agency administering the State plan in the political sub- 20division) to applicants for and recipients of aid to the per- 21manently nd totally disabled to help them attain self-sup- 22port or sell-care."

23 FEDERALMATCIUNGPERCENTAGE 24 SEC. 5)5. Subsection (a) of section 1101 of the Social 101 1Security Act is amended by adding at the end thereof the fol-

2lowing new paragraph: 3 "(8)(A) The. 'Federal percentage' for any State 4 (other than Puerto Rico, the Virgin Islands, and Guam) 5 shall be 100 per centum less the State percentage; and 6 the State percentage shall be that percentage which 7 bears the same ratio to 50 per centumas the square of

8 the per capita income of such State bears to thesquare 9 of the per capita income of the continental United States 10 (excluding Alaska); except that(i)the Federal per-

11 centage shall in no case be less than 50 per centumor 12 more than (84)74 75percentum, and (ii) the Federal 13 percentage shall be 50 per centum for Alaska and 14 Hawaii. 15 "(B) The Federal percentage for each State (other 16 than Puerto Rico, the Virgin Islands, and Guam) shall 17 be promulgated by the Secretary between Ju'y 1 and 18 August 31 of each even-numberedyear, on the basis of 19 the average per capita income of each State and of the 20 continental United States(excluding Alaska)for the .21 three most recent calendar years for which satisfactory 22 data are available from the Department of Commerce. 23 Such promulgation shall be conclusive for each of the 24 eight quarters in the period beginning July 1next sue- 102

1 ceeding such promulgation: Provided, That the Secre-

2 tary shall promulgate such percentage as soon as possible after the enactment of the SociaI Security Amend- ments of 1958, which promulgation shall be conclusive for each of the eevn quarters in the period beginning

6 October 1, 1958, and ending with the close of June 30,

7 1961."

8 EXTENSION TO GUAM

9 So. 506. Section 1101 (a)(1) of the Social Security

10Act is amended by striking out "Puerto Rico and the Virgin Islands" and inserting in lieu thereof "Puerto Rico, the Vir-

12gui Islands, and Guam".

13INCREASE IN LIMITATIONS ON PUBLIC) ASSISTANCE PAY-

14 MENTS TO PUERTO RICO AND THB VIRGIN ISLANDS

15 SEc. 507. (a) Section 1108 of the Social Security Act is 16 amended by striking out "$5,312,500" and "$200,000" and

17inserting in lieu thereof "$8,500,000" and "$300,000", re-

18spectively, by striking out "and" immediately following the

19semicolon, and by adding immediately before the period at

20the end thereof ";andthe total amount certified by the

21Secretary under such titles for payment to Guam with respect

22to any fiscal year shall not exceed $400,000".

23 (b) The heading of such section is amended to read 103 i"LIMITATION ON PAYMENTS TO PUERTORICO, (85)rrtE

2 VIRGIN ISLANDS, AND GtTAM".

3 MATERNAL AND CHILD WELFARE GL&NTS FOB GUAM

.4 SEC. 508. Such. section 1108 is further amended by adding at the end thereof the followingnew sentence: "Not-

6withstanding the provisions of sections 502, (a)(2),512 (a)(2), and 522 (a), and until such timeas the Congress

8may by appropriation or other law otherwise provide, the Secretaryshall,inlieuofthe $60,000, $60,000, and

10$60,000, respectively, specified in such sections, allot such smaller amounts to Guam as he may deem appropriate."

12 TEMPORARY EXTENSION OF CERTAIN SPECIAL PROVISIONS

13 RELATING TO STATE PLANS FOR AID TO THE BLIND

14 SEC. 509. Section 344 (b)of the Social Security Act

15Amendments of 1950 (Public Law 734, Eighty-first. Con-

16gress), as amended, is amended by striking out "June 30,

171959" and inserting in lieu thereof "June 30, 1961".

18(86)rEcIAI1 PJtOVIiTON CERTAIN INDJAN T1EFEALBD

19 SECT 510. Effective in 1e ease o paymcnthwith rcopcot 20 o expenditures1yStates, undcr plane approvcd undcr 1e 21 P ei ef the Social Sccurliy Act, 4ei quarters bcginn big 22alter Scptcmbc 1958kcctione he Ae ef April .1-9

231950, as nmcndcd -f2.5 U S 639} is rcpcalcd. 104

I TECHI'flCALAMENDMENT

2. SEC. (864)511 510. Section2 (a)(11) of the Social

3Security Act is amended by inserting before the period at

4the end thereof ",includinga description of the steps taken

5to assure, in the provision of such services, maximumutiliza-

6tion of other agencies providing similar or related services".

7 (87)PAYMENTS TO LEGAL REPRESENTATIVES

8 SEC. 511. (a) Title XI of the Social Security Act ü

9amended by adding after section 1110 the following new

10section:

11. "PUBLICASSISTANCE PAYMENTS TO LEGAL

12 REPRESENTATIVES

13 "SEC. 1111. For purposes of titles I, IV, X, and XIV, 14payments on behalf of an individual, made to another person 15who has been judicially appointed, under the law of the State 16in which such indipidual resides, as legal representative of 17such individual for the purpose of receiving and managing 18such payments (whether or not he is such individual's legal 19representative for other purposes), shall be regarded as money

20payments to such individuals." 21 (b) The amendment made by subsection (a) shall be 22applicable in the case of payments to legal representatives by 23any State made afterJune 30, 1958; and to such payments 24by any State made after December 31, 1955, and prior to 105

1July 1, 1958, if certifications for payment to such State have

2been made by the Secretary of Health, Education, and Wel-

3fare with respect thereto, or such State has presented to the

4Secretary a claim (and such other data as the Secretary may

5require) with respect thereto, prior to July 1, 1959.

6. . EFFECTIVE DATES

7 SEc. 511.Notwithstanding.the provisions of sections

8305 and 345 of the Social Security Amendments of 1956,

9as amended, the amendments made by sections 501, 502, 10503, 504, 505, and 506 shall be effective— 11 (1) in the case of money payments, undera State 12, plan approved under title I, IV, X, or XIV of the 13 Social Security Act, for months after September 1958,

14 &id

15 (.2) in the ease of assistance in the form of medical

16 or any other type of remedial care, under such a plan,

17 with respect to expenditures made after September

18 1958.

19The amendment made by section 506 shall also become

20effective, , fOrpurposes of title V of the Social Security Act,

21for fiscal years ending after June 30, 1959.The amend-

22ments made by section 507 shall be effective for fiscal years

23 , endingafter June 30, 1958.The amendment made by

H.R.13549 8 106 Isection 508 shall be effective for fiscal years ending after

2Jime 30, 1959.The amendment made by section 510 shall

3become effective October 1, 1958. 4 TITLE VI—MATEIRNAL AND. CHILD WELFARE

5 CHILD WELFARE SERVICES

6 SEC. 601. Part 3 of title V of the Social Security Act

7 is amended to read as follows:

8 "PAiT 3—CIirLD-WELFAlE SERVICES

9 "APPROPRIATION

10 "SEC. 521. For the purpose of enabling the United

11States, through the Secretary, to cooperate with State pablo-

12welfare agencies in establishing, extending, and strengthen-

13ing public-welfare services (hereinafter in this title referred

14to as 'child-welfare services') for the protection and careof 15homeless, dependent, and neglected children, and children 16in danger of becoming delinquent, there is hereby authorized 17to be appropriated for each fiscal year, beginning with the 18fisca1 year ending June 30, 1959, the sum of $17,000,000.

19 "ALLOTMENTS TO STATES

20 "Sx. 522. (a) The sums appropriated for each fiscal

2.1 year under section 521 shall be allotted bythe Secretary 22for use by cooperating State public-welfare agencies which 23have plans developed jointly by the State agency and the 24Secretary, as follows: He shall allot to each State such por- 107

1 tion of $60,000asthe amount appropriated under section

2521 for such year bears to the amount authorized to be so

3appropriated; and he shall allot to each Sta.te an amount

4which bears the same ratio to the remainder of the sums so

5appropriated for such year as the product of (1) the popula-

6tion of such State under the age of 21 and (2) the allot-

7 mentpercentage of such State (as determined under section

8524) bears to the sum of the corresponding products of all

9the States. [0 "(b)(1) If the amount allotted to a State under sub-

11 section (a) for any fiscai year is less than such State's base

[2allotment, it shall be increased to such base allotment, the total

[3of the increases thereby required being derived by propor-

14tionately reducing the amount allotted under subsection (a)

15to each of the remaining States, but with such adjustments

16as may be necessary to prevent the allotment of any such 17remaining State under subsection (a) from being thereby 18reduced to less than its base allotment. 19 "(2) For purposes of paragraph (1)the base allot- 20ment of any State for any fiscal year means the amount 21which would be allotted to such State for such year under 22the provisions of section 521, as in effect prior to the enact- 23ment of the Social Security Amendments of 1958, as applied 24to an appropriation of $12,000,000. 108

1 "PAYMENT10 STATES

2 "SEc. 523.(a) From the sums appropriated therefor

3and the allotment available under (88)cction this part,

4the Secretary shall from time to time pay to each Statewith

5a plan for child-welfareservices developed as provided in

6(89)rnch section ö this part an amount equal to the Fed-

7eral share(as determined under section 524) of the total

8sum expended under such plan(including the cost of adminis-

9tration of the plan) in meeting the costs of district, county, or

10other local child-welfare services, in developing State services

11for the encouragement and assistance of adequate methodsof

12community child-welfare organization, in paying the costs of

13returning any runaway child who has not attained the age

14of eighteen to his own community in another State, and of

15maintaining such child until such return (for a period not

16exceeding fifteen days), in cases in which such costs cannot

17be met by the parents of such child or by any person, agency,

18or institution legally responsible for the supportof such child:

19Provided, That in developing such services for children the

20facilities and experience of voluntary agencies shall be utilized

21in accordance with child-care programs and arrangements

22in the States and local communities as may be authorized by

23the State.

24 "(b) The method of computing and paying such amounts

25shall be as follows: 109

1 "(1) The Secretary shell, prior to the beginning of each

2period for which a payment is to be made, estimate the

3amount to be paid to the State for such period under the 4provisions of subsection (a).

5 "(2) From the allotment available therefor, the Secre-

6taryshallpay the amount so estimated, reduced or increased,

7as the casemaybe, by any sum (not previously adjusted

8under this section) by which he finds that his estimate of the

9amount to be paid the State for any prior period under this

10section was greater or less than the amount which should

11have been paid thereunder to the State for such prior period.

12 "ALLOTMENT PERCENTAGE AND FEDERAL SHARE

13 "SEc. 524.(a)The 'allotment percentage' for any

14State shall be 100 per centum less the State percentage;

15and the State percentage shall be that percentage which

16bears the same ratio to 50 per centumas the per capita in-

17come of such State bears to the per capita income of the con-

18tinental United States(excluding Alaska); except that

19 (A) the allotment percentage shall in nocase be less than

2030 per centum or more than 70 per centum, and (B) the

21allotment percentage shall be 50 per centum in thecase of

22Alaska and 70 per centum in the cas& of Puerto Rico, the

23Virgin Islands, and Guam.

24 "(b)For the fiscal year ending June 30,1960,

25and each year thereafter, the 'Federal share' for any State 110

1shall be, 100 per centum less that percentage which bears

2the same ratio to 50 per centum as the per capita income of

3such State bears to the per capita income of the continental

4UnitedStates (excluding Alaska), except that(1)in no

5case shall the Federal share be less than 331 per centum

6or more than 66* per centbm, and (2) the Federal share

7shallbe 50 per centum in the case of Alaska and 66* per centum in the case of Puerto Rico, the Virgin Islands, and

9Guam.For the fiscai year ending June 30, 1959, the

10Federal share shall be determined pursuant to the provisions

11of section 521 as in effect prior to the enactment of the

.12Social Security Amendments of 1958.

13 "(c) The Federal share and the allotment percentage 14for each State shall be promulgated by the Secretary between 15July 1 and August 31 of each even-numbered year, on the 16basis of the average per capita income of each State and of 1'fthe continental United States(excluding Alaska) for the 18three most recent calendar years for which satisfactory data

19ar available from the Department of Commerce.Such 20promulgation shall be conclusive for each of the tw fiscai 21years in the period beginning July 1 next succeeding such 22promulgation: Provided,. That the Secretary shall promul- 23gate such Federal. shares and allotment percentages as soon

24 aspossible after the enactment of the Social Security Amend- 111

1 ments of 1958, which promulgationshall be conclusive for

2each of the 3 fiscal years in the period ending June 30, 1961.

3 "BEA&LLOTMENT

4 "SEc. 525. The amount of any allotment to a State

5under section 522 for any fiscal year which the Statecertifies

6to the Secretary will not berequired for carrying out the

7State plan developed as provided in such section shallbe

8available for reallotment from time to time, on such dates as

9the Secretary may fix, to other States which theSecretary

10determines (1) have need in carrying out their State plans

11so developed for sumsin excess of those previously allotted

12to them under that section and (2) willbe able to use such

13excess amounts during suchfiscal year.Such reallotments 14shall be made on the basis of the State plans sodeveloped, 15after taking into consideration the population under the age 16of twenty-one, and the per capita incomeof each such 17State as compared with the population under the ageof 18twenty-one, and the per capita incomeof all such States 19with respect to which such a determination by theSecretary 20has been made. Any amount so reallotted to aState shall 21be deemed part of its allotment under section 522."

22 MATERNAL AND CHILD HEALTH 23 SEO. 602. (a) Section 501 of such Act is amended by 24striking out "for the fiscal year ending June 30, 1951 the 112

1 sumof$15,000,000, and for each fiscal year beginning after

2June 30, 1951, the sum of $16,500,000" and inserting in

3lieu thereof "for each fiscal year beginning after June 30,

41958, the sumof$21,500,000".

5 (b) Section 502 (a)(2) of such Act is amended by

6striking out "for each fiscal year beginning after June 30,

71951, the (90)Federal Security Administrator shall allot

8$8,250,000 as follows: He shall allot to each State $60,000

9and shall allot to each State such part of the remainder

10Of the $8,250,000" and inserting in lieu thereof "for each

11fisca1 year beginning after June 30, 1958, the Secretary

12shall allot $10,750,000 as follows: He shall allot to each

13State $60,000 (even though the amount appropriated for

14such year is less than $21,500,000), and shall allot each

15State such part of the remainder of the $10,750,000".

16 (c) Section 502(b)of such Act isamended by

17striking out "the fiscal year ending June 30, 1951, the

18sum of $7,500,000, and for each fiscal year beginning after

19June 30, 1951, the sum of $8,250,000" and inserting in

20lieu thereof "each fiscal year beginning after June 30, 1958,

21the sum of $10,750,000".

22 CRIPPLED CHILDREN'S SERVICES

23 SEQ. 603. (a) Section 511 of such Act is amended by

24striking out "for the fiscal year ending June 30, 1951, the

25sam of $12,000,000, and for each fiscal year beginning 113

1 after June30,1951, the sum of $15,000,000" and inserting

2in lieu thereof "for each fiscal year beginning after June 30,

3 1958, the sumof$20,000,000".

4 (b) Section 512 (a)(2) of such Act is amended by

5striking out "for each fiscal year beginning after June 30,

6 1951, the (91)Federal Security Administrator shall allot

7$7,500,000 as follows: He shall allot to each State $60,000,

8and shall allot the remainder of the $7,500,000" and inserting

9in lieu thereof "for each fiscal year beginning after June 30,

101958, the Secretary shall allot $10,000,000 as follows: He

11shall allot to each State $60,000 (even though the amount 12appropriated for such year is less than $20,000,000) and

13shall allot the remainder of the $10,000,000".

14 (c) Section 512 (b) of such Act is, amended by strik-

15ing out "the fiscal year ending June 30, 1951, the sum of

16$6,000,000, and for each fiscal year beginning after June

1730, 1951, the sum of $7,500,000" and inserting in lieu

18thereof "each fiscal year beginning after June 30, 1958, the

19sum of $10,000,000".

20 TITLE Vu—MISCELLANEOUS PROVISIONS

21FURNISHING OF SERVICES BY DEPARTMENT OF HEALTH,

22 EDUCATION, AND WELFARE

23 SEc. 701. Seètion 1106 (b) of the Social Security Act

24is amended to read as follows:

25 "(b) Requests for information, disclosure of which is 114

1authorized by regulations prescribed pursuant to subsection

2 (a)of this section, and requests for services, may, subject

3to such limitations as may be prescribed by the Secretary to

4avoidundue interference with his functions under this Act,

5be complied, with if the agency, person, or organization

6making the request agrees to pay for the information or serv-

7ices requested in such amount, if any (not exceeding the cost

8of furnishing the information or services), as may be deter-

9minedby the Secretary.Payments for information or serv-

10ices furnished pursuant to this section shall be made in ad-

11vance or by way of reimbursement, as maybe requested by

12the Secretary, and shall be deposited in the Treasury as a

13special deposit to be used to reimburse the appropriations

14 (including authorizations to make expenditures from the

15Federal Old-Age and Survivors Insurance Trust Fund and

16theFederal Disability Insurance Trust Fund) for the unit

17or units of the Department ofHealth, Education, and Wel- 18fare which furnished the information or services."

19 (92)eovEitoi F-OftOEILTAINE1PLOYEES8F AX EXEMPT

20 OILOANIZATIOSWIHQIIPAID TAX

21 SEe.7O2 -(4Section4ø -(4-fI-.)-e4 the Social 22ccurityArncn4rne4s e1954 amcndcd by strikingout

23 "hasfailed e fi4e prior o the enaetment e4 Ie Social Security 24 Amcndmcnts o 4-9&6 &ii4 incrtingii14et thcreof "-did 115 1 ne have in effect, during the entirepcrioI in which he 2individual wae so employed,". .3 -Section4O -(4)- ofthe Social Security 4 Amendmcnt of 1054 is amcndcdby incrting "performed 5during the period in which such organization 444iet he 6a valid waief ccrtffieatc" after "crvicc".

7 -(4Section4ø -(4-(53-of the SocialSecurity 8Amendnjpnts of 4-954 is amended by inserting"without 9knowledge 1Mta waiver certificate was ncccsary ei after 10.I!in good faith and".

11 ?i!EANINGOFThEM "SECRETARY"

12 SEc. (93)703 702.Asused in the provisions of the So-

13 . cialSecurity Act amended by this Act, theterms "Secretary", 14unless the context otherwise requires,means the Secretary of 15Health, Education, and Welfare.

16 AMENDMENT PRESERVING RELATIONSHIPBETWEEN RAIL-

17 ROAD RETIREMENT AND OLD-AGE, SURViVORS,AND

18 DISABILITY INSURANCE 19 SEc. (94)704 703. Section 1(q) of the Railroad Re- 20tirement Act of 1937,as amended, is amended by striking 21out "1957" and inserting in lieu thereof "1958".

22 (95)ADVIsoRy COUNCILON PU13LIC ASSISTANCE

23 SEC. 704. (a) There is hereby establishedan Advisory 24Council on Public Assistance for thepurpose of reviewing 116

1 thestatus of the public assistance program in relation to the

2old-age,survivors, and disability in8urance program, the

3fiscalcapacities of the States and the Federal Government, and

4any other factors bearing on the amount and proportion of

5theFederal and States sharesinthepublicassistance

6program.

7 (b) The Council shall be appointed by the Secretary

8beforeJanuary 1959 without regard to the civil-service laws

9and shall consist of the Commissioner of Social Security, a

10chairman,and of twelve other persons who shall, to the extent

11possible,represent employers and employees in equal numbers,

12personsconcerned with the administration or financing of the

13Stateand Federal programs, other personA with special

14knowledge,experience, or qualifications with respect to the

15program,and the public.

16 (c)(1) The Council i$ authorized to engage such techni-

17calassistance, as may be required to carry out its functions,

18andthe Secretary shall, in addition, make available to the

19Councilsuch secretarial, clerical, and other assi.stance and

20suchother pertinent data prepared by the Department of

21Health,Education, and Welfare as it may require to carry

22outsuch functions.

23 (2)Members of the Council, while serving on business

24ofthe Council (inclusive of travel time), shall receive com-

25pensationat rates fkced by the Secretary, but not exceeding 117

1 $50per day; and shall be entitled to receive actual and neces-

2sarytraveling expenses and per diem in lieu of subsistence

3whileso serving away from their places of residence.

4 (d) The Council shall make a report of its findings and

5recommendations.(including recommendations for changes in•

6the provisions of sections 3, 403, 1003, and 1403 of the Social

7Security Act) to the Secretary and the Congress, such report

8tobe submitted not later than January 1, 1960, after which

9date such Council shall cease to exist.

10 (96)ADvIS0RYCOUNCIL ON CHILD WELFARE SERVICES

11 SEC.705. (a) There is hereby established an Advisory

12Councilon Child Welfare Services for the purpose of making

13recommendationsand advisingthe Secretary of Health,

14Education,and Welfare in connection with the effectuation

15ofthe provisions of part 3 of title V of the Social Security

16Act,as amended by the Social Security Amendments of

171958.

18 (b)The Council shall be appointed by the Secretary

19beforeJanuary 1959, without regard to the civil-service laws,

20andshall consist of twelve persons representative of public,

21voluntary,éivic, religious, and professional welfare organiza-

22tionsand groups, or other persons with special knowledge,

23experience,or qualifications with respectto child-welfare

24services,and the public.

25 (c)(1) The Secretary shall make available tothe 118

1 Council such secretarial, clerical, and other assistance and

2such other pertinent data prepared by the Department of

3Health, Education, and Welfare as it may require to carry

4out such functions

5 (2) Members of the Council, while serving on business

6of the Council (inclusive of travel time), shall receive com-

7pensatirn at rates fived by the Secretary, but not exceeding 8 L50 per day; and shall be entitled to receive actual and nec-

9essary traveling expenses and perdiem in lieu of subsist-

10ence while so serving away fromtheir places of 'residence.

11 (d) The Council shall make a report of its findings and

12recommendations (including recommendations for changes

13in the provisions of part 3 of title V of the Social Security 14Act) to the Secretary and to the Congress on or before Jan- 15uary 1, 1960, after which date suchCouncil shall cease to

16ea,ist. Passed the House of Representatives July 31, 1958. Attest: RALPH R. ROBERTS, Clerk. Passed the Senate with amendments August 16, 1958. Attest: FELTON M. JOHNSTON, Secretary. 8rH CONGRESS 21) SESSION • • AN ACT To increase benefits under the Federal Old-Age, Survivors, and Disability Insurance System, to improve the actuarial status of the Trust Funds of such System, and otherwise improve such System; to amend the public assistance and maternal and child health and welfare provisions of the Social Security Act; and for other purposes.

IN THE SENATE OP TKE UNITED STATEs AUGuST 16, 1958 Ordered to be printed with the amendments of the Senate numbered

GPO861-630

18014 CONGRESSIONAL RECORD —SENATE August 16 The motion wasagreed to: andthe Presiding Officer appointed Mr. BYiu, Mr. KERR, Mr. FREAR,Mr.LONG, Mr. MARTIN of Pennsylvania, Mr. WILLIAMS, and Mr. FLANDERS conferees on he part of the Senate.

Mr. KERR.I move that the Senate insist upon its amendments, ask for a - conferencewith the House of Represen- tatives on the disagreeing votes of the two Houses thereon, and that the Chair appoint the conferees on the part of the Senate.

Sr.DAnD rOØM NO. 84

OfficeMemorandum• UNITEDSTATES GOVERNMENT l1:A:P TO : Administrative,Supervisory, DATE: August 16,1958 andTechnical nployees

FROM : VictorChristgau, Director Bureau of Old-Age and Survivors Insurance SUBJECT: Director's Bulletin No. 286 SenatePassage of LR. i35i9

The Senate by a vote of' 79 to 0today passed. LR. l35i9. The bill had been reported favorably by the Committeeon Finance on Thursday.As pa5sed by the Senate the old-age, aurvivora,and disability insurance provisions of the billare substantially the same as described in the attachment to Director'sBulletin No.283, except thatthe increased benefits w-ouldbepayablefor January 1959 (rather than for November)and Vermont would be added to the list of States whichmaymakeuseof the divided retirementsystem provisions. Several changes were madeinthe public assistance provisions of thebill.

We will let you know when furtheraction is taken.

/24VictorChristgau

18538 CONGRESSIONAL RECORD —HOUSE August 19 SOCIAL SECURrTY AMENDMENTS amend the public assistance and mater- OF 1958 nal and child health and welfare provisions of the Social Security Act; and for Mr. MILLS.Mr.Speaker, I ask unan-otherpurposes, with Senate amend- Imousconsenttotakefromthements thereto, and concur in the Senate Speaker's desk the bill (H. R. 13549) toamendments. increase benefits under the Federal old— The clerk read the title of the bill. age, survivors, and disability insurance The clerk read the Senate amend- system, to improve the actuarial statusments, as follows: of the trust fund of such system, and Page 3, strike out all after line 2 over to otherwiseimprovesuchsystem;toand including table on page 4 and insert: "TABL]B FOR DETERMINING PRIMARY INSURANCE AMOUNT AND MAXIMUM FAMILY BENEFITS

"I H UI IV V "I II III IV V "(Primary insuranoe(Primary Insurance (Average (Primary(Maximum "(Primary insurance(Primary insurance (Avcrage (Primary(Maximum benefit under 1939 amount under monthly insurance family benefit under 1939 amount under monthly insuranco family Act, a modified) 1954 Act) wage) amount) benefits) Act, as modified) 1954 Act) wage) amount) benefits)

"If an Individual's Or his primary Or his average And the "If an individual's Or his primary Or his average And the primary Insurance Insurance amountmonthly wage maximum primary insurance Insurance amount monthly wage maximum benefit (as deter- (as determined (as determined The amount of benefit (as deter- (as determined (as determined The amount of mined under under subsec. under subsec. amount benefits mined under undcr subsec. under subsec. amount benefits subsec. (d)) Is— (c)) Is— (b)) Is— referred payable (as subsec. (d)) is— (c)) is— (b)) is— referred payable (as to in the provided in —— to In theprovided in precedingsec. 203 (a)) precedingsec. 203 (a)) paragraphson the basis paragraphson the basis of this of hIs wages of this of his wages "At But not At But not At But notsubsection and sell- "At But not At But not At But notsubsection and self- least— more least— more least— more shall be— employ- least— more least-— more least— more shall be— employ- than— than— than— ment than— than— than— ment Income Income shall be— shall be—

$10.00 $30.00 $54 $33 $53.00 $35.81 $36.40 $75.30 $76. 10 $184 $188 $81 $150. 40 "$10.01 10.48 $30.10 31.00 $55 56 34 54.00 36.41 37.08 76.20 77.10 189 193 82 154.40 10. 49 11.00 31. 10 32.00 57 58 35 55.00 37.09 37.60 77.20 78.00 194 197 83 157.70 11.01 11.48 32.10 33.00 59 60 36 56.00 37.61 38.20 78.10 78.90 198 202 84 161.60 11.49 12.00 33.10 34.00 61 61 37 57.00 38.21 39.12 79.00 79.90 203 207 85 165.60 12.01 12. 48 34. 10 35.00 62 63 38 58.00 39. 13 39.68 80.00 80.80 208 211 86 168. 80 12.49 13.00 35. 10 36.00 64 65 39 59.00 39. 69 40.33 80.90 81.70 212 216 87 172. 80 13.01 13. 48 36. 10 37.00 66 67 40 60.00 40.34 41.12 81. 80 82.70 217 221 88 176.80 13.49 14.00 37.10 38.00 68 69 41 61.50 41.13 41.76 82.80 83.60 222 225 89 180.00 14.01 14.48 38.10 39.00 70 70 42 63.00 41.77 42.44 83.70 84.50 226 230 90 184.00 14.49 15.00 39.10 40.00 71 72 43 64.50 42.45 43.20 84.60 85.50 231 235 91 188.00 15.01 15.60 40.110 41.00 73 74 44 66.00 43.21 43.76 85.60 86.40 236 239 92 191.20 15.61 16.20 41.10 42.00 75 76 45 67.50 43.77 44.44 86.50 87.30 240 244 93 195.20 16.21 16.84 42.10 43.00 77 78 46 69.00 44.45 44.88 87,40 88.30 245 249 94 199.20 16.85 17.60 43.10 44.00 79 80 47 70.50 44.89 45.60 88.40 89.20 250 253 95 202.40 17.61 18.40 44.10 45.00 81 81 48 72.00 89.30 90.10 254 258 06 206.40 18.41 19.24 45.10 46.00 82 83 49 73.50 90.20 91.10 29 263 97 210.40 19.25 20.00 46.10 47.00 84 85 50 75.00 91.20 92.00 264 267 98 213.60 20.01 20.64 47.10 48.00 86 87 51 76.50 92.10 92.90 268 272 99 217.60 20.65 21.28 48.10 49.00 88 89 52 78.00 93.00 93.90 273 277 100 221.60 21.29 21.88 49.10 50.00 90 90 53 79.50 94.00 94.80 278 281 101 224.80 21.89 22.28 O.10 50.90 91 92 54 81.00 94.90 95.80 282 286 102 228.80 22.29 22.68 51.00 51.80 93 94 55 82.50 95.90 96.70 287 291 103 232.80 22.69 23.08 51.90 52.80 95 96 56 84.00 96.80 97.60 292 295 104 236.00 23.09 23.44 52.90 53.70 97 97 57 85.50 97.70 98.60 296 300 105 240.00 23.45 23.76 53.80 84.60 98 99 58 87,00 98.70 99.50 301 305 106 244.00 23.77 24.20 54. 70 55.60 100 101 59 88.50 99.60 100.40 306 309 107 247. 20 24.21 24.60 55.70 56.50 102 102 60 90.00 100.50 101.40 310 314 108 251.20 24. 61 25.00 56.60 57. 40 103 104 61 91.50 101. 50 102.30 315 319 109 254.00 25.01 25.48 57.50 58.40 105 106 62 93.00 102.40 103.20 320 323 110 254. 00 25.49 25.92 58.50 59.30 107 107 63 94.50 103.30 104.20 324 328 111 254.00 25 93 26. 40 59.40 60. 20 108 109 64 96.00 104.30 105.10 329 333 112 254.00 26.41 26.94 60.30 61.20 110 113 65 97.51) 105.20 106.00 334 337 113 254.00 26.95 27.46 61.30 62.10 114 118 66 99.00 106.10 107.00 338 342 114 254.00 27.47 28.00 62.20 63.00 119 122 67 100.50 107.10 107.90 343 347 115 254.00 28.01 28.68 63.10 64.00 123 127 68 102.00 108.00 108.50 348 351 116 254.00 28.69 29.25 64.10 64.90 128 132 69 105.60 352 356 117 254.00 29. 26 29.68 65.00 65.80 133 136 70 108. 80 357 361 118 254.00 29.69 30.36 65.90 68.80 137 141 71 112.80 362 365 119 254. 00 30.37 30. 92 66.90 67. 70 142 146 72 116.80 366 370 120 254.00 30.93 31.36 67.80 68.60 147 150 73 120.00 371 375 121 254.00 31.37 32.00 68.70 69.60 151 155 74 124.00 376 379 122 254.00 32.01 32.60 69.70 70.50 156 160 75 128.00 380 384 123 254.00 32. 61 33.20 70. 60 71.40 161 164 76 131.20 385 389 124 254.00 33.21 33.88 71.50 72.40 165 169 77 135.20 390 393 125 254.00 33. 89 34.50 72.50 73.30 170 174 78 139.20 394 398 126 254.00 34.81 35.00 73.40 74. 20 175 178 79 142.40 399 400 127 254.00" 35.01 35.80 74.30 75.20 179 183 80 140.40

Page 4, lIne 2, after '(b)" insert: (1). entitledtohavehis primary insuranceSocial Security Amendments of 1958 were en- Page 5, line 8, strike out all after 'after"amount recomputed under such sflbpara-acted" and insert "December 1958." down to and including 'enacted,' in line 10graph." Page 10, line 15, after "(1)" insert "and sec- and insert "December 1958". Page 6, line 13, strike out "who—". tion 223 (b) Page 5, line 11 strike out "second." Page 6, line 14, after ""(A)"insert "who." Page 10, line 19, strike out all alter "to" Page 5, line 15, strike out "second." Page 6, line 15, strike out all after"223"down to and including "enacted" in line 21 Page 5, line 19, strike out "second." down to and including line 17, and insertand insert "January 1959." Page 5,line 22,strike out "(4)."" and Insert "(4); or." "or died prior to January 1959, and." Page 10, line 21, strike out "uninterrupt-. Page 5, alter line 22, insert: Page 6, line 18, strike out "died prior toedly.' "(E) who files an application for a recom-such third month" and insert "to whom the Page 11, line 11, strike out "smallest" and putation under subparagraph (B) of sectionprovisions of paragraph (5) of &ubsection (b)Insert 'smaller." 102(1)(2)of the Social Security Amend-are not applicable." Page 11, lines 24 and 25, strike out "the ments of 1954 after such month and is (or Page 9, line 17, alter "(1) "Insert "and sec.second month following the month in which would, but for the fact that such recomputa-tion 223 (b) ." thisact is enacted" and insert "December tion would not result in a higher primary Page 9, lines 19 and 20, strike out "the sec- 1958." Insurance amount for such individual, be)ond month following the month in which the Page 12, line 2, strike out "second." 1958 CONGRESSIONAL RECORD —HOUSE 18539 Page 12, lines 7 and 8, strike out "the Page 28, line 11, strike Out "benefit" andany teacher,principal,supervisor, school second month after the month in which thisinsert "benefit,". nurse, school dietitian, school secretary or act is enacted" and insert "December 1958." Page 28, line 13, strike Out "benefits" andsuperintendentemployedinanypublic Page 12, lines 9 and 10, strike Out °theInsert °benefits,". school, including teachers in unorganized third month alter the month in which this Page 28, line 14, strike Out "entitled" andterritory." - actis enacted" and insert "January 1959." Insert °entitled,". "Page69, strike Out all after line 9 over Page 12, strike Out all after line 19 over Page 29, line 12, strike Out "202" and in-to and including line 3 on page 70. to and including line 9 on page 13 and insert: sert "202,". Page 75,line10,after °exceed" insert "(i) In the case of any individual to whom Page 30, line 10, strike Out "subsection (k)'"$4800, the employee shall not be entitled the provisions of subsection (b) (5) of sec..and insert "subsections (k) and (m) (subject to the." tion215of the SocialSecurity Act,as. Page 30, line 15, strike Out "subsection (k)' Page 85, line 24, after "act" insert "and amended by this act, are applicable and onand insert "subsections (k) and (m) requests filed under subparagraph (F)of the basis of whose wages and self-employ- Page 37, line 13, after 'died" insert "or thesuch section after such date." ment income benefits are payable for monthsdate of enactment of this act." Page 87, lines 8 and 9, strike Out °clause prior to January 1959, his primary insurance Page 38, line 3, after "303." insert "(a)." and clause (B) and for purposes oi clause amount for purposes of benefits for such Page 38, strike Out line 11 and insert "is(2)" and insert "subsection." prior months shall, if based on an applica-not, and upon filing application therefor in Page 87, line 20, strike Out "$66" and insert tion for such benefits or for a recomputationthe month in which he died would not be, "$65." of such amount, as •the case may be, filedentitled to benefits for such month on the Page 88, line 4, strike Out "$36" and insert after December 1958, be determined underbasis of his wages and self-employment insuch section 215, as in effect prior to the come." Page 89, line 4, strike Out "five-sixths" and enactment of this act, and, if such indivi- Page 38, after line 22, insert: insert "fourteen-seventeenths." dual's primary insurance amount as so de- "(b) The paragraph (3) added to such sec- Page 89, line 6, strike out "$18" and in- termined is larger than the primary insurance tion 202 (g) by H. R. 5411, 85th Congress, issert '$17." amount determined for him under sectionhereby repealed effective with respect to Page 89,line9,strike Out °clause and 215 as amended by this act, such largerbenefits payable for any month following theclause (B) and for purposes of clause (2)' primary insurance amount (increasedtomonth in which this act is enacted." and insert "subsection." the next higher dollar If it is not a multiple Page 43, line 5, strike Out "death" and in- Page 89, line 19, strike Out "but." of a dollar), shall ror months after De-sert "death,". Page 89, line 21, strike Out "$33" and in- cember 1958 be his primary insurance amount Page 45, line 7, strike Out °death" and in-sert '$30." for purposes of such section 215 (and of thesert "death,". Page 91, lines 11 and 12, strike Out "clause other provisions) of the Social Security Act Page 46, line 15, strike Out 'entitled" and• and clause (B) and for purposes of clause as amended by this act in lieu of the amountit3ert "entitled,'. (2)" and insert "subsection." determined without regard to this subsec- Page 47, line 15, strike Out "entitled" and Page 91, line 21, strike Out 'but." tion." insert "entitled,". Page 91; line 23, strike Out "$66" and in- Page 17 line 13, strike Out "without in- Page 47, line 17, before "mother's" insertsert '$65." terruption." °such." Page 92, line 7, strike Out "$36" and in- Page 48, line 16, strike Out all alter "under"sert '$35." Page 18, line 24, strike Out "coverage.""down to and including "payable" in line 19 Page 93, lines 12 and 13, strike Out "clause and insert "coverage; except that the pro-and insert "subsection (d) or (g) of sectionand' clause (B) and ior purposes oi clause visions of subparagraph (A)of this para-202 of the Social Security- Act for months in(2)" and insert 'subsection." graph shall not apply in the case of any in-any taxable year, of the individual to whom Page 93, line 22, strike out 'but." dividual with respect to whom a period ofthe person entitled to such benefits is mar- Page 93, line 24, strike Out "$66" and indisability would, but for such subparagraph, sert '$65." beginpriorto 1951." ried.'Page 50, line 12, strike Out "for all such Page 94, line 10, strike Out "$36" and in- Page 19, line 21, strike Out all after "hus-t:Onths of such year." sert "$35." band" down to and including line 23 and in- Page 53, strike out all after line 19 over to Page 95, line 10, strike Out "70" and insert "is not- entitled to disability insuranceand including line 20 on page 54. sert "75." benefits and is not entitled to old-age in- Page 54, line 23, strike Out '312" and insert Page96,line20,after"Rico,"insert surance benefits." "the." Page 21, line 3, strike Out all after "wife" Page 55, line 11, strike Out "313" and insert Page 97, strike Out lines 13 to 18 inclusive. down to and including "benefits" in line 5"312." Page 97,line 20, strike Out "511" and and insert "is not entitled to disability in- Page 56, line 17, strike Out "314" and insertinsert "510." surance benefits and is not entitled to old- Page 97, after line 24, insert age insurance benefits." Page 58, line 4, strike out "315" and insert - Page 22, line 22, strike Out all after "the"O314 "PAYMENTS TO LEGAL REPRSENTAT1VES where it appears the second time over to Page 58, lines 6 and 7, strike Out °and sec- - "SEc.511. (a)Title XI of the Social Se- and including °entitled" in line 1 on pagetion 215 (d)." curity Act is amended by adding after sec- 23 where it appears the first time and in- Page 59, line 11, alter "202" insert "(f) tion 1110 following new section: sert "first month for which such individualor." 'PUBLIC ASSISTANCE PAYMENTS TO LEGAL is not entitled to such benefits unless such Page 59, line 12, strike Out "by a parent.' REPRSENTAT1VES individual is, for such later month." Page 62, line 7, strike Out "316'! and in- 'Sec. 1111. For purposes of titles I, IV, X, Page 26, line 12 strike Out all after "un-sert "315." andXIV, payments on behalf of an inder" down to including °insurance" in line Page 63, line 8, alter "Tennessee," Insertdividual, made to another person who has 21 and insert "section 203 (b)(1)or (2),°Vermont." been Judicially appointed, under the law of under section 203 (c), or under section 222 Page 63, line 11, strike Out "subparagraph"the State in which such individual resides, (b)." and insert "subparagraph,". as legal representative of such individual ior (4) Such paragraph is further amended by Page 64, line 9, strike Out "(8) )" andinsertthe purpose of receiving and managing such striking Out "(A), (B), and (C)" in the"(8)),". payments (whether or not he is such in- material following subparagraph (C) and in- Page 66, line 12, after "(6)" insert "or thedividual'slegalrepresentativeforother serting in lieu thereof "(A), (B), (C), andcorresponding provision of prior law." purposes), shall be regarded as money pay.. (D)", by redesignating subparagraph C) as Page 66, line 19, alter "(6)" insert "or the ments to such individual.' subparagraph (D), by inserting "and" at thecorresponding provision of prior law." "(b) The amendment made by subsection end of subparagraph (B) and by adding Page 69, after line 9, insert: (a) shall be applicable in the case of pay- alter such subparagraph (B) the following "TEACHERS IN THE STATE OF MAINE ments to legal representatives by any State new subparagraph: 'SEc. 316. For the purposes of any modifi-made alter June 30, 1958; and to such pay- (C) the number equal to the number oication which might be made after the datements by any State made after December 31, months for which such." of enactment of this act and prior to July 1,1955, and prior to July 1, 1958, it certifica- Page 27,line6,after "ing" insert "a1960, by the State of Maine of its existingtions for payment to such State have been comma and." agreement made under section 218 of themade by the Secretary of Health, Education, Page 27, line 7, strike Out 'benefits" andSocial Security Act, any retirement system ofand Welfare with respect thereto, or such insert "benefits,". such State which covers positions oZ teachersState has presented to the Secretary a claim Page 27, lines 23 and 24, strike Out "in-and positions of other employees shall, If(and such Other data as the Secretary may serting'ordisability'immediatelyaltersuch State so desires, be deemed (notwith-.require) with respect thereto, prior to July old-age'" and insert "striking Out 'or' Im-standing the provisions of subsection (d) oi1, 1959." mediately preceding(3)' aid by insertingsuch section) to consist of a separate retire- Page 100, line 20, strike Out "section 522" or (4) in the case of any individual entitledment system with respect to the positionsand insert 'this part." to disability insurance benefits, the quarterof such teachers and a separate retirement Page 100, ilnes 22 and 23, strike out "such in which he most recently became entitledsystem with respect to the positions of suchsection 522" and Insert 'this part." to disability insurance benefits,' immediatelyOther employees; and for the purposes oi Page 104, line 21, after 'the" insert "Fed- alter 'section.'" this sentence, the, term 'teacher' shall meaneral Security." 18540 CONGRESSIONAL RECORD —HOUSE August 19 Page105, line 20, after "the" Insert 'Ted-while so serving away from their places ofcompleted. jt Is my understanding that eral Security." residence. only a relatively few cases would be af- Page 107, strike out lines 9 to 24, inclusive. "(d) The Council shall make a report offected by this. Page 108, line 2, strike out "703" and in-Its findings and recommendations (including Third, the Senate added an amend- sert "702." recommendations for changes in the provi- Page 108, line 9, strike out "704" and in-sions of part 3 of title V of the 8ocial Se-ment the purpose of which Is to facili- sert '703." curity Act) to the Secretary and to the Con-tate the extension of social security cov- Psge 108, after line 11, insert: gress on or before January 1,1960, aftererage to employees of certain municipal- which date such Council shall cease to exist." "ADVISORY CoUNCIL ON PU5LIC ASSISTANCE ities in the State of Maine until July 1, "SEc. 704. (a) There is hereby established The SPEAKER.Is there objection to1960.It is my understanding that only an Advisory Council on Public Assistance fortherequestofthegentleman froma few hundred teachers in the State of the purpose of reviewing the status of theArkansas? Maine are involved in this amendment. public assistance program in relation to the There was no objection. While the foregoing are the only real old-age, survivors, and disability insurance substantive amendments to theold- program, the fiscal capacities of the States The Senate amendments were con-age, survivors, and disability insurance and the Federal Government, and any othercurred in. provisions of the bill, I should mention factors bearing on the amount and propor- A motion to reconsider was laid onthat technical amendments were made tion of the Federal and States shares in thethe table. so as• to coordinate this measure with

public assistance program. • GENERAL LEAVE TO EXTEND "(b) The Council shall be appointed by legislative action taken by the Congress the Secretary before January 1959 without re- Mr.MILLS. Mr. Speaker, I ask unan-several days ago with respect to several gard to the civil-service laws and shall con-imous consent that the gentleman fromminor social security amendments. In- sist of the Commissioner of Social Security,New York [Mr. REED], and I, and otherasmuch as no substantive changes are as Chairman, and of 12 other persons whoMembers who desireto do so, may extendinvolved, I will not burden this discussion shall, to the extent possible, represent em-their remarks at -thispointintheby going into details relative to these ployers and employees in equal numbers,RECORD. technical and conforming amendments. persons concerned with the administration or financing of the State and Federal pro- The SPEAKER. Without objection, itNext, I will explain an amendment which grams, other persons with special knowledge,is so ordered. was made to those provisions of the experience, or qualifications with respect to There was no objection. Housebillrelatingtochild welfare the program, and the public. Mr. MILLS. Mr. Speaker, the sub-services. "(c)(1) The CouncIl is authorized to en-stantive amendments made by the Sen- A Senate amendment provides for the gage such technical assistance, as may beate to H. R. 13549, the Social Securityestablishment of an Advisory Council required to carry out its functions, and theAmendments of 1958, are relatively fewon Child Welfare Services to be ap- Secretary shall, in addition, make available to the Council such secretarial, clerical, andin number.I have certain general ob-pointed by the. Secretary of Health, Edu- other assistance and such other pertinentservations to make relative to the ac-cation,and Welfare before January data prepared by the Department of Health,tions of the Senate and some of the con-1959, for the purpose of making recom- Education, and Welfare as it may require tosiderations which I understand weremendations and advising the Secretary

carry out such functions. involved in connection with the amend- • in connection with the effectuation of "(2) Members of the Council, while serv-ments, but before doing so I will sum-that provision of the bill which extends ing on business of the Council (inclusive ofmarize and explain briefly precisely whatchild welfare services to urban areas travel time), shall receive compensation at as well as rural areas. Senator PURTELL, rates fixed by the Secretary. but not exceed-the substantive amendments were in ing $50 per day; and shall be entitled to re-order that Members of the House may• thesponsor of the amendment, ex- ceive actual and necessary traveling expensesbe aware of the action which has beenplained on the floor that the purpose and per diem in lieu of subsistence while sotaken. of this council is to assure that there serving away from their places of residence. First, I will outline the amendmentswill be an effective coordination between (d) The Council shall make a report ofwhich were made by the other body topublic agencies and existing voluntary its findings and recommendations (includ-the old-age,survivors,and disabilityorganizations and associations performing recommendations for changes in the pro-insurance provisions of the bill.Thereing services in urban areas.He stated visions of sections 3, 403, 1003. and 1403 of the Social Security Act) to the Secretary and thewere only three substantive amendmentsthat "Duplication of effort could well Congress, such report to be submitted notto this part of the bill. result in waste of both money and time later than January 1, 1960, after which date First, and most important, under theto the detriment of all agencies.In such Council shall cease to exist." House-passed bill the benefit increases oforder to avert any such situation aris- Page 108, after line 11, insert: 7 percent—with a minimum of $3—ing, and to utilize to the fullest extent "ADvIsoRY COUNCIL ON CHILD WELFARE would have been effective for monthsthe existing voluntary agencies and the SERVICES following the second month followingpublic agencies now existing or that "SEC. 705. (a) There Is hereby establishedthe month of enactment.Under themight well be created or expanded by an Advisory Council on Child Welfare Serv-Senate version, the benefit increases willthis program, I suggest that we provide ices for the purpose of making recommenda-be effective for January 1959, and thethe machinery to help direct and assess tions and advising the Secretary of Health,first checks in the increased amountsthe progress of the program initiated Education, and WeLfare in connection withwill go out early in February. by the change in the law." The council the effectuation of the provisions of part 3 is to be composed of 12 members repre- oftitle V of the Social Security Act, as Second, under the House-çassed bill amended by the Social Security Amendmentsprovision is made for payment of bene-senting public, voluntary, civic, religious, of 1958. fits to a child, if at the time of the work-and professional welfare organizations (b) The Council shall be appointed byer's death the child was a member ofand the public. the Secretary before January 1959, withoutthe worker's household, if the child was Finally, the Senate amended the pub- regard to the civil-service laws, and shallnot being supported by any other per-lic-assistance provisions of the bill in consist of 12 persons representative of pub-son, and if the worker's spouse adoptsseveral respects. lic, voluntary, civic, religious, and profes-thechildwithin2years As may be recalled, under the new sional welfare organizations and groups, or after the other persons with special knowledge, ex-worker's death.Under the House ver-formula for assistance expenditures for perience, or qualifications with respect tosion there could be a case where thethe aged, blind, and disabled, contained child-welfare services, and the public. worker had died several years ago andin the House-passed bill, the Federal •'(c)(1) The Secretary shall make avail-where all of these conditions were met • share would be four-fifths of the first able to the Council such secretarial, cleri-except that the widow has not com-$30 of the average monthly assistance cal, and other assistance and such other per-pleted adoption of the child, in whichexpenditure as under present law, and tinent data prepared by the Department ofevent since the 2 years condition hadthe Federal participation in the assist- Health, Education, and Welfare as it may re-not been met the child could not receive quire to carry out such functions. ance expenditures made above these any benefits. Under the Senate amend- • (2) Members of the Council, while serv- maximums, within the ceiling of $66, ing on business of the Council (inclusive ofment there will be afforded a period of • would be 50 percent for States whose per travel time), shall receive compensation at2 years from the date of enactment ofcapita income was equal to or above the rates fixed by the Secretary, but not ex-the bill for the qualification of suchaverage per capita income for the United ceeding $50 per day; and shall be entitledchild.That is, there will be a furtherStates and would range upward to 70 to receive actual and necessary travelingopportunity of 2 years from date of en-percent for States whose per capita in- expenses and per diem in lieu or subsistenceactment for adoption proceedings to becomeisbelow the national average. 1958 CONGRESSIONAL RECORD —HOUSE• 18541 flrst, a Senate amendment reduces theclerical, and conforming amendments Second. OASI coverageforcertain range on the variable matching provi-which 1 need not explain here. State and local employees in the State sion from 50—70 percent to 50—65 percent. The, public assistance provisions in the.of Maine would be facilitated; In other words, the 70 percent wasbill are the result of very careful con-. Third. There would be. established an changed to 65 percent.Second, aSen-sideration and study.The new formulaAdvisory Council on Child Welfare; ate amendment reduced the maximumis a sound and Important improvement Fourth. The status of a legal repre- matchable payment for the aged, blind,.In the law. We had the benefit of thesentative with respect to a mentally and disabled, the so-called Federal "ceil-best technical advice of the experts fromincompetent public-assistance recipient ing," from $66 to $65, and the maximumthe Department of Health, Education,would be clarified; f or aid to dependent children recipientsand Welfare indeveloping the new Fifth. The existing law provisions af- from$33to$30.Third,aSenateformula and also the best technical ad-fecting the Navaho and Hopi Indian amendment reduced the Federal share ofvice of the State welfare directors. Tribes would be restored; aid to dependent children payments Secretary Fleming has indicated that Sixth. There would be established an from five-sixths of the first $18 to four-there are three elements in the newAdvisory Council on Public Assistance; teen-seventeenths of the first $17.It isformula which greatly improve the pro-and understood that these three changesgram—namely, first, changing the indi- Seventh. The public-assistance benefit would affect savings so as to reduce thevidual matching maximum to an aver-formulas would be revised so as to re- estimated cost of the public-assistanceage; second, combining the individualduce the estimated cost to the Federal formulas from $288 million in the Housemoney maximum and the medical careTreasury. version of the bill to $197 million in themaximum into one figure; and third, re- It is in the interest of expediting the Senate version. lating the Federal grants to the fiscallegislative consideration of this bill and There are three other Senate amend-ability of the States by the use of perinsuring its passage by the Congress prior ments to the public-assistance provisionscapita income. to adjournment that the chairman and I of the bill which should be explained. Secretary Fleming indicated that ifhave urged the adoption of this pro- A provision was included to authorizethe Congress were going to make anycedure of accepting the Senate amend- the establishment of an Advisory Coun-.öhanges in the public assistance formula,ments:In view of the fact old-age ahd cil on Public Assistance, consisting of thethe one included is the soundest thatsurvivors insurance benefits have not Commissioner of Social Security and 12could be devised. been liberalized since 1954, it is appro- other members to be appointed by the On several occasions President Eisen-priate that the Congress should act at Secretary of Health, Education, andhower has recommended that Federalthis time to provide the modest increases Welfare to review the status of the pub-grants be based upon the fiscal abilitycontemplated by this legislation.On lic-assistance program in relation to old-of the States.He made such a recom-the subject of public assistance liberali- age, survivors, and disability Insurancemendation with respect to vocationalzation I am confident that I express the program, the fiscal capacities of therehabilitation and with respect to edu-hope of every Member of Congress that States and the Federal Government, andëation.The Commission on Intergov-the States will act to reflect the addi- any other factors bearing on the amounternmental Relations, which he appointedtitonal Federal funds available under and proportion Federal and this legislation in Increased benefits to of the also has so recommended.Recognizing,the genuinely .needy of our Nation. States'shares In the program. Thehowever, that there may be some modi- Council is directed to report its findings Mr. BOSCH. Mr. Speaker, it should fications that might be necessary in thebe understood that, while the conference and recommendations not later thanproposed public assistance formula, the January 1, 1960, to the Secretary andprovision was added, as I have indicated,report on the Welfare and Pension the Congress. Plans Disclosure Act Is brought before establishing an advisory council on pub-the House without objection, there is still Second, an amendment was adopted tolic assistance for the purpose of review-considerable feeling that this legislationS facilitate payment of public-assistanceing the status of the programs in rela-covers certain plans upon which no evi- funds in instances where the recipient istion to the insurance program, the fiscaldence has been taken as to possibility of legally incompetent or where, for onecapacities of the States and the Federalabuses with respect to such plans azkd reason or another, he is unable to han-Government, and anyotherfactorsthey should be exempt.It is respect- dle his own affairs.This amendmentbearing on the amount and proportionfully suggested that the Committee on provides that for purposes of title I, IV,of the Federal and State shares in theEducation and Labor should make it X, and XV payments on behalf of an in-public assistance programs. their business to conduct hearings with dividual, made to another person who As chairman of the Committee onrespect to these plans in order to do has been judicially appointed under theWays and Means, I can say that theequity. law of the State in which such individualcommittee will give careful considera- Mr. PHILBIN.Mr. Speaker, this bill resides, as legal representative of suchtion to any recommendations made byhas great merit.It is urgently required individual for the purpose of receivingthis council and we will give very care-to adjust social security benefits more and managing such payments—whetherful study to how the new amendmentsapproximately in line with increases in or not he is such individual's legal rep-work out both with respect to theirwages and prices.Itis necessary to resentative for other purposes shall beeffect in the various States and withbuttress the actuarial soundness of the regarded as money payments to such in-respect to the Federal legislation. program. dividual.It is our understanding that Mr. Speaker, this is sound and meri- this will give effect to the laws in certain Twelve million people now receive specific States, particularly Texas andtorious legislation which will be of greatmonthly checks from the Social Security Louisiana, which provide for the ap-benefit to millions of American citizens.System as a foundation of their economic pointment of a legal representative to Mr. REED. Mr. Speaker, 1 have con-security.Numbered among these are receive public-assistance payments incurred In the action to have the Houseaged and disabled persons, widows and behalf of an incompetent person; evenagree with the Senate amendments toorphans, whose social-security benefits though those State laws do not make thisH. R. 13549, the Social Security Amend-are the major source of their support. person a general guardian for all otherments of 1958.While these amend-Current inflation and rising prices have purposes. ments are 96 In number, they are forgreatly diminished the purchasing power Third, a Senate amendment removesthe most part of a technical, clarifying,of these benefits. or conforming character. Seventy-five million people are cur- from the bill the provision which the rently contributing to the socialse- House bill contained which would have The principalsubstantivechangescurity program toward benefits which repealed certain provisions of existingmade by the Senate may be summarized•they and their families will need and lawrelatingto publicassistancetoas follows: expect to have when they reach ad- Navaho and Hopi Indians residing on First. The effective date for the In-vanced years, or are disabled, or when reservations or on allotted trust lands. crease in OASI benefit payments wouldthe breadwinner of the family may ex- The foregoing are the substantivebe made applicable with respect to thepire. The rights of these people to bene- amendments which were made by themonth of January 1959 instead of thefits must and should be protected at all other body. The balance of the amend-second month following the month oftimes and the Congress cannot be dila- ments consist of numerous technical,enactment; tory about increasing the benefits to CW—1167 18542 CONGRESSIONAL RECORD —HOUSE August 19 meetaugmented costs of living and ad-kept on a firm, solid financial basis.At justing the rates to make sure that thethe same time it must be understood by overall fund is actuarially solvent andthe beneficiaries who are seeking larger sound. benefits that such can be assured in the The proposed Increases, while desir-long run only by increasing the contri- able and helpful, are certainly not ade-butions or by making up any resulting quate in most instances. For many, thedeficit out of general revenue. benefits are and will be clearly inade- One of the most advantageous provi- quate and that is a problem that Con-sions of the bill Is that which increases gress must approach before long.In-from $4,200 to $4,800 the maximum of stead of increasing the benefits to thethe annual amount of earnings on which point where they might be adequate inworkers pay social-security taxes and a large number of cases, this bill willwhich count in the computation of their use the additional contributions pro-benefits, since it reflects a conservative vided by the measure to strengthen theadjustment to the rise in wages which financing of the system more than tohas taken place.Another very salu- improve benefit protection. tary provision is that which extends dis- The present state of the fund mustability protection to provide monthly give Congress deep concern. The testi-benefits for insured workers who are no mony shows that at the present time thelonger able to work because of extended actuarial balance of the program fundtotal disability. is not what it should be, as measured The committee is of the opinion that by standards of prudence and sound in-all of the recommended improvements vestment.The drains on the fund havein the disability provision of the pro- been truly monumental and the incomegram can be adequately financed from has not kept pace with the heavy draftthe contributions already earmarked for upon the fund.Recent estimates showthe Federal disability insurance trust actuarialdeficits, and imbalance, andfund. The committee has recommended actuaries are agreed, that deficits of thisthat monthly benefits for the dependents' size cannot be permitted to continue. of disabilityinsurancebeneficiaries The disability insurance part of theequaling those now provided for the. de- program shows an actuarial surplus be-pendents of retired workers be adopted, cause this program was set up probablyand that the so-called offsetting provi- on a more conservative basis and thesions of the present law be eliminated. contributions up to this point have been The bill is very extensive and contains fully adequate to meet outgo.Never-many very desirable changes and im- theless, the committee found that thereprovements in the social-security sys- was room for improvement in the pro-tem which I will not analyze at length tection afforded. in these remarks.Several very impor- It was the considered view of the com-tant problems will receive further care- mittee that the financial basis of thefulstudy,includinghospitalization old-age, survivors', and disability insur-insurance for old-age survivors and de- ance program needs to be strengthenedpendent beneficiaries, coverage of tips, so as to make certain that it is sound,the impact of the retirement test, all that old-age, survivors', and disabilityof which seem to hold promise of addi- insurance benefit amounts need to be in-tionalhelpfulrevisions.Thesocial- creased, that the maximum limits onsecurity program is a broad one and the annual amount of earnings that canranges over a field that covers many be credited toward benefits and taxedpressing and difficultsocial problems for old-age survivors' and disability in-that have to do with the welfare of a surance purposes need to be increasedlarge body of American citizens. and, finally, that the disability insurance It is appropriate that Congres should program should be improved by thefrom time to time give this program provision of benefits for dependents ofcareful attention with a view to bring- disabled workers and by the eliminationing it up to date and making it what of the provision offsetting other disabil-it was intended to be, an instrument for ity benefits, and in other ways. distributing justice, for easing the lot I think the American people will beof millions of worthy people who have In hearty agreement with these objec-retired after long, arduous labors in tives.Of great concern to many of usvarious important economic fields, and are the questions constantly raised re-providing social benefits across a wide garding the soundness of the fund andspan of American life for individuals the steady increase of the rates.Of course, it must be recognized that unlessand families who, because of mishap the rates are increased whenever theand misfortune, particularly health or benefits are increased, that the fund isadversity, do not have the means to solve bound to become actuarily unsound.their personal problems without guid- The original long-time plans for theance and help. fund were considered to be sound, but I commend the committee forits they have unquestionably been thrownsplendid work on this vital measure and, out of balance by recent changes in thewhile I realize there are still imperfec- benefits and rates, and if the growingtions and shortcomings in the social- demand for higher benefits is any 'cri-security program, it is gratifying for me terion, this Imbalance may present ato know that Congress is steadily im- real problem in the future. proving and strengthening these laws in It must be the purpose of the Con-order to promote more efficient admin- gress at all times to make sure thatistration and more humanely just re- this fund Into which so many hard-sultsfortheAmericanpeople.I working Americans have paid a substan-strongly support this theasure and urge tial portion of their earnings, and uponits adoption by unanimous vote of the which they must depend for benefits, isCongress.

Public Law 85-840 85th Congress, H. R. 13549 August 28, 1958 AN ACT 72Stat. 1013. Toincrease benefits under the Federal Old-Age, Survivors, and Disability Insur- ance System, to Improve the actuarial status of the Trust Funds of such System, and otherwise improve such System; to amend the public assistance and maternal and child health and welfare provisions of the Social Security Act; and for other purposes. Be it ernwted by the Senate and HouBe of Repre8entative8 of the United State8 of America in Congre88 a88embled, That this Act may Sooial Seourity be cited as the "Social Security Amendments of 1958". ts of 1958. TITLEI—INCREASE IN BENEFITS UNDER TITLE II OF THE SOCIAL SECURITY ACT

INCREASE IN BENEFIT AMOTJNTS Primary Insurance Amount

SEC. 101. (a)Subsection(a) of section 215 of the Social Security 64 Stat. 506. Act is amended to read as follows: 42 USC415. "Primary Insurance Amount "(a) Subject to the conditions specified in subsections (b), (c), and (d) of this section, the primary insurance amount of an insured individual shall be whichever of the following is the largest: "(1) The amount in column IV on the line on which in column III of the following table appears his average monthly wage (as determined under subsection (b)); "(2) The amount in column IV on the line on which in column II of the following table appears his primary insurance amount (as determined under subsection (c)); "(3)Theamount in column IV on the line on which in column Iofthe following table appears his primary insurance benefit (as determined under subsection (d)) ;or "(4) In the case of an individual who was entitled to a disability insurance benefit for the month before the month in which he became entitled to old-age insurance benefits or died, the amount in column IV which is equal to his disability insurance benefit.

308500—58 9Z7) Pub. Law 85-840 -2- August 28, 1958 72Stat. 1014. "TAULEFOR DETERMINING PRIMARY INSURANCE AMOUNT AND MAXIMUM FAMILY BENEFITS

"I II III IV V (Primary insurance (Primary Insurance (Average monthly (Primary (Maximum benefit under 1939 amount under 1954 wage) inaurance family Act, asmodified) Act) amount) benefits)

'If an iudividuai'o Or hio primary inour-Or hlo average monthly And the mail- prImary Inourauce ance amount (as deter- wage (o determined mum amount henefit (as determined mined under oubsec. under oubsec. (h)) 10— The amount of benefits pay- tmder subsec. (d)) Is— (c)) Is— referred to In able (as pro - thepreceding vided In see. paragraphs of203 (a)) on the this subsection basisofhis 'At But not But not But not shall be— wages andself- more At least— nore At least— more employment least— Income shall than— than— than— be-

$10.00 $30.00 $54 $33 $53.00 "$10.01 10.48 $30.10 31.00 $55 56 34 54.00 10.49 11.00 31.10 32.00 57 58 35 55.00 11.01 11.48 32.10 33.00 59 60 36 56.00 11.49 12.00 33.10 34.00 61 61 37 57.00 12.01 12.48 34.10 35.00 62 63 38 53.00 12.49 13.00 35.10 36.00 64 65 39 59.00 13.01 13.48 36.10 37.00 66 67 40 60.00 13.49 14.00 37.10 38.00 68 69 41 61.50 14.01 14.48 38.10 39.00 70 70 42 63.00 14.49 15.00 39.10 40.00 71 72 43 64.50 15.01 15.60 40.10 41.00 73 74 44 66.00 15.61 16.2*) 41.10 42.00 75 76 45 67.50 16.21 16.84 42.10 43.00 77 78 46 69.00 16.85 17.60 43.10 44.00 79 80 47 70.50 17.61 18.40 44.10 45.00 81 81 48 72.00 18.41 19.24 45.10 46.00 82 83 49 73.50 19.25 *00 46.10 47.00 84 86 50 75.00 20.01 64 47.10 48.00 86 87 51 76.50 20.65 21.28 48.10 49.00 88 89 52 78.00 21.29 21.88 49.10 50.00 90 90 53 79.50 21.89 22.28 50.10 50.90 91 92 54 81.00 22.29 22.68 51.00 51.80 93 94 55 82.50 22.69 23.08 51.90 52.80 95 96 56 84.00 23.09 23.44 52.90 53.70 97 97 57 85.50 23.45 23.76 53.80 54.60 98 99 58 87.00 23.77 24. 54.70 55.60 100 101 59 88.50 24.21 24.60 55.70 56.50 102 102 60 90.00 24.61 28.00 56.60 57.40 103 104 61 91.50 25.01 25.48 57.50 58.40 105 106 62 93.00 25.49 25.92 58.50 59.30 107 107 63 94.50 25.93 2&40 5W40 60 108 109 64 9&00 65 97.50 26.41 26.94 60.30 6I. 110 113 99.00 26.95 27.46 61.30 62.10 114 118 66 100.50 27.47 28.00 62.20 63.00 119 122 67 .o1 28.68 63.10 64.00 123 127 68 102.00 105.60 28.69 29.25 64.10 64.90 128 132 69 fl26 fl68 6&00 680 133 136 70 10810 29.69 30.38 65.90 66.80 137 141 71 II2. 3037 30.92 66.90 67.70 142 146 72 116.80 30.93 31.36 67.80 68.60 147 ISO 73 I.00 31.37 32.00 68.70 69.60 151 155 74 124.00 32.01 32.60 69.70 70.50 156 160 75 I.00 32.61 33. 70.60 71.40 161 164 76 I3I. 33.21 33.88 71.50 72.40 165 169 77 I35. 139.2*) 33.89 34.50 72.50 73.30 170 174 78 34.51 35.00 73.40 74. 175 178 79 142.40 35.01 35.80 74.30 75.20 179 183 80 146.40 35.81 36.40 75.30 76.10 184 188 81 150.40 82 36.41 37.08 76. 77.10 189 193 154.40 7.09 37.60 77. 78.00 194 197 83 157.60 37.61 38. 78.10 78.90 198 2 84 161.60 38.21 30.12 79.00 79.90 203 )7 85 165.60 39.13 39.68 80.00 80.80 MS 211 86 168.80 39.69 40.33 80.90 81.70 212 216 87 172.80 40.34 41.12 81.80 82.70 217 221 88 176.80 41.13 41.76 g2.8o 83.60 222 225 89 180.00 41.77 42.44 83.70 84.50 226 230 90 184.00 42.45 4t 84.60 8.5.50 231 235 91 188.00 191.4) 43.21 43.76 85.60 St40 236 239 92 43.77 44.44 88.50 87.30 240 244 93 195.20 94 I99. 44.45 44.88 87.40 88.30 245 249 95 44.89 45.60 88.40 89. 250 253 2.4o 89.30 90.10 254 258 96 90.20 91.10 259 263 97 210.40 91.20 92.00 264 207 98 213.60 92.10 92.90 268 272 99 217.60 93.00 93.90 273 277 100 721.60 94.00 94.80 278 281 101 224.80 94.90 9.SO 282 286 102 228.80 August 28, 1958 -3- Pub. Law 85-840 72 Stat. 1015. TARLEFOR DETERMINING PRIMARY INSURANCE A1ouNT AND MAXIMI;M FAMILY BENEFIrB—COntjnued

"1 ii III IV V '(PrimaryInsurance (Primary Insurance (Average monthly (Primary (Maximum benefit under 1939 amount under 3954 wage) insurance family Act,asmodified) Act) amount) benefits)

"If an individuals Or his primary insur- Or hisaveragemonthly And the maxi- primary Insurance ance amount (as deter- wage (as determined benefit mum amount (asdetermined mined under subsec. under subsec. (b)) The amount of benefits pay- under subsec. (d)) is— (c)) Is— referred to in able (as pro- preceding vided in Sec. I paragraphs of 203 (a)) on the this subsection basis of his 'At But not But not But not shall be— wages and self• lea8t— more At least— more At least— more than— employment than— than— income shall be-

$95.90 $96. 70 287 $291 tO $232. 80 96. 80 07.60 292 295 104 236.00 97. 70 98.60 29 300 105 240.00 98. 70 99. 50 301 3k5 106 244.00 99.60 100.40 306 O9 1fl7 247.20 100. O 101.40 310 314 108 251.20 101. O 102.30 315 319 109 254.00 102.40 103.20 320 323 110 254.00 103.30 104.20 324 328 111 254.00 104.30 105. 10 329 333 112 254.00 105.20 106.00 334 337 113 254.00 106.10 107.00 338 442 114 254,00 107. 10 107.90 343 347 115 254.00 108.00 108. 41 348 351 116 254.00 3.52 356 117 254.00 357 31 11$ 254.00 362 365 119 254.00 3M 370 120 254.00 371 375 121 254.00 376 379 122 254.00 380 384 123 254.00 385 389 124 254.00 390 393 325 254.00 394 398 l2 2M.00 399 400 127 254. ('

AverageMonthly WLge

(b)(1) Section 15 (b) (1) of such Act is ILinended by striking42 USC 415. out"An"andinsertingin lieu thereof the following: "Forthepi— poses of column III ofthetableappeamhig insubsection(a) ofthis section, an". (2) Suchsection15 (b)is furthei neiided by ;iddiug at the end thereof the following paragraph: "(5) The provisions of this subsection S1nL11 be applicable onlyiii the case of an individual with respect to whom not less th;Lhl sixof the quarters elapsing after 1950 are quarters of coverage, and— "(A) who becomes entitled to benefits under section 21)2 (a)42 USC402, or ectoii 223after1)ecernber 1958, or 423. "(B) who dies after such month without being entitledto Post, pp.1020, benefitsunder urli section 202 (a) or section 23, or 1021. "(C) who files aunpplicatioiu for a recomputation undersec— tioiu 215 (f)(2)(A) Lfteuuclu niotutli and is (or wonld, but for the provisions of section 1t (f)(6), be) entitled to lu1Lve his primary insurance amount recomputed under such section,or "(D) who dies after such month and whose survivorsaie (or would. but for the provisions of section 215 (f) (6), be) entitled to a recomputLtio1u of his primary ilusuirance ainoutut undersection 215 (f) (4); or "(E)who files an aplicatioiu for recomputation uiudei sub— paragraph(H) of section 102 (f) ()ofthe Social Seeuiitv 68 Stat. 1062. Amendments of 1954 after suchmonth and is (or would, but 42 USC415note. for the fact that such recomputatioii would not result iiia higher primary Insurance arnowt for suchindividual, be) entitled to have his primary insurance amount recomputed under such subparagraph" Pub. Law 85-840 -4- August 28, 1958 72 Stat. 1016. Primary Insurance Amount Under 1954 Act 42 iC 415. (c) Section 215 (c) of such Act is amended to rend as follows: "Primary Insurance Amount Under 1954 Act "(c) (1) For the purposes of column II of the table appearing in subsection (a) of this section, an individual's primary insurance amount shall be computed as provided in, and subject to the limitations specified in, (A) this section as in effect prior to the enactment of the Social Security Amendments of 1958, and (B) the applicable 68 Stat. 1052.provisiois of the Social Security Amendments of 1954. "(2) The provisions of this subsection shall be applicable only in the case of an individual— "(A) who became entitled to benefits under section 202 (a) or 42 USC 402, section 223 or died prior to January 1959, and 423. "(B) to whom the provisions of paragraph (5) of subsection. Post, pp. 1020, (b) are not applicable." Primary Insurance Benefit TJnder 1939 Act (d) Section 215 (d) of such Act is amended to read as follows: "Primary Insurance Benefit Under 1939 Act "(d) (1) For the purposes of column I of the table appearing in subsection (a) of this section, an individual's primary insurance benefit shall be computed as provided in this title as in effect prior to the 64 Stat. 477. enactment of the Social Security Act Amendments of 1950, except 42 USC301 that— note. "(A) In the computation of such benefit, such individual's 2 P. 1051. average monthly wage shall (in lieu of being determined under 42 USC 409. section 209 (f) of such title as in effect prior to the enactment of such amendments) be determined as provided in subsection (b) of this section (but without regard to paragraph (5) thereof), except that his starting date shall be December 31, 1936. "(B) For purposes of such computation, the date he became entitled to old-age insurance benefits shall be deemed to be the date he became eititled to primary insurance benefits. "(C) The 1 per centum addition provided for in section 209 (e) (2 of this Act as in effect prior to the enactment of the Social Security Act Amendments of 1950 shall be applicable only with respect to calendar years prior to 1951, except that any wages paid in any year prior to such year any part of which was included in a period of disability shall not be counted.Notwith- sthnding the preceding sentence, the wages paid in the year in which such period of disability began shall be counted if the counting of such wages would result in a higher primary insurance amount. "(D) The provisions of subsection (e) shall be applicable to such computation. "(2) The provisions of this subsection shall be tpplicable only in the case of an individual— "(A) with respect to whom at least one of the quarters elapsing prior to 1951 is a quarter of coverage; "(B) who meets the requirements of any of the subparagraphs of paragraph (5) of subsection (b) of this section; and "(C)whoattained age 22 after 1950 and with respect to whom less than six of the quarters elapsing after 1950 arc quarters of coverage, or who attained such &ge before 1951." August 28, 1958 -5- Pub. Law 85-840 72 Stat. 1017. Minimum Survivors or Dependents Benefit (e) Section 202 (ni) of the Social Security Act is amended by 68 Stat. 1073. striking out "$30" wherever it occurs and inserting in lieu thereof 42 USC 402. "the first figure in column IV of the table in section 215 (a)". Maximum Benefits (f) Subsection (a) of section 203 of the Social Security Act is 42 USC 403. amended to read as follows: "Maximum Benefits "(a) Whenever the total of monthly benefits to which individuals are entitled under sections 202 and 223 for a month on the basis of 42 USC 402,423. the wages and self-employment income of an insured individual is PP.1020- greater than the amount appearing in column V of the table in 5cc- 1024. tion 215 (a) on the line on which appears in column IV such insured pp. 1013) individual'sprimary insurance amount, such totalof benefits shall be loiS,1016. reducedto such amount; except that— Post, pp. 1020, "(1) "lien any of such individuals so entitled would (but for. the pIovisiois of section 202 (k) (2) (A)) be entitled to child's insurance benefits on the basis of the wages and self-employment income of one or more other insured individuals, such total of benefits shall not be reduced to less than the smaller of: (A) the sum of the maximum amounts of benefits payable on the basis of the wages and self-employment income of all such insured individuals, or (B) the last figure in column V of the table appear- in in section 215 (a), or (2) when any of such individuals was entitled (without the application of section 202 (j)(1)and section 223 (b)) to monthly benefits under section 202 or section 223 for December 1958, and the primary insurance amount of the insured individual on the basis of whose wages and self-employment income such monthly benefits are payable is determined under the provisions of section 215 (a) (2), then such total benefits shall not be reduced to less than the larger of— "(A) the amount determined under this subsection without regard to this paragraph, or "(B) the amount determined under this subsection as in effect prior to the enactment of the Social Security Amend- ments of 1958 or the amount determined under section 102 (h) of the Social Security Amendments of 1954, as the case 68 Stat. 1072. may be, plus the excess of— 42 USC 403 note. "(i) the primary insurance amount of such insured individual in column IV of the table appearing in section 215 (a), over Ante, p. 1016. "(ii)hisprimaryinsurance amount determined — undersection 215 (c),or "(3) when any of such individuals is entitled (without the application of section 202 (j)(1)and section 223 (b)) to monthly benefits based on the wages and self-employment income of an insured individual with respect to whom a period of disability (as defined in section 216 (i)) began prior to January 1959 and42 USC 416. continued until— pp.1020, "(A) he became entitled to benefits under section 202 1021. or 223, or Pub. Law 85-840 August 28, 1958 "(B) he died, which ever first occurred, an the primary insurance amount of such insured individual 42 USC 415. is determined under the provisions of section 215 (a) (1) or (3) Ante,. 1013. and is not less than $68, then such total of benefits shall not be — reducedto less than the smaller of— "(C) the last figure in column V of the table appearing in section 215 (a), or "(D) the amount in column V of such table on the same line on which, in column IV, appears his primary insurance amount, plus the excess of— "(i) such primary insurance amount, over "(ii) the smaller amount in column II of the table on the line on which appears such primary insurance amount. In any case in which benefits are reduced pursuant to the preceding provisions of this subsection, such reduction shall be made after any deductions under this section and after any deductions under section 42 USC422. 222 (b).'Whenever a reduction is made under this subsection, each Post,pp.1025, benefit, except the old-age or disability insurance benefit, shall be 1032. proportionatelydecreased." Effective Date (g) The amendments made by this section shall be applicable in 42 USC401—425. the case of monthly benefits under title II of the Social Security Act, for months after December 1958, and in the case of the lump-sum death payments under such title, with respect to deaths occurring after such month. Primary Insurance Amount for Certain Disability Insurance Bene- ficiaries (h) If an individual was entitled to a disability insurance benefit Post, PP.1020 under section 23 of the Social Security Act for December 1958, 1ö21. ' andbecame entitled to old-age insurance benefits under section 2)2 (a) 42 USC 402. of such Act, or died, in January 1959, then, for purposes of paragraph (4) of section 215 (a) of the Social Security Act, as amended by this Act, the amount in column IV of the table appearing in such section 215 (a) for such individual shall be the amount in such column on the line on which in column II appears his primary insurance amount (as determined under subsection (c) of such section 15) instead of the amount in column IV equal to his disability insurance benefit. Saving Provision (i) In the case of any individual to whom the provisions of subsec- 42 USC 415. tion (b) (5) of section 215 of the Social Security Act, as amended by this Act, are applicable and on the basis of whose wages and self- employment income benefits are payable for months prior to January 1959, his primary insurance amount for purposes of benefits for such prior months shall, if based on an application for such benefits or for a recomputation of such amount, as the case may be, filed after Decem- ber 1958, be determined under such section 215, as in effect prior to the enactment of this Act, and, if such individual's primary insurance amount as so determined is larger than the primary insurance amount determined for him under section 215 as amended by this Act, such larger primary insurance amount (increased to the next higher dollar if it is not a multiple of a dollar) shall, for months after December 12 Stat. 1018. 1958, be his primary insurance amount for purposes of such section 12 Stat. 1019. 215 (and of the other provisions) of the Social Security Act as amended by this Act in lieu of the amount determined without regard to this subsection. August 28, 1958 -7- Pub. Law 85-840 72 Stat. 1019. INCREASE IN IARNINGS BASE FROM $4,200 TO $4,S0O

Definitionof Wages

SEc. 102. (a) (1) Paragraph (2) of section 209 (a) of the Social 42USC 409. SecurityAct is amended to read as follows: "(2) That part of remuneration which, after remuneration (other than remuneration referred to in the succeeding subsections of this section) equal to $4,200 with respect to employment has been paid to an individual during any calendar year iifter 1954 and prior to 1959, is piid to such individual during such calendar year ;". (2)Section 209 (a) of such Act is further amended by adding at the end thereof the following new paragraph: "(3) That part of remuneration which, after remuneration (other than remuneration referred to in the succeeding subsections of this section) equal to $4,800 with respect to employment has been paid to an individual during any calendar year after 1958, is paid to such individual during such calendar year;". Definition of Self-Employment Income

(b) Paragraph (1) of section 211 (b) of the Social Security Act 42USC 411. isamended to read as follows: "(1) That part of the net earnings from self-employment which is in excess of— "(A) For any taxable yeat ending prior to 1955, (i) $3,600, minus (ii) the amount of the wages paid to such individual during the taxable year; and "(B) For any taxable year ending after 1954 and prior to 1959, (i) $4,200, minus (ii) the amount of the wages paid to such individual during the taxable year; and "(C) For any taxable year ending after 1958, (i) $4,800, minus (ii) the amount of the wages paid to such individual during the taxable year; or". Definitions of Quarter and Quarter of Coverage

(c) Clauses (ii) and (iii) of section 213 (a) (2) B) of the Sochil 42USC 413. SecurityAct are amended to read as follows: "(ii) if the wages paid to any individual in any calendar year equal $3,600 in the cuse of a cileiidar year after 1950 and before 1955, or $4,200 in the case of a calendar year after 1954 and before 1959, or $4,800 in the case of a calendar year after 1958, each quaiter of such year shall (subject to clause (i)) be a luarter of coverage; "(iii) if an individual has self-employment income for a taxable year, and if the sum of such income and the wages paid to him during such year equals $3,600 in the case of a taxable year beginning after 1950 and ending before 1955, or $4,200 in the case of a taxable year ending after 1954 and before 1959, or $4,800 in the case of a taxable year ending after 1958, each quarter any part of which falls in such year shall (subject to clause (i)) be a quarter of coverage ;". Pub. Law 85-840 -8- August 28, 1958 72 Stat. 1020. Average Monthly Wage

42 USC 415. (d) (1) Paragraph (1) of section 215 (e) of such Act is amended to read as follows: "(1) in computing an individual's average monthly wage there shall not be counted the excess over $3,600 in the case of any calendar year after 1950 and before 1955, the excess over $4,200 in the case of any calendar year after 1954 and before 1959, and the excess over $4,800 in the case of any calendar year after 1958, of (A) the wages paid to him in such year, plus (B) the self- employment income credited to such year (as determined under section 212) ;". (2) Section 215 (e) of such Act is further amended by striking out "(d) (4)" each place it appears and inserting in lieu thereof "(d)". TITLE 11—AMENDMENTS RELATING TO DISABILITY FREEZE AND DISABILITY INSURANCE BENEFITS

APPLICATION FOR DISABILITY DETERMINATION

42 USC 416. SEC. 201. Section 216(i)(2)of the Social Security Act is amended— (1) by striking out "while under a disability," in the second sentence and inserting in lieu thereof "while under such disability "; and (2) bystrikingout "one-year" in clause (ii) of subparagraph (A) and inserting in lieu thereof "eighteen-month".

RETROACTIVE PAYMENT OF DISABILITY INSURANCE BENEFiTS

42 USC 423. SEC. 202. (a) Section 223 (b) of such Act is amended by adding at the end thereof the following new sentence: "An individual who would have been entitled to a disability insurance benefit for any month after June 1957 had he ified application therefor prior to the end of such month shall be entitled to such benefit for such month if lie files application therefor prior to the end of the twelfth month immediately succeeding such month." (b) The first sentence of section 223 (c) (3) of such Act (defining the term "waiting period" for purposes of applications for disability insurance benefits) is amended to read as follows: "(3) The term 'waiting period' means, in the case of any application for disability insurance benefits, the earliest period of six consecutive calendar months— "(A) throughout which the individual who ifies such application has been under a disability which continues until such application is filed, and "(B) (i) which begins not earlier than with the first day of the eighteenth month before the month in which such application is filed if such individual is insured for disability insurance benefits in such eighteenth month, or (ii) if he is not so insured in such month, which begins not earlier than with the first day of the first month after such eighteenth month in which he is so insured." August 28, 1958 -9- Pub. Law 85-840 72Stat. 1021. RETROACTIVEEFF1cTOFAPPLICAflONS FOR DISABILITY DETERMINATION

Sic. 203. Paragraph (4) of section 216 (i) of such Act is amended 42 usc416. by striking out "July 1957" and inserting in lieu thereof "July 1960", by striking out "July 1958" and inserting in lieu thereof "July 1961", and by striking out ",ifsuch individual does not die prior to July 1, 1955,". INSURED STATUS REQUIREMENTS Disability Freeze SEC. 204. (a) Paragraph (3) of section 216 (i) of such Act is amended to read as follows: "(3) The requirements referred to in clauses (A) and (B) of paragraphs (2) and (4) are satisfied by an individual with respect to any quarter only if— "(A) he would have been a fully insured individual (as defined in section 214) had he attained retirement age and filed applica- 42 usc 414. tion for benefits under section 202 (a) on the first day of such 42 usc 402. quarter; and "(B) he had not less than twenty quarters of coverage during the forty-quarter period which ends with such quarter, not counting as part of such forty-quarter period any quarter any part of vhich was included in a prior period of disability unless such quarter was a quarter of coverage; except that the provisions of subparagraph (A) of this paragraph shall not apply in the case of any individual with respect to whom a period of disability would, but for such subparagraph, begin prior to 1951." Disability Insurance Benefits (b? Section 223 (c) (1) (A) of such Act is amended by striking 42 usc 423. out 'fully and currently insured" and inserting in lieu thereof "fully insured".

BENEFITS FOR THE DEPENDENTS €)F DISABILITY INSURANCE BNEFICIARIE8 Payments from Disability Insurance Trust Fund

SEC. 205. (a) The first sentence of section 201 (h) of such Act is 42 usc401. amended by inserting ",andbenefit payments required to be made under subsection (b), (c), or (d) of section 202 to individuals entitled 42 usc402,423. to benefits on the basis of the wages nnd self-employment income of an individual entitled to disability insurance benefits," after "section 223". Wife's Insurance Benefits (b) (1) Subsection (b) of section 202 of such Act is amended by 42 usc 402. inserting "or disability" after "old-age" wherever it appears therein. (2) So much of paragraph (1) of such subsection as follows the colon is amended by striking out "or" the first time it appears and inserting immediately before the period at the end of such paragraph ",orher husband is not entitled to disability insurance benefits and is not entitled to old-age insurance benefits".

308500—58 —z Pub. Law 85-840 -10- August 2', 1958 72Stat. 1022. Husband'sInsurance Benefits (c) (1) Subparagraph (C) of subsection (c)(1) of such section 402. 202isamended to read as follows: 42 USC "(C) was receiving at least one-half of his support, as determined in accordance with regulations prescribed by the Secretary, from such individUal— "(i) if she had a period of disability which did not end prior to the month in which she became entitled to old-age or disability insurance benefits, at thebeginning of such period or at the time she became entitled to such benefits, or "(ii) if she did not have such a period of disability, at the time she became entitled to such benefits, and filed proof of such support within two years after the month in which she filed application with respect to such period of disability or after the month in which she became entitled to such benefits, as the case miy be, or, if she did not have such a period, two years after the month in which she became entitled to such benefits, and". (2) The remainder of such subsection (c) (1) is amended by inserting "or disability" after "old-age" wherever it appears therein. (3) So much of such subsection (c)(1) as follows the colon is further amended by striking out 'or" the first time it appears and inserting immediately before the period at the end thereof ",orhis wife is not entitled to disability insurance benefits and is not entitled to old-age insurance benefits".

• Child's Insurance Benefits

42 UsC402. d) Section 202 (d) (1) of such Act is amended to read as follows: Post, .'028. ' (d)(1) Every child (as defined in section 216 (e)) of an mdi- — vidua]entitled to old-age or disability insurance benefits, or of an individual who dies a fully or currently insured individual after 1939, if such child— "(A) has tiled application for child's insurance benefits, "(B) at the time such application was filed was unmarried and either (i) had not attained the ae of eighteen or (ii) was under t disability (s defined in section 223 (c)) which began Ante, .1020. — beforehe attained the age of eighteen, and

• "(C) was dependent UOfl such individual— "(i) if such individual had a period of disability which did not end prior to the month in which he became entitled to old-age or disability insurance benefits or (if he has died) prior to the month in which he died, at the beginning of such period or at the time he became entitled to such benefits or died, "(ii)if such individual did not have such a period and is living, at the time such application was filed, or "(iii)if such individual did not have such a period and has died, at the time of such death, shall be entitled to t child's insurance benefit for each month, beoin- ing w•ith the first month after August 1950 in which suchchild becomes so entt1ed to such insurance benefits and ending with the month preceding the first month in which any of the following occurs: such child dies, marries, is adopted (except for adoption by a stepparent, grandparent, aunt, or uncle subsequent to the death of such fully or currently insured individual), attains the age of eighteen and is not under a disability (as defined in section 223 (c)) which began before he attained such age, or ceases to be under a disability (as so defined) on or after the day on which he attains age eighteen. August 28, 1958 -11- Pub. Law 85-840 72Stat.1023. Entitlementof any child to benefits under this subsectionon the basis of the wages and self-employment, income ofan individual entitled to disability insurance benefits shall also end with the month before the first month for which such individual is not entitled to such benefits unless such individual is, for such later month, entitledto old-age insurance benefits or unless he dies in such month." Widower's Insurance Benefits

(e) Subparagraph (D) of section 202 (f)(1) of such Act is42 USC402. amended to read as follows: "(D) (i) was receiving at least one-half of his support,as determined in accordance with regulations prescribed by the Secretary, fromsuch individual at the time of her death or, if such individual had a period of disability which didnot end prior to the month in which she died, at the time such period beganor at the time of her death, and filed proof of such support within two years after the date of such death, or, if she had sucha period of disability, within two years after the month in which she filed application with respect to such period of disabilityor two years after the date of such death, as the casemay be, or (ii) was receiving at least one-half of his support,as determined in accordance with regulations prescribed by the Secretary, from such individual, and she was a currently insured individual, at the time she became entitled to old-age or disability insurance benefitsor, if such individual had a period of disability which didnot end prior to the month iii which she becameso entitled, at the time such period began or at the time she became entitledto such benefits, and filed proof of such support withintwo years after the month in which she became entitled to such benefits,or, if she had such a period of disability, within twoyears after the month in which she filed application with respect to such periodof disability or two years after the month in which she became entitled to such beiiefits, as the case may be, and". Mother's Insurance Benefits (f) Sectioii 202 (g) (1) (F) of such Act is amended byinserting 42 USC 402. 'or, if such individual had a period of disability whichdid not end prior to the month in which he died, at the time such periodbegftn or at the time of such death" after "death". Parent's Insurance Benefits

(g) Subparagraph (B) of section 202 (h)(1) of such Act is42 USC 402. ftiiiended to read as follows: "(B) (i) was receiving at least onehalf of his support from such individual at the time of such individual's deathor, if such individual had a period of disability which did not end priorto the month in which he died, at the time such period beganor at the time of such death, and (ii) filed proof of such support within two years after the date of such death, or, if such individual had such a period of disability, within two years after the month in which such individual filed application with respectto such period of disability or two years after the dtte of suchdeath, as the case may be,". Simultaneous Entitlement to Benefits (h) Section 202 (k) of such Act is amended by inserting "or(us-42 USC 402. ability" after "old-age" each time it appears therein. Pub. Law 85-840 -12- August 28, 1958 72Stat. 1024. Adjustmentof Benefits of Female Beneficiaries (i)(1) Subparagraph (B) of paragraph (5) of section 202 (q) 42USC 402. ofsuch Act is amended to read as follows: "(B) the number equal to the number of months for which the wife's insurance benefit was reduced under such paragraph (2), but for which such benefit was subject to deductons under paragraph (1) or (2) of section 203 (b), under section 203 (c), 42isc 403. orunder section 222 (b),". Post,pp. 1025, (2)Such paragraph is further amended by striking out the period 1032. atthe end of subparagraph (C) and inserting in lieu thereof ",and", by striking out "(A), (B), and (C)" in the material following subparagraph (C) and inserting in lieu thereof "(A), (B), (C), and (D) ",andby adding after subparagraph (C) the 'following new subparagraph:. "(D) the number equal to the number of months for which such wife's insurance benefit was reduced under such paragraph (2), but in or after which her entitlement to wif&s insurance benefits was terminated because her husband ceased to beunder a disability, not including in such number of months any month after such termination in which she was entitled to wife's insurance benefits.". (3) Subparagraph (A) of paragraph (6) of such section 202 (q) is amended to read as follows: "(A) the number equal to the number of months for which such benefit was reduced under such paragraph, but for which such benefit was subject to deductions under section 203 b) (1) or (2), under section O3 (c), or under section 2(b),'. (4) Such paragraph is further amended by striking out "(A), (B), and (C)" in the material following subparagraph()andinserting in lieu thereof "(A), (B), (C), and (D)", by redesignat.ing subparagraph (C) as subparagraph (D), by inserting "and" at the end of subparagraph (B) and by adding after such subparagraph (B) the following new subparagraph: "(C) the number equal to the number of months for which such benefit was reduced under such paragraph, but in or after which her entitlement to wife's insurance benefits was terminated because her husband ceased to be under a disability, not includ- inginsuch number of months ay month after such termination in which she was entitled to wife's insurance benefits,". Deduction Provision

42USC 403. (j) Section203 (c) of such Act is amended by inserting a comma %tnd "bftsed on the wages and self-employment income of an individual entitled to old-age insurance benefits," after "childs insurance beiiefit" the first time it appears therein. Circumstances Under Which Deductions Not Required (k) Section O3 (h) of such Act s amended to read as follows: "Circumstances Under Which Deductions Not Required "(h) In the case of any individual, deductions by reason of the provisions of subsection (b), (f), or (g) of this section, or the pro- Post, pp. 1025, visions of section 222 (b), shall, notwit1istinding such provisions, be made from the benefits to which such individual is entitled only to the extent that sich deductions reduce the total amount which would otherwise be paid, on the basis of the same wages and self-employment income, to such individual and the other individuals living in the same household" August 28. 1958 -13- Pub. Law 85-840 72 Stat. 1023. Currently Insured Indvidua1

(1) Section 214 (b) of such Act is amended by striking out "or"42 USC 414. immediately preceding "(3)" and by inserting "or (4) in thecase of any individual entitled to disability insurance benefits, the quarter in which he most recently became eiititled to disability insurance benefits," immedifttely after "section,". Rounding of Benefits

(iii) Section 215 (g) of such Act is amended by striking out "sections42 Usc 415. 203 (a) and 221" and inserting in lieu thereof "section 203 (a)". Deductions on Account of Refusal To Accept Rehabilitation Services

(n) Section 222 (b) of such Aèt is amended by inserting ftfterPost, p.1032. paragraph (2) (added by section 307 (g) of this Act) the following new paragraph: "(3) Deductions shall be mftde from any wife's, llusbftnds,or child's insurance benefit, based on the wages and self-employment income of an individual entitled to disability insurance benefits, to which a wife, husband, or child is entitled, until the total of such deductions equal such wif&s, husband's, or childs insurance benefit or benefits under section 202 for any month in which the individual, Ante,pp.1017, onthe basis of whose wages and self-employment income such benefit1021, 1022— was payable, refuses to tccept rehabilitation services and deductions, 1024. on account of such refusftl. are imposed under pftragraph (1)." PP. 1026, 1027, 1029 Suspension of Benefits Based on Disability 1032. (o) Section 225 of such Act is amended by adding ftt the end thereof 42 USC 425. the following new sentence: "Whenever the benefits of n individual entitled to a disability insurance benefit are suspended for any month, the benefits of any dividual entitled thereto under subsection (b), (c), or (d) of section 202, on the basis of the wages ftnd self-employ- 42USC 402. ment income of such individual, shall be suspended for such month." REPEAL OF REDUCTION OF BENEFIP5 BASED ON DI5ABILITY

SEc. 206. Section 224 of such Act is hereby repealed. 42 USC 424.

EFFECTIVE DATES SEC. 207. (a) The amendments made by section 201 shall apply with respect to applications for a disability determination under section 216 (i) of the Social Security Act filed after June 1961.The Ante, pp.1020, amendmentsmade by section 202 shall apply with respect to applica- IT. tions for disability lnsurftnce benefits under section 223 of such Act Ante, pp.1017, filedafter December 1957. The amendments made by section 203 shall1020—1024. apply with respect to applications for a disability determination under Post,pp. 1026, such section 216 (i) filed after June 1958.The amendments made by T7, 1029— section 204 shall apply with respect to (1) applications for disability1032. insurance benefits under such section 223 or for a disability determination under such section 216 (i) filed on or after tlie date of en- ftctment of this Act, and (2) applications for such benefitor for such a determination filed after 1957 and prior to such date of enactment if the applicant has not died prior to such date of enactment and if notice to the applicant of the Secretary's decision with respect there- to has not been given to him on or prior to such date, except that (A) no benefits under title II of the Social Security Act for the month 42 USC 401-425. in which this Act is enacted or any prior month shall be payable or Pub. Law 85-840 -14- August 28, 1958 72Stat. 1026. increasedby reason of the amendments made by section 204 of this Act, and (B) the provisions of section 215 (f)(1) of the Social. 42 usc415,402. SecurityAct shall not prevent recomputation of monthly benefits under section 202 of such Act (but no such recomputation shall be regarded as a recomputation for purposes of section 215 (f) of such Act). The amendments made by section 205 (other than by subsections (k) and (m)) shall apply with respect to monthly benefits under 42usc 401-425.title II of the Social Security Act for months after the month in which this Act is enacted, but only if an application for such benefits is filed on or after the date of enactment of this Act.The amendments made by section 206 and by subsections (k) and (m) of section 205 shall apply with respect to monthly benefits under title II of the Social Security Act for the month in which this Act is enacted and succeeding months. (b) In the case of any husband, widower, or parent who would not be entitled to benefits under section 202 (c), section 202 (f), and sec- Ante, pp. 1022,tioii 202 (h), respectively, of the Social Security Act except for the enactment of section 205 of this Act, the requirement in such section Post,I. 1027,1029, 202 (c), section 202 (f), or section 202 (h), as the case may be, that 1031, 1032. proof of support be filed within a two-year period shall not apply if such proof is filed within two years after the month in which this Act i enacted. TITLE Ill—PROVISIONS RELATING TO ELIGIBILITY OF CLAIMANTS FOR SOCIAL SECURITY BENEFITS, AND MISCELLANEOUS PROVISIONS

}LIGIBILITY OF sPOUSE FORDEPENDENTSOR SURVPJORS BENEFITS Husband's Insurance Benefits Ante, p. 1022. SEC. 301. (a)(1) Section 202 (c) of the Social Security Act is — amendedby redesignating p&ragriph (2) as paragraph (3) and add- mg after paragraph (1) the following new paragraph: "(2) The requirement in paragraph (1) that the individual entitled to old-age or disability insurance benefits be a currently insured individual, and the provisions of subparagraph (C) of such paragraph, shall not be applicable in the case of any husband who— "(A) in the month prior to the month of his marriage to such individual was entitled to, or on application therefor and attainment of retirement age in such prior month would have been entitled to, benefits under subsection (f) or (h) ; or "(B) in the month prior to the month of his marriage to such individual had attained age eighteen and was entitled to, or on application therefor would have been entitled to, benefits under subsection (d)." 42 usc416. Section 216 (f) of such Act is amended to read as follows: '(f) The term 'husband' means the husband of an individual, but only if (1) he is the father of her son or daughter, (2) he was married to her for a period of not less than three years immediately preceding the day on which his application is filed, or (3) in the month prior to the month of his marriage to her (A) he was entitled to, or on application therefor and attainment of reti'rement age in such prior month would have been entitled to, benefits under subsection Ante, p. 1)23. (f) or (h) of section 202, or (B) he had attained age eighteen and pp. iov,,was entitled to, or on application therefor would have been entitled 1029, .1031,1032. to, benefits under subsection (d) of such section." August 28, 1958 -15- Pub. Law 85-840 72 Stat. 1027. Widow's Insurance l3enefits (b) (1) Subparagraph (B) of section 202 (e)(3) of such Act is 42 USC 402. amended by striking out "but she is not his widow (as defined insection 216 (c) )" andInserting in lieu thereof "which occurs within one 42 USC 416. year after such marriage and he did not (lie a fully insured individual". (2) Section 216 (c) of such Act is amended to readas follows: "(c) The term 'widow' (except when used in section 202 (i))means Post, p. 1030. the surviving wife of an individual, but only if (1) she is the mother of his son or daughter, ('2)shlegally adopted his son or daughter while she was married to him and while such son or daughter was under the age of eighteen, (3) he legally adopted her son or daughter while she was married to him and while such son or daughterwas under the age of eighteen, (4) she was married to him at the time both of them legally adopted a child under the ae of eighteei, (5) she was married to him for a period of not less dan one year immediately prior to the day on which he died, or (6) in the month prior to the month of her marriage to him (A) she was entitled to, or on application therefor and attainment of retirement age in such prior month would have been entitled to, benefits under subsection (e) or (h) of section 202, or (B) she had attained age eighteen and was entitled to, Ante,P.1023. 01 011 application therefor would have been entitled to, benefits under PP.1029, subsection (d) of such section." 1031, 1032. Widower's Insurance Benefits

(c)(1) Section 202 (f) of such Act is amended by redesignating p.1023. paragraph (2) as paragraph (3) and by adding after paragraph (1) P.l°31. the following new paragraph: "(2) The requirement in paragraph (1) that the deceased fully insured individual also be a currently insured individual, and the provisions of subparagraph (D) of such paragraph, shall not be applicable in the case of any individual who— "(A) in the month prior to the month of his marriage to such individual was entitled to, or on application therefor and attainment of retirement age in such prior month would have been entitled to, benefits under this subsection or subsection (h); or "(B) in the month prior to the month of his marriage to such individual had attained age eighteen and was entitled to, or on application therefor would have been entitled to, benefits under subsection (d)." (2) Section 216 (g)ofsuch Act is amended to read as follows: 42 USC 416. "(g) The term 'widower' (except when vised in section 202 (i)) nieans the surviving husband of tn individual, but only if (1) he is the father of her son or daughter, (2) he legally adopted her son or daughter while he wts married to her tnd while such son or daughter was under the age of eighteefl, (3) she legally adopted his son or daughter while he was mtrried to her and while such son or daughter was under the age of eighteen, (4) he was married to her at the time both of them legally adopted a child under the age of eighteen, (5) he was married to her for a j)eriod of not less than one year immediately prior to the day on which she died, or (6) in the month before the month of his marriage to her (A) he was entitled to, or on application therefor and attainment of retirement. age in such prior month would have been entitled to, benefits under subsection (f) or (h) of section 202, or (B) he had attained age eighteen and was entitled to, or on application therefor would have been entitled to, benefits under subsection (d) of such section." Pub. Law 85-840 -16- August 28, 1958 72Stat. 1028. Definition of Wife

42 USC 416. (d)Section 216 (b) of such Act is amended by striking out "or" at the end of the clause (1), and by inserting before the period at the end thereof: ",or(3) in the month prior to the month of her marriage to him (A) was eiititled to, or on application theref or and attainment of retirement age in such prior month would have been entitled to, Ante, pp. 1023,benefits under subsection (e) or (h) of section 202, or (B) had at- 1027. tamed age eighteen and was entitled to, or on application therefor Post, pp. 1029,would have been entitled to, benefits under subsection (d) of such 1031, 1032. section". Defiuiitioii of Former 'Wife Divorced

42 UsC 416. (e) Section 216 (d) of such Act is amended to read as follows: "(d) The term'former wife divorced' means a woman divorced from auiiidividual, but olily if (1) she is the mother of his son or daughter, (2) she frgally adopted his son or daughter while she was married to him and while such son or daughter was under the age of eighteen, (3) he legally adopted her son or daughter while she was married to him and while such son or daughter wasunder the age of eighteen, or (4) she was married to him atthe time both of them legally adopted a child under the age of eighteen." Effective Date (f) The amendmeiits made by this section shall apply with respect Ante, P.1o17,to monthly benefits under section 202 of the Social Security Act for 1021-1024,1026,monthsbeginning after the date of enactment of this Act, but only 1027. if an application for such benefits is filed on or after such date. Post, pp. 1029— 1032. ELIGIBILITY OF CHILD FORDEPENDENTSOR sURVIvORs BENEFITS Definition of Child

42 USC 416. SEO. 302. (a) Section 216 (e) of such Act is amended to read as follows: "(e) The term 'child' means (1) the child or legally adopted child of an individual, and (2) in the case of a living individual, a stepchild who has been such stepchild for not less than three years immediately preceding the day on which application for child's benefits is filed, and (3) in the case of a deceased imidividual, a stepchild who has been such stepchild for not less than one year immediately preceding the day on which such individual died. For purposes of clause (1), a person shall be deemed, as of the date of death of an individual, to be the legally adopted child of such individual if such person was at the time of such individual's death living in such individual's household and was legally adopted by such indiviual's surviving spouse after such individual's death but before the end of two years after the day on which such individual died or the date of enactment of this Act; except that this sentence shall not apply if at the time of such individual's death such person was receiving regular contributions towardhis support from someone other than such individual or his spouse, orfrom any public or private welfare organization whichfurnishes services or assistance for children." Effective Date (b) The amendment made by this section shall apply with respect Ante, pp. 1017,to monthly benefits under section 202ofthe Social Security Act for 1021-1024,1026months beginning after the date of enactment of this Act, but only if 1027. 'anapplication for such benefits is filed on or after such date. Post, 1029— 10 32. August 28, 1958 -17- Pub. Law 85-840 72Stat. 1029. )LIGJB1Lr'j'y(iFI I.ffl{ ID WIDO\VS FOR Molt i • N$1ILNUI8INEFI'j'S

SEc. 303. (a)Section O2 (g)ofthe SocialSecurity Actis42USC 402. amendedby adding at the end thereof the followingnew paragraph "(3) In the case of any widowor former wife divorced of an individual— "(A) who marries another individual, and (B) whose inarrilge to the individual referredto iiisubpara- graph (A) is terminated by his death but she isnot, and upon lin application tlierefor in the month in which he diedwould not e, entitled to benefits for such month on the basis of his wages and self-employmnemit i ncomne, the marriage to the individual referred to iiiclause(A) shall, for the p•pose of parngraph (1), be deemed not to have occurred.No bemie- fits shall be payable under this subsection byreason of the preceding sentence for aiiy month piioi to whichever of the followingis the latest :(i) the monUi hi which the death referred to in subparagraph (B) of the preceding sentence occurs, (ii) the twelfth mouthbefore the nioiith in vliicli such widow or former wife divorced files applica_ ion for purposes of this paragraph, or (iii)themonth following the iiionth in whkh this paragraph is enacted." (b) The paragraph (3) added to such section '202 (g) by H. II. 41 1, Eighty-fifth Congress, is hereby reea1ed effective with respect to benefits payable for any month following the month in which thliF Actis enacted.

}LIGIIIILIl'y FOR PARENTS iSStflANOI HENIFmTS Provisions Relating to Eligibility

SEc. 304. (a)(1) So much of section 2O (11)(1) of the Social 42 USC 402. Security Act as precedes subparagraph (A)is anieiicled to read as follows "(1) Every Pfllemit (as defined iiithissubsection) of an individual who died a fully insured individual after 1939, if such parent—". ()Theanienclmneiit made by this subsection shall apply withie- spect to monthly bnefits under section 202 of the Social Security Act for months beginmi ing after the date of eiiactnient of this Act, but only if au application for such benefits is filedoh or after such date. 1)eaths Before Effective 1);ite (b) Where— (1) one or more persons were entitled (without the applica- tiouu of section 202 (j) (1) of the Social Security Act) to monthly42 USC 402. benefits under section 202 of such Act for the month iii which this Act is enacted on the basis of the \vages and self-employmemit pp. 1017, 1021—1024, 1026, income of auiuudividtual and 1027. ()aperson is emutitlecl to ;i paremuts insurance benefit nmidei!' pp130_. section 02 (li of the Social Security Act forally subsequentAnte, p. 1023. month on the basis of such wages auud self-eniploynient incomePost, p. 1032. and such person would uuot be entitled to such benefit but for the enactment of this section ; auucl (3) the total of the benefits to which all persouusare euutitled inuder section 202 of the Soeial Security Acton the basis of such wages and self-employment income for such subsequent niomuth are reduced by reason of the applicitiomi of section 203 (a) of42 USC 403. such Act, then the amount of the bemuefit to which each suchulemsouu referred to in paragraph (1) of this subsection is entitled for such ubsequeuut month shall he increased, after the application of snelu section 203 (;i),Ante, p. 1017.

308500—58—3 Pub. Law 85-840 -18- August 28, 1958 72 Stat. 1030. to the amount it would have been if no person referred to in paragraph (2) of this subsection wts entitled to a parent's insurance benefit for such subsequent month on the basis of such wages and self-employment income. Proof of Suppoit in Cases of Deaths Before Effective Date (c) In the case of any parent who would not be entitled to parent's Ante,pp. 1023, benefits under section 202 (h) of the Social Security Act, except for 1029 • theenactment of this section, the requirement in such section 202 P. 1032. (h) that proof of support be filed within two years of the date of death of the insured individual. referred to therein shall not apply if such proof is filed within the two-yealr period beginning with the first day of the month after the month in which this Act is enacted.

ELIOIBILITY FORLtTMP-5LTMDEATH PAYMENTh 42 USC 402. Requirement That Surviving Spouse Be a Member of Deceased's Household SEC. 305. (a) The first sentence of section 202 (1) of the Social Security Act is amended by inserting "in the same household" after "livings'. Provisions Relating to Widows and Widowers 42 USC 416. (b) Section 216 (Ii) of such Act is trnended by striking out paragraph (3). Effective Date (c) The amendments mtde by this section shall apply in the case 42 USC 402. of lunTkp-sun1 death payments under such section 202 (i) on the basis of the wages aiid self-employment income of any individual who dies i.ft.er the month in which this Act is enacted.

ELIGIBILITY OF DI5ABLED PER5ON FOR CHILD'S INSURANCE BENEFITS Provisions Relating to Dependency 42 USC 402, SEC. 306. (a)Section 202(d)of the Social Security Act is amended by striking out "who has not attained the age of eighteen" etch place it appears in paragraphs (3), (4), and (5) thereof, and by striking out paragraph (6). Effective Date (b) The amendments made by this section shall apply with respect Ante, pp.1017, tomonthly benefits under section 202 of the Social Security Act for 102 1—1024, 1026, months beginning after the date of enactment of this Act, but only if an application for such benefits is filed on or after such date. pp. 1030— 1032. ELIMINATIONOF MARRLGE As BA5IS FOR TERMINATING CERTAIN suRvIvoRs BENEFIT5 Child's Insurance Benefits

p.1022. SEC.307. (a)Section 202 (d) of the Social Security Act is ! amended by inserting immediately after ptragraph (5) thereof the following new ptragraph: "(6) In the case of a child who hts attained the Ige of eighteen and who marries— "(A) an individual entitled to benefits under subsection (a), 42 USC 423. (e), (f), (g), or (h) of this section or under section 223 (a), or August 28, 1958 -19- Pub. Law 85 24tat.1031. "(B)another individual who has attained the age of eighteen and is entitled to benefits under this subsection, such child's entitlement to benefits under this subsection shall,iiot- withstanding the provisions of paragraph (1), not be terminated by reason of such marriage; except that, in the case of such a marriage to a male individual entitled to benefits under section 223 (a)or this subsection, the preceding provisions of this paragraph shallnot apply with respect to benefits for months after the last month forwhich such individual is entitled to such benefits under section 223 (a)or this subsection unless (i) he ceases to beso entitled by reason of his death, or (ii) in the case of an individual whowas entitled to benefits under section 223 (a), he is entitled, for the month followingsuch last month, to lenefits under subsection (a) of this section." Widow's Insurance Benefits

(b) Section 202 (e) of such Act is amended by insertingat the end Ante,p.1027. thereof the following new paragraph: "(4) In the ca;e of a widow who marries— "(A) an individual entitled to benefits under subsection (f)or (h) of this ;ection, or "(B) an individual who has attained theage of eighteen and is entitled tc benefits under subsection (d), such widow's entitlement to benefits under this subsection shall,notwithstanding the provisions of paragraph (1), not be terminatedby reason of such marriage; except that, in the case of such a marriage to an individual entitled to benefits under subsection (d), the preceding provisions of this paragraph shall not apply withrespect to benefits for months after the last month for which such individual isentitled to such benefits under subsection (d) unless heceases to be so entitled by reason of his death." Widower's Insurance Benefits

(c) Section 202 (f) of such Act is amended by adding at theendAnte,pp.1023, thereof the following new paragraph: 1027. "(4) In the case of a widower who marries— •'(A) an individual entitled to benefits under subsection (e), (g), or (h), or "(B) an individual who has attained the age of eighteen and is entitled to be:riefits under subsection (d). such widower's entitlement to benefits nnder this subsection shall,notwithstanding the provisions of paragraph (1), not be terminated by reason of such marriage." Mother's Insurance Benefits

(d) Section 202 (g) of such Act is amended by adding afterpara- Ante,pp.1023, graph (3)(added by section 303 of this Act) the followingnew 1029. paragraph "(4) In the case of a widow or former wife divorced whomarries— "(A) an individual entitled to benefits under subsection (a), (f), or (h), or under section 223 (a), or 42 USC 423. "(B) an individual who has attained the age of eighteen and is entitled to benefits under subsection (d), the entitlement of such widow or former wife divorced to benefitsunder this, subsection shall, notwithstanding the provisions of paragraph (1), not be terminated by reason of such marriage; except that,in the case of such a marriage to an individual entitled to benefits under section 223 (a) or subsection (d) of this section, the precedingpro- Pub. Law 85-840 -20- August 28, 1958 72Stat. 1032. 'visioiiof this paragraph shall iiot apply with respect to benefits for months after the last month for which such individual is entitled to such benefits wider section 223 (a)orsubsection (d) of this section unless (i) he ceases to be so entitled by reason of his death, or (ii) in the case of an individual who was entitled to benefits under section 223 (a),heis entitled, for the month following such last month, to benefits under subsection (a) of this section." Parent's Insurance Benefits Ante, i023, (e)Section 202 (h) of such Act is amended by adding at the end thereof the following new paragraph: "(4) In the case of a parent who marries— "(A)anindividual entitled to benefits under this subsection or subsection (e), (f),or (g),or "(B) an individual who has attained the age of eighteen and is entitled to benefits under subsection (d), such parent's entitlement to benefits under this subsection shall, notwithstanding the provisions of paragraph (1), not be terminated by reason of such marriage; except that, in the case of such a marriage to a male individual entitled to beiefits under subsection (d), the preceding provisions of this paragraph shall not apply with respect to benefits for months after the last month for which such individual is entitled to such benefits under subsection (d) unless lie ceases to be so entitled by reason of his death." 1)eduction Provisions

USC 403. (f)Subsection(c) of section 203 of such Act is amended by insert- 42 ing "(1)" after "(c)", by redesignating subparagraphs (1) and (2) as subparngniphs (A) and (B), respectively, by striking out "paragraph (1)" and inserting in lieu thereof "subparagraph (A)", and by ndding at the end of such subsection the following new paragraph: "(2) Deductions shill be mide from any child's insurance benefit to which a child who has attained the age of eighteen is entitled or from nny rnothers insurance benefit to which a ersoi is entitled, until the total of such deductions equals such child s insurance benefit or Ante, 1017,benefits or rnothers insurince benefit or benefits under section 202 for 1021—1024,1026, anymonth— 1027,1029—1031. "(A)in which s1ch child or person entitled to inothers insurance benefit is married to mn individuil entitled to old-age insurance benefits under section 202 ()whois under the age of seventy- two tnd for which month such individual is charged with any post, p. 1033. earnings under the provisions of subsection (e) of this section, or — "(B)in which such child or person entitled to mothers insur- mnce benefits is mnrried to the individual referred to in subparagraph (A) ind on seven or more different calendar days of which such individuil engaged in noncovered remunerative activity outside the United States." 1)eductions on Account of Refusal To Accept Rehabilitation Services Ante, p. 1025. (g) Section 222 (b) of such Act is tmended by inserting "(1)" — nfter"(b) ",andby adding at the end thereof the following new paragraph: "(2) Deductions shall be made from any childs insurince benefit th which a child who has attained the age of eighteen is entitled or from any mother's insurmce benefit to which a erson is entitled, until Ante, pp. 1017, the tota'of such deductions equals such child s insunince benefit or 1021—1024,1026,benefits or such mothers insurance benefit or benefits under section 202 1027,1029—1031. August 28, 1958 -21- Pub, Law 85-840 72Stat.1033. forany month in which such child or person entitled to mother's insurance benefits is mtrried to an individual who is entitled to disability iiisurance benefits and in which such individual refuses toaccept rehabilitation services and a deduction, on account of such refusal, is imposed under paragraph (1).If both this paragraph and paragraph (3) are applicable to a child's insurance benefit forany month, only an amount equal to such benefit shall be deducted." Effective Date (h)(1) The amendments made by this section (other than by subsections (f) and (g)) shall apply with respect to monthly benefits under section 202 cf the Social Security Act for months following theAnte, pp.1017, monthin which this Act. is enacted; except that inany case in which T—1024,1026, benefitswere terminated with the close of the month in which this1027, 1029—1032. Act is enacted or any prior month and, if the amendmentsmade by this section had be€n iii effect for such month, such benefits wouldnot have been terminated, the amendments made by this sectionshall apply with respect to monthly benefits under section 202 of the Social Security Act for months beginning after the date ofenactment of this Act, but only i: an application for such benefits is filed aftersuch date. (2) The amendments made by subsection (f) shall apply withrespect to monthly b€nefits under subsection (d)or (g) of section 202 of the Social Security Act for months inany taxable year, of the individual to whom the person entitled to such benefits ismarried, beginning after the month in which this Act is enacted. (3) The amendments made by subsection (g) shall applywith respect to monthly benefits under sectioi 202 of the Social Security ct for months, occuPring after the month in which thisAct is enacted, iu which a deduction is incurred under paragraph (1)of section 22 (b) of the Social Security Act. Ante, pp.1025,

AMOUNTWiric:iiMAYBE E.RNED wITHoUT Loss OF BENEFITS

SEC. 308. (a) Section 203 (e) (2) of such Act is amended by strik-42 USC 403. ing out "last month' and "preceding month" wherever theyappear iiidsubstitutinginlieuthereof"first month" and "succeeding month", respectively. (b) Section 203 (e) (3) (A) of such Act is amended by striking out "the term last month of such taxable year' means the latest month" amid substitul ing in lieu thereof "the term 'first month of such hixable year' mnealls t tie earliest month". (c) Subsections (e)(2) (D) and (e) (3) (B) (ii) of section 203 of such ct are each uniended by striking out "$80" and inserting iii lieu thereof "$100". (d) Section 203 (g) (1) of such Act is amended to readas follows: (g) (1) (A) If au individual is entitled to airy monthly insunuice benefit under section 2O during any t;ixable year in which he has Ante,pp.1017, earililigsor wages, a coIlIl)uted pursuant to paragraph (4) of sub— 1022—1024, 1026, section (e), in excess of the product of $100 times the number of 1029—1032. iiioiitlisiii such year, such individual (or the individual who is in leceipt. of such benefit on his behalf) shall make a report to the Sec- ietiry of his earnings (or wages) for such taxable year.Such report shall be made on or before the fifteenth day of the fourth month fol— lowiig the close of such year, and shall contain such inforiiiation and be made. in sticIL maiiiier as the Secretary may by iegulationspie— .ciibe. Such report need not be made for aiiy taxableyear (i) begin- lung with or after the mouth in which such iiidividiial attained the age of ,or(ii) if benefit payments for all iiontlis (in such taxable Pub. Law 85-840 -22- August 28, 1958 72 tat.1O4. year) in which such individual is tinder age 72 have been suspended under the provisions of the first sentence of paragraph (3) of this subsection. "(B) If the benefit payments of an individual have been suspended for all months in any taxable year under the provisions of the first sentence of paragraph (3) of subsection (g), no benefit payment shall be made to such individual for any such month in such taxable year aftei the expiration of the period of three years, three months, and fifteeii days following the close of such taxable year unless within scli period the individual, or some other person entitled to benefits inder this title on the basis of the same wages and self-employment income, files with the Secretary information showing that a benefit for such month is payable to such individual." 42 USC403. (e) Section 203 (1) of such Act is amended by striking out "(g)" and inserting in lieu thereof "(g) (1) (A)". (f) The amendments made by this section shall be applicable with respect to taxable years beginnillg after the month in which this Act is enacted.

REPRESENTATION OF CLAIMANTS BEFORE SECRETARY OF I-IEALTH, 1nUCATION, AND W}LFARE

42 USC 406. SEC. 309. The second sentence of section 206 of the Social Security Act is amended by strking out "upon filing with the Administrator a certificate of his right to so practice from the presiding judge or clerk of any such court". OTEN5E5 UNDER TITLE II OF THE 5OIAL SECURITY ACT

42 USC408. SEC. 310. Section 208 of the Social Security Act is amended to read as follows: "I'1NMTIE5 "SEc. 208. Whoever— "(a) for the purpose of causing an increase in aity payment authorized to be made under this title, or for the purpose of causing any payment to be made where no payment is authorized under this title, shall make or cause to be made any false statement or representation (including any false statement orrepresentation under subchapter E of 26 USCapp.1400— 111 connection with any matter arising 1426. chapter 1or subchapter A or E of chapter 9 of the Interna' 26 USC 1401—1403; Revenue êode of 1939, or chapter 2 or 21 or subtitle F of the In- 3101.-3125;6001— ternal Revenue Code of 1954) as to— 7852 "(1) whethei wages were paid or received for employment Post, pp. 1041—1044; (as said terms aie defined in this title and the Internal 1046, 1047. Revenue Code), or the amount of wages or the period during which paid or the person to whom paid; or "(2) whether net earnings from se1f-enipoyiuent (as such term is defined in this title and in the Internal Revenue Code) were derived, or as to the amount of such net earnings or the period during which or the person by whom derived; or "(3) whether a person entitled to benefits under this title had earnings in or for a particular period (as determined under section 203 (e) of this title for purposes of deductions from benefits), or as to the amount thereof; or "(b) makes or causes to be made any false statement or representation of a material fact in any application for any payment or for a disability determination iuider this title; or August 28, 1958 -23- Pub. Law 85-840 72Stat. 1035. (e)at any time makes orcaitse to bemade aiiy false state— nieiitor repiesentation of ;t initeriiil fact for use in deteriiiiii ing rights topayment under this title; or "(d)llavnlgkiiowlede of the occurrenceof anyevent affecting (1)hisinitial orcontinuedi'iglit to any l)aYIllelItiiiider this title,or (2) the initialor continued right toanypaymentof iiiiy otherindividual inwhose behalflie luis applied for or is receivilig su(h payment,conceals or fails to disclose such event withan intent fraudulently to secure payment eithem inii greater amount than is due or when no l)aylnent is authorized;or "(e) having made application to receive payment tindem this title for the use and benefit of another and having received such a pilyment, knowingly and willfully converts such a payment, or any part thereof, to a use other than foi the use and benefit of such otherperson; shallbe guilty of i misdemeanor ind upon conviction thereof shnll be fined not morethnn $1,000 orimnprisoiied for notmore than one year, or both."

EX'I'ENSON OF COVEB.U;E IN CONNECTION WiTH (L'M IW$IN IBUDU(Ts

SEC.311. (a) Section 210('i)(1) of the SocialSecurity Act is42 USC 410. imnended tomeidas follows: "(1)Service peiformned byfomeigmi ;igiicnltnral workers (A) iindei contractsentered into inaccordance with titleV of the Agricultural Act of1949,as aniended, or (B) hiwfullyadnmitted65 Stat. 119. to the ljiiited States from the Bahamas, Jamaica, and the other7 USC 1461— BritishWestIndies, or from any other foreigii country or posses- 1468. sion thereof, on a temporary basis to perform agricultural labor;". (b) The amendment made by subsection (a) shall apply withrespect toserviceperformed after1958.

EMI9.OYMEIcrF(RNONPROFIT ORGANIZATION

SEc. 312. (a) Sectioii 210 (a)(8) (B) of title II of the Social42 USC 410. Security Act is amended to read as follows: "(B) Service performed in the employ of a religious, charitable, educational, or otherorganizationdescribed insection501 (c)(3) of the Internal Revenue Code of 1954, which is exempt 68AStat. 163. from income tax wider section 501 (ii) of such Code, but this sub-26 USC 501. paragraph shall not apply to service performed during the period for which a certificate, filed pursuant to section 3121 (k) of the Internal Revenue Code of 1954, is in effect if such service isper-Post, p.1044. formed by an employee— "(i)whose signituireappears onthe list filed by such or- ganizationunder such section 3121 (k), "(ii) who became an emnployee of such orgami izationafter the calendar quarter in which the certificate (other thana certificateteferred toin clause (iii)) was filed,or "(iii) who,afterthe ca1emidirquarterin which the certifi- catewas filed with respect to a group described in paragraph (1) (E) of such section 3121 (k), becimne a mnembei of such grollp, except that this subpar;tgriph shall apply with respectto service performedby a; employee as a member of a group described in such parigrnpli (1) (E) with respect to which 110 certificate is in effect;". (b) The aniendinent mnade by subsection(a)shtll apply with respect to ceitificates filed under section 3121 (k) (1) of the Internal Revenue Code ofl54 after the date of enactment of this Act. Pub. Law 85-840 -24- August 28, 1958 72Stat. 1036. PARTNER'STAXABLE YEAR ENDING AS RESULTOFDEATH

Ante, .1019. SEC. 313. (a) Section 211 of the Social Security Act is amended by — addingat the end thereof the following new subsection: "Partner's Taxable Year E'iding as Result of Death "(f) In computing a partner's net earnings from self-employment for his taxable year which ends as a result of his death (but only if such taxable year ends within, and not with, the taxable year of the partiership), there shall be included so much of the deceased partner's distributive share of the partnership's ordinary income or loss for the partnership taxable year as is not attributable to an interest in the partnership during any period beginning on or after the first day of the first calendar month following the month in which such partner died.For purposes of this subsection— "(1) in determining the portion of the distributive share which is attributable to any period specified in the preceding sentence, the ordinary income or loss of the partnership shall be treated as having been realized or sustained ratably over the partnership taxable year; and '(2)the term 'deceased partner's distributive share' includes the share of his estate or of any other person succeeding, by reason of his death, to rights with respect to his partnership interest." (b) The amendment made by subsection (a) shall apply— (1) with respect to individuals who die after the date of the enactment of this Act, and (2) with respect to any individual who died after 1955 and on or before the date of the enactment of this Act, but only if the 42 USC 603. requirements of section 403 (b) (2) of this Act are met.

GRATtIITOUS WAGE CREDITs FOR AMERICAN CITIZENS wno 5ERVED IN THE ARMED FORCES OF ALLIED COUNTRIES General Rule

Post, .1037. SEC. 314. (a) Section 217 of such Act is amended by adding at the — endthereof the following new subsection: "(h)(1) For the purposes of this section, any individual who the Secretary finds— "(A) served during World War II (as defined in subsection (d) (1)) in the active military or naval service of a country which was on September 16, 1940, at war with a country with which the United States was at war during World War II; "(B) entered into such active service on or before December 8, 1941; "(C) was a citizen of the United States throughout such period of service or lost his United States citizenship solely because of his entrance into such service; "(D) had resided in the United States for a period or periods aggregating four years during the five-year period ending on the day of, and was domiciled in the United States on the day of, such entrance into such active service; and "(E) (i) was discharged or released from such service under conditions other than dishonorable after active service of ninety days or more or by reason of a disability or injury incurred or aggravated in service in line of duty, or "(ii) died while in such service, shall be considered a World War II veteran (as defined in subsection (d) (2)) and such service shall be considered to have been performed in the active military or naval service of the United States. August 28, 1958 -25- Pub. Law 85-840

"(2) In thec:tse ofanyindividualto whom paragraph (1) applies, proofof support required under section 202 (f) or (Ii) may be filed Ante,pp.1023, atany time prior to the expiration of two years after the date of such 1027,1029, 1031, individual'sdeath or the date of the enactment of this subsection, 1032. whicheveris the later." Reimburement to Disability Insurance Trust Fund

(b) (1) Section 217 (g) (1) of the Social Secuiity Act is amended 42USC 417. bydeleting "Trust Fund" and inserting in lieu thereof "Trust Funds". (2) Section 217 (g) (2) of the Social Security Act is amended by deleting "the Trust Fund" each time it appears therein and iiiserting in lieu thereof "the Federal Old-Age and Survivors Insurance Trust Fund" the first time and "such Trust Fund" the other times. Effective Date (c)(1) The atnendment made by subsection (a) shall apply only with respect to (A) iiionthly benefits under sections 202 and 223 ofAnte,pp. 1017, theSocial Security Act for months after the month in which this Act 1021,1024, isenacted, (B) ILimp-slim death payments under such section 202 in 1026,1027, 1029— thecase of deaths occurring after the month in which this Act is 1032. enacted,and (C) periods of disability under section 216 (i) in the Ante,pp.1020, caseof applications for a disability determination filed after the 1021. monthin which this Act is enacted. (2) In the case of any individual— (A) who i; a WTorld War II veteran (as defined in section 217 (d) (2) of the Social Security Act) wholly or partly byreason 42USC417. ofservice described in section 217 (h) (1) (A) of such Act; and ,p. 1036. (B)who (i) became entitled to old-age insurance benefits under section 202 (a) of the Social Security Act or to disability insurance benefits under section 223 of such Act prior to the first day of the month following the month in which this Act is enacted, or (ii)diedprior to such first day, and whose widow, former wife divorced, widower, child, or parent is entitled for the month in which this Act is enacted, on the basis of his wages and self-employment income, to a monthly benefit under section 02 of such Act; and Ante, pp.1017, (C) anypartof whoseservice described in section 217 (h) (1)1021,10221024, (A)ofthe Social Security Act was not included in the computa- j8:1027, 1029 tionof his primary insurance amount under sectioii 215 of such Ante, pp.1013, Actbut would have been included in such computation if th1015,1016,1020, amendmentmade by subsection (a) of this section had been effec1025. tiveprior to the date of such computation, the Secretary of Halth, Education, and Welfare shall, notwithstanding the provisions of section 215 (f) (1) of the Social Security Act, recompute the primary insurance amount of such individunl upon the filing of an application, after the month in which this Act is enacted, by him or (if he has died without filing such an application) by any person entitled to monthly benefits under section 202 of the Social Security Act on th basis of his wages and self-employment income. Such recompiitatioii shall be made only in the manner provided in title II of the Social Security Act as in effect at the time of the last previ- 42USC 401—425. oiiscomputation or recomputation of such individiiaFs primary insurance amount, and as though application therefor was filed in the month in which application for such last previous computation or recomputation was filed. No recomputation made under this subsection shall be regarded as a iecomputation under section 215 (f) of the Social Security Act. Any such recomputation shall be effective for 72Stat. 1037. andafter the twelfth month before the month in which the ipp1ica- 72Stat. 1038. tionis filed, but in ito case for the month in which this Act is enacted or any prior month. Pub. Law 85-840 -26.. August 28, 1958

POSITIONS COVERED BY STATE AND LOCAL RETIREMENT STSTEMS Division of Retirement Systems

42 usc418. SEC. 315. (a) (1) Section 218 (d) (6) of the Social Security Act is amended to read as follows: "(6) (A) If a retirement system covers positions of employees of the State and positions of employees of one or more politicalsubdi- visions of the State, or covers positions of employees of two or more political subdivisions of the State, th?n, for purposes of the preceding paragraphs of this subsection, there shall, if the State so desires, be deemed to be a separate retirement system with respect to any one or more of the pohtical subdivisionsconcerned and, where the retirement system covers positions of empkyees of the State, a separate retirement system with respect to the State or with respect to the State and any one or more of the political subdivisions concerned. "(B) If a retirement system covers positions of employees of one or more institutions of higher learning,then, for purposes of such preceding paragraphs there shall, if the State so desires, be deemed tobe a separate retirement system for theemployees of each such institution of higher learning. For the purposes of this subparagraph, the term 9nstitutions of higher learning' includes junior colleges and teachers colleges. "(C) For the purposes of this subsection, any retirement system established by the State of California, Connecticut, Florida, Georgia, Massachusetts, Minnesota, New York, North Dakota, Pennsylvania, Rhode Island, Tennessee, Ve'mont, Washington, Wisconsin orthe Territory of Hawaii, or any political subdivision of any suchtate or Territory, which, on, before, or after the date of enactment of this subparagraph, is divided into two divisions or parts, one of which is composed of positions of members of such system who desire coverage under an agreement under this section and the other of which is composed of positions of members of such system who do not desire such eoverage, shall, if the State or Territory so desires andif it is provided that there shall be included in such division or part. composedof members desiring such coverage the positions of individualswho become members of such system after such coverage is extended, be deemed to be a separate retirement system with respect. to eachsuch division or Inirt. "(D) The position of any individual which is covered by any retire- nient system to which subparagraph (C) is applicableshall, if such individual is ineligible to become a member of such system on August 1, 1956, or, if hiter, the day he first occupies such position,be deemed to be covered by the separate retirement systemconsisting of the positions of members of the division or part who do not desire coverage under the insurance system established under this title. "(E) An individmil who is in a position covered by a retirement system to which subparagraph (C) is applicable andwho is not a member of such system but is eligible to become a member thereof shall, for purposes of this subsection (other than paragraph (8)), be regarded as a member of such system; except that, in the caseof any retiremeiit system a division or partof which is covered under the agreement (either in the original agreement or by amodification thereof), which coverage is agreed to prior to 1960, the preceding provisions of this subparagraph shall apply only if the State so 72Stat. 1038. guestsand any such individual referred to in such preceding pro- 72Stat. 1039. visionsshall, if the State so requests, be treated, after division of the retirement system pursuant to such subparagraph (C), the same as individuals in positions referred to in subparagraph (F). August 28, 1958 —27- Pub. Law 85-840 72 Stat. 1039. "(F) In the case of any retirement system divided pursuant to subparagraph (C), the position of any member of the division or part composed of positions of members who do iiot desire coverage may be transferred to tie separate retirement system composed of positions of members wh desire such coverae if it is so provided in a modification of such agreement which is mailed, or delivered by other means, to the Secretary prior to 1960 oi, if later, the expiration of one year after the date on which such agreement, or the modification thereof making theagreementapplicable to such separate retirement system, as the case may be, is agreed to, but only if, prior to such modification or such later modification, as the case may be, the individual occupyiiig such position files with the State a written request for such transfer. "(G) For the purposes of this subsection, in the case of any retire- inent system of the State of Florida, Georgia, Minnesota, North Dakota, Pennsylvania, 'Vashington, or the Territory of Hawaii which covers positions of employees of such State or Territory who are compensated in whole or in part from grants made to such State or Territory under ;itle III, there shall be deemed to be, if such State or Territory so desii:es. a separate retirement system with respect to any of the following: "(i) the positions of such employees; "(ii) the positions of all employees of such State or Territory covered by such retirement system who are employed in the department of such State or Territory in which the employees referred to in clause (i) are employed; or "(iii) employees of such State or Territory covered by such retirement system who are employed in such department of such State or Territory in positions other than those referred to in clause (i)." (2) Paragraph (7) of section 218 (d) of such Act is amended by42 USC 418. striking out "(created under the fourth sentence of paragraph (6))" and inserting in Jieu thereof "(created under subparagraph (C) of paragraph (6) or the corresponding provision of prior law)"; and by striking out "the fourth and fifth sentences of paragraph (6)" and inserting in lieu thereof "subparagraphs (C) and (D) of paragraph (6) or the corresponding provision of prior law". (3) The second sentence of paragraph (2) of section 218 (k) of42 USC418. such Act is ameicIed by striking out "the preceding sentence" and inserting in lieu tereof "the first sentence of this paragraph".The last sentence of such paragraph is amended by striking out "the fourth sentence o subsection (d) (6)" and inserting ii lieu thereof "subparagraph (C) of subsection (d) (6) or the corresponding provision of prior law".Such paragraph is further amended by inserting after the first sentence the following new sentence: "An individual who is in a position covered by a retirement system divided pursuant to the preceding scntence and who is not a member of such system but is eligible to become a member thereof shall, for purposes of this subsection, be regarded as a member of such system.Coverage under the agreement of any such individual shall be provided under the same conditions, to the extent practicable, as are applicable in the case of the States to which the provisions of subsection (d)(6)(C) apply." Pub. Law 85-840 -28- August 28, 1958

72 Stat. 1040. CoverageUtiderOther Retirerneiit Systems

Ante, pp.1038, (b) Section218 (d) of such Act is amended by adding at the eiid thereof the following new jaragraph : "(8) (A) Notwithstandingiragrapli (1), if under the provisions of this subsection an agreement is, ;tfter December 31, 1958, made ipplicable to service performed in positioiis covered by a retirement system, service performed by an individual in i position covered by such a system may not be excluded from the agreement because such position is also covered under another retirement system. "(B) Subiragriph (A) shall not. apply to service performed by an individual ii i position covered under a retireineiit systemf such individual, on the day the agreement is made applicable to service performed iiipositoiiscovered by such retirement system, is not a member of such system aiid s a nieber of aiother system. "(C) If an agreement is made ipplicable, 1)m01to1959, to service in positions covered by any retirement system the preceding provisions of this panigniph shall be ipplicible iiithecase of such system f te igreement is modified to so provide. "J) Except in the cise of agi'eernents with the States iiamed in subse'ction (p) and agreements with interstate instriimeiitaflties, nothing in this piragriph shall authorize the application of in igreement to service in aiiy policeman's or fireman's position." Retroactive Coverage

USC 418. (c)(1) Section 218 (f) of such Act is ameiided by inserthig "(1)" 42 immediately after "(f)", by redesignating chiuses (1), (2), (3), and (4) thereof as clauses (A), (B), (C) and (D), respectively, and by adding ittheend thereof the following new )lragrlpli "(2) In the case of service performed by members of aiiy coverage group— "(A) to which an agreemeflt under this sectioii s made applicable, and "(B) with respect to whichtheagreement, or modification thereof making the agreement so applicible, specifies an effective date earlier than the date of execution of such agreement aiid such modification, respectively, the agreement shall, if so requested by the State, be ipphicable to such services (to the exteit the igreernent was not ilreidy npphicable) performed before such date of execution ind after such effective thite by any individual as a member of such coverage groupjf he is such a member on a date, specified by the State, which is eulier tlnin such date of execution, except that in ito case may the date so specified be earlier than the date such agreemt or such modification, ts the case may be, is mailed or delivered by other means, tothe Secretary." (2) The ameiiàment made by this subsection shall apply in the case of any agreement, or modification of an tgreement,under section Ante, .io— 218of the Social Security Act, which is executed after the date of enactment of this Act. TEACHER5 iN 'Ffl S'rATI OF MAINE SEc. 316.For the purposes of any modification which might be made after the date of enactment of this Act and prior to .July 1, 1960, by the State of Maine of its existing agreement made under section Q18of the Social Security Act, any retirement system of such State antE, 1038—which covers positions of teachers and positions of other employees shall, if such State so desires, be deemed (notwithstanding the provi- August 28, 1958 -29- Pub. Law 85-840 72Stat. 104h sioiisof subsection (d) of such section) to consist of a separate retire- tiient system with respect to the positions of such teachers and a separate retirement Sstemwith respect to the positions of such other employees; and for I he purposes of this sentence, the term "teacher" shall mean ally teacher, piiicipal, suj)ervisor, school nurse, school dietitian, school secretary or superintendent employed in any public school, in- cludi ng teachers in imorgan ized territory. TITLE IV—AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1954

C1-IANGE5 IN TAX SCHEDULES Self-Employment Income Tax SEC. 401. (a) Section 1401 of the Internal Revenue Code of 1954 68A Stat 353. (relating to rate of tax on self-employment income) is amended to 26 USC 1401. read as follows: "SEC. 1401. RATE OF TAX. "Inndditionto other taxes, there shall beimposed for each taxable year,on the self-mployment income of every individual, a tax as follows: "(1)iii the case of any taxable year beginning after December 31, 1958, and before January 1, 1960, the tax shall be equal to 33/4 l)elcent of the amount of the self-employment income for such taxable yar; "(2) in the case of any taxable year beginning after December 31, 1959, and before January 1, 1963, the tax shall be equal to 4% percent o:P the amount of the self-employment income for such taxable year; "(3) in the ense of any taxable year beginning after December 31, 1962, and before January 1, 1966, the tax shall be equal to 51/4 percent of the amount of the self-employment income for such taxableyEar; "(4)in the ease of any taxableyearbeginning after December 31, 1965, and before January 1, 1969, the tax shall be equal to 6 percent of the umoiint of the self-employment income for such taxable year; and "(5) inthecase of any taxable year beginning after December 31, 1968, the tLx shall be equal to 63/4 percent of the amount of the self-employment income for such taxable year." Tax on Employees

(b) Section 3101 of such Code (relating to rate of tax on em- 26USC 3101. ployees under the Federal Insurance Contributions Act) is amended to read as follows: "SEC. 3101. RATE OF TAX. "In addition to ot:her taxes, there is hereby imposed on the income of every individual a tax equal to the following percentages of the wages (as defined ii section 3121 (a)) received by him with respect p.1042. to employment (as defined in section 3121 (b) )— pp.1044— "(1) with respect to wages received during the calendar year1046. 1959, the rate shall be 21/2 percent; "(2) with respect to wages received duriig the calendar years 1960 to 1962, both inclusive, the rate shall be 3 percent; "(3) w'ith respect to wages received during the calendar years 1963 to 1965, both inclusive, the rate shall be 3½ percent; Pub. Law 85-840 -30- August 28, 1958 72Stat. 1042. "(4)with respect to wages received during the calendar years 1966 to 1968, both inclusive, the rate shall be 4 percent; and "(5) with respect to wages received after December 31, 1968, the rate shall be ½percent." Tax on Employers

26 USC 3111. (c) Section 3111 of such Code (relating to rate of tax on employers under the Federal Insurance Contributions Act) is amended to read as follows: "SEC. 3111. RATE OF TAX. "In addition to other taxes, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to the following percentages of the wages (as defined in section 3121 (a)) paid by him with respect to employment (as Post, pp. 1044,defined in section 3121 (b) )— 15w. "(1) with respect to wages paid during the calendar year 1959, the rate shall be 2½ percent; "(2) with respect to wages paid during the calendar years 1960 to 1962, both inclusive, the rate shall be 3 percent; "(3) with respect to wages paid during the calendar years 1963 to 1965, both inclusive, the rate shall be ½percent; "(4) with respect to wages paid during the calendar years 1966 to 1968, both inclusive, the rate shall be 4 percent; and "(5) with respect to wages paid after December 31, 1968, the rate shall be 4½percent." Effective Dates (d) The amendment made by subsection (a) shall apply with respect to taxable years beginning after December 31, 1958.The amendments made by subsections (b) and (c) shall apply with respect to remuneration paid after December 31, 1958.

INCRE%5E IN TAX BASE Definition of Self-Employment Income

26 USC 1402. SEc. 402. (a) (1) Subparagraph (B) of section 1402 (b) (1) of the Internal Revenue Code of 1954 is amended to read as follows: "(B) for any taxable year ending after 1954 and before 1959, (i) $4,200, minus (ii) the amount of the wages paid to such individual during the taxable year; and". (2) Paragraph (1) of section 1402 (b) of such Code is further amended by adding at the end thereof the following new subparagraph "(C) for any taxable year ending after 1958, (i) $4,800, minus (ii) the amount of the wages paid to such individual during the taxable year; or". Definition of Wages

26USC3121 (b) Section 3121 (a) of such Code (relating to the definition of wages) is amended by striking out "$4,200" wherever it appears and inserting in lieu thereof "$4,800". Federal Service

26 USC 3122. (c) Section 3122 of such Code (relating to Federal service)is unended by striking out "$4,200" wherever it appears and inserting in lieu thereof "$4,800". August 28, 1958 -31- Pub. Law 85-840 72Stat. 1043. Refunds (d) (1) Paragraph (1) of section 6413 (c) of such Code is amended 26 USC 6413. to read as follows: "(1) IN G.ENERAL.—If by reason of an employee receiving wages from more than one employer during a calendar year after the caleidftr year 1950 and prior to the calendar year 1955, the wages received, by him during such year exceed $3,600, the employee shall be entitled (subject to the provisions of section 31 (b)) to a credit or refund of any amount of tax, with respect to such wages, imposed by section 1400 of the Internal Revenue Code of 1939 and deducted from the employee's wages (whether 26 USC app. ornot paid to the Secretary or his delegate), which exceeds the 1400. tax with respect to the first $3,600 of such wages received; or if by reason of an employee receiving wages from more than one employer (A) during any calendir year after the calendar year 1954 and prior to the calendar year 1959, the wages received by him during such year exceed $4,200, or (B) duriiig any calendar year after th calendar year 1958, the wages received by him during such year exceed $4,800, the employee shall be entitled (subject to tlu provisions of section 31(b).) to a credit or refund of any amount of tax, with respect to such wages, imposed by section 3101 and deducted from the employee's wftges (whether 26 USC 3101. or not pud to the Secretary or his delegate), which, exceeds the tax with respect to the first $4,200 of such wages received in such calendar year after 1954 and before 1959, or which exceeds the tax with respect to the first $4,800 of such wages received in such calendar year fter 1958." ()Subparagraph(A) of section 6413 (c)(2) of such Code is26 USC 6413. ;imended to read a follows: "(A) FEDERAL EMPL0YEE8.—In the case of remuneration received from the United States or a wholly owned instrumentality thereof during any calendar year, each head of a Federal agency or instrumentality who makes a return pursuant. to section 3122 and each agent, designated by the head P. 1042. of a Federal agency or instrumentality, who makes a return pursuant to such section shall, for purposes of this subsection, be deEmed a separate employer, and the term 'wages' includes for purposes of this subsection the amount, not to exceed $3,600 for the calendar year 1951, 1952, 1953, or 1954, $4,200 for the calendar year 1955, 1956, 1957, or 1958, or $4,800 for any calendar year after 1958, determined by each such head or agent as constituting wages paid to an employee." Effective Date (e) The amendments made by subsections (b) and(c) shall be applicable only with respect to remuneration paid after 1958.

i'.RTER'5 TAXARLE YE.AR ENDING AS RESULT OF DEATh General Rule Sc. 403. (a) Section 1402 of the Internal Revenue Code of 1954Ante, p.1042. is amended by adding at the end thereof the following new subsection: "(f) PRTNER'5 TAXABLE YEAR ENDING AS TIlE RESULT O' DEATH.— In computing a partner's net earnings from self-employment for his taxable yeir which ends as a result of his death (but only if such taxable year ends within, and not with, the tftxable year of the part- neiship), there shall be included so much of the deceased partner's Pub. Law 85-840 -32- August 28, 1958 72Stat. 1044. distributiveshare of the partnership's ordinary income or lossfor the part1te1sl111) taxible year as is notLttributable to an interest in the partnership during ;iny period begiining oil orafter the first day of the lust calendar month following themonth in which such partner died. For purposes of this subsectiofl— "(1) in deteiininiiig the portion of thedistributive share which is attributable to any period specified iiithe preceding sentence, the ordinary income or loss of thepartnership shall be treated as haviiig been realized orsustained ratably over the partnership taxable year; and '(2) the term 'deceased partner'sdistributive share' includes the shire of his estate or of any other personsucceeding, by reason of his death, torights with respect to his parthership interest." Effective Date (b) (1) Except as provided in paragraph(2), the amendment made by subsection (a.) shall apply only withrespect to individuals who die after the date of the enactment ofthis Act. (2) In the case of an individual whodied after 1955 and on or before the date of the emictment of thisAct, the amendment made by subsection (a) shall apply only if— (A) before January 1, 1960, there isfiled a return (or amended return) of the tax imposed by chapter 2of th Internal Revenue result of his death, Ante,pp. 1041— Code of 1954 for the taxable year ending as a and 1043. (B) in any case where the return is filedsolely for the purpose of reporting net e;lrnings from self-employmentresulting from the aniendinent made by subsection (a), thereturn is iccoinpanied by the amount of tax attributable to such netearnings. In any case described in th preceding sentence, nointerest or penalty shall be assessed or collected on th amountof any tax due under chapter 2 of such Code solely by reasonof the operation of section Ante, p.1043. 140 (f)of such Code. SERVICE IN CONNECTION WITH GUM RESINI'RODUcTS of the Internal Reveiue Code 26 USC 3121. SEC. 404. (a) Section :3121 (b) (1) of 1954 (relating to definition of employment)is amended to read as follows: "(1) service performed by foreigflagricullura workers (A) under contracts entered into in accordancewith title V of the Agricultural Act. of 1949, as amended (65Stat. 119; 7 U. S. C. 1461—1468), or (B) lawfully admitted to thUnited States from the Bahamas, Jamaica, and the otherBritish West Indies, or from any other foreign country or posse.ssionthereof, on a temporary basis to performagricultural labor;". (b) The amendment made by subsection(a) shall apply with respect to service performed after 1958.

NONPROFIT oRG.NIzA!JL'toN'S WAIVER CERTIFICATES SEC. 405. (a) Section 3121 (k) (1)of the Internal Revenue Code 26 C 3121. of 1954 is amended to read as follows: "(1) W.UVER OF EXEMPWION BY ORGANIZATiON.— "(A) An organization described in section 501 (c)(3) which is exempt from income tax undersection 501 (a) may 26 USC501. file a certificate (ii such form and manner, andwith such officiaL as may be prescribed by regulationsmade under this chapter) certifying that it desires to have the insurance sys- August 28, 1958 -33- Pub. Law 85-840 72Stat. 1045. teinestablished by title 11 of the Social Security Act ex-42USC 401— tendedto service performed by its employees iiid that nt 425. leasttwo—thirds of its employees concur in the filing of the certificate.Such certificate nmy be filed only ifit isaccom- 1)li1ied by a list containing the signature, address, and social security account number (if any) of each employee who concurs in the filing of the certificate.Such list may be amended at uiy time prior to the expiration of the twenty- fourth month following the calendar quarter in which the certificate is filed by filing with the ptesctil)ed official a sup- plementnl list or lists containing the signature, address, and social security account number (fany) of each additional ernploye€ who concurs in the filing of the certificate.The list and any suppleineiital list shall l)e filed in such form iiid manner s may be prescribed by regulations made under this chapter. "(B) The certificate shall be iiieffect(for purposes of subsection (b) (8) (B and for purposes of section 210 (a) Post,p. 1046. (8)(B) of the Social Security Act) for the period beginning P.1035. withwhi3hever of the following may be designated by the organization "(i)the first day of the calendar quarter iii which the certificate is filed, "(ii) the first day of the calendar quarter succeeding .such quarter, or "(i:ti) the first day of any calendar quarter precediiig the calendar quarter in which the certificateisfiled, except that, in the case of a certificate filed prior to .Janunry 1, 1960, such date may not be earlier than .Jnnu- ary 11956, ind in the case of a certificate filed after 1959, such date may not be earlier than the first day of the fourth calendar quirter preceding the quarter in which such certificate is filed. "(C)Inthe case of service performed by an employee whose name appears on a supplemental list filed after the first month followiig the calendar quarter in which the certificate is filed, the certificate shall be in effect (for purposes of subsection (b) (8) (B) and for purposes of section 1O (a)(8)(B) of the Social Security Act) only with respect to seivice performed by such individunl for the period beginning with the first dtiy of the calendar quarter in \vhich such supplemental list is filed. "(D)Theperiod for whichcertificate filed pursuant to this subsection or the coriwponding subsection of prior hiw is effective may be terminated by the orgahization, effective at the end of a calendar quarter, upon giving 2 years' advance notice in writing, but only f, at the time of the receipt of such notice, the certificate has been in effect for a period of not less than 8 years.The nqtice of terminntioi may be revoked by the organization by giving, prior to the close of the calend.r quarter specified in the notice of termination, a written notice of such revocatioii.Notice of termination or ievocation thereof shall be filed in such form and manner, and with such official, as may be prescribed by regulatioiis made under this chapter. "(E) Ifanorganization described in subparagraph (A) employs boi:h individuals who are in positions covered bya pension, annuity, retirement, or simirar fund or system established by a State or by a political subdivision thereof and Pub. Law 85-840 -34- August 28,1958 72Stat. 1046. individuals who are not in such positions, the organization shall divide its employees into two separate groups.One group shall consist of all employees who are in positions covered by such a fund or system and (i) are members of such fundor system, or (ii) are not members of such fund or sys- tein but are eligible to become members thereof; and the other group shall consist of all remaining employees. An organization which has so divided its employees into two groups may file a certificate pursuant to subparagraph (A) with respect to the employees in one of the groups if at least two-thirds of the employees iii such group concur in the filing of the certificate.The organization may also file such a certificate with respect to the employees in the other group if at least two-thirds of the em1oye2s in such other group concur in the filing of such certificate. "(F) An organization which filed a certificate under this subsection after 1955 but prior to the enactment of this subparagraph may file a request at any time before 1960 to have such certificate effective, with respect to the service of individuals who concurred in the filing of such certificate (initially or through the filing of a supplemental list) prior to enactment of this subparagraph and who concur in the filing of such new request, for the period beginning with the first day of any calendar quarter preceding the first calendar quarter for which it was effective and following the last calendar quarter of 1955.Such request shall be filed with such official and in such form and manner as may be prescribed by regulations made under this chapter. If a request is filedrrsuant to this subparagraph—— (i) for purposes of computing interest and for pur- 26 USC6651. poses of section 6651 (relating to addition to tax for failure to file tax return), the due date for the return and payment of the tax for any calendar quarter resulting from the filing of such request shall be the last day of the calendar month following the calendar quarter in which the request is filed; and "(ii) the statutory period for the assessment of such tax shall not expire before the expiration of 3 years from such due date. "(0) If a certificate filed pursuant to this paragraph is effective for one or more calendar quarter prior to the quarter in which the certificate is filed, then— "(i) for purposes of computing interest and for pur- 26 USC 6651. poses of section 6651 (relating to addition to tax for failure to filetax returii), the due date for the return and payment of the tax for such prior calendar quarters resulting from the filing of such certificate shall be the last day of the calendar month following the calendar quarter in which the certificate is filed; and "(ii) the statutory period for the assessment of such tax shall not expire before the expiration of 3 years from such due date." 26 USC 3121. (b)Section 3121 (b) (8) (B) of the Internal Revenue Code of 1954 is amended to read as follows: "(B) service performed in the employ of a religious, charitable educational, or other organization described in section 26 USC 501. 501 c) (3) which is exempt from income tax under section 501 (a), but this subparagraph shall not apply to service performed during the period for which a certificate, filed August 28, 1958 -35- Pub. Law 85-840 72 Stat. 1047. pursusntto subsection (k) (or the corresponding subsection of prior law), is in effect if such service is performed by an employee— '(i) whose signature appears on the list filed by such organization under subsection (k)(or the corresponding subsection of prior law), '(ii) who became an employee of such organization after the calendar quarter in which the certificate (other than a certificate referred to in clause (iii)) was filed, or "(iii) who, after the calendar quarter in which the certificate was filed with respect to a group described in section 3121 (k)(1)(E), became a member of such Ante, p.1044. group, except that this subparagraph shall apply with respect to service performed by an employee as a member of a grou described in section 3121 (k) (1) (E) with respec.t to whic no certificate is in effect;". (c) The amendments made by subsections (a) and (b) shall apply with respect to certificates filed under section 3121 (k)(1) of the Internal Revenue Code of 1954 after the date of enactment of this Act and requests filed under subparagraph (F) of such section after such date.

EXEMPTiON OF UNEMPLOYMENT BENEFITS FROM LEvy

SEC.406. Section 6334 (a) of the Internal Revenue Code of 1954 26USC 6334. (relatingto enumeration of property exempt from levy) is amended by adding at the end thereof the following new paragraph: "(4) UNEMPLOYMENT BENEFIT5.—Any amount payable to an individual with respect to his unemployment (including any portion thereof payable with respect to dependents) under an unemployment compensation law of the United States, of any State or Territory, or of the District of Columbia or of the Com- monwealth o:P Puerto Rico." TITLE V—AMENDMENTS RELATING TO PUBLIC ASSISTANCE

OLD-AGE ASSISTANCE

SEC.501.Subsection (a) of section 3 of the Social Security Act is42USC 303. amendedto read as follows: "(a) From the sums appropriated therefor, the Secretary of the Treasury shall pay to each State which has an approved plan for old-age assistance, for each quarter, beginninct with the quarter commencing October 1, 1958, (1) in the case o? any State other than Puerto Rico, the Virgin Islands, and Guam, an amount equal to the sum of the following proportions of the total amounts expended during such quarter as old-age assistance under the State plan (including expenditures for i:surance premiums for medical or any other type of remedial care or the cost thereof)— "(A) four-fifths of such expenditures, not counting so much of any expenditure with respect to any month as exceeds the product of $30 multiplied by the total number of recipients of old-age assistance for such month (which total number, for purposes of this subsection, means (i) the number of individuals who received old-acte assistance in the form of money payments for such month, plus Tii) the number of other individuals with respect to whom expenditures were made in such month as old-age assistance in the form of medical or any other type of remedial care); plus Pub. Law 85-840 -36- August 28, 1958 12Stat. 1048. B)the Fedenil percentage of the amount by which such expenditures exceed the maximum which may be counted under clause (A), not counting so much of any expenditure with respect to any month as exceeds the product of $65 muItipled by the tottI number of such recipients of old-tge assisttnce for such month; tiid (2) in the case of Puerto Rico, the Virgin Ishinds, and Guam, an tmonnt equil to one-half of the total of the sums expended during such quarter ;ts old-tge assstaiice inider the State phut (including ex- peiiditiiies for insurance premiums for medical or any other type of ieniedial cure or the cost thereof), not counting so much of iuiiy ex penditure with respect to aiiv month as exceeds $35 multiplied by the tohil iiurnber of recipients of old-age assistance for such month; and ()inthe case of uiiy State, an amount equal to one—half of the total of the stuns expended during such quarter as found necessary by the Secretary of Health, Education, and Welfare for the proper and effident administration of the State plan, including services which jre provided by the staff of the State agency (or of the local agency administering the State plan in the poitical subdivision) to applicants for and recipients of old-age assistance to help them nttain self-care."

AIDTh D}I'ENI)ENTCHILDREN

42usc 603. SEc. 502. Subseétion (a) of section 403 of the Social Security Act is amended to read as follows: "(a) From the sunis appropriated therefor, the Secretary of the Treasury shall pay to each State which has an approved plan for aid to dependent children, for each quarter, beginning with the quarte.r commencing October 1, 1958, (1) in the case of any State otherthan Puerto Rico, the Virgin Islands, and Guam, an amount equal to the sum of the following pIoportion5 of the total amountsexpended during such quarter as aid to dependent children under the State plan (in- chiding expenditures for insuriiice premiums for medical or any other type of iernedial care or the cost thereof)— "(A) fourteen-seveiiteenths of such expenditures, not counting so much of any expenditure with respect to any month as exceeds the product of $17 multiplied by the total number of recipients of aid to dependent children for such month (which total number, for purposes of this subsection, means (i) the number of individuals with respect to whom aid to dependent children in the form of money payments is ptid for such month, plus (ii)the number of other individuals with respect to whom expenditures were made in such month as aid to dependent children in the form of medical or any other type of remedial care) plus "(B) 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 expenditurewith respect to any month as exceeds the product of $30 multipliedby the total number of recipients of aid to dependent childrenfor such month; and (2) in the case of Puerto Rico, the Virgin Islands, andGuam, an amount equal to one-half of thetotal of the sums expended during such quarter as aid to dependent children under the Stateplan (including expenditures for insurance premiums for medical or an other type of remedial care or the cost thereof), notcounting so muc of any expenditure with respect to any month as exceeds$18 multiplied by the total number of recipients of aid to dependentchildren for such month; and (3) in the case of any State, an amountequal to one-half of the total of the sumsexpended during such quarter as found necesstry by theSecretary of Health, Education, and Wel- August 28, 1958 -37- Pub. Law 85-840 72Stat. 1049. farefor the proper and efficient administration of the State plan, including services which are provided by the staff of the State agency (or of the local agency admrnistering the State plan in the political subdivision) to r'1atives with whom such children (applying for or receiving such aid) are living, in order to help such relatives attain self-support or self-care, or which are provided to maintain and strengthen family life for such children."

AID TO THE BLIND SEC. 503. SubsEction (a) of section 1003 of the Social Security Act 42 USC 1203. is amended to read. as follows: "(a) From the sums appropriated therefor, the Secretary of the 'rreasury shall pay to each State which has an approved plan for aid to the blind, for each quarter, beginning with the quarter commencing October 1, 1958, (L) in the case of any State other than Puerto Rico, the Virgin Islands, and Guam, an amount equal to the sum of the following proportions of the total amounts expended during such quarter as aid to the blind under the State plan (including expendi- I nres for insurance premiums for medical or any other type of remedial care or the cost thereof)— "(A) four-fifths of such expenditures, not counting so much of any expenditure with respect to any month as exceeds the prod- nct of $30 multipled by the total number of recipients of aid to the blind for ;uch month (which total number, for purposes of this subsection, means (i) the number of individuals who received aid to the blind in the form of money payments for such month, plus (ii) the number of other individuals with respect to whom expenditures were made in such month as aid to the blind in the form of medical or any other type of remedial care) ;plus "(B) 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 expenditure with respect to any month a; exceeds the product of $65 multiplied by the total number of such recipients of aid to the blind for such month; tnd (2) rn the casef Puerto Rico, the Virgin Islands, and Guam, an tmount equal to one-half of the total of the sums expended during such quarter as aidto the blind under the State plan (including expenditures for insnrance premiums for medical or any other type of renidial care or the cost thereof), not counting so much of any expenditure with respect to any month as exceeds $35 multiplied by the total number of recipients of aid to the blind for such month; :tnd (3) in the case of any State, an amount equal to one-half of the total of the sums expended dnring such quarter as found necessary by the Secretary of Health, Educahon, and Welfare for the proper and efficient administration of the State plan, rncluding services which are rovided by the staff of the State agency (or of the local agency admrnistering the State plan in the political subdivision) to apph- cants for and recipiEnts of aid to the blind to help them attain self- support or self-care."

AID TO TH L'ERMANENTLY AND TOTALLY DISABLED SEC. 504. Subsection (a) of section 1403 of the Social Security Act 42 USC 1353. is amended to read as follows: "(a) From the sums appropriated therefor, the Secretary of the Treasury shall pay to each State which has an approved plan for aid to the permanently atd totally disabled, for each quarter, beginning with the quarter commencing October 1, 1958, (1) in the case of any State other than Puerto Rico, the Virgin Islands, and Guam, an Pub. Law 85-840 -38- August 28, 1958 72 Stat. 1050. amount equal to the sum of the following proportionsof the total amounts expended duriiig such quarter as aid to thepermanently and totally disabled under the State plan (including expendituresfor insurance premiums for medical or ayother type of remedial care or the cost thereof)— "(A) four-fifths of such expenditures, not countimmg so much of any expenditure with respect to uny month as exceeds the product of $30 multiplied by the total number of recipients of aid to the permaneiitly and totally disabled forsuch month (which total number, for of this subsection, means (i) the mmm- ber of individuals who received aid to the permaimently andtotally disabled in the form of money payments for such month, plus (ii) the number of other individuals with respect to whom expenditures were made in such month as aid to the permanently and totally disabled in the form of medical or any other type of remedial care) ; plus "(B) the Federal percenhige of the amount by which such expenditures exceed the maximum which may be counted under clause (A), not counting so much of any expenditure with respect to any month as exceeds the product of $65multiplied by the total number of such recipients of aid to the permanently and totally disabled for such month; and ()inthe case of Puerto Rico, the Virgin Islands, and Guam, an amount equal to one-half of the total of the sums expendedduring such quarter as aid to the permanently and totallydisabled under the State plan (including expenditures for insurance premiumsfor medical or any other type of remedial cnre OF the cost thereof), not counting so much of any expenditure with respect to any month asexceeds $35 multiplied by the total number of recipients of aid to the permanently and totally disabled for such month; and (3) in the case of any State, an amount equal toonehalf of the total of the sums expended during such quarter as found necessary by the Secretary of Health, Education, and 'vVelfare for the proper andefficient administration of the State plan, including services which are provided by the staff of the State agency (or of the local agencyadministering the State plan in the political subdivision) to applicants for and recipients of aid to the permanently and totally disabled to help them attain self-support or self-care."

FEDERAL MATCBINO PERCENTAGE

42 usc 1301. SEc. 505. Subsection (a) of section 1101 of the Social Security Act is amended by adding at the end thereof the following new paragraph: "(8) (A) The 'Federal percentage' for any State (other than Puerto Rico, the Virgin Islands, and Guam) shall be 100 per centum less the State percentage; and the State percentage shall be that percentage which bears the same ratio to 50 per centum as the square of the per capita income of such Statebears to the square of the per capita income of the continentalUnited States (excluding Alaska) ;except that(i)the Federal percentage shall in no case be less than 50 per centum or more than 65 per centum, and (ii) the Federal percentage shall be 50 per centum for Alaska and Hawaii. "(B) The Federal percentage for each State (other than Puerto Rico, the Virgin Islands, and Guam) shall be promulgated by the Secretary between July 1 and August 31 of each even-numbered year, on the basis of the average per capita income of each State and of the continental United States (excluding Alaska) for the three most recent calendar years for which satisfactory data are available from the Department of Commerce.Such August 28, 1958 -39- Pub. Law 85-840 72 Stat. 1051. proinulgatioti shall be conclusive for each of the eight quarters in the period beginning July 1 next succeeding such promulgation: Provided, That the Secretary shall promulgate such per- centaes as oon as possible after the enactment of the Social Security Aniendinents of 1958, which promulgation shall be conclusive for each of the eleven quarters in the period beginning October 1, 198, and ending with the close of June 30, 1961."

EXTENSION TO GUAM SEC. 506. Section 1101(a)(1)of the Social Security Act is p. 1050. amended by striking out "Puerto Rico and the Virgin Islands" and inserting in lieu thereof "Puerto Rico, the Virgin Islands, and Guam".

iNCREASE IN LIMITATIONS ON PUBLIC ASSISTANCE PAYMENTS TO PUERTO RICO AND THE VIRGIN ISLANDS SEc. 507. (a) Section 1108 of the Social Security Act is amended by 70 Stat. 855. striking out "$5,312,500" and "$200,000" and inserting in lieu thereof 42 USC1308. '$8,500,0O0" and "$300,000", respectively, by striking out "and" immediately following the semicolon, and by adding immediately before the period at the end thereof "; and the total amount certified by the Secretary under such titles for payment to Guam with respect to any fiscal year shall not exceed $400,000". (b) The heading of such section is amended to read

"LIMITATION ON PAYMENTS TO PUERTO RICO, THE VIRGIN ISLANDS,AND OUAM".

MATERNAL AND CHILD WELFARE GRANTS FOR GUAM

SEC. 508. Such section 1108 is further amended by adding at the end42 USC1308. thereof the following new sentence: "Notwithstanding the provisions of sections 502 (a) (2), 512 (a) (2), and 522 (a), and until such timePost, pp.1055, as the Congress may by appropriation or other law otherwise provide,1053. the Secretary shall, in lieu of the $60,000, $60,000, and $60,000, respectively, specified in such sections, allot such smaller amounts to Guam as he may deem appropriate."

TEMPORARY EXTENSION OF CERTAIN SPECIAL PROVISIONS RELATiNG TO STATE PLANS FOR AID TO THE PLIND SEC. 509. Section 344 (b) of the Social Security Act Amendments of

1950 (Public Law 734, Eighty-first Congress), as amended, is amended 64 Stat• 554. by striking out "June 30, 1959" and inserting in lieu thereof "June 30,42 USC 1202a 1961". note. TECHNICAL AMENDMENT SEC. 510. Section(a) (11) of the Social Security Act is amended 42 USC 302. by inserting before the period at the end thereof ",includinga description of the steps taken to assure, in the provision of such services, maximum utilization of other agencies providing similar or related services". PAYMENTS TO LEGAL REPRESENTATIVES

SEC. 511. (a) Title XI of the Social Security Act is amended by add-42 USC 1310. ing after section 1110 the following new section: Pub. Law 85-840 -40- August 28, 1958 72 Stat. 1052. 'PUBLIC ASSISTANCE PAYMENTS TO LEGAL REPRESENTATIVES

42 USC 301—306, "SEC. 1111. For purposes of titles I, IV, X, and XIV, payments on 601—606,1201— behalf of an individual, made to aiiother person who has been judi- 1206, 1351—1355. emIly ippointed, under the law of the State in which such individual resides, as legal representative of such individual for the purpose of receiving and managing such payments (whether or not he is such individual's legal representative for other purposes), shall be regarded as money payments to such individual." (b) The amendment made by subsection (a) shall be apj)licable in the caseofpayments to legal representatives by any State made after .Tune30,1958; and to such payments by any State made after Decem- ber 31, 1955,andprior to July 1,1958, ifcertifications for payment to such State have been made by the Secretary of Health, Education, and Welfare with respect thereto, or such State has presented to the Secretary a claim (and such other data as the Secretary may require) with respect thereto, prior to July 1, 1959.

EFFECTIvE DATES SEC. 512. Notwithstanding the provisions of sections 305 'and 345 70 Stat. 848, of the Social Security Amendments of 1956, as amended, the amend- 854. ments made by sections 501, 502, 503, 504, 505, and 506 shall be 42 USC303 effective— note. (1) in the case of money payments, under a State plnn approved 42 USC301—306, under title I, IV, X, or XIV of the Social Security Act, for months 601—606, 1201— after September 1958, and 1206,1351—1355. (2) in the case of assistance in the form of medical or any other type of remedial care, under such a plnn, with respect to expenditures made after September 1958. The amendment made by section 506 shall also become effective, for 42 USC 701—731. purposes oftitle V of the Social Security Act, for fiscal years ending after ,June 30, 1959.The amendments made by section 507 shall be effective for fiscal years ending after June 30, 1958.The amendment made by section 508 shall be effective for fiscal years ending after .June 30, 1959.The amendment made by sectio1 510 shall become effective October 1, 1958. TITLE VI—MATERNAL AND CHIJA) WELFARE

CHIW WELFARE sERvICES

64 Stat. 551. SEC. 601. Part 3 of title V of the Social Security Act is amended 42 USC 701 et to read as follows:

"PART 3—CHILD-WELFARE SERvIcEs

"APPROPRIATION "SEC. 521. For the purpose of enabling the United States, through the Secretary, to cooperate with State public-welfare agencies in establishing, extending, and strengthening public-welfare services (hereinafter in this title referred to as 'child-welfare services') for the protection and care of homeless, dependent, and neglected children, and children in danger of becoming delinquent, there is hereby authorized to be appropriated for each fiscal year, beginning with the fiscal year ending June 30, 1959, the sum of $17,000,000. August 28, 1958 -41- Pub. Law 85-840 72Stat. 1053. "ALLOTMENTSTO STA'ES

"SEC.522.(a) The sums appropriated for each fiscal year under section 521 shall be allotted by the Secretary for use by cooperating State public-welfare gencies which have plans developed jointly by the State agency and the Secretary, as follows: He shall allot to each State such portion of $60,000 as the amount appropriated under section 521 for such year bears to the amount authorized to be so appropriated; and he shall allot to each State an amount which bears the same ratio to the remainder of the sums so appropriated for such year as the product cf (1) the population of such State under the age of 21 and (2) the allotment percentage of such State (as determined under section 524) bears to the sum of the corresponding products of all the States. "(b) (1) If the amount allotted to a State under subsection (a) for any fiscal year is less than such State's base allotment, it shall be increased to such base allotment, the total of the increases thereby required being derived by proportionately reducing the amount allotted under subsection (a) to each of the remaining States, but with such adjustments as may be necessary to prevent the allotment of any such remaining State under subsection (a) from being thereby reduced to less than its base allotment. "(2) For purposes of paragraph (1) the base allotment of any State for any fisc:tl year means the amount which would be allotted to such State for such year under the. provisions of section 521, as in effect prior to the enactment of the Social Security Amendments of 1958, as applied to an appropriation of $12,000,000.

'FAYMENT TO STATES "SEc. 523. (a) From the sums appropriated therefor and the allotment available under this part, the Secretary shall from time to time pay to each State with a plan for child-welfare services developed as provided in this part an amount equal to the Federal share (as determined under section 524) of the total sum expended under such plan (including the cost of administration of the plan) in meeting the costs of district, cunty, or other local child-welfare services, in developing State services for the encouragement and assistance of adequate methods of community child-welfare organization, in paying the costs of returning any runaway child who has not attained the age of eighteen to his Own community in another State, and of maintaining such child until such return (for a period not exceeding fifteen days), in cases in which such costs cannot. be met by the parents of such child or by any pe:rson, agency, or institution legally responsible for the support of such child: Provided, That in developing such services for children the failities and experience of voluntary agencies shall be utilized in accordance with child-care programs and arrangements in the States and loal communities as may be authorized by the State. "(b) The method of computing and paying such amounts shall be as follows: "(1) The Secretary shall, prior to the beginning of each period for which a payment is to be made, estimate the amount to be paid to the State for such pericd under the provisions of subsection (a). "(2) From the allotment available therefor, the Secretary shall pay the amount so estimated, reduced or increased, as the case may be, by any sum (not priviously adjusted under this section) by which he finds that his estimai:e of the amount to be paid the State for any prior period under this section was greater or less than the amount which should have been paid thereunder to the State for such prior period. Pub. Law 85-840 -42- August 28, 1958 72Stat. 1054. 'ALLOTMENT1'ERCENTAG AN 1) FEDERAL JLRE "SEc. 524. (a) The 'illotment percentage for aiiy Stite shall be 100 centum less the State percentage; and the State percentage shall be that percentage which bears the same ratio to 50 per centum as the per capita income of such State bears to the per capita income of the continental United States (excluding Alaska.) ; except that (A) the allotment percentage shall in no case Jess than 30 per centum or more than 70 per centum, and (B) the allotment percentage shall be 50 per centum in the case of Alaska and 70 per centum in the case of Puerto Rico, the Virgin Islands, and Guam. "(b) For the fiscal year ending .Jue 30, 1960, and each year thereafter, the 'Federal share' for any State shall be 100 per centum less that percentage which bears the same ratio to 50 per centum as the per capita income of such State bears to the per capita income of the continental Uiiited States (excluding Alaska), except that (1) in no case shall the Federal share be less than 331/3 per centtim or more than 66% per centum, and (2) the Federal share shall be 50 per eentum in the case of Alaska. and (6% per centum in the case of Puerto Rico, the Virgin Islaiids, and Guam. For the fiscal year ending .June 30, 1959, the Federal share shall be determined Pursuant to the provisions of section 521 as in effect prior to the enactment of the Social Security Amendments of 1958. "(c) The Federal share and the allotment percenhige for each State shall be promulgated by the Secretary between .July 1 and August 31 of each even-numbered yeir, on the basis of the average per capita iiicome of each State and of the continental United States (excluding Alaska) for the three most recent calendar years for which sntisfactory data are available from the Department of Commerce.Such promulgation shall be conclusive for each of the two fiscal years in the period beginning .July 1 next succeeding such promulgation: Pro- vided, That the Secretary shall promulgate such Federal shares and allotment percentages is soon s possible after the enactment of the Social Security Amendments of 1958, which promulgation shall be conclusive for each of the 3 fiscal yeals in the period eiiding June 30, 1961. "REALLOTMENT "SEC. 25. The amount of any allotment to a State under section 52 for any fiscal year which the State certifies to the Secretary will not be required for carrying out the Stite plan developed as provided in such section shall be available for real]otment from time to time, on such dates as the Secretary may fix, to other States which the Secre- tary determines (1) have need in carrying out their State plans so developed for sums in excess of those previously illotted to them under that section and (2) will be able to use such excess amounts duriiig such fiscal year.Such reallotments shall be made oii the basis of the State plans so developed, after taking into consideration the population under the age of twenty-one, and the per capita income of each such State as compared with the population under the ge of twenty- one, and the per capita income of all such States with respect to whichsuch a determination by the Secretary has been made. Any amotuit so reallotted to a State shall he deemed pait of its allotment umider section 522." MATERNAL AND CHILD HEALTIE

42 IJSC701. Sw. 6O. (a) Section 501 of such Act is amended by strikiiig out "for the fiscal year ending .June 30, 1951, the sum of $15,000,000, uid for each fiscal year beginning after .Juine 30, 1951, the sum of $16,500,000" and inserting in lieu thereof "for each fiscal year beginning after June 30, 1958, the sum of $21,500,000". August 28, 1958 -43- Pub. Law 85-840 72Stat. 1055. (b)Section 502(a) (2)of such Act is amended by striking out 42USC 702. "for each fiscal year beginning after June 30, 1951, the Federal Security Adninistrator shall allot $8,250,000 as follows: He shall: allot to each State $60,000 and shall allot to each State such part of the remainder of the $8,250,000" and inserting in lieu thereof "for each fiscal ye.r beginning after ,June 30, 1958, the Secretary shall allot $10,750,000 as follows: He shall allot to each State $60,000 (even though the amount appropriated for such year is less than $21,500,000), and shall allot each State such part of the remainder of the $10,750,000". (c) Section 502 (b) of such Act is amended by striking out "the fiscal year ending June 30, 1951, the sum of $7,00,000, and for each fiscal year beginning after June 30, 1951, the sum of $8,250,000" and inserting in lieu thereof "each fiscal year beginning after June 30, 1958, the sum of $10,750,000".

CRIPPLED CHILDREN'5 SERVICE5

SEC. 603. (a) Section 511 of such Act is amended by striking out 42USC711. "for the fiscal year ending June 30, 1951, the sum of $12,000,000, and for eachfiscal year beginning after June 30, 1951, the sum of $15,000,000" and inserting in lieu thereof "for each fiscal year beginning after June 30,1958, the sum of $20,000,000". (b) Section 512 (a) (2) of such Act is amended by striking out 42 USC712. "for each fiscal year beginning after June 30, 1951, the Federal Secu- iity Administrator shall allot $7,500,000 as follows: He shall allot to each State $60,000, and shall allot the remainder of the $7,500,000" and inserting in lieu thereof "for each fiscal year beginning after ,June 30, 1958, the Secretary shall allot $10,000,000 as follows: He shall allot to each State $60,000 (even though the amount appropriated for such year is less than $20,000,000) and shall allot the remainder of the $10,000,000". (c) Section 51 (b) of such Act is amended by striking out "the fiscal year ending June 30, 1951, the sum of $6,000,000, and for each fiscal year beginn:ng after June 30, 1951, the sum of $7,500,000" and inserting in lieu thereof "each fiscal year beginning after June 30, 1958, the sum of .10,000,000". TITLE Vu—MISCELLANEOUS PROVISIONS

FURNISHING OF 5ERVICE5 BY DEPARTMENT OF HEALTH, EDUCATION3 AND WELFARE

SEC. 701. Section 1106 b) of the Social Security Act is amended 42 USC1306. to read as follows: "(b) Requests for information, disclosure of which is authorized by regulations prescribed pursuant to subsection (a;) of this section, and requests for se:vices, may, subject to such limitations as may be prescribed by the Secretary to avoid nndue interference with his functions under this Act, be complied with if the agency, person, or organization making the request agrees to pay for the information or services requested in such amount, if any (not exceeding the cost of furnishing the information or services), as may be determined by the Sec- retary.Payments for information or services furnished pursuant to this section shall be made in advance or by way of reimbursement, as may be requested by the Secretary, and shall be deposited in the Treasury as a special deposit to be used to reimburse the appropriations (including anthorizations to make expenditures from the Federal Old- Age and Survivors Insurance Trust Fund and the Federal Disability Pub. Law 85-840 -44- August 28, 1958 72 Stat. 1056+ Insurance Trust Fund) for the unit or units of theDepartment of Health, Education, and Welfare which furnished theinformation or services." MEANING OF TERM"SECRETARY" S. 702.As used in the provisions of the Social SecurityAct amended by this Act, the term "Secretary",unless the context otherwise requires, means the Secretary of Health,Education, and Welfare.

AMENDMENT PRESERVING RELATIONSHIP BETWEEN RAILROADRETIREMENT AND oLD-AGEs SURvIvORS, AND DISABILITY INSURANCE 1937, as 71 Stat. 520. SEC. 703.Section 1 (q) of the Railroad Retirement Act of 45 USC 228a. amended, is amended by striking out "1957" andinserting in lieu thereof "1958".

ADVISORY COUNCIL ON PUBLIC ASSISTANCE SEC. 704. (a) There is hereby established anAdvisory Council on Public Assistance for the purpose ofreviewing the status of the riiblic assistance program in relation tothe old-age, survivors, and disability insurance program, the fiscalcapacities of the States and the Federal Government, and any otherfactors bearing on the amount and proportion of the Federal and Stateshares in the public assistance program. (b) The Council shall be appointed by theSecretary before Jan uary 1959 without regard tothe civil-service laws and shall consist of the Commissioner of Social Security, aschairman, and of twelve other persons who shall, to the extent possible,represent employers and employees in equal numbers, personsconcerned with the administration or financing of the State and Federal programs,other persons with special knowledge, experience, orqualifications with respect to the program, and the public. (c) (1) The Council is authorized to engagesuch technical assistance, as may be required to carryout its functions, and the Secretary shall, in addition, make available to the Councilsuch secretarial, clerical, and other assistance and such otherpertinent data prepared by the Department of Health, Education, andWelfare as it may require to carry out such functions. (2) Members of the Council, while serving onbusiness of the Coun- cil(inclusive of travel time), shall receivecompensation at rates fixed by the Secretary, but not exceeding $50 perday; and shall be entitled to receive actual and necessary traveling expensesand per diem in lieu of subsistence while so serving awayfrom their places of residence. (d) The Council shall make a report of itsfindings and recommendations (including recommendations for changes in theprovisions Security Act) to the 42 USC 303,603, of sections 3, 403, 1003, and 1403 of the Social 1203, 1353. Secretary and the Congress, such report to besubmitted not later than January 1, 1960, after which date suchCouncil shall cease to exist. ADVISORY COUNCIL ON CHILD WELFARE SERVICES SEC. 705. (a) There is hereby established anAdvisory Council on Child-Welfare Services for the purpose of makingrecommendations and advising the Secretary of Health,Education, and Welfare in connection with the effectuation of the provisions of part 3 oftitle V the Social Security Amend- Ante, p.1052. of the Social Security Act, as amended by ments of 1958. August 28, 1958 -45- Pub. Law 85-840 72 Stat. 1057. (b) The Council shall be appointed by he Secretary before Jan- miry 1959, without regard to the civil-service laws, and shall consist of twelve persons representative of public, voluntary, civic, religious, nnd professional welfare organizations and groups, or other persons with special knowledge, experience, or qualifications with respect to child-welfare services, and the public. (c)(1) The S9cretary shall make available to the Council such secretarial, clerical, and other assistance and such other pertinent data prepared by the Department of Health, Education, and 'Welfareas it may require to (airy out such functions. (2) Members cf the Council, while serving on business of the Council (inclusivE of travel time), shall receive compensation at rates fixed by the SecrEtary, but not exceeding $50 per day; and shall be entitled to receive actual and necessary traveling expenses andper diem in lieu of subsistence while so serving away from their places of residence. (d) The Council shall make a report of its findings and recommendations (including recommendations for changes in the provisions of part 3 of title V of the Social Security Act) to the Seiretary and to Ante, p1O2. theCongress on or before January 1, 1960, after which date such Council shall cease to exist. Approved August 28, 1958.

THE WHITE HOUSE

STATEI€I1T BY TIlE PRESDE1T

I have today approved H.R. 135)4.9,ttTo increase benefits under the Federal Old-Age, Survivors, and Disability Insurance System, to improve the actuarial status of the Trust Funds of such System, and otherwise improve such System; to amend the public assistance and maternal and child health and welfare provisions of the Social Security Act; and for other purposes."

This ct is a significant forward step in the old-age, survivors, and disability insurance program of the social security system. The increases in benefits and in the tax base are desirable in the light of changes in the economy since these provisions were last amended in 195)4.. The increase i:a social security contribution rates and the accelerated tax schedu:Le in the bill will further strengthen the financial condition of this system in the years immediately ahead and over the long—term future. It :Ls, of course, essential that the old-age, survivors, and disability insurance program, which is so vital to the economic security of the American people, remain financially sound and self- supporting.

The act also makes desirable changes which will permit Federal support for chLld welfare services where needed in urban areas and provides for State and local financial participation in the costs of this program on an improved basis.

In the public assistance programs the bill institutes the desirable principle of varying Federa.l matching of costs in accordance with the relative fiscLl capacity of each State as measured by per capita income. However, the effect of this change is very limited because the formula used results only in increases in the Federal share. In addition, the introduction of averaging of benefits on an overall basis provides increases in the Federal share, regardless of the fiscal ability cf the State.

For the fifth time in twelve years legislation has been enacted providing an increase in the Federal share of the costs of these programs and a decrease in the relative financial contribution of the States and communities. These successive increases have raised the Federal share from about 14.5 percent in 1914.6 to an estimated 58.5 percentunder this bill. 2

Increases in the proportion of the public assistance programs which are financed by the Federal Government can lead only to a weakening of the responsibility of the States and cormnunities. I believe deeply in the concept that the States and cormnunities can best determine the actual needs of individuals and best administer programs of assistance to them--and that State andlocal financial responsibility in these programs should be strengthened, not weakened.

I am, accordingly, asking the Secretary of Health, Education, and Welfare to deal specifically with this problem in the review of the public assistance programs which is now under way. It is my hope that the work of the Advisory Council on Public Assistance which is established by this bill will materially assist in the early development of constructive recormnendations.

IMIGHTD.EISENHOWER

TEE WHITE HOUSE, August 28, 1958

STANDARD FORM NO. 64

OfficeMemorandum • UNITEDSTATES GOVERNMENT 114:A:P

TO : Administrative,Supervisory DATE: August 29, 1958 and Technical 1oyees

FROM : RobertK. Bali, Acting Director Bureau of Old-Age and Survivors Insurance

SUBJECT: Directorts Bufletlii No. 288 Enactment of the Social Security Amendment8 of 1958 and Minor Social Security BulB

The Presiden,t signed H.R. 1351i9, the Social Security Amendments of 1958, onAugist 28,1958.He also sied several bills which make additionalchanges in the old-age, survivors, anddisabilityinsurance provisiona. These minor bills areH.R.7570, H.R. 51411, H.R. 8599, and H.R. 11311.6.

Themajor old-age, survivors, and diaability insurance provisions of the l95 amendments are a general benefit increaGe effective for January 1959, an increase in the earnings base to $14,800, increases in the contribution rates, and provi8ion of benefit8for dependents of d.isabled workers.

Otherchanges In the disability provisions of the program are modification of the work requirezents for disability benefits and. the freeze, repeal of the disability benefits offset provision, retroactive payment of disability benefita for as many as 12 months, and extenBion of the June 30, 1956, deadlineforfiling fully retroactive disability freezeapplications.

Amongseveral changes relating to dependents benefits are proviBionS for paying benefits to the dependent parent of a deceased worker even thougb a widow, dependent widower, or dependent child also survived, and for removing the requirement that a d.isabled child furnish proof of his dependency on the parent for one-half of his eupport. I am attaching a smm'ry of the changes in old-age, aurvivors, and disability insurance proviGions made by the new legislation, which mentions some of the considerations underlying the changes, and an outline showing the effective date for each provision.Also attached is a suary of the changes in public assistance and maternal and child. welfare provisions. Claims Manual holders will soon receive a comprehensive summRry of the 1958 aaendmeats arranged in the order of the Claims Manual chapters.Later they will begin to receive supplements for the Claima Manual onblue paperto be filed at the end of the chapters affected. -2-

Administrative,Supervisory and Technical 1oyees--8/29/58

TheManual supp].aentswillcontain policy and procedure for the d.evelojasnt and adjudication of c1 a1• Theseinstructions will be issued as far as possibleinadvance of the effectivedatesof the various provisions.We hope to be able to issue all of the suppleaenta3. material within a nth or six wee

RobertM. l Acting Dicthr Attachments (3) BRIEF CPLAXATION OF OlD-AGE, &JRVIVDRS, AND DISABILITY INSAJCE LISTATION iAC' IN 1958

Benefit Increase Benefit amounts for all beneficiaries--those nov on the rolls andthose vhoviii on after the effective date of the legislation-.are increasedby about7 percent,withanincrease of at least $3inthe amount payable to a retired worker (except that voen workers andwivesrece:Lving benefits before age 65 get actuarially reduced amounts).The dollar ceiling on. total family benefits is increased from $200 to $251i.For families now on the rolls at the $200 aaxiaa the $251e aeximia will apply If the Insured worker's average monthly wage was $315 or more •Ifhis average monthly wage was less than $315, th new maxima will be less than $251e (about 80 percent of the average monthlywage, but with an Increase over present law guaranteed by saving clauses).A consolidated benefit table for effectuating the benefit Increase and determining future benefits replaces the benefit formulas and conversion table of the 1951i Act.

Thebenefitincrease provided by the amendments would bring benefits approxImately Into line with price changes between September l951 (when the last beuefit increasebecameeffective) andJune1958 (when hearings began before the Coazitteeon Ways andMeans of the House of Representatives).In that interval, the Consaeer Price Index had risen 7.7 percent.The Cittee on Ways and Means, in Its reporton the bill, recognIsed that the benefit Increase did not quite offset the full rise in prices, but pointed to the need for using the additional tax income that the bill provides to strengthen the finan- clal.be.sis of the syst, as well astoIncrease benefit amounts. Whenever benefit amounts have been raIsed, the dollar ceiling on total family benefits has also been Increased.Each time, the maximum family benefit has been about twice the maximum primary Insurance ammmt payable under the new provisions.The new, ceiling ontotalfaai].y benefits isexactlytwice the new maximum primary insurance amount payable.

Theconsolidatedbenefit table provided for in the amendments is along the lines of a proposal recommended by the bureau' aprogramsimpli- fication group that stud.ied benefit computation.A single table is used both for determining the new benefit amounts for present beneficiaries and for figuring the benefit amounts for those coming ontherolls —2- after the effective date of the legi elation.Future changes in benefit rates can be made eimp].y by replacing the present benefit table with a new one, rather than by adding a new alternative formula for computing the rate, as has been the practice in the past.Under the table, only 9 primary insurance amounts are provided, rather than the 69primary insurance amounts thich would have been possible under former procedures with an earnings base of $Li,800. Increase in Earnings Base

Themaximumamount of annual earnings taxable andcreditable toward benefits is increased from$11,200to $4,800, beginning with 1959.This chAnge recognizes the rise in earnings levels BiDce the $11,200 base was established in 19511. Unless the maximum ii increased as earnings levels rise, fever workers will receive benefits based on all of their earnings.Also, as more and more workers have earnings in excess of the maximum there tends to be a concentration of workers receiving benefits at or near the 1mum and benefits tend toreflectdifferences in individual earnings to a lesser extent. The $li,800 maximum restores the relationship between workers' creditable earnings and total earnings that existed in 19511, when the $11,200 earnings base was adopted.The$11,200 base wouldhave covered all, the earnings of about 56percentof the regularLy employed male workers in 19511.In 1957 only 113 percent of such workers had all. their earnings credited; about 56percentwould have had all their earnings credited under a $11,800 base. Financi The amendments provide the following new schedul. ofcontribu- tion rates:

Year . Percent .

. Eployers ployees Self-employed

1959 2 1/2 2 1/2 3 3/11 1960—62 ...... 3 3 11. 1/2 1963—65,...... 3 1/2 3 1/2 5 1/14. 1966—68 14. li 6 1969and thereafter ..... 11 1/2 11 1/2 6 3/11

Congress has always carefully considered the cost of the program when amending the law.In 1950 the belief that the program should be completely supported from contributions by covered individuals and -3- .p1oy.rs was so strong that a.provisionauthorizingappropriations ..rosgeneral revenues wasremovedfrc* the law.The tax schedules under major aaenasnts since 1950havebeen designed tomake the system self-porting.

The new schedule of contributions provided inthe amendments willyield inccs mor, than sufficient topay for theaM.ttional benefits.It viU decrease the estimatd actuarial insufficiency ofthe old-age and survivors insurance trust fund from 0•57percent of payroll to 0.25 percent of payroll.The Chief Actuary has stated that with a deficiency of this size the system can be considered in actuarial balance, and in f..*t the Board of Trustees had considered the fund to be in actuarial balance when a sinilar Imbalance was estimated under the law as amended in 1956.Under the 1958 amóndments, the disability insurance trust fund will havea. favorableactuarial balance of 0.01 percent of payrolL. Congress was also concerned with Improving the relation between income and outgo over the next few years.Theexpected excess of outgoover .nccae in 1959willbe greatly reduced, and in1960-6k contribution and interestincome will againexceed benefitpayments andadministrative expenses.

pendents ofDisabled Workers

The legislation provides monthly benefits for dependents of disability insurancebeneficiarieslike those provided for the dependents of old-age insurance beneficiaries. These dependents benefits willepayable for the first time for the monthof September1958.

In providing these new benefits, the Congressrecognizedthat theneeds of the familyofa disability insurancebeneficiary are asgreat as, or greaterthan,theneeds of the familyofan old-age insurancebeneficiary.It may be assumed that in a great many instances the care which the disabled person requires makes it difficult, ifnoti*poissible, for hiswife toLncreàse the family income by working.In addition, a person receiving disability insurance benefits frequently hashighmedical expenses. The categories of dependents eligible for the new benefits parallel those eligible for benefits as dependents of old-age insurance beneficiaries--namely, wives and dependent husbands who have reached retirement age, unmarried dependent children (including sons or daughter. disabled in childhood), and wives who have an entitled child in thej:r care.The new benefits are subjectto the same conditions asareapplicable to benefits for the dependents - ofold-age insurance beneficiaries, except that, in addition, the d.ependents' benefits will be suspended if the di8abled. worker refuses, withoutgood cause, to accept vocational rehabilitation. It is estimated that there are at preøent about 180,000 dependents of disability insurance beneficiariee (or disabled worker8 nov eligible for disability insurance benefite) who can beccine eligible for these monthly benefita. Other Changes inDlubilityProvisions 1.The amendments repeal the disability benefite offset provision.Under the offset provision, social security disability insurance benefits (and benefits payable to persons disabled In childhood) were reduced by the amount ofany periodicbenefits payable to an individual on account of di8ability under certain other Federal programs or under State workmen' 8ooipensationlava. The provision was included in the disability provisions in 1956 to prevent.uplicet1on or unwarranted pyramidiug ofdisability benefits. Asof June 30,1958,about 36,000 dIsability insurance benefits (and lessthan 1,000 childhood disability benefits) were eitherreduced orwithheld underthe offset provision.Inrecommending repealof theoffset proviaion, the congressional committees working on the eocial security amendments stated that disability benefits payable under OASDI should be looked upon as providing the basic protection against loss of inco due to dissbiing ilineis and th&t it is undesirable, and inccpatible vith th purposes of the program, to reduce these benefits on account of disability benefits that are p&ysble under other prograI.The repeal of the off8et provision ii effective beginning with disability insurance benefits for the aonth of August 1958.Disabilitybenefitspayable for montha. prior to August 1958, as a result of the provision for piying disability insurance benefits retrolLctively, will, continue to be subject to the offset provision of prior law. 2.Tb. York requlreaents for both cash disability benefits and the disability freeze are modified so as to niake it easier for people whose disabilities have a gmdu*1 onset to qualify.Under the nev law, s worker is no longer required to have 6 quarters of coverage during the 13 quarter period ending with quarter of disablement.Fully thsure& status is addeL as a requirennt for eligibility for the freeze.Thus, to qualify for caah benefits or the freeze the workeruat be fully inaured and must have 20 quarters of coverage durthg the 40 quarter period. th&t .zds with the quarter of dlssble- nt. -change&work requirentai are effective vith reipect to el]. —5—

applicationsfiled onor after August 28,.1958,andalso with respect to those e.pplieationa which were filed after 1957 and before Augl8t 28,1958,ifthe applicant did not die before auch date ofenactment andanotice of deternainationwaenot sent to the claint on or before thatdate.. Benefits to newly eligible disabled persons--and. increased, benefits to old-age inaurance beneficiaries newly eligible for the freeze because of the changed work requirements--are payable under thechangedrequirements beginning with benefits for the month of September 1958.As a result of the changedworkrequirements about 35,000 persons who couldnot qualify for d.isability insurancebenefitsunder the previous requirements can, upon filing application, become inimedi- atelyeligible for benefits.In addition, about 15,000 peraon canqualifyliiediately for a disability freeze.

3.Theazendaeits provideretroactive payientofdisability insurance benefits for as aany as 12 monthibeforethe nth inwhich application iafiled for these benefits. Applications for disability insurance benefitsarethus accorded.the saae retroactive effect aa applications for al]. other typesofmonthly benefits under the program. Toperait the paymentofasnySB12nth8' retroactive benefita, the legislation provides thatthewaiting periody begin 18 months before the application is filed.The provieion for payment of retroactive diisbility benefits waspropoaed bythe Department onthe:basis of a study of disability applications filed early thu year. Thestudr indicated thatftlargeproportion of theapplicants for disability insurancebsefitsdid not apply inthe first nth forwhich they were otkierwiae eligible and, under the prior law, lost one or more ztonth'benefits.

li.The aluendmerLtapostponefor 3 years the June 30, 1958, deadline for filing applications for the disability freeze which periilt a period of disability to be established as early*8the actual. onset of the diiability.With respect to applications for the freeze filed after June 30, 1961, the legislation providea that the beginning of a period of disability sy predate the filing of an application by as many as 18 months.Under prior law, a period of diaability could beginnoearlier than1year before application if filing occurred after thedeadlinefor fully retroactive applications.As a consequence, peraons with long-standing disabilities whose applicatione werc filed after June 30, 1958, would usually have been ineligible for the freeze; andny ofthese applicatB would have lost allprotectionunder the program--retire*ent and survivoras well a diiability protection.The postponement of the deadlinefor filing fullyretroactivefreeze applications kes it possible(ifapplications are filed) for about 30,000 additional -6- disabledworkers to b.ccm. iediately eligible for disability insurance benefits; an additional 10,000 could become immediately eligible for the freese.The deadline for filing fully retroactive applications for the disability frsee (originally Jun.30,l97, but extended to June 30, 1958, by Public Law 85-109) was provided because it was thought that making detertnations of disability in cases involving long-standing disabilities would be extremely difficult.Experience has indicated, however, that the difficulties encounteredin makingdeterminations of disability in thesecases are not so serious astobe a major problem.

RetirementTest Three chwges have been made in the retirement test provision: 1.Th. most importanthang. provides that excess earnings will not be allocated to months in ichabeneficiary earns wages of $100 or less(rather than $80 as previously provided).Rereafter, as a result, regardless of a beneficiary' a tots], earnings during his taxable year, he will not lose a benefit for any month in which he earns ges of $100 or less (and does not render substantial services in self-employment.)

This ohge does not affect the provision of the law which requires thatexcessearnings shall be allocated in,uniteof$80. Asbefore, excess earnings willbe charged to the months of theyear inunits of$80 orany part thereof. Th. change eliminates the confusion which existed under pr,or lawwherethe exempt amount was based on $100 times the number of months in the taxable year, and excess earnings werechargedto months with aver $80 in wages.To the extent that this àontugion is removed, the ch*ug. should improve public understanding and acceptance of the retirementtest. The Department originally favored a propose.1 to raise not only the monthly wage savings clause to $100, but also to raise the unit of excess earnings to $100.Rovever the Rouse Ccmmittee on Ways and )(eans felt this recommendationwastoo expensive (0.05 percent of payroll).It was then decided that it would be better to raise only the monthly amount to $100 (costing 0.01 percent of payroll) than to have no change at all in this area.

2.The orderofcharging excess earnings to the months of the yearisreversed.Underthe new provision excessearningswillbe charged starting with the first month of the taxableyea' instead of the last month (normally, January instead of December) as before theamendments.The Department proposed this change to alleviate a number of probls oriatsd by the former method of allocating exc.ss earnings.Under the old procedure, whenawife attained retirementage and came on the benefit rolls during a year in which the husband was on the rolls for the entire year, or when benefits were recc.puted or otherwise increased during the year, charging excess earnings beginning with the last mouth of the taxable year aworking backward operated to the disadvantage of beneficiaries. -7- (You may recognise this hange asone of the recendationa of the 3ureeu work group that studied simplification of the retirement test; the remainder of the group 's reooendat ions have not yet bean sub.. aitted to the Congresi.)

3.Filingof an annual report of earnings is elfiuated as a requirement for a beneficiary who receives no benefits for the year because of the retirent test.It seems unnecessary to require a beneficiary to sukmjt an annual report of his earnings when he has already notified us that he eqiected to earn aver the exempt amount and when he did not reaeive any benefitè for the year. Included in thin ch'nee is a provision that the beneficiary (or his survivors) has a period of 3years,3months,aM 15 days after the close of the year in which to file information that benefits are due for any month Ln the year; if this is not done, no benefits are payable for such month.This provision is necessary so that "stale" requests for benefits, many years after the year for which benefits are requósted will not have to be processed.It would often be very difficult to eiitablish the facts after a lapse of many years. AU the retirement teat changes are effective with taxable years beginning after the mouth of enactment.Genera.1y, this means they will be effective beginning January 1, 1959. Dependent.' lenef its A number of changes are made in provisions relating to dependentsbenefits.All of these cha1ige. were recoemended by the Department substantially as enacted. 1.Where a ehiLd who has been disabled since before age 18 is over age 18 when hii; parent dies or becomes entitled to an old- age insurance benefit, the new law provides for the payma nt of benefits to the child without requiring proof (required under former law) that he has been dependent upon his parent for one-half of hi support. The change makes the dependency requirements for the disabled child the same as for the child under age 18. Presumptions of dependency where such presumptions are reasonable are to be preferred to an actual showing of dependency in a social insurance program so as to avoid unnecessary investigations of the detaiij pf a person's sources of support.A person who is so djeabled thai; he cannot engage in any substantial gainful activity and who has bàen disabled since childhood can be as validly presumed to be dependent on his parent as can a child under 18. The effect of the former provision in many cases was that the receipt of public as.iiitance payments precluded payment of old-age and survivors insurance benefits •Thisresult is opposed to the generally accepted theory that social insurance should provide income protection to the extent feasible and that public assistance should operató only whore there are special needs or where the risks cannot be assumed by the social insurance program.If the risk of loss of support (or poi;entia]. support) to the disabled child iø to -8- befUlly sasumed by socis.]. insurance, requirements for the benefit should be so de8igned as not to bar benefite to people who were previouoly supportedinwhole or in part by public aBaistance. 2.The amendments provide benefits for the dependent parent of a deceased worker even though a widow, dependent widower, or dependent child of the worker aleo survived.(Benefit8 *yab1e to other survivors of a iorker on the rolls in August 1958 wil]. not be decreased because of the family &dzunt provieiona if such a parent ccmei on the rolls.) The bar to the payment of prents benefits baa been in the 1*w since 1939, when parents' benefits were first provided.With thi. ber, it was possible for the existence of a cbi]4 or widow who would. never receive benefits to preclude a dependent parent fr receiving benefita.Moreover, the reaovs]. of the "living-with" requir'ent for nth].y benefits i 1957 made it posaible for the e,d..tence of a widow long aepsratedL from the worker to bar payment to a parent. It is not uncoon for a worker 'with a feii]y to have a].ao aa.uaed reaponaibility for the aupport of one or both of his p.rents, ax. there ia no reason why, within the limit on payment of benefits to a fi1y, benefits should not be paid to a parent where he was dependent on the worker for more than one-half of his support.

3. Theuendments provide for the pyneflt of a lump-sua to the widow of a deceaøe worker only if ahe was living in the sane houho].d with him or he4 paid his burial expenses. Before 1957, for a widow to receive either monthly benefits or the lump-sum death payment based. on the earnings record of her deceaaed huab.M, the law required that she have been living in the aee houaehold with the worker or receiving contributions fr bia or that the worker have been under a court order to contribute to her support.In 1957 Congresa removed the "living-with" provision ai a requirement for entitlement to iionthly 'benefits. Since the purpose of the 1ump-si death psyent is to help with the expenae incident to the death of a worker, it ii appropriate to psy the 1ump-.u death payment to the spouse only where it can be presuaed that she wi].]. take reaponaibility for tho.e expenaes. This preeption can aost reasonably be m.de where the spouse was act"—l ly living in the same houBehold ith the worker. 1.The aaendents rove the 3-year waiting period before an sd.optsd child can qualify for benefits on the earuing5 record of a retired or disftbled worker. Under the 1939 ae11Isent8, which ..t up the provisions for dependents' bez,afit., in ordsr for sn adopted cbil of a retired -9- worker to receive benefits the child had to have been adopt.d before the worker attained age 60.For an adopted child to receive benefits on his deceased father's wage record he had to have been adapted at least 1 year before the worker a death and the adoption had to take place before the worker reached age 60. In 1946 the law was changed to provide a 1-year time require- sent for an adopted child of a deceased worker and a 3-year requirement for an adopted child of a retired worker..In 1950, the 1-year require— sent in death cases vat eliminated.The changes in 1946 and 1950 presbly were made on the basis of experience under the program since 1939 and on the ground that it is unlikely that an adaption would be entered into solely for the purpose of gaining rights to old-age and survivors insurance benefits. State laws governing adoptions have changed over the years to follow sore closely guides set by the Children's Bureau to insure that the welfare of adcpted children is adequately protected.The waiting requirements, Investigation requirements, and other safeguard. in these laws say now be considered adequate deterrents to adoptions solely for the purpose of qualifying a child for benefits. The former provision was unduly strict; it worked a hardship on the adopted child by withholding benefits for as much as 3 years in bona-fide cases solely to prevent the very infrequent case of abuse that sight have occurred.

5• Thensv law sakes eligible for child 's insurance besefit s a child adapted by the widow of a worker within 2 years after the worker died (or 2 years after the date of enactment) if the child had been living in the worker's household and if the child had not been supported by anyone else. Former law required that a legal adoption under the applicable State law have been cow!plet.d prior to an insured worker's death in order for the child to be eligible for benefits.This requirement was intended to insure that the child's benefits would be paid only when it was reasonable to assiae tInt the child would have been supported by the insured worker if the latter had not died.

On September 7,1957,the President approved LB. 11992, a bill "For the relief of Michael D. Ovens." Michael had been placed with the Ovens family with a viev to eventual adaption.Before the adoption could be cc*p]..ted, Mr. Ovens died,later, Mrs. Ovens adapted Michael.In approving LR. 11992, the President said: "Ordinarily I would not be inclined to approve special legislation which not only s.ti aside a provision of general law, but also calls for paa.nt fro. a trwrt fund.However, I agree with Congress that -10- application of the existing law to this situation tends to defeat the purpose of the program.This case seen to me to illustrate the need for reconsideration of the strict criteria of the Social Security Act. It ii ir hope that next year the rule on adaption in the Social Security Act may be modified to permit all children like Xichael to receive the benefits which should be theirs." For sost practical purposes, when a child eligible for adoption becomes a member of a worker's household and is supported by him the worker enters into a parintal relationship with the child.When the worker dies before the child is adopted and subsequently the surviving spouse adopts the child, the loss to the child occasioned by the worker 'adeath turns out to be similar to the loss suffered by any child on the death of his parent.

6.Thenew law sakes a person eligible for widow's, widower's, or mother's insurance benefits if he or she is the parent of a child adopted by the deceased spouse. Since 1950 a woman who adopts her husband' a child has not had to meet the 1-year marriage requirement for entitlement to mother 's or widow', benefits.However, the woman whose own child is adopted by her husband must have met a 1-year marriage requirement.There is no indication that this situation was anything butthe result of an oversight.

Theprovision eliminates the anomalous situation where a child can qualify for benefits but his mother who is caringfor him cannot qualify for mother's benefits even though the child's stepfather, on whose earning, record the child qualified for benefits, had been married to her and had adopted the child. 7.The new law makes a wife, husband, widow, or widower eligible for benefit, if in the month before marriage the person was eligible for dependents' or survivors' benefits(or would have been ifhe had attained retirement age). Inthe case of a husband or widower theprovision deletes theone-half support and "currently insured" status requirements for benefits. Under former law, a woman who was receiving widow's bensfite and who married an old-age insurance beneficiary had herwidow's benefits terminated and had to wait for 3 year. before she could qualify for wife's benefits based on her new husband's earnings record. tnameich a. the former duration-of-marriage requirements were intended to prevent exploitation of the trust fund by claims for benefits from person. whomarried beneficiaries solelyto get wife'. benefits, it doe. not seem unreasonable to delete those requirements — 11— for psrsons 'who bays already established their entitlement to dependents' benefits or 'who would be eligibl. for those benefits upon attaient of retiru.et age.In the.. instances there i O possibilitythat marriage would be undertaksn in order to obtain &benefit.

8.Thensw law 1l-(natesmarriage as a terminating event in cases where &p.rsonentitled to widow's, widower's, mother' a, parent's, or childhood disability benefits marries another person receiving any such benefits and where a MIIILThOOd disability or mother beneficiary marries an old-age insurance beneficiary or a disability insuranc, beneficiary. Under former la'w a secondury beneficiary lost her benefit rights 'when she married.If she married a person 'who 'was insured under the pro*m she 'would, after the 'waiting period (3 years for wife's or husband's berLefits; 1 year for 'widow's or 'widower's benefits), qualify for benefits on the earnings record of her new husband.If the secondary beneficiary married another secondary beneficiary (for example, .a widow marrying a dependent parent), the benefits of both tcxminated and no new benefit rights developed from the marriage. Presumably the provision 111ng for the termination of benefits upon the marriage of a secondary beneficiary was included in the law on the baaiu that when a secondary beneficiary rsrries she acquires a new source of support and. accordingly has no need for the insurance bene1it previouzly paid. When secondary beneficiaries married each other they lost valuable insurance benefit rights and no new benefit rights could ordinarily accrue because of the marriage.It does not seem reasonable to ter4 n&te benefits unless a new source of support is acquired or a new benefit right is established. In most situations where secondary beneficiaries marry each other it is iinlfkely that either will have any source of support other than their benefiLts.Normally such beneficiaries do not have a history of any iiignificant earnings and most of them are not able to support themselves after the benefit has terminated. In order to prevent these people from becoming public assistance charges it is desirable to continue the benefit to which each was entitled prior to the marriage. While the proviiiion is designed primarily to continue benefits to secondary 1eneficiaries who marry each other, similar considerations apply w]en a childhood disability or mother beneficiary marries an old-age or disability insurance beneficiary. In these cases the individual may eventually qualify for wife 'a, - 12— huabaM's, widow ,widower.,or aothar' $ t*.urancs benefits vish are higher than the orina1 benefit.It ii Lssirsblto continu the earlier bensfit until. that happens.

9. Then.y isv provides for the r.iustateeat of aothar'. aM viovt $ benefits texinsted by ran-isg. vhen the .•ooha- ba die. within a ye.r and. benefits are not ssb1eon hi. es'ruinp record. Under the 1956 social security asm.nt., a voann vlio give. up rights to vidov's beefit8 (pssb1e at sM after age 62) by rerrying and those new huzbaM dies withina year regsina her eligibility to receive widow's benefits basedon the earning. record of her forasr husband.Those nts did not provlda sii1ar prot•ction for a aother ofyoung thfl&r.n whose iecoth bugb..M dies vithin a year--she is left without current right,to monthly benefits on either huabaz4 account.It sesas only opr to give mothersprotectionequal to that scoordad vidova under siKiisr circatanaes.

Since the passage of the t!hr%ge describ.d in Nab.r7abov., the aged. widow who rries aM whose seaon husbaM dies withina year can iediate1y receive benefits on her new husband 's earniup record.Accordingly, the law vas changed to provide that the aged. vidow who reaarrie. ca* have her benefits reinatated only ifh.r new huab.M diee within a year aM is not insured. - 13 -

Coverage

Nonprofit ployent 1.The legislation providea for a limited period of retroactive coveragefor employees of nonprofit organizations whichelectcoverage. Nonprofit organizations which elect coverage after 1959 maymakethe coverageretroactive for a period not exceeding four calendar quarters prie to the quarter irL 'which the organization files the certificate waiving its tax-exempt status for social 8ecurity purposes.Nonprofit organizations which elect, or have elected, coverage after 1955 and prior to 1960maycover employees retroactively as farback as January1, 1956.Under prior law, coverage could be effective no earlier than the quarter in which the waiver certificate was filed.Because of a number of circumstances many rLonprofit organizations have found it difficult to file the certificate promptly, and employees of these organizations have been deprived of some cve, 2.The amendxnerLts require a nonprofit organization employing persona in positions covered by a State or local retirement system who are members, or eligible to become members of such a system, to treat these enployees as a ccmpletely separate group for purposes ofsocial security coverage. Coverage would thus be made possible for employees of certain nonprofit organizations which under prior law could not secure the necessary concurrence of two-thirds of their employees because some oftheir employees were covered by a public retirement system and did not desire social security coverage. 3.Provisionscontained in a separate bill, H.R. 7570, ithich b.cae Public lAy 85-785,make technical ihgee ich broaden Bugbtly the proviBiorla of existin8 lay under which tax returns filedbya nonprofit organization be:fore it filed its waiver certificate mayetab1ish soai&]. 8scurity credit for wages reported onthesereturns if the igea ,ere paid. for Bervices performed before 1957.As an alternative to the condition that the nonprofitorganization musthave m&te social security reporte inthemlBtaken belief that it had filed a valid .1ver certificate,P.L. 785addsthe condition that the failureto file a waiver certificateimadue to an assumption by the orgazization that it was unneceeøarytofile mtha certificate. This legislationalso provides social-security credit for certain eloye.a of nonprofit orgazizationa ithich tiled iiaiver certificates before the enactment of the Social Security M*'dnts of 1956 but after the teri1nation of elojnt relationship between the organization and mach employees. State and Local Government loymeut

1. The legislation extends to Massachusettsend Vermont the provision of the Federal law that permits specified States to bring under soci&l. security ouly those nmbers of a Btate or local, retire- itent Byste1 tho desire social security coverage provided all future ebers of the system are covered.With the add.ltion of these two States the "divided retirement system" provision now applies to fourteen States and. the Territory of Hawaii. -lii.

5. Thedividedretirementsystem provision is amended to give individuals who have an option to join a State or local retirement system, but who have not joined, the same opportunity for securing social security coverage as that given members. Under prior law, only persons who were actually members of the State or local system could obtaincoverage underthe divided retirementsystem provision; there wasordinarilyno wayforper&ons who were in positions underaState or local system, but who had not exercised theiroption of joining suchsystem, to be covered under social security when coverage was extended under the divided retirement system provision.

6.Anotherchange in the divided retirement system provision allows further opportunity for social security coverage for persons who did I2ot elect social security coverage when it wasoriginally provided for those retirement system members who desired coverage. Underprior law, persons who did not elect coverage under this provision before the coverage action was approved had no further opportunity to obtain it. In many cases persons who, for various reasons, had not originally chosen coverage later changed their minds. Under the amendment, a State maymodifyits coverage agreement at any time before 1960, or, if later, wIthin 1 year after coverageis approved fora retirement system group, to obtain coveragefor thosein the group who were not originally covered and who have filed a request for coverage withthe State.

7. TheState and local coverage provisions applying to retirement systemgroups are amended to make iteasier for persons who are in positions covered by more than one State or local retirement system to get social security coverage. Under prior law it was often difficult or impossible for persons in positions under more than one State or local retirement system to secure social security coverage even when a retirement system of which they were metbers came under the program. The amendment permits such persons to cone under social security with a retirement system group regardless of the fact that their position may also be under another retirement system; however, the amendment does not change the conditions for covering persons who are not actually members of the system coming under social security, but who are members of another system; nor does it permit coverage of persons in policemen's and firemen' a positions in States wherepersons in such positions cannot be covered.

8. Thenew legislation pertnits retroactive coverage for people in theemploy of State or local goverrments who die or whose employment isterminated after the proposed State coverage agreement is dispatched to the Federal Government but before it is approved by the Federal Government.Under prior law retroactive coverage wasavailableonly to persons still employed on the daythe coverageaction wa approved. Thisamendmentwill help prevent hardships which could occur under prior law in cases where an individual left the employ of a State or locality--because of death,a change ofjobs, retirement, or aomeother reason--duringthe period when a coverage agreement wasin the process of beingexecuted. — 15 —

9.A proviaion ad.ded on the floor of the Senats permite the State of )ine to treatthepositions of teachers and, the positiona of nonteaching employeeii as constituting separate retirement yBtems for purpoøee of social iecurity coverage.Thia provision, which is not a part of the SoeiaL Security Act and which viii be effective only vith respect to mod.ificationB of ?ine' 8 coverage agreement that are completed. before July 1, 1960, permite the State of )ine to cover undar social security members of the State retirement ayetem vhiie continuing to exclude those member8 who are in teaching or related positions • Theemployees who are excluded tro coverage under this provision are barred. froi aociai security coverage by Maine law, and apparently do not want eoverage.(The Department of Health, Education, and Welfare doee not be:Lieve special provisione of this kind. are generally deeirabie and. did not favor the enactment of thiB provision.) 10.Additional 5tate and. bee], coverage provisions containeti in LE.51].1yore •naebd aseeparatelegislation. Thulegislation extends .to the State of Washington and to all Interstate iastnaentaiitie. the proviiion aakig eoial Becurity coverage avBilabie In epecified States to polieeen and firemen in positions covered under a retirement System.Withthis ehsne the pro1sion nov applies to eleven specified. States, the Territory o:t Eavaii, and. to all interstate instientaiLties; it repz'eBents an except:Lon to the general exclusion frog social security coverage of policeaen aad firemen retirement system aeabers.

ii.Under a separate bill, H0R. 8599,whichbecame Public Law 85-786, pa'mentsreeived by empioyee8 of State and local governments while they are on sick leaveare to be treated the same regard.lesG of the employee's age •Underprevious law, moat such paymenta were wages before the employee reached retirement age but, because of the application of section 209(i) c)f the Social Security Act, were not wages after he reached' retirement age if he did not work during the pay period.The change overcome5 the difficultie8 the States experienced in eliminating from their wage reporta payments for periods during which an employee past retirement age vas on sick leave. Partner's Net Earninga :Frc eif-npioment in Year of Death 12.The legislation provides that a partner shall be credited for old-age, survivorø, and disability insurance purposes (but not for incoie tax purposes) with his d.lstributive share of partnership earnings in the year of his death.The appropriate amount to be credited vii]. be determined by apportioning the partnership income between the perioda befDre and. after death, taking into account the number of montha before death that the individual was a member of the partner8hip.Under prior law, as a result of a change made in the Internal Revenue Code ia 19514, the deceased partner could generally - 16-

haveno self-employment income from a partnership for the year in which hedied ux].less the partnership agreenent provided specifically that the partnership terminate upon the death of a partner.His distributive share of the partnership earnings for such year belonged to his estate and could not be credited for social security purposes.The chRnge made by the 1958 amendments will affect relatively few people but will correct an inequity which sometimes resulted from inability to credit a partner with income in the year of death.Old-age, survivors, and disability insurance cciverage of the deceased partner's share of partnership incQne in the year of death is mandatory if the partner dies after August 28, 1958. In the case of individuals who died. after 1955 and on or before August 28, 1958, the provision is optional and effective only ifan amended social. security tax return is filed.The retroactive voluntary feature of the provision was designed to take care of farm operators, ].avyere, 'and mnbers of other recently covered oups who died before they attained insured. status.In the future, practically the only people who wi.ll benefit from the provision will be rourig persons who die after only a few years of self-employment as partners in a business.

TurpentineWorkers

13. Thelegislationextends coverage to workers engaged in the productionof turpentine and gum naval stores 'who are employed by the original producer of the crude gum.Beginning with 1959, services performed by these workers will be covered under the conditions applicable to other agricultural workers.While many of the estimated 15,000 workers in this new coverage group are only seasonallyor temporarily employed in the production of turpentine andgum naval stores, this new source of coverage will in many instances Bupplement the old-age, survivors, anddisability insuranceprotectionthese workers acquirein other covered employment and self-employment. Wage Credits for Military Service With Our World War II Allies 111. The amendments broaden the provisions of prior law for gratuitous wage credits of $160 for each month of active military service for the United States to provide such credits for certain American citizens who served in the arued forces of our allies during WorldWar II. The new credits are restricted to AniericancitizenB who, before December 9,19111,entered the military service of a foreign country which was, on September 16, 19140, at warwitha country that becanie an enemy of the United States during World War II.The credita are furtherrestrictedto citizens wholived in the United. States11 out of 5yearsbefore entering into the foreign military service and who weredmic1led inthis country at the time ofsuch entrance.In view of these restrictions the relatively few individuals 'whowill receive - 17-

thenew credits will be mainly individuals who either left emplojment covered by social secur:Ltytoenter serviceabroador would have vorked in covered employmenthiid.they not entered military service •Asin the case of the noncontribu tory credits for military service provided under prior law, the social security trust funds will be reimbursed from general revenues for the additional cost of benefits resulting from the new provision. )Iisoelianeous Tii*1ly, three other minor changes were Made: 1.Penelties.--Ouie of these changes spells øixt more clearly and ccpletely in the law (section 208 of the Social Security Act) the definition of what constitutes fraud nuder the old-age, survivors, and disability insurance program.Section 208 was part of the Social Security Act Amendments of 1939, and was designed to protect the syst against fraud.The 1951i amendments applied the provision to net earnings from self-employment.A revision was needed in the penalty provisions to take account of major provisions adopted in l95 and 1956, such as the provisions on disability and the application of the retirement test to noncovex'ed work.Clarification was also needed to make the provision apply clearly to willful failure to disclose information, as veil as positive action, and to actions in connection with suspensions, terminations, and misuse of benefits as well as to actions in connction with applications for benefits. United States attorney, bay, often been reluctant to prosecute for fraud bealuse the law has not spelled out clearly enough what constitutes fraud.The Department proposed the changes in the fraud provision as a means of assuring nor. effective end uniform treatment of offenses by the courts and by Uflited States attorneys. 2.Charging for Non-Progru S.rvices.--A second change makes provision for colieoti*g and depolitiug in th. social security trust funds apprcpriat. charges for furnishing to the public services not connected with the program (such as forwarding mail).Anthority to charge for information which the Bureau could supply under applicable regulations was included in the 1950 amendments. The Bureau has been forwarding letters for social security account number holders in a 1iited number of situations where strong humanitarian considerations are involved.Because the number of cases isfl, this service is rendered gratis. 'The Bureau receives a large volume of request a to forward letters in other situations where it would sometimes be desirable to render the service from a public- relations standpoint or because the public interest is involved. The Cissioner has approved a policy of forwarding letters in certain situations provided the Bureau charges for services and provided such services do iaot unduly interfere with the administration of the old-age and survivors insurance program.The change in the law allows the deposit Lu the trust funds of the proceeds of such letter-forwarding services so that the trust funds will be reimbursed for the expenses incurred. - 18-

3.Certificate Requ.ireent for Attorneys.--Thethirdchang. roves the requirement that an attorney, in order to represent a c1a1nt for social security purposes, aust fils a certificate of his right to practice Lay before the courts.The requirement for the filing of this certificate bi attorneys was part of the Social Security Act Azeaents of 1939.The provision was presiaably designed as a precaution to asks sure that persons representing old-age and survivors insurance olaiaauts are not masquerading as attorneys.It has been th. general practice to accept as such,persons 'who purport to be attorneys.A p.rsom 'who misrepresented himself as an attorney would be subject to penalties outside th. provisions of the Social Security Act.Tb. removal of th. statutory requirement for the filing of a certificate hi an attorney coufoTas to bag-standing practic. in other fields. Social SecurityAmendments of 1958 O1d-4ge, Survivors, and Disability Insurance Effective It.s

Provision Effective Ite

BenefitIncrease. I&nthe after 12/58.

Earning. Base Increase...... Taxableyearsendingaftex, 1958 Tax Rat. Increase 1oyers 1oyees Self-bzployed ./ 1959 21/2% 2 1/2% 33/1% 1960-62 3 3 Ii 1/2 1963-65...... 3 1/2 3 1/2 5i/li 1966-68 Ii 1969 sad thereafter..Ii 1/2 Ii 1/2 63/li Disability A—,'—ents

1. Benefits for wives,dependenthusbands, and

childrenof d.ts&bilityinsurance beneficiarieS. benefits payable 9/58 onapplications filed on or afterenact- mentdate.

2.Elimination of disability benefitsoffset for

disability insuranc,benefits and childhood

disability benefits ...... 8/58 3. R.vslof "6out of 13" for benefits and freeze and addition of "fu.Uy insured" for freeze benefits payableor increased under new requirements for 9/58, onapplications filedonor after enactment date and applications filed after 1957 and before enactmentdate if claimant is alive and notice of 4.- termination not sent to him as of such date.

/ Yortax&bleyear. begiflniagfter1958,etc. -2- Provision ff.ctive ts k.12months retroactivity for

disability insurance b.neflts.... . applicationstiled after1,2/57.

5.6/30/58 deadlineforfilingfully retroactive

freeze- application postponed for three years..... applicationsfiled after 6/58. 6.Permitfreezeapplicationsfiled after 6/30/61 to establish freeze period as early as 18 nonthsbeforefiling ...... applicationsfiled after6/61. Dspsndents Benefits 1.Remove one-half support requirement for disabled child

who isoverage 18 'when parent dies or retires benefitspayable 9/58on applications filed on or after enactment date. 2. Benefitsfor dependent parent ofa deceased yorker even though a widow, dependent widower, or de-

'pendent cb.i].d survived ...... benefitspayable 9/58 onapplications filed on or after enactment date / 3.Pa" lu sum to 'widow of a deceased 'worker only if she yealivinginthe swhousehold 'with kin, or had paid

hisburial,expenses ...... basedond.atb.. after8/58. 14. QIL11fyforchild's benefits, a child adopted bythe

'widov of the worker . . benefitspayable 9/8 / onapp].icatióna filed on or after enactment date.

/Insuch oases proof of support ybe filed'within 2 years after 8/58. -3- Provision Effective t. 5. Removeon. year liarrisge requIrement for spouse iihere

h.rchild adopted. by d.ceeeed yorker bsfleflte payable 9/58onapplicatione filed on or after enactment date.

6. Removalof 3-year adoption requIrement forchildof retiredordissblsdvorker...... ,. . benefitspayable 9/58onapplications filed on or after •nactmsnt date.

7.Remove duration of marrIage requirementswh.re epova. yes •ligibl. for rneconde.ry benefit before marriage.....benefits payable 9/58onapplications filed on or alter enaotntdate. 8.1I4nationof benefit teination 'wb.re secondary beneficiariesarry each oth.r ...... benefits payable 9/58onapplications filed after enactment date. 9.R.inatat.ntofaoth.r' s and widow's bias fits ither. second husband di.o within ayear and benefits act

p$7sb1. .. • .• ...... benefitspa'able 9/58 on' applications filed on or after enactment date.

10. provide thatdependency may beestablished es of the

beginning of a period of disability...... benefitspayable 9/58onapplications filed on or after enactmentdat.. -

ProVision EffectiveDate

1.Retroactive coverage for nonprofit organizationa

electingcoverage after 1955 •n&ctnt date

2. Require nonprofit orginizationa to truit 1oye.e covered by State or local retirementsysteas separately from those not *bers of such & ay.ten.....•uactntdate

3.Broadenslightlytheprovi8iona under thich

earningsex'roneoualyreportedby nonprofit

orgenizationa be validated . enactasntdate/ i.ctenddivided retirentsy8tea proviaioui to

)tftasachuetts end Vermont .nactntdate

5. Provideanadd.ltionaJ.opportunity for coverage under

theetate andlocaldivided retireaent ey5t.provision

to psrsona not originally covered. enactment date

6. Makecoverage easier for State and loosi employees in

positions covered by re than one State or loesi

retirant 8y8ta enactnt date

7. Permitretroactive coverage for Stateor local eaploye..

'who diedor vbo8eeploynt vaa terainatedshortly

before approvalof date

8. Per1t)ine to treat teacher aiid non-teacherpositions

asbeingunder a.parateretixentaysteaa for coverage

piixpo.e...... •D.&CtIUtdate

•/I.R. 7570 -5-i Provision,. Effectjvite 1ke 9. coverage avaU.able tooçn&ud. firemen ',:. retirementsystem mbereemployedby an intsrstate inatruntalty or inth.State of Washington. enactment date / 10 Permit coverage under the divided retirementsystem provision of persons who have notexercised their option to Join a StateorIöca]. retirement system enactment date U. Creditpartnership earnings inyearof death compulsory for deaths afterenactment; voluntary for deaths after1955andonor before enactment date,;bytiling amended return and paying tax.a.

12.Coverservices performedinprocessing of

crude gum . secesperfod after1958. 13. Broadenthe provision for $160 wage credit formilitary service to include servicesbymericene with a].lisd

countriesin World arII . payable9/58;re- computationapplica- tions may be filed aftermonth ofenactment.

RetirementTest

1. Jo benefit loss for monthith.reearningsdonot

exceed $100 . . . taxableyearsbe- ginncugaft.r 8/58. 2.Charge exo.ss earningsbeginningwith first month of

year...... tacableysarsbe- ginning aft.r 8/58.

H.R. 5411 Provisic fsetivi ts

3. Rsaovslofr.quirntfor'ii1r.portirsbsfits

..rs vithhSld.••••.....•... •...... • ...... t.zsbl. year. bi— gI.ning.St.r 8/58. .aas11an.ous

1. Clarify defl.nitica of freud...... •uactntdat.

2.ProvIde fOr aharnfor certain airvicie...... nactntdate 3.Bavsr.quir..nt that an attorney uet fil. "right to practics" csrtificats...... inaotsnt date

1i. Provide thatpaynte rsesiv.dby aState or local.

govsrnnentelo7ei il.hi is on leavebe counted as gesafter hireaches retireasnt .s...... easotnent dateJ

5j ti.8599 SUMMARY OF 1958 CRANGES IN PUBLIC ASSISTANCEAND MATAL AND CHILD WKLFARE PROVISIONS Public Assistance

Agei, B11n1, Disablei,and DependentChildren An aMitional $197 million are made availableto the States under revised formu].as for the Public Assistanceprograms. AU States vi].]. receive add.itional Federal funds.As at present, the FederalGovernment vii]. provide 1/5 of the first $30on an average to the aged, blind,an. disabled recipients. States now receive doilar-for-d.c)flarmatciing onthat partof the payment to one of these recipientsthat xceeda $30 ani is less than $60. Theyal8o receiveone-half of an average of upto $6forpaym.nta 14e iirectly to suppliers of medical care.Thenew law continues to provid2 ollar-for-dofl matching on amounts inexcese of $30 with a n.y aaxiinum of $65onan average baaie beyond which Fedra1 aatchin will not be available.The higkier average maxina vii]. provide add.itional fund.a to Statea making substantialpayments 'while adju8tmente in thia forzu.1.a vi].]. be nat1e forStatea with lover incoee, giving them both additional fund8. A new average maximia of $30 per recipientis provided for dependent children in lieu of present halts of $32for the first child. and an ad.u].t providing care, $3 each foradditional children, and $3 med.ical care on an average basia. The Beparate matching of payitenta to doctors,hospitals end. other suppliers of neiica1 care iaeliminatedwith the new x1mn of $65coveringthe individual payznt and payments for aed.ical careof publicassistancerecipients. Boththie provisionend. the average limitation on money payments wlU provide greaterflexibility to the States in the operation of theirprograw, an vii]. also eliMi- nate the special problea in some State. arisingoutof previoua law. The newlaw establishes an Atvisory Councilon PLiblic Assist- ancefor the purpoae of reviewing the atatue ofth. public asaistsnc• programinrelationto te o11-age, survivors, aM disability insurance program, the fiscaL capacities of the States end th.Fedarsi Government, and any othir factors bearingon the amount and proportion of theFederalath States' shareø in the jrograa.Th. Council would be patterned attex the existing AdvisoryCouncilon Social Security Financing end. vou]4 report not later thmnJanuary 1,1960. PuertoRico, Guam,VirLn Islands

Fedra1 paymenteto Puerto Rico aM the Virgin Ial'inda for public assiitanc• paentiiihichhavebs•nlimitedto$5,312,500 ath $200,000 reepectively ar, increasedto $8,500,000 and, $300,000. Guan iiincluded, for the firit t1 with a $lêOO,000 azii authorization. -2-

Blin.aPrograaa -Miaouriend.Pennsylvania Special provisionB regardi.ngStateblind prograaa in Per]ia and. Missouri are extendad. from June 30, 1959, to June30,1961. Maternal end. QiilI Welfare The authorization for aaterne]. and child. health i increa from $16.51Ii ion to $21.5 i 1) ion, theauthorizationfor cripp1d children aervices from $15iiii lionto $20 11 ion, ath the authorition for child. welfare serviceø from $1.2mionto $17 it1 lion. The increaaee raise the total authorized for the three proam frt $J13.5"Illion to $58.5flhion.

AnAdvisory CouncilonChild WelfareBervlc.a iseatab1ihe. for the purpose cf kirgrecend*tiortBand. advisingthe Secretary ofHealth, ucation, and Welfare in connection ijith theeffectuati© of theprovisionsof Part 3ofTitle V of the Social 8ecurity Act, as amended. by the Social Security Msnnteof1958.The Councils t be appointed,bythe Secretary, is to consiatoftwelve persona repre8eutative of public, voluntary, civic, religioua, and prof sional velfare organizationB and groupE, or otherperaons with8p©i1 knowledge, experience, or qualification8 with respect to chi1d iLare aervicea, and. the public.

G'OO663O

[COMMITTEE PRINT]

COMMITTEEON FINANCE UNITED STATES SENATE ][Iarry Flood Byrd, Chairman

OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE, PUBLIC ASSISTANCE, MATERNAL AND CHILD WELFARE SERVICES

SHOWING CHANGES MADE IN THE SOCIAL SECURITY ACT BY THE 85TH CONGRESS

(Compiled by Helen Livingston and Frederick Arner, Education and Public Welfare Division, Legislative Reference Service, Library of Congress, at the Direction of the Chairman and Printed for the Use of the Committee on Finance)

UNITED ST&TES GOVERNMENT PRINTING OFFICE WASHINGTON :1958 COMMITTEE ON FINANCE HARRY FLOOD BYRD, Virginia,Chairman ROBERT S. KERR, Oklahoma EDWARD MARTIN, Pennsylvania J. ALLEN FREAR, R., Delaware OIJN .WILLIAMSDelaware RUSSELL B. LONG, Louisiana RALPH E. FLANDERS, Vermont GEORGE A. SMATHERS, Florida GEORGE W. MALONE, Nevada CLiNTON P. ANDERSON, New Mexico FRANK CARLSON, Kansas PAUL H. DOUGLAS, Illinois WALLACE F. BENNETT, Utah ALBERT GORE, Tennessee WILLIAM E. ENNER, Indiana ELIZABETH B. SPRiN(ER, CMef Clerk (I') CON!FENTS

OLD-AGE, SURVIVORS, AND DISABItTy II. Provisions relating to permanent and total dla- IN SURANCE Page ability—Continued Page C. Disabled children I. Coverage 16 1 1. Benefits A. Self-employed 16 1 2. Disability determinations 1. Professional groups 16 1 3. Administrative expenses 2. Ministers 16 1 4. Adjustment ofduplicatebene- 3. Farm operators 2 fits—offset provision 16 4. Public officials 2 5. Rehabilitation 16 5. Newspaper vendors 2 6. Suspension of benefits based on B. Employees 2 disability 16 1. Agricultural workers 2 III. Benefit categories 17 2. Domestic workers 3 A. Workers and their dependents 3. Casual labor 11 3 1. Worker—old age 4. State and local government em- 1 2. Wife 11 ployees 3 3. Dependent husband 5. Employees of nonprofit organ- 19 4. Child 20 izations 8 B. Survivors of deceased workers 6. Federal employees 22 8 1. Surviving widow 1. Students, internes, and nurses in 22 2. Surviving widow with children schools and hospitals 9 8. Newsboys (mother's benefit) 23 10 3. Surviving former wife divorced 9. Members of the Armed Forces_- 10 (mother's benefit) 25 10.Railroad employees 10 4. Surviving child 11. Family employment 26 10 5. Surviving dependent widower 12. Employees ofCommunist or- - 28 6.SurvIving dependent parent.-- - 30 ganizations 11 7. Lump-sum death payment 31 C. Geographical scope 11 C. Disabled worker 31 II. Provisions relating to permanent and total dis- IV. Benefit amounts ability - 31 12 A. Average monthly wage A. 31 Disability "freeze" 12 B. Benefit formula 1. Nature of provision 82 12 C. Minimum primary insurance amounL- 33 2. Eligibility requirements 12 D.Maximum family benefits 33 a. Definition 12 E. Dependents' and survivors' benefits... b. Work requirement -- 33 12 1.WifeorhusbandofInsured c. Period of disability 12 worker 33 3. Disability determinations 13 2. Child of insured worker 33 4. Administrative expenses 13 3. Widow, widower, former wife 5. Rehabilitation 13 B. Cash disability benefits divorced,orparentofde. 13 ceased insured worker 1. Benefit categories 33 13 4. Child of a. Worker deceased insured 13 worker 33 b. Dependents 14 5. Lump-sum death payment 33 2. Eligibility requfrements 14 F. Comparison of benefits under old law a. Definition 14 and under 1958 amendments b. Waiting period 34 14 V. Creditable earnings 35 c. Work requirement 14 VI. Insured status 36 d. Age 14 A. Fully insured 36 3. Disability determinations 15 B. Currently insured 36 4. Administrative expenses 15 C. Quarter of coverage defined 36 5. Adjustment of duplicate benefits— VII. Retirement test 31 off-set provision A. Scope 31 15 B. Test of earnings 6. Rehabilitation 15 87 7. Suspension of benefits based C. Test for noncovered work outside the on United States disability 87 15 D. Age exemption 38 (III) Iv

Page Page VIII. Financing- 38 IV. Special formula for Puerto Rico, Virgin Islands, A. Administration of the trust fund&._..__ 38 and Guam 45 B. Investment of the trust funds 38 A. Matching formula 45 C. Review of status of trust funds 39 B. Dollar limitation 45 1. Board of Trustees 39 V. Administrative costs 45 2. Advisory Council 39 VI. Advisory Council on Public Assistance 45 D. Maximum taxable amount 40 MATERNAL AND CHILD WELFARE 40 E. Tax rate for self-employed SERVICES F. Tax rate for employees and employers_ 40 IX. Misccllaneous 40 I. Child welfare services A. Termination of benefits upon deporta- A. Purpose 48 B. Scope of the program 46 tion C. Authorization of annual appropriation_ 46 B. Suspension of benefits for certain aliens D. Allotments to States 46 outside of the United States 40 E. Use of funds 46 C. Lossofbenefits upon convictionof 1. Local 46 certain subversive crimes 41 2. State 47 D. Criminal offenses 42 3. Runaway child 47 E. Representation of claimants 42 F. Matching requirement 47 G. Reallotment to other States 47 PUBLIC ASSISTANCE H. Advisory Council 48 II. Maternal and child health services 48 I. Scope of program A. Scope of the program 48 II. Matching formulas.... B. Authorization of annual appropriation. 48 A. Old-age assistance, aid to the blind, and C. Allotments to States 48 aid to the permanently and totally III. Crippled children's services 49 disabled. 43 A. Scope of the program 49 B. Aid to dependent children 44 B. Authorization of annual appropriation.__ 49 III. Separate medical care financing 44 C. Allotments to States 49 OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE

I. COVERAGE

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as nQted)

A. Sell-employed Cover8allself-employedif they have netNo change. earnings from self-employment of $400 a a year except that certain types of income including dividends, interest, sale of capi- tal assets, and rentals from real estate (including certain rentals paid in crop shares— see item3, "Farm Operators") are not covered unless received by dealers in real estate and securities in the course of business dealings. The earnings of an individual from aCovers a partner's distributive share of part- partnership cannot ordinarily be credited nership earnings or loss in the year of his for the year of his death. death—prorated so that it will exclude any earnings or loss attributable to the months beginning after the partner's death.Makes coverage effective on a compulsory basis with respect to deaths after Aug. 28, 1958.With respect to deaths in 1956, 1957, and on or before Aug. 28, 1958, coverage is on a voluntary basis provided an amended tax return is filed before Jan. 1, 1960. 1. Professional groups-Cover8 allprofessional groups except physi-No change. clans. 2. Ministers Cover8dulyordained,commissionedor No change, except a minister who elects licensed ministers, Christian Science prac- coverage shall, in determining his net earn- titioners, and members of religious orders ings, include the rental value of a parsonage (other than those who have taken a vow of and the value of meals and lodging furnished poverty) serving in the United States, and for the convenience of the employer [Public those serving outside the country who are Law 85—239). citizens and either working for UnitedEffective date: For coverage purposes, taxable States employers or serving a congregation years ending on or after Dec. 31, 1957; for predominantly made up of United States retirement test purposes, taxable years begin- citizens.Coverage is available under the ning after Aug. 30, 1957. self-employment coverage provisions on an individual voluntary basis regardless of whethertheyareemployeesorself- employed. Allows a period of time up to the taxExtends the period of time (generally through filing date (Apr. 15, 1957) for the 2d taxable Apr. 15, 1959) within which certain ministers year after coverage was first available to may elect coverage (Public Law 85—239). ministers (Jan. 1, 1955) or the 2d taxable year filing date after the individual became a minister, if later, in which to elect coverage. An election of coverage once made is irrevocable. (1) 2

I.COVERAGE—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong.(Public Law 85—840 effective Aug. 28, 1958,except as noted)

A. Self-employed-—Continued 3. Farm operators Covers farm operators on the same basis as No change. other self-employed persons except that farm operators whose annual gross earnings are $1,800 or less can report either their actual net earnings or 66% percent of their gross earnings. Farmers whose annual gross earnings are over $1,800 report their actual net earnings if over $1,200, but if actual net earnings are less than $1,200, they may report $1,200. Rentals from real estate (excluded in A above) are not creditable as self-employment earnings, but if landlord under arrangements with tenant or share farmer, participates materially in the production of, or in the management of, the p'roduc- tion of the crops or livestock on his land, the income is covered. 4. Public officials Excludes individuals performing functions ofNo change. public officia1. 5. Newspaper vendors_ -Cover8individuals over 18 who buy news-No change. papers and magazines at one prico and sell them at another regardless of whether they are guaranteed minimum compensation or may return unsold papers and magazines. B. Employees Covers employees including certain agent orNo change. commission drivers, life-insurance salesmen, homeworkers,travelingsalesmen, and officers of corporations regardless of the common-law definition of employee. 1. Agricultural workers_Covers agricultural workers who either (1) are No change. paid $150 or more in cash wages in a calendar year by an employer or (2) perform agricultural labor for an employer on 20 days or more during the calendar year for cash wages computed on a time basis. Farm workers who are recruited and paid by a crew leader shall be deemed to be employees of the crew leaderi.fsuch crew leader is not, by written agreement, designated to be an employee of the owner or tenant and if such crew leader is customarily engaged in recruiting and supplying individuals to perform agricultural labor; under such circumstances the crew leader shall be deemed to be self-employed. 3

I.COVERAGE—Continued

. Under Social Security Act amendmentiin 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28,

. 1958, except aa noted)

B. Employees—'Continued And excludes: 1. Agriculturalwork- a. Mexican contract workers a. No change. ers—Continued b. Workers lawfully admitted tothe b. No change. United States from the Bahamas, Jamaica, and other British West Indies or from any other foreign country or its possessions, on a temporary basis to perform agricultural labor. c. Persons producing or harvesting gum c. Covered. resin products (turpentine and gum naval Effective for service performed after 1958. stores). 2. Domestic workers__.. Covers persons performing domestic service No change. in private nonfarm homes if they receive $50 or more during a calendar quarter from 1 employer.Noncash remuneration is excluded. Excludes students performing domestic serv-No change. ice in clubs or fraternities if enrolled and regularly attending classes at a school, college, or university. 3. Casual labor Covers cash remuneration for service not in No change. the course of the employer's trade or business if the remuneration is. $50 or more from 1 employer during a calendar quarter. 4. State and local gov-Covers employees of State and local govern-No change but see below for additional Statea ernment emplo3'ees. ments provided the individual State enters coming under special provi$ioflB. into an agreement with the Federal Gov- ernment to provide such coverage, with the following special provisions: a. Employees who are in positions covered under an existing State or local retirement system (except policemen and firemen in most States) may be covered under State agreements only if a referendum is held by a secret written ballot, after not less tIan 90 days' notice, and if the majority of eligible employees under the retirement system vote in favor of coverage.In most States, all members of a retirement system (with minor exceptions) must be covered if any members are covered. Employees of any institution of higher learning (including a junior college or a teachers' college) under a retirement system can, if the State so desires, be covered as a separate coverage group, and 1or more political subdivisions may be considered as a separate coverage group even though its employees are under a statewide retirement system. 4

I.COVERAGE—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

B. Employees—Continued 4. State and local government employees—Con. Cover&—Coatinued In addition, employees whose positions Permits employees in positions under more are covered by a retirement system but who than 1retirement system to come under are not themselves eligible for membership social security with a retirement system in the system could be covered without a group without regard to what action, if any, referendum. Employees who are members the other retirement system that covers their or who have an option to join more than 1 positions takes on social security coverage. State or local retirement system cannot be Would not apply to employees who, on the covered unless all such retirement systems date the State's coverage agreement is made are covered. applicable to a retirement system, are not Employees in positions which were cov- actually members of such system (though ered by a retirement system on the date the their positions are covered by the system) agreement was made applicable to the cov- and are members of another system.Would erage group but which, by reason of action be optional for the States with respect to re- taken prior to Sept. 1, 1954, are no longer tirement systems covered before 1959.For covered by a retirement system on the date groups brought under coverage after 1958, when the agreement is made applicable to States would be required to apply the new such services, may also be covered without provisions when they extend coverage to a referendum at any time prior to Jan. 1, retirement system groups. 1958, at which time the provision expired. KzCeptiofl8togeneral law authorizing coverage in named States: (1) Split-systemprovision—Authorizes (1) Adds California, Connecticut, Minne- Florida, Georgia, New York, North Dakota, sota, and Rhode Island [Public Law 85—227], Pennsylvania, Tennessee, Washington, Wis- any interstate instrumentality IPublic Law consin, and Hawaii, at their option, to ex- 85—226J, and Massachusetts and Vermont to tend coverage to the members of a State list.Would permit all named States to allow retirement system by dividing such a sys- employees to elect coverage even though they tem into 2 divisions, 1 to be composed of had not originally chosen coverage.States those persons who desire coverage and the can modify their coverage agreements with other of those persons who do not wish the Federal Government at any time before coverage, provided that new employees are 1960 and, after that, within 1 year after covered compulsorily. Also authorizes simi- coverage was approved fortheoriginal lar treatment of political subdivision retire- group, to cover additional persons. Such ment systems of these States. employees would betransferredtothe group desiring coverage but the transfer would only apply to those who filed a request with the State to be covered by the modification proposing the transfer.Also provides for the coverage of employees who have an Option to join the State or local system but who have not joined.When coverageactionisapproved after1959, the State would be required to treat employees having an option to join the State or local system in the same manner as members of the system. The coverage under the divided retirement system provision of employees who have not exercised their option to join a system would be at the discretion of the State in the case of coverage actions that are completed before 1960.In the case of coverage actions which have already been 5

LCOVERAGE—Continued

UnderSocial Security Act amendment8 in 85th Item Under Social Security Act prior to 85th Cong. Cong.(Public Law 85—840 effective Aug. 28,

. 1958,except as noted)

B. Employees—Continued Exceptions to general law authorizing coverage completed, such employeea couldbe oovered 4. State and local gov- in named States—Continued under the provision (described above) whlah ernment employees—Con. would afford individuala a second chanceto jointhe group desiring coverage. (2) Policemen and firemen—Allows the (2) Adds Alabama, Georgia, Maryland, States of Florida, North Carolina, Oregon, New York, Tennessee, and Hawaii (Publio South Carolina, and South Dakota to make Law 85—226] and Wa8hington and any instru- coverage available to policemen and fire- mentality of 2 or more States(PublioLaw men in those States, subject to the same 85—798) to list. conditiona that apply to coverage of other employees who are under State and local retirement systems, except that where the policemen and firemen are in a retirement system with other classes of employeea the policemen and firemen may, at the option of the State, hold a separate referendum and be covered as a separate group. (3)Employee8of unemplo?,mentcorn- (3) No change. pensation 8y8tema—Authorjzes Florida, Georgia, Minnesota, North Dakota, Penn- sylvania, Washington, and Hawaii, at their option, to cover their employees who are paid wholly or partly from Federal funds under the unemployment compensation provisions of the Social Security Act—either by themselves or with the other employees of the department of the State in which they are employed—after complying with the referendum provisions. (4)Non profe88ional 8chool employee8— (4) No extension of July 1, 1957, cutoff Authothes Florida,Minnesota, Nevada, date but another 8omewhat similar provifon New Mexico,Oklahoma,Pennsylvania, wa8 enacted which would allow the Stateof Texa8, Washington, and Hawaii, at their Maine, until July1,1960, to treat the option ip until July 1,1957, to include positiona of teachers (and other related employees of public school districts who are positions) and the positions of other membezi under teachers' retirement systems, but who of the same retirement syatem 58separate are not required to have teachers' or school systems for coverage purposce. administrators'oertificate(for example, school custodians), in the State's agreement without a referendum and without including the certificated employees who are under the teachers' retirement system. b. States have the option of covering or b. No change. excluding employees in any class of elective position, part-time position, fee-basis position, or performing emergency services. c. Excludes the services of the followirg c. No change exoept: persons, specifying that they cannot be included in a State agreement and cannot, therefore, be covered: (1) employees on work relief projects; (2) patients and inmates of institutions who are employed by such institutions; 82841—48—--—-.2 6

. COVERAGE—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 8öth Cong Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

B. Employees—Continued And exc?udes—-- Coi tinued 4. State and local gov- (3) exeept in crtain specified States, (3)See a—(2) for exception for certain ernment employees—Con. polleemen atd firernei having their own additional specified States. retirement syst*m; ud (4) servics of t1 typeswhieh voud be excliuhd by the general coverago pro— ViSIOflM of the law if they were performed for a private rnp1oyr, xcept tiat agri— tultural and i:iidnt s(rvicEs in this cate gory may b ovred tt tie optiu of the State. d. An agreemnl or modificatkli of an d. AUows an effective date as early as agreemelLtetw('n the State uid ±e Fed- Jan. 1, 1956, for agreements in 1958 and eral Covrirnii$ 1ia11 be effective, as to 1959 [Public Law 85—226]. covrage on a dattspecifiedintieagree- meitt,xcpt thatiithe t!a* of agrcerneits or rnodifleathm u4reed to— (1)prier to 1954, uct datemay not be ear1ur thn Jan. 1,19.51; (2)inI9S1S, 195i, orin1957such date mayrnt b ar1ieithati Jan.1,1955;and (3)during i9t4orafter 1957, such date may 2rnt be ar1kr than the 1st day of the year in whhh the agreement is executed. Retroactive coverage i only avaif able for PermitsStatestoprovideretroactive employees who are still employees on the coverage, within the general time limits datethe agreementormodificationis applicable,forindividuals who are em- approved by the Ftderal Government. ployees on any date specified by a State which is (1) not earlier than the date the State submits its agreement or modification to the Federal Government and (2) not later than the date the agreement is approved by the Federal Government.If an individual is in the employ of the State or local government on the date specified by the State he would be covered for whatever retroactive period is provided for the group of which he is a member, even though his employment is terminated before the agreement is executed. e. Covragc on a compulsory basis is No change. provided for employeos of certain 1)uhlicly owned transportation systtnis as shown below: (1) A transpwtatioi system that cquircd a privati ytm priw to 1051.—-1k1J employees of a trLwsportation systern owned by a State or Iau1 unit of govenxnent, any ptrt of which IM acquired frompri- vate company after1936 and before1951, are covercd by oId-gr and survivors insurance unlts3 the emp1oyec are x)vered 7

I.COVERAGE—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (PubUc Law 85—840.effective Aug. 28, 1958, except a noted)

B. Employees—Continued Coverage—Continued 4. State and local gov- as of Dec. 31, 1950, by a general retire- ernment employees—Con. ment system (applicable on a citywide or statewide basis) under which the benefits are protected from diminution or impairment by express provision of the State constitution.If the transportation system owned by a State or local unit of government has a retirement system applicable to its employees and acquires a private transportation system after 1950, the employees taken over with such acquisition are covered by old-age and survivors insurance if the employer has provided for integration of the general retirement system with old-age and survivors insurance. (2) A tran8poriation 8y8tem no part of which wa acquired from a private company prior to 1951.—As to a transportation system owned by a State or local unit of government, no part of which was acquired from a private company after 1936 ad before 1951, but which acquires a private transportation company after 1950, the employees taken over with the acquisition are covered by old-age and survivors insurance unless they are covered by a general retirement system which does not provide for integration with old-age and survivors insurance. (3) A tTan8portation 8y8tem beginning operation after December 1950.—If a State or local unit of government does not operate a transportation System on Dec. 31, 1950, but acquires a system after such date, all employees of the transportation system are covered by old-age and survivors insurance unless at the time the first part of the transportation system is acquired from private owner- ship the State or local unit of government has a general retirement system that covers the employees of the transportation system. 8

I.COVERAGE—Continued

UnderSocial Security Act amendments in 85th Item Under Social Security Act prior to 8!th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

B. Employees—Continued 5. Employees of non-Covers employees of religious, charitable, edu-No change, but employees of nonprofit organ profit organizations. cational, and other iionprofit organizations izations who are in positions covered by (which are exempt from income tax andare State and local retirement systemB and are described in sec. 501 (c) (3) of the internal members or eligible to become members of Revenue Code) on a voluntary busi if— such systems must be treated apart from a. theemployerorganizationcertifies those not in such positions.Certificates that it desires to extend coverage t its em- must be filed separately for each group and ployees, and, two-thirds of the employees in each group b. at least of the organization's em- must concur in the filing of its certificate. ployees concur in the filing of a waiver cer- All new employees who belong to a group tificate.Employees who do not concur in for which a certificate has been filed are the filing of the certificate are not covered automatically covered, and new employees except thatall employees hired after a who belong to a group for which a certificate certificate becomes effective are covered. has not been filed are not covered. Waiver certificate may b made effective Provides for retroactive coverage, if it is at the option of th orgamzation on the 1st desired, so that if the certificate is filed prior day of the qutrter in which the certificate is to 1900, coverage may be effective with the filedor the Jt day of the succeeding 1st day of any quarter preceding th quarter quarter. the certificate is filed but not earlier than Jan. 1, 1956.If the certificate is filed after 1959, provides that organizations may make coverage effective with the 1st day of any of the 4 quarters preceding the quarter such certificate is filed.Organization which filed a certificate after 1955 and prior to enact.- ment may request retroactive coverage to Jan. 1, 1956, for employees who concurred in the filing of the certificate and in the request for retroactive coverage. Allows employees who do not concur in Provides, as a conforming amendment to initit1 coverage certificate of a nonprofit provisions for retroactive coverage, that the orgaiiizttion to be covered by supp1mental list of concurring employees may be amended lists filed within 2 years of the 1st qutrter within 24 months after the quarter in which in which the rtificate is in effect, or any the certificate is filed. time prior to Jan. 1, 1959, whichever is the later. An individual employed, after 1050 and No change, except (1) eliminates require- before entctmvit date of the 195G Social ment that the organization must have failed Security Amndment (Aug. 1, 1956), by a Lo fileprior to enactment date of 1956 nonprofit organization which failed to file, amendments (Aug. 1, 1956) and substitutes prior to the eltactinent date of the 1956 requirement that the waiver certificate must amendments, a valid waiver certificate but nt have been in effect for the entire period believed that it had done so, can get credit that the individual was so employed, and (2) for his employment by filing a request 1)rOvid(S alternative reason for an organiza- with Internal Revenue if at least part of tion's failure to file so that lack of knowledge his taxes were paid and iot refunded prior that a waiver certificate was necessary would to enactment date. also be a qualifying condition.Effective Aug. 27, 1958 [Public Law 85—785]. 6. Federal employees.. --Excludes employees of the inited Stat or its No change. instrumentalities if— a. they are covered by a retiremeiit system established by Federal law; or 9

I.COVERAGE—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

B. Employees—Continued &cludes—Continued 6. Federal employees— b. they perform services— Continued (1) as the President, Vice President, or a Member of Congress; (2) in the legislative branch; (3) in a penal institution as an inmate; (4) as certain internes, student nurses, and other student employees of Federal hospitals; (5) as employees on a temporary basis in disaster situations; (6) as employees not covered by the CivilService Retirement Act because they are subject to another retirement system (other than the retirement system of the Tennessee Valley Authority). c. the instrumentality has been specifically exempted by statute from the employer tax; or d. the instrumentality was exempt from the employer tax on Dec. 31, 1950, and its employees are covered by its retirement system. Covers the following Federal employees ex- No change. cepted from the exclusion in 6—d unless they are excluded on the basis of one of the other provisions: a. employees of a corporation which is wholly owned by the United States; b. employees of a national farm loan association, a production credit association, a Federal Reserve bank, or a Federal credit union; c. employees (not compensated by funds appropriated by Congress) of the post ex- changes of the various armed services (including the Coast Guard) and other similar organizations at military installations; d. employees of a State, county, or community committee under the Production and Marketing Administration. 7.Students,internes,&cludes: and nurses in schools and a. students in the employ of a school,Nochange. and hospitals, college, or university if enrolled and regularly attending classes. b. student nurses employed by a hospital or nurses training school if enrolled and regularly attending cla$ses. c. Internes in the employ of a hospital if they have completed a 4-year course in an approved medical school.(Students may be covered as employees of State or local governments at option of the State under State agreements.See 4 c (4), p. 6.) 10

I.COVERAGE—Continued

UnderSocial Security Act amendments in 85th Item Under Social Security Act prior to 851;h Cong. Cong.(Public Law 85—840 effective Aug. 28,. 1958,except as noted)

B. Employees—Continued 8. Newsboys Covers individuals18 and over who deilver andNo change. distribute newspapers or shopping news, but covers individuals under18only if they deliver or distribute such publications to points for subsequent delivery or distribution. 9. Members of theCovers members of the uniformed Hervices,No change. Armed Forces. after December 1956, while on active duty (including active duty for training), with contributions and benefits computed on basic military pay. Noiicoiitributory wage credits of $160 per Extends the noncontributory wage credits month are granted, in general, for each to certain American citizens who, prior to month of active service in the Armed Forces Dec. 9, 1941, entered the active military or of the United States during the World War naval service of countries that, on Sept. 16, II period (Sept. 16, 1940—July 24, 1947) and 1940, were at war with a country with which during the postwar emergency period (July the United States was at war during World 25, 1947-Dec. 31, 1056). War II.Wage credits of $160 would be provided for each month of such service performed after Sept. 15, 1940, and before July 25, 1947.To qualify for such wage credits, an individual must either have been a United States citizen throughout the period of his active service or have lost his United States citizenship solely because of his entrance into such active service.He must have resided in the United States for at least 4 years during the 5-year period ending on the day of his entrance into such active service and must have been domiciled in the United States on such day. 10. Railroad employees..Under coordination provisions contained inAmendments made to the Railroad Retire- the Railroad Retirement Act: (1) employ- mnent Act to preserve the present relation- ment under both the railroad system and ship between the 2 programs; otherwise no the old-age and survivors insurance system change. is counted for purposes of survivor benefits under either system; (2) railroid employment of workers with less than 10 years of railroad service is credited under the Social Security Act andthebenefits based on such employment are payable under this act; and (3) provision is made for mutual reimbursement between the 2 systems in order to place the old-age and survivors insurance trust fund in the same position in which it would have been if railroad service after 1936 had been counted as social-security employment. 11. Family employmenLExcludes persons in the employ of a son,No change. daughter, or spouse; or child under 21, if in the employ of a parent. 11

I.COVERAGE—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except a noted)

B. Employees—Continued 12. Employees of Com-Exclude8 from coverage employees of any or-No change. munist organizations. ganization which is registered, or against which there is a final order of the Sub- versive Activities Control Board to register, under theInternalSecurity Actasa Communist-action, a Communist-front, or Communist-infiltrated organization. C. Geographical scope Excludes the following from coverage within No change. the United States (which includes Alaska, Hawaii,PuertoRico,andtheVirgin Islands): a. Nonresident aliens engaged inself- employment. b. Employees offoreign governments and their instrumentalities. c. Employees of international organiza. tions entitled to certain privileges under the InternationalOrganizationsImmunities Act. d. Employees on foreign registered aircraft or ships who also perform services while the plane or ship is outside of the United States, if the employee is not a citizen of the United States or the employer is not an American employer. Coverage out8ide of the United State8 28limited to- a. American citizens either self-employed or employed by an American employer, except ministers outside the United States if they serve a congregation predominantly made up of United States citizens even though their employer may not be a United States employer. b. Citizens of the United States employed by certain foreign subsidiaries of American corporations are covered by voluntary agreements between the Federal Government and the parent American company.The domestic corporation can include some or all of its foreign subsidiaries in the agreement and must agree to pay the equivalent of both employer and employee taxes on behalf of the subsidiaries included. c. Individuals, regardless of citizenship, who are employed on American registered ships and aircraft if either the contract of service was entered into in the United States or the plane or vessel touches a port in the United States. 12

II.PROVISIONS RELATING TO PERMANENT AND TOTAL DISABILITY

Under Social Security Act amendmenth in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

A. Disability "freeze": 1. Nature of provision -Provides that when an individual for whom aNo change. period of disability has been established dies or retires on account of age or disability his period of disability will be disregarded in determining his eligibffity for benefits and his average monthly wage for benefit computation purposes. 2.Eligibility requirements. a. Definition a. An individual must be precluded from a. No change. engaging in any substantial gainful activity by rea8on of a physical or mental impairment.The impairment must be medically determinable and one which can be expected to be of long-continued and indefinite duration or to result in death.An individual is disabled, within the meaning of the law, if he is blind, as that term is defined. b. Work require- b. To beeligibleforthedisability b. Adds requirement that an individual ment. "freeze," an individual must—- must be "fully insured". (1) Have acquired at least 20 quarters (1) No change. of coverage out of the last 40 quarters ending with the quarter in which the period of disability begins; (2) Have acquired 6 quarters of cover- (2)Deletes this requirement.Effective age out of the last 13 calendar quarters with respect to applications filed after Aug. ending with the quarter in which the 27,1958, and to applicationsfiledafter period of disability begins; and 1957 and before Aug. 28, 1958, provided individualisliving on such date and a notice of determination has not been sent to the claimant as of Aug. 28, 1958.In- creased benefits to old-age insurance beneficiaries who become eligible for the freeze because of the changed requirements become payable for months after August1958. Effective to establis1 a period of disability as early as date on which individual meets new work requirements. o. Period of disa- A period of disability cannot be estab- No change. bility. lished unless it has lasted 6 full calendar months. No period can be established unless an Change makes clear that the disabled per- individual is alive and under a disability at son must file an application while under the the time of application. disability with respect to which he seeks to secure a "disability freeze." A period can be established as early as Extends to July 1961 the deadline for fil- the actual onset of the disablement in re- ing fully retroactive disability freeze applica- spect to "freeze" applications filed before tions.(The July 1957 deadline had been July 1957. extended to July 1958 by Public Law 85— 109.) II. PROVISIONS RELATING TO PERMANENT AND TOTAL DISABILITY—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except 98noted)

A. Disability"freeze"—Con.Provides—Continued 2. Eligibility require- As to applications filed after this filing Where application fordisability freeze ments—Continued cutoff date, the period may be established is filed after June 1961 the period of disa- as beginning no earlier than 12 months bility cannot be determined to have begun prior to date of filing. more than 18 months before the application is filed. 3. Disabilitydetermi-In administering the disability "freeze"— nations. a. the Secretary enters into contractualNo change. agreements under which State vocational rehabilitation agencies, or other appropriate Stateagencies, make determinationsof disability. b. the Secretary is authorized to make determinations of disability for individuals who are not covered by State agreements. c. the Secretary may, on his own motion, review a State agency determination that a disability exists and may, as a result of such review, find that no disability exists or that the disability began later than determined by the State agency. d. Any individual who is dissatisfied with a determination, whether made by a State agency or by the Secretary, has the right to a hearing and to judicial review as provided in the law. 4. Administrativeex- Appropriations are authorized from the Old- No change. penses. Age and Survivors Insurance Trust Fund to reimburse State agencies for neáessary costs incurred in making disability determinations for disability "freeze" purposes. 5. Rehabilitation The policy of Congress is stated that disabled No change. persons applying for a determination of disability be promptly referred to State vocational rehabilitation agencies for necessary rehabilitation services. A disabled person who is receiving rehabilitation services and returns to work shall not, for at least 1 year after his work first started, be regarded as able to engage in substantial gainful activity solely by reason of such work. B. Cash disability benefits-- - 1.Benefit categories___- a.Worker Provides an insurance benefit(for monthsNo change. beginning July 1957) for disabled workers between ages of 50 and 65 meeting eligibility requirements.Benefits are computed in the same way as retirement benefits and are payable from the Federal Disability Insurance Trust Fund. 32841—8---—-8 14

II.PROVISIONS RELATINGTO PERMANENT AND TOTAL DISABILITY—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

B. Ca8h disability benefits— Continued 1. Benefit categories— Continued a. Workers—Con. Provides—Continued No provision for retroactive benefit pay- Disability benefits may be paid for as ments when applicatioxi is filed after 1957. many as twelve months before the month of Benefits are retroactive to July 1957 when application (as are old-age benefits) provided application filed before 1958. individual is otherwise eligible to benefits for such months.Effective as to applications filed after December 1957. b. Dependents No benefits payable to dependents of dis-Provides that the wife, dependent husband, or abled workers. child of an individual entitled to disability insurance benefits will be entitled to monthly benefits on the same basis as similar dependents of a ref ired worker.Benefits are payable from Disability Insurance Trust Fund. Dependents benefits payablefor months beginning with September 1958 for those months the disability insurance beneficiary is eligible to receive benefits.Effective with respect to applications filed on or after Aug. 28, 1958. 2. Eligibilityrequire- ments. a. Definition a. An individual must be precluded from a. No change. engaging in any substantial gainful activity by reason of a physical or mental impairment.The impairment must be medically determinable and one which can be expected to be of long-continued and indefinite duration or to result in death. b. Waiting period.. - b. A 6 months' "waiting period" is re- b. No change ofher than a conforming quired before disability insurance benefits amendment to take care of provision for 12 can begin.No "waiting period" can begin months retroactive benefits. before Jan. 1, 1957, nor more than 0 months before age 50.Applicant must be alive and still disabled at time application is filed, o.Work require- c. To be eligible for disability benefits, c. No change except— ment. an individual must— (1) Have acquired at least 20 quarters of coverage out of the last 40 quarters ending with the quarter in wthcb the period of disability begins; (2) be currently insured; (2) deletes requirement that applicant must be currently insured. (3) be fully insurecL Effective with respect to applications filed after Aug. 27, 1958, and to application8 filed after 1957 and before Aug. 28, 1958, pro- ided individual is living on such date and a notice of determination has not been sent to the claimant as of Aug. 28, 1958.Benefits to persons newly eligible for disability insurance on the basis of the changed requirements become payable for months after 15

fl.PROVISIONS RELATING TO PERMANENT AND TOTAL DISABILITY—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

B. Cash disability benefits— Continued 2. Eligibility require- menth—Continued c. Work requirement—Continued (3) be fully insured—Continued Effective—Continued August 1958.Effectivedate: Disability benefits payable solely on basis of changed work requirement8 may be paid beginning September 1958. d. Age d. Individual must be age 50 to 65. d. No change. 3. Disability determina-In administration of disability benefits usesNo change. tions. the same administrative structure for disability determinations as that established for disability "freeze." (II—A—3) 4. Administrativeex-Appropriations are authorized from the Fed- No change. penses. eral Disability Insurance Trust Fund to reimburseStateagenciesfornecessary costs incurred in making disability determinations for benefit purposes. 5. Adjustmentofdu-Disability insurance benefit reduced by theRepeals provision with respect to benefits pay- plicatebenefits—offset amount of any benefit payable— able for months after July 1958.[Reduction provision. a, by any agency of the United States of benefit for service-connected VA compen- (including wholly-owned instrumentalities) sation eliminated by Public Law 85—109 with under another Federal law or under a sys- respect to benefits payable for months after tem established by such an agency where June 1957.] the payment is based in whole or in part on a physical or mental impairment; or b.underaworkmen'scompensation law or plan of a State on account of physical or mental impairment. 6. Rehabilitation The policy of Congress is stated that disabledNo change, but dependents of a disabled worker persons applying for a determination of dis- receiving benefits on account of the worker's ability be promptly referred to State voca- disability will also suffer deductions if disabled tional rehabilitation agencies for necessary worker refuses, without good cause, to accept rehabilitation services.Act provides for de- rehabilitation. duction of benefits for refusal, without good cause, to accept rehabilitation services available under a State plan approved under the VocationalRehabilitationActinsuch amounts as the Secretary shall determine. A mén*er or adherent of a recognized churh-o religious sect that relies on spirit- ual healing who refuses rehabilitation services is deemed to have done so with good cause. A disabled person who is receiving rehabilitation services and returns to work shall not, for at least 1 year after his work first started, be regarded as able to engage in substantial gainful activity solely by reason of such work. 7. Suspension of bene-If the Secretary believes that the disability noNo change, but dependents receiving benefits fits based on disability. longer exists, he may suspend benefits pend- on account of the worker's disability will ing his disability determination or that of also have benefits suspended. the appropriate State agency. 16

0.PROVISIONS RELATING TO PERMANENT AND TOTAL DISABILITY—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

C. Disabled children Pays benefits (from Federal Old-Age and Sur-Makes support requirement for disabled chil- 1. Benefits. vivors Insurance Trust Fund) to dependent dren over age 18 the same as for children disabled child of a deceased or retired in- under age 18.Effective with respect to sured worker if the child is permanently benefits for months beginning September and totally disabled and has been so dis- 1958 upon application filed after August 27, abled since before he reached age 18. 1958. If the disabled child was not entitled to child's benefits before he reached age 18, it will be necessary to show that the child was receiving at least half his support from the worker at the time the child applied for benefits or when the worker died. 2. Disabilitydeterini-Uses same definition of disability a is usedNo change. nations. for covered workers (B—2—a and same structure for disability determinations (B 3). 3. Administrativeex-Appropriations are authorized from the Fed- No change. pnses. eral Old-Age and Survivors Insurance Trust Fund to reimburse State agencies for necessary costs incurred in making children's disability determination. 4. Adjustment of dupli-Reducesdisabledchild'&benefitby theRepeals provision with respecttobenefits cate benefits—offset pro- amount of the benefit payable— payable for months after July 1958.[Re- vision. a. by any agency of the United States duction of benefit for service-connected VA (including wholly owned instrumentali- compensation eliminated for months after ties) under another Federal law or under June 1957.Public Law 85—109.] a system established by such an agency where the payment is based in whole or in part on a physical or mental impairment; or b. under a workmen's compensation law or plan of a State on account of physical or mental impairment. Also reduces mother's or wife's benefit deriving from such child's benefit where the other Federal or State disability payment exceeds the child's benefit.However, if such a wife or mother is entitled to her benefit because of another child in her care, the reduction will not take place. 5. Rehabilitation Same as for covered worker (B 6 p. 15) No change. 6. Suspension of bene-Same as for covered worker (B 7, p. 15) No change. fits based on disability. 17

ilLBENEFIT CATEGORIES

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

A. Workers and their dependents: 1. Worker—old age Payable at age 65 to fully insured retired male No change. worker.Payable at age 62 to fully insured retired female worker, but on an actuarially reduced basis.Her benefit is reduced by 5/9th of 1 percent for each month she is eatitled to receive a benefit before age 65— the total reduction is 20 percent if she begins drawing at age 62.The reduced amount is permanent, continuing after she reaches age 65. A woman who is entitled to an old-age insurance benefit prior to 65 and is eligible for a wife's benefit at the same time will be deemed to have filed application for both benefits.The appropriate reduction factor would be applied to each benefit separately, and the reduced benefits would be adjusted against each other so that, in effect, the larger of the 2 benefits would be paid.In the case where a woman is entitled to a reduced old age insurance benefit and subsequently becomes entitledtoawife's benefit, the latter benefit would be reduced to take into account the fact that benefits were already drawn at an earlier age. No reduction in benefits for dependents and survivors of women workers who elect reduced benefits. 2. Wife When a worker receives old-age insuranceA wife of worker receiving disability benefits benefits, wife's insurance benefits are pay- would be entitled to wife's benefits if other- able upon filing application if the wife (as wise eligible.Effective for September 1958 defined below) of the retired worker— and thereafter upon application filed after 1958. a. has reached age 62 or, if under 62, a. No change. has in her care (individually or jointly with her husband) at the time of filing the application, a child entitled to a child's insurance benefit on the basis of the wages and self-employment income of her husband; b. is not entitled to an old-age insur- b. Broadened so that no benefit would be ance benefit based on her own earnings payable if wife was entitled to a disability equal to or greater than the amount she benefit equal to or greater than her wife's would be entitled to as the wife of the benefit.Effective for September 1958 and worker; and thereafter. c. has been living with the husband at c. Deletes requirement that wife must be time the application s filed. living with husband at time application ified. Effective for September 1957 and thereafter LPublic Law 85—238). 18

III.BENEFIT CATEGORIES—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except aa noted)

A. Workers and their depend-When—Continued ents—Continued Full benefits paid to the wife at age 65, No change. 2. Wife—Continued but on an actuarially reduce'1 basis if she claims at age 62. Her benefit is reduced by 2%oof1 percent for each month she is entitled to receive a benefit before age 65— the total reduction is 25 percent if she begins drawing at age 62.The reduced amount is permanent, continuing after she reaches age 65. A woman who is entitled to a wife's benefit prior to 65 and is eligible for an old-age insurance benefit at the same time will be deemed to have filed application for both benefits.The appropriate reduction factor would be applied to each benefit separately, and the reduced benefits would be adjusted against each other so that, in effect, the larger of the 2 benefits would be paid.In the case where a woman is entitled to a reduced wife's benefit and subsequently becomes entitled to her own old-age insurance benefit, the latter benefit would be reduced to take into account the fact that benefits were already drawn at an earlier age. A woman who has a child in her care entitled to a child's insurance benefit will continue to receive an unreduced wife's benefit. Termination of benefits No benefits paid for the month (or sub-No change, other than to provide for termina- sequent months) that the wife dies, her tion of benefits if her husband is no longer husband dies, they are divorced a vinculo entitled to a disability benefit and has not matrimonii (an absolute divorce), no child attained retirement age.Effective for Sep- of her husband is entitled to a child's bene- tember 1958 and thereafter upon applica- fit and the wife has not attained retirement tion filed after Aug. 27, 1958. age, or the wife becomes entitled to an old- age insurance benefit which is as much as her wife's benefit. Definüion of a wife Means the wife of the individual but only. ifProvides a 3d alternative qualifying condition she (1) is the mother of his son or daughter, so that a wife of a worker will meet the or (2) wa married to him not less than 3 definitionif,in the month prior to the years immediately preceding application. month of her marriage, she was actually or potentially entitled to widow's, parent's, or disabled child's benefit.Effective for Sep- tember 1958 and thereafter upon application filed after Aug. 27, 1958. 19

lB.BENEFIT CATEGORIES—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

A. Workers and their dependent$—Continued 3. Dependent husbancL..When a woman worker receives old-age insur-The dependent husband of a woman worker ance benefits and in addition is currently receiving disability benefits would receive a insured, husband's insurance benefits are benefit if otherwise entitled.Woman worker payable uponfilingapplicationifthe would not have to be currently insured if husband— her husband, in the month prior to their marriage, was actually or potentially entitled to a widower's, parent's, or disabled child's benefit.Effective for month of September 1958 upon application filed after Aug. 27, 1958. a. has reached age 65; a. No change. b. was receiving at leastof his support b. Husband's of support requirement from his wife at the time she became entitled upon wife who had a period of disability in to old-age insurance benefits and filed proof effect at the time she became entitled to of such support within 2 years after she old-age or disability insurance benefits could became so entitled (an additional period of be met either at the time of her entitlement 2 years is authorized if there was failure to or at the time of the beginning of her period file for good cause); of disability.Proof of such support must be filed within 2 years of either the time the wife (1) applied for the period of disability or (2) became entitled to benefits, whichever was applicable.For the husband who would not be entitled to benefits except for the enactment of this provision proof of support can be filed by September 1960. The support requirement would not be applicable in the case of a husband who was actually or potentially entitled to a widower's, parent's, or disabled child's benefit for the month prior to the month that he married his wife. Effective for September 1958, upon application -after Aug. 27, 1958. c. is not entitled to an old-age insurance c. Broadened so that no benefit would be benefit based on his own earnings equal to payable if hu3band was entitled to a disa- or greater than the amount he would be bility benefit equal to his husband's benefit; entitled to as the dependent husband of the worker; and d. has been living with the wife at the d. Deletes requirement that husband must time the application is filed. be living with wife at time that application isfiled. EffectiveforSeptember1957 [Public Law 85—238]. Termination of benefits No benefits paid for the month (or sub-No change, other than to provide for the termi- sequent months) that either the husband nation of benefit if his wife is no longer dies,his wife dies, they are divorced a entitled to a disability benefit and she has vinculo matrimonii (an absolute divorce), not attained retirement age.Effective for or he becomes entitled to an old-age or September 1958. disabilityinsurance benefit which isas much as his husband's benefit. 20

IlL BENEFITCATEGORIES—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

A. Workers and their dependents—Continued 3. Dependent husband— Continued

Definilion of hu8band Means the husband of an individual but onlyProvides a 3d alternative qualifying condition if he (1) is the father of her son or daughter, so that the husband of a worker will meet or (2) was married to her not less than 3 the definition if, in the month prior to the years immediately preceding the date he month of his marriage, he was actually or applied for benefits. potentially entitled to a widower's, parent's, or disabled child's benefit.Effective for September 1958 upon application filed after Aug. 27, 1958. 4. Child When a worker receives old-age insurance Children of workers receiving disability bene- benefits, child's insurance benefits are pay- fits will receive benefits if otherwise entitled. able to the child of the worker (including a Effective September 1958 on applications stepchild or adopted child as defined below) filed after Aug. 27 1958. upon filing application if— a. the childis unmarried and either a. No change. under 18 or is under a permanent and total disability which began before he attained the age of 18; and b. the child is dependent (as defined on b. If the worker had in effect a period of p. 21) on the retired worker at time of appli- disability at the time he became entitled to cation. old-age or disability insurance benefits, the dependency of the child could be determined either at the beginning of the period of disability or when the worker became entitled to benefits.Effective for September 1958 upon application filed after Aug. 27, 1958.

Termination of benefits No benefits paid for the month (and sub-Provides for termination ofchild'sbenefit sequent months) that the child either dies, when worker is no loiger entitled to a disa- marries, is adopted, attains the age of 18 bility benefit and has not attained retire- unless disabled, and, if over 18 and dis- ment age.Effective for September 1958. abled, the disability ceases. Makes an exception to the termination provision in the ca2e of a disabled child 18 and over who marries an individual entitled to old-age, disability, widow's, widower's, disabled child's, mother's, or parent's benefit.However, in the ca8e of the marriage of a woman entitled to disabled child's benefits to a man entitled to disability insurance benefits or disabled child's benefits, her benefit will end when her spouse is no longer entitled to his benefits unless he dies or, in case he was entitled to disability benefits, he becomes entitled to an old-age insurance benefit.Effective for September 1958 upon application after Aug. 27, 1958, for benefits which have already been terminated. 21

ilLBENEFIT CATEGORIES—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

A. Workers and their depend- enta—Continued 4. Child—ContInued

Definition of child The term "child" includessstepchild orEliminates the 3-year requirement for a legally adopted child who has been such for at adoptedchild.EffectiveforSeptember least 3 years immediately preceding the 1958 upon application filed after Aug. 27, day on which the application for child ben- 1958. efits is filed (if a stepchild of the worker is later adopted by the worker, the child is considered to be an adopted child during the period the stepchild relationship existed). Definitionof dependencyon father, adopting father, 8tep.. father,mother,ado pUng mother, and 8tepmot her A child (under 18) is considered dependentEliminates age distinction so that dependency upon the father if the father is living with or requirements are applicable to children under contributing to the support of the child. 18 and disabled children 18 and over on the However, even if the father is not living same basis.Effective for September 1958 with the child or contributing to his sup- upon application filed after Aug. 27, 1958. port, the child, if legitimate, is considered dependent upon the father unless the child— a. Has been adopted by some other individual, or b. Is living with and receiving more than of his support from his stepfather. An adopted child (under 18)is consideredSame as above. dependent upon his adopting father under the same conditions as those which apply to a father an'd his natural child. A child (under 18) is considered dependentSame as above. upon his stepfather at the time of filing application for child benefits if the child was— a. living with his stepfather; or b. receiving at least 4. his support from his stepfather. A child (under 18) is considered dependentSame aa above. upon his natural mother or adopting mother at the time of filing application for child benefits if such mother was currenUy in- 8Ured when she became entitled to old-age benefits regardless of presence of or support furnished the child by the father. Also a child (under 18) is considered depend-Same as above. ent upon his nagural, adopting or 8tepmother at the time of filing application for child benefits if she was living with the child or contributing to the support of the child and provided the child was— (1) neither living with, nor receiving contributions from, his father or adopting father, or (2) receiving at least of his support from her. 82341—58————4 22

m.BENEFIT CATEGORIES—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

A. Workers and their dependents—Continued 4. Child—Continued

Definition of dependency-—Con.A child (who has attained 18) and is under aSpecial test for disabled children 18 and over permanent and total disability which began eliminated. before 18 will be deemed dependent upon his natural or adopting father, his natural or adopting mcther, his stepfather, or his stepmother for a child's benefit if—-- a, he was entitled to a child's benefit before 18 on the wage record of such parent, or b. he was receiving at least of his support from the parent at the time of application for child's benefits. B. Survivors of deceased workers: 1. Surviving widow.. .._.. Widow's insurance benefits are payable, uponNo change. filing application (no application required if widow was receiving a mother's insurance benefit when she becomes eligible for widow's benefit) at age 62 if the deceased worker was fully insured at the time of his death and the widow (as defined below)— a. has not remarried; (marriage deemed a. No change but exception revised (mar.. to have not occurred if new husband died riage deemed not to have occurred if new before she is his widow as defined.) hu8band dies within 1 year of marriage and he was not fully insured).Effective for September 1958 upon application filed after Aug. 27, 1958. b. is not entitled to an old-age insurance b. No change. benefit based on her own earnings equal to or greater than the amount she would be entitled to as the widow of the deceased worker; and c. was living with the husband at the o. Deletes requirement that widow has to time of his death.Widow is deemed to be living with husband at time of death. have been living with her husband at the EffectiveSeptember1957[PublicLaw time of his death if they were both mem- 85—238]. bers of the same household on the date of his death, or she was receiving regular contributions from him toward her support on such date, or he had been ordered by a court to contribute to 1er support. 23

III.BENEFIT CATEGORIES—Contjnued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

B. Survivors of deceased workers—Continued 1. Survivingwidow— Continued Termination of benefits— Provides that a widow'8 benefit shall not be No further benefits paid for the month terminated because of remarriageifthe (and subsequent months)in which the marriage is to a person entitled to widower's, widow remarries, dies or becomes entitled parent's, or disabled child's benefits.How- to an old-age insurance benefit in her own ever, in case of her remarriage to an indi- right which equals the amount ofher vidual entitled to a disabled child's benefit widow's benefit. her widow's benefit would be terminated if his entitlement ceases(unless by death). Effective for September 1958, upon application filed alter Aug. 28, 1958, for benefits which have been terminated. Allows reinstatement of widow's benefit Amends provision so as to allow such a in the situation where the widow remarries reinstatement in the situation where the but the new husband dies before she is able new husband dies within 1 year after the to meet the definition of a widow. marriage and wa not fully insured.Con- forming amendment with (f) below, relating to definition of widow.Effective for Sep- tember 1958 upon application after Aug. 27, 1958. Widow defined The term "widow" means the surviving wifeAdds 2 other alternative conditions as a basis of a deceased worker, but only if she meets for meeting definitions. one of the following conditions: a. was married to him for not less than 1 a. No change. year immediately prior to the day on which he died; or b. is the mother of his son or daughter; or b. No change. c. legally adopted his son or daughter c. No change. while married to him and while such son or daughter wa under age 18; or d. was married to him at the time both of d. No change. them legally adopted a child under the age of 18. e. her husband legally adopted her son or daughter while married to her and while such son or daughter wa under the age of 18; or f. in the month before her marriage, she wa actuallyorpotentiallyentitledto widow'8, parent'8, or disabled child'a insurance benefit. Effective for September 1958 upon application after Aug. 27, 1958. 2. Surviving widowMother'a insurance benefits are payable, upon No change. withchildren(mother'a filing application (no application required benefit). if mother wa receiving a wife's insurance benefit when 8he becomes eligible for a mother's benefit), to the widow of a deceased worker if he wa currently or fully insured at time of death and the widow— a. ha in her care a child of the deceased a. No change. worker entitled to child insurance benefits; 24

ill.BENEFIT CATEGORIES—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

B. Survivors of deceaaed workers—Continued 2. Surviving widow with children(mother's benefit)—Continued b. has not remarried; b. Makes an exception as to the no- remarriage requirement where the widow marries another individual who dies but she cannotreceivebenefitsonhisearnings record.Benefits under this provision would not be paid earlier than the month before the month that the new husband dies, the 12th month before the widow files application on the basis of this provision, or September 1958, whichever is the latest. c. is not entitled to a widow's insurance c. No change. benefit; d. is not entitled to an old-age insurance d. No change. benefit based on her own earnings equal to or greater than the amount she would be entitled to as the widow with children of the deceased worker; and e. was living with the husband at the e. Deletes requirement that widow has to time of his death.Widow is deemed to be living with husband at time of his death. have been living with her husband at the Effective September 1957 [Public Law 85— time of his death if they were both mem- 238]. bers of the same household on the date of his death, or she was receiving regular contributions from him toward her support on such date, or he had been ordered by a court to contribute to her support. Termination of benefits No further benefits paid to the widowMakes an exception as to the termination pro- for the month (and subsequent months) vision where the widow marries another that there is no child of the deceased hus- individual and then that individual dies but band entitled to a child's benefit, the widow she cannot become entitled to benefits on is entitled to an old-age insurance benefit his earnings.Benefits under this section which is as much as her mother's benefit, would not be payable earlier than the month sheisentitled to widow's benefits,she in which the husband dies, the 12th month remarries, or she dies. before the month in which an application is filed to reinstate the earlier benefits, or September 1958, whichever is the latest. Also provides for the reinstatement or continuation of benefits upon the widow's marriage to a man entitled to an old-age, disability, widower's, parent's or disabled child's benefit.However, if she marries a man entitled to disability benefits or a disabled child's benefits her benefit will terminate when he ceases to be entitled to his benefits unless he dies or, in ca8e he wa8 entitled to disability benefits, he becomes entitled to an old-age insuranoe benefit. Effeotive for September 1958 upon applioa- tion filed after Aug. 28, 1958, for benefits which have already been terminated. 25

III.BENEFIT CATEGORIES—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

B. Survivors of deoeaaed workers—Continued 3. SurvivingformerMother's insurance benefies are payable, uponNo change. wifedivorced(mother's filing application, to the former wife di- benefit). vorced (as defined below) of a deceased worker if he wa currently or fully in8ured at time of death and the former wife divorced— a. has in her care a child of the deceased a. No change. worker who is her son, daughter, or legally adopted child entitled to child insurance benefits payable on the basis of the deceased worker's wages or self-employment income; b. was receiving from the deceased worker b. Provides alternative time that support (pursuant to agreement or court order) at requirement can be met where a deceased least 34ofher support at the time of his husband has a period of disability at his death; death—either at the beginning of the period ofdisabilityor at death.Effectivefor September 1958 upon application filed after Aug. 27, 1958. c. has not remarried; c. Makes an exception to the remarriage requirement in the same manner as for the surviving widow with children(see2.b. above). d. is not entitled to a widow's insurance d. No chnge. benefit; and e. is not entitled to an old-age insurance e. No change. benefit based on her own earnings equal to or greater than the amount she would be entitled to as the former wife divorced of the deceased worker. Terminafton of benefit: No further benefits raid t the survivingSame exceptions to termination for remarriage wife divorced for the month (or subsequent provisions as are applicable to surviving months) that there is no child of the de- widow with children (see 2 above). ceased husband entitled to a child's benefit, the surviving wife divorced is entitled to an old-age insurance benefit which is as much as her mother's benefit, she is entitled to a widow's benefit, she remarries, or she dies.Benefits will also terminate for a survivingwifedivorced when noson, d8ughter, or legally adopted child of hers is entitled to a child's benefit on the basis of the deceased husband's earnings. Former wifedivorceddefined The term "former wife divorced" means aAdd8 another alternative qualifying oondition: woman divorced from a decea8ed worker, but only if she meets 1 of the following conditions: a. is the mother of his son or daughter; a. No change 26

Ill.BENEFIT CATEGORIES—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

B. Survivors of deceased workers—Continued 3. SurvivIng former wifedivorced(mother'B benefit)—Continued b. legally adopted his son or daughter b. No change. while married to him and while such son or daughter was under age 18; or o. waa married to him. at the time both c. No change. of them legally adopted a child under the age of 18. d. The deceased former husband legally adopted her son or daughter while she was married to him and while such son or daughter was under the age of eighteen. Effective for September 1958 upon application filed after Aug. 27, 1958. 4. Surviving child Child insurance benefits are payable upon filing application, to the child (including Step- child or adopted child as defined below) of a deceased worker if he or she was currently or fuUy insuredandthe child— a. is unmarried and is either under 18 or a. No change. under a permanent and total disability which began before the child attained the age of 18; b. was dependent (as defined below) upon b. If the deceased worker had a period of the deceased worker at the time of his death. disability at the time he died, the dependency of the child could be determined either at the beginning of the period of disabifity or at the time he died.Effective for Sep- tember 1958 upon application filed after Aug. 27, 1958. Ter,ninaUon of benefits No benefits paid for the month (and sub-Makes an exception to the termination pro- sequent months) that the child dies, mar- vision in the case of a disabled child 18 and ries, is adopted (exoept for adoption by a over who marries an individual entitled to step-parent, grandparent, aunt, or uncle old-age, disability, widow's, widower'8, dis- after deceased worker's death), attains the abled child's, mother's, or parent'8 benefitø. age of 18 unle disabled, and, if disabled, However, in the case of the marriage of a the disability ceaaeB. woman entitled to a disabled child's benefit to a man entitled to disability insurance benefit or a disabled child's benefit, her benefit will end when her husband is no longer entitled to his benefit, un1e he dies or, in the case he was entitled to a disability benefit, he becomes entitled to an old-age insuranoe benefit.Effective for September 1958, upon application after Aug. 28, 1958, for benefitø which have already been terminated. 27

m. BENEFITCATEGORIES—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except aa noted)

B. Survivors of deceaaed work- er8—Continued 4. Surviving child—Con.

DefiniUon of child The term "child" includes a stepchild of. aA child will be deemed a legally adopted child deceased worker who has been such a step- if he was living as a member of deceased childfor at least 1 year immediately preced- worker's household at the date of his death, ing the day on which the worker died; the was not receiving regular contributions toterm "child" also includes am adopted child ward his support from someone other than of a deceased worker without regard to the worker or his spouse or from a welfare length of time the child has been adopted. organization furnishing services or aasistance for children, and the surviving spouse legally adopts thechild within 2 year8 of the worker's death.Effectivefor September 1958 on application filed after Aug. 27, 1958. Definitionof dependency on father, adopting father, 8tep- father, mother, adopting mother, and stepmother. A child (under 18) is considered dependentEliminates age distinction so that dependency upon the father if the father at the time of requirements are applicable to children under hia death waa living with or contributing to 18 and diBabled children 18 and over on the support of the child. However, even if the same baais,Effective for September the father at the time of his death was not 1958 upon application after Aug. 27, 1958. living with the child or contributing to his support, the child,if legitimate, is considered dependent upon the father unless the child— a. had been adopted by some other individual; or b. was living with and receiving more than one-hail of his support from his stepfather. An adopted child (under 18) is consideredSame as above. dependent upon his adopting father under the same conditions as those which apply to a father and his natural child. A child (under 18) is considered dependentSame as above. upon his 8tepfather at the time of the stepfather's death if the child was— a. Living with his stepfather; or b. Receiving at least of hia support from his stepfather. A child (under 18) is considered dependentSame as above. upon his natural mother or adopting mother at the time of her death if such mother was currently insured when she died regardless of presence of or support furnished the child by the father. 28

ilLBENEFIT CATEGORIES—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except a noted)

B. Survivors of deceaaed workers—.-Continued 4. Surviving child—Con.

Definition af dependency—Con. A child (under 18) is considered dependentSame as above. upon his natural, adopting, or stepmother at the time of death of such mother if she was living with or contributing to the support of the child and provided the child— a. Was neither living with nor receiving contributions from his father or adopting father, or b. Was receivingatleast ofhis support from her. A child (who has attained 18) and is under aSpecial test for disabled children 18 and over permanent and total disability which began eliminated. before 18 will be deemed dependent upon his natural or adopting father, his natural or adopting mother, his stepfather, or stepmother if the child— a. was entitled to a child's benefit before 18 on the wage record of such deceased parent, or b. was receiving at least 34hissupport from the deceased parent at his death. 5. SurvIving dependent Widower' 8insurancebenefits are payable, uponDeceased woman worker would not have to widower. filing application, to the widower of a de- be currently insured if the widower in the ceaaed woman worker who was currently month prior to their marriage was actually and fully insured at the time of death and orpotentiallyentitledtoawidower'8, the widower (as defined below)— parent's, or disabled child's benefit.Effec- tive for September 1958, upon application filed after Aug. 27, 1958. a. haa reached age 65; a. No change. b. has not remarried; b. No change. c. is not entitled to an old-age insurance c. No change. benefit based on his own earnings equal to or greater than the amount he would be entitled to as the dependent widower of the deceased wife; d. was living with the wife at the time of d. deletes requirement that widower must her death (widower is deemed to have been be living with wife at the time of her death. living with his wife at the time of her death Effective for September 1957 [Public Law if they were both members of the same 85—238]. household on the date of her death, or he he was receiving regular contributions from her toward his 8upport on such date, or she bad been ordered by a court to contribute to his 8upport); and e. either— e. Provides an alternative date for meeting (1) wa receiving at least 4 of his sup- support requirement in both (1) and (2)— port from the wife at the time of her death the beginning of the wile's period of die- and filed proof of such support within 2 ability—il the wife has such a period of years of the date of death; or disability in effect at the time of her entitle- 29

III.BENEFIT CATEGORIES—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

B. Survivors of deceased workers—Continued 5. Surviving dependent widower—Continued (2) was receiving at least 34ofhis sup- ment to old-age or disability benefits, or at port from the wife and she wascurrently the time she died, which ever was applicable. insured at the time she became entitled to Proof of support in such instances must be old-age benefits and filed proof of such filed within 2 years of her application for a support within 2 years after the month period of disability, her date of entitlement, in which she became so entitled. or her death, depending on the time as of An additional period of 2 years is author- which the support is claimed.For the wid- ized if there was failure to file for good ower who would not be entitled to benefits cause. except for the enactment of this provision proof of support can be filed by September 1960.Effective for September 1958 upon application after Aug. 27, 1958.Also provides that the support requirement will not be necessary for the widower if in the month prior to his marriage to his deceased wife he was actually or potentially entitled to a widower's,parent's,ordisabledchild's benefit.Effective for September 1958 upon application after Aug. 27, 1958. Termination of benefit8 No further widower's benefits paid forProvides exception to the termination provi- the month (and subsequent months) that sion where the widower marries a woman the widower remarries, dies or becomes en- ntitled to a widow's, mother's, parent's titled to an old age insurance benefit ex- or disabledchild'sbenefit.Effective for ceeding his widower's benefit. September 1958 upon application after Aug. 28, 1958, for benefits which have already been terminated. Widower defined The term "widower" means the surviving hus-Adds 2 other alternative qualifying conditions: band of a deceased woman worker, but only if he meets one of the following conditions: a. was married to her for not less than 1 a. No change. year immediately prior to the date on which she died; or b. is the father of her son or daughter: or b. No change. c.legally adopted her son or daughter c. No change. while married to her and while such son or daughter was under age 18; or d. was married to her at the time both of d. No change. them legally adopted a child under the age e. his deceased wife legally adopted his son of 18. or daughter while he was married to her and while such son or daughter was under the age of 18; or f. the widower was actually or potentially entitled to widower's, parent's, or disabled child'sbenefitsin the month before his marriage to his deceased wife.Effective September 1958 upon application filed after Aug. 27, 1958. 30

IlLBENEFIT CATEGORIES—Confinued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

B. Survivors of deceaaed workers—Continued 6. Surviving dependentParent's insurance benefits are payable, upon Removesprohibitionagainstpaymentof parent. filing application, to the parcnt or parents parent's benefit where there is a surviving (as defined below) of a deccased worker who widow or child who is actually or potentially was fully insured at the time of death if the entitled to a benefit.Effective for Sep- workcr did not leave a widow, widower, or tember 1958 upon application after Aug. 27, child who could ever qualify for monthly 1958.This amendment, however, will not insurance benefits on the worker's wages operate to reduce other benefits which are andself-employmentincomeandthe payable for the month of August 1958 on the parent— deceased worker's earning record because of the maximum familybenefitprovision. Proof of support for parent's newly entitled to benefits under this provision must be filed before September 1960. a. has reached age 65, if the father, and a. No change. 62 if the mother; b. has not remarried after the death of b. No change. the worker; c. was rcceiving at least 3'ofhis or hcr c.Provides alternative time at which support from the worker at the time of the support requirement can be shown if de- worker's death and filed proof of such sup- ceased worker has a period of disability in port within 2 years of the date of death (an effect at the time of death—at beginning of additional period of 2 years is authorized if period of disability or at death.Proof of thore was failure to file for good cause); such support must be filcd within 2 years after the period of disability began or 2 years after the date of such death.Effective for September 1958 upon application filed after Aug. 27, 1958. d. is not entitlcd to an old-age insurance d. No change. benefit based on his or her own earnings equal to or greater than the amount he or she would be cntitled to as the dependent parent of the dcccascd worker. Termination of benefits Provides exception to the termination provi- No further bencfits paid to thc surviving sion for parents marrying individuals en- parentforthemonth(orsubsequent titledtowidow's,widowcr's,mother's, months) that she dies, remarries, or be- parent's, or disabled child's benefit. How- comes entitledto an old-age insurance ever, if such parent marries a man entitled benefit which equals or exceeds his parent's to a disabled child's benefit, the parent's benefit. benefit will be terminated if the individual loscs entitlcment otherwise than by death. Effective for Septembcr 1958, with application necessary alter Aug. 28, 1958, for reinstatement of terminated benefits. Parent defined

I The term "parent" means— No change. a. the mothcr or father of a dcceascd worker; b. a stepparent of thc deceased w()rkcr by a marriage contracted bcfore the workcr attained the age of 16; or c. an adopting parent who adopted the dcceased worker before hc or she reached age 16. 31

IlL BENEFITCATEGORIES—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

B. Survivors of deceased workers—Continued 7. Lump-sumdeathUpon the death of a worker who died cur-Provides that widow or widower must have payment. rently or fully in8ured a lump-sum death been living in the same household with the payment is payable to the person whom deceased worker at the time of his death the Secretary of Health, Education, and rather than living with the worker as previ- Welfare determines to be the widow or wid- ously defined.Applies to workers who die ower of the deceased and to have been living after August 1958. with the deceased at the time of death.If there is no such person, an amount is payable to any person or persons to the extent and in the proportion that he or they have paid the burial expenses for the deceased insured individual.No payment is made,

. however, unless application is filed within 2 years after the date of death.An addi-

. tional period of 2 years is authorized if there was failure to file for good cause. A widow is deemed to have been living Repealed. with her husband at the time of his death

• if they were both members of the same household on the date of his death, or she was receiving regular contributions from him toward her support on such date, or he had been ordered by a court to contribute to her support.

. A widower is deemed to have been living Repealed. with his wife at the time of her death if they were both members of the same household on the date of her death, or he was receiving regular contributions from her toward his

support on such date, or she had been . ordered by a court to contribute to his support. C. Disabled worker See II. B., page 13; Cash Disability Benefits.

IV. BENEFIT AMOUNTS

A. Average monthly wage In general, an individual's average monthlyNo change. wage for computing his monthly old-age insurance benefit amount is determined by dividing the total of his creditable earnings after the applicable starting date and up to the applicable closing date, by the number of months involved.Excluded from this computation are all months and all earnings in any year any part of which was included in a period of disability under the disability "freeze" (except that the months and earnings in the year in which the period 32

IV.BENEFIT AMOUNTS—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

A. Average monthly wage— Continued of disability begins may be included if the resulting benefit would be higher).Also excluded from the computation areall months in any year prior to the year the individual attained age 22 if less than 2 quarters of such year were qwLrters of coverage.Starting dates may be last day of (1) 1936, or (2) 1950, or, if later, the year of attainment of age 21. The closing date may be either (1) the 1st day of the year the individual died or became entitled to benefits or (2) the 1st day of the year in whichhe was fully insured and attained retirement age, whichever results in a higher benefit. Applicable starting and closing dates are thosewhichyieldthehighestbenefit amount. The minimum divisoris18 months. Individuals can "drop out" up to 5 years of lowest or no earnings in computing average monthly wage. Special provisions—new stare 1. Intended primarily for persons first covered in 1955: Individual who became entitled to old-age insurance benefits or died in 1956, and had at least 6 quarters of coverage after 1954, can have starting date of Dec. 31, 1954, and closing date of July 1,1956, if that will yield a larger benefit amount. 2. Intended primarily for persons first covered in 1956: Individual who becomcs entitled or dies in 1957, and has at least 6 quarters of coverage after 1955, can have a starting date of Dec. 31, 1955, and closing date of July 1, 1957, if that will yield a larger benefit amount. B. Benefit formula An individual mty have his benefit cornputhd The law provides a consolidatcd benefit table to under 1 of the 3 following methods provided replace the benefit formulas and the con- he meets the condition$ therein prescribed. version table.The consolidated table would If more than 1 method is 9pplicable, the one be used in determining benefit tmounts for yielding the highest benefit amount will be both future beneficiaries and those now on used: the benefit rolls.In essence,, the table is 1. 1954 benefit formula—55 percent of based on the benefit amounts of prior law the first $110 of average monthly wage plus increased by 7 percent, with the resulting 20 percent of the next $240, based on tver- amount rounded to the nearest dollar, with a age monthly wg.3 after 1950, or after age 21, minimum benefit increase of at least $3 if later. (except for women who htve elected to 33

IV.BENEFIT AMOUNTS—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

B. Benefit formula—Con. Conditions: draw benefits before 65 and therefore get (a) 6 quarters of coverage after June actuarially reduced benefit amounts). 1953, or Though not specifically stated in the law (b) First eligible for old-age insurance the 1954 benefit formula would be changed benefits after August 1954, or dies after by the table to be, in effect, 58.85 percent of August 1954 and before eligible for old- the first $110 of the average monthly wage, age insurance benefits, provided he has plus 21.40 percent of the next $290 of such 6 quarters of coverage after 1950. wage (except that in some cases, for average 2. 1952benefitformulawith benefit monthiy wages under $85, a slightly higher amount increased through conversion table amount is payable so as to fit in with the in the law."Dropout" not applicable. increased minimum benefit). Conditions: 6 quarters of coverage after Increased benefit amounts will be effective 1950. for monthly benefits payable for January 3. 1939benefitformulawith benefit 1959 (checks in February), and for lump- amount increased through conversion table sum death payments where death occurs in the law. after Dec. 31, 1958. C. Minimum primary insur- $30 $33. ance amount. D. Maximum family benefits.. -The maximum amount payable on a singleFamily maximum benefits are set by the new wage record is the lesser of $200 or 80 per- table and range from $53 to $254 (subject to cent of the insured person's average monthly roundingofindividualbenefitstonext wage.The 80-percentlimitation,how- higher 10 cents).Though not specifically ever, cannot reduce total family benefits stated in the law, the table provides that the below the larger of $50 or 134 times the maximum amount payable on a single wage primary amount. record is the lesser of $254 (twice the maximum possible primary insurance amount) or 80percentoftheindividual'saverage monthly wage.The 80-percent limitation, however, cannot reduce family benefits below the larger of $53 or 1> times the primary amount. E.Dependents' and survivors'(Subject to maximum limitations on totalNo change except that minimum benefit to sole benefits. family benefits.) survivor is raised from $30 to $33. 1. Wife or husband of 4 of primary insurance amount. insured worker. 2.Childof insured 34 of primary insurance amount. worker. 3. Widow, widower, %ofprimary insurance amount except former wife divorced, or minimum benefit is $30 if individual is sole parent of deceased insured beneficiary entitled. worker. 4. Child of deceased in- If only 1 child is entitled, 3/4ofprimary sured worker. insurance amount, except minimum is $30 if the child is the sole beneficiary entitled. If more thanchild entitled, each child gets > of primary insurance amount plus an equal share in an additional 3 of primary insurance amount. 5. Lump-sum death 3 times the primary insurance amount payment. with a statutory maximum of $255. 34

IV.BENEFIT; AMOUNTS—Continued

P. Comparison of benefits under Old-age benefits Survivors benefits' 1958 old law and under Average monthly Worker and wife Worker and wife Widow, widower, Widow and 2 amendments. at age 62 at age 65 chIld or parent children

Old law New lawOld lawNçw lawOld law New law Old law New lawOld law New law

$50 $30.00 $33 $41.30 $45.40 $45.00 $49.50 $30.00 $33.00 $50.20 $53.10 $100 55.00 59 75.70 81.20 82. 50 88.50 41.30 44.30 8 60 88.60 $110 6 50 65 83.30 89.40 O. 80 97.50 45.40 48.80 90.90 97.60 $120 62. 50 67 86.00 g2.20 9& 80 100.50 46.90 50.30 96.00 100.70 $130 64.50 69 8&80 94.90 96,80 l0& 50 4& 40 51.80 104.00 105.60 $140 66.50 71 91.50 97.70 99.80 106. 50 49. 90 53.30 112.00 112.90 $150 6& 50 73 94.30 100.40 lO 80 109.50 61.40 54.80 l200 120.00 $160 70. 50 75 97.00 103.20 105.80 112. 50 ô 90 56.30 128.00 128.00 $170 72,50 78 99.80 107.30 108.80 117.00 5440 5&50 136.00 139.20 $180 74. 50 80 102. 50 110.00 111.80 120.00 55.90 60.00 144.00 146.50 $190 76.50 82 105.30 112.80 114.80 l200 67. 40 61.50 152.00 154.50 $200 78. 50 84 108.00 11&50 117.80 126.00 5& 90 63.00 157. 10 161.60 $210 80.50 86 110.80 118.30 120.80 129.00 60.40 64.50 161.20 16& 90 $220 82. 50 88 113.50 121.00 123.80 132.00 61.90 66.00 165. 10 176. 00 $230 84.50 90 116.30 123.80 126.80 l35 00 63.40 67. 50 169.20 180. 10 $240 86.50 93 119.00 127. 90 129.80 139.50 64.90 69.80 173. 10 186.20 $250 8& 50 95 121.80 130. 70 132.80 142.50 66.40 71.30 177.20 190. 10 $260 90.50 97 124. 50 133.40 135. 80 l4 50 67. 90 72.80 181. 10 194.20 $270 92.50 99 127.80 13&20 13&80 14& 50 69.40 74.30 18& 20 198. 10 $280 94. 50 101 130.00 138. 90 141. 80 151. 50 70.90 7& 80 189. 10 202.20 96 50 103 132.80 141.70 144.80 154.50 72,40 77.30 193.20 206. 10 $300 98.50 105 135.50 144.40 147. 80 157. 50 73. 90 78.80 197. 10 210.20 $310 10 50 los 138.30 148.50 l580 162.00 76.40 81.00 200.00 216 00 $320 102.50 110 141.00 .151.30 153.80 165.00 76.90 8 50 200.00 220.10 $330 1O 50 112 143.80 154.00 l580 16&00 78.40 84.00 200.00 224.00 $340 10650 114 146.50 156.80 159. 80 171.00 79.90 85.50 200.00 223. 10 $350 108.50 116 149.30 159.50 12.80 174.00 81.4.0 87.00 200.00 232.00 $360 118 177.00 88.50 236. 10 $370 120 180.00 90.00 240.00 $380 123 184.50 92.30 246. 10 $390 125 187. 50 9& 80 250. 20 $400 127 190.50 95 30 264. 10

I Suvivorbenefit:amount8 for a widow and 1 chIld or for 2 parents would be the same as for a man and wile. 35

V.CREDITABLE EARNINGS

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong.. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

All remuneration for services in covered work is covered except— 1. Earnings in excess of $4,200 (after 1. Earnings in excess of $4,800.Effective Jan. 1, 1955). forwagespaidafter 1958andself- employment income for taxable years ending after 1958. 2. Certain types of payments for retire- 2. No change. ment and payments under a plan or system providing benefits on account of sickness or accident disability, etc. 3. Payments made to an employee who 3. Provides for the coverage of sick leave has reached retirement age (other than va- payments for State and local employees cation or sick pay) if he did not work for the irrespective of whether they have reached employer in the period for which such pay- retirement age by stating that "sick pay" as ments were made. used in the parenthetical exception includes remuneration paid to such employees for periods during which they were absent from work becuseofsickness.Public Law 85—786. Effective for payments after Aug. 27, 1958, and for payments made before this date if the State has paid, or agrees (before Jan. 1, 1959) to pay, the contributions that would have been payable to cover such payments for all employees in the State and local coverage group if this amendment had been in effect on and after Jan. 1, 1951. 4. Payment by the employer of the em- 4. No change. ployee tax under the Federal Insurance Contributions Act or under a State unemployment compensation law. 36

VI.INSURED STATUS

UnderSocial Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong.(Public Law 85—840 effective Aug. 28, 1958,except as noted)

A. Fully insured 1 quarter of coverage (acquired at any timeNo change. after 1936) for every 2 calendar quarters elapsing after 1950(or after quarter in which age 21 was attained, if later) and before quarter of death or attainment of retirement age whichever first occurs. No person can be fully insured unless he has at least 6 quarters of coverage. Per$ons who died before Sept. 1, 1050, and after 1939 with at least 6 quarters of coverage are considered fully insured for purposes of survivors' benefits (other than for widower or former wife divorced). Special provision primarily for per8ons newly covered in 1955 and 1956 Fully insured if all but 4 (but not less than 6) No change. of the quarters after 1954 and prior to the later of (1) July 1, 1957, or (2) quarters of death or attainment ofretirement age (whicheverfirst occurs)are quarters of coverage. Fully insured status qualifies for old-age, Currently insured status eliminated for dependents, and survivors' benefits; both disability benefits. fully and currently insured status required fordisabilitydependent husband's and dependent widowers' benefits. B. Currently insured 6quarters of coverage within 13 quarters end-Includes in the definition of "currently in- ing with quarter of death or entitlement to sured individual" an individual who meets old-age insurance benefits. the present coverage requirement in the Currently insuredstatusqualifiesfor quarter in which be becomes entitled to child's, widowed mother's, and lump-sum disability insurance benefits. benefits. Effective for September 1958 upon application after Aug. 27, 1958. C. Quarter of coverage defined_Quarter in which individual received at least No change. $50 in wages (other than for agricultural work) or was credited with at least $100 in self-employment income. Every quarter in any calendar year in whichNo change other than to make $4,800 a year wages are $4,200 or more, and every quarter (instead of $4,200) applicable as to wages in a taxable year in which combined wages after 1958 and self-employment income in and self-employment income equal at least taxable years ending after 1958. $4,200. In the case of wages computed on an annual No change. basis for agricultural workers, 4 quarters of coverage are credited for a minimum of $400; 3 quarters for income of $300 to $399.99; 2 quarters for income of $200 to $299.99, and 1 quarter for $100 to $199.99 for a year. 37

VII.RETIREMENT TEST

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

A.Scope Applies to covered as well as noncovered work No change. B. Test of'earnings 1. Annual test of earnings under which1 1. No change. month's benefit is withheld from the beneficiary under age 72 (and from any dependent drawing on his record) for each unit of $80 (or fraction thereof) by which annual earnings from covered or noncovered em- ploymentandself-employmentexceed $1,200. 2. Earnings in excess of $1,200 are charged to2. Reverses the order of charging excess earn- months beginning with the last month of ings so that units are charged to months the taxable year and working backward. starting with the 1st month of the taxable year and working forward.Effective with respect to taxable years beginning after August 1958. 3. Benefits not withheld for any month during3. Increases from $80 to $100 amount of wages which the individual neither rendered serv- used in determining whether benefits are to ices for wages in excess of $80 nor rendered be withheld for a month.Effective with substantial services in a trade or business. respect to taxable years beginning after August 1958. 4. Where the taxable year is less than 124. Drops the requirement that a beneficiary months, the basic exempt amount isre- furnish an annual report of earnings to the duced inproportion to the number of Secretary if he has had his benefits suspended months in the taxable year. under the retirement test for the full taxable Beneficiaries required to file annual re- year.Providesfurtherthatthebene- ports f earnings in excess of $1,200, or the ficiary (or his survivors) haa a period of 3 proportionate amount for taxable years of years, 3 months, and 15 days after the close less than 12 months.Penalties imposed for of the year in which to file information that failure to file timely reports of earnings, benefits are due for any month of the year; if unless the failure to file on time was for this is not done, no benefits will be paid for "good cause." suchmonth.Effectivewithrespectto Estimates of earnings (and other informa- taxable years beginning after August 1958. tion) may be requested from the beneficiary during the course of the year. Temporary suspensions of benefits may be made during -the course of a -year.At the close of the year it is determined whether permanent deductions apply. C. Test for noncovered work1. Deductions made from the benefits forNo change. outside the United States. any month in which a beneficiary under age 72 engages in a noncovered remunerative activity(whether employmentorself- employment) outside the United States on 7 or more calender days.If deductions are made for any month for this reason, deductions are also made from the benefits cf any dependent drawing benefits on the basis of the individual's wage record. 38

VII.RETIREMENT TEST—Continued

Under Social Security Act amendments in 85th Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, Item 1958, except as noted)

C. Test for noncovered work outside the United States—Continued 2. Beneficiaries not required to file annual reports but must report when they work on 7 or more calendar days in the month. Penalties imposed for failure to file timely

• reports of work unless the failure to file on time was fox' "good cause." No change. D.Age exemption Benefits are not suspended because of work or earnings if beneficiary is age 72 or over.

VIII. FINANCING

A. Administration of the trustThe Federal Old-Age and Survivors InsuranceNo change. funds. Trust Fund receives all tax contributions, other than those allocated for the disability program, from which benefits and adminis1- trative expenses are paid for the old-age and survivors insurance program. The Federal Disability Insurance Trust Benefits paid to the eligible dependents of Fund receives tax contributions at the rate individuals drawing disability benefits will of of 1 percent each for employers and come from the Federal Disability Insurance employees, and %of1 percent for the self- Trust Fund.Effective for months after employed from which benefit and adminis- August 1958. trative expenses are paid for the disability insurance program. These funds are administered by a Board No change. of Trustees consisting of the Secretary of the Treasury,as managing trustee, the Secretary of Labor and the Secretary of Health, Education, and Welfare,allex officio (with the Commissioner of Social Security as Secretary). B. Investment ofthetrustProvides that the managing trustee (Secre-No change. funds. tary of the Treasury) shall invest such portion of the trust fund as is not, in his judgment, needed to meet current withdrawals. Investments must be made in interest-bearing obligations of the United States or in obligations guaranteed both as to interest and principal by the United States. Such obligations issued for purchase by the trust funds shall have maturities fixed with due regard for the needs of the funds, and bear interest at a rate equal to the average rate of all marketable interest-bearing obligations not due or callable until after the expiration of 5 years from the date of original issue.This interest rate, if not a multiple of 4of1 percent, is rounded to the nearest multiple of 4of1 percent. 39

VIII.FINANCING—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 5—84O effective Aug. 28, 1958, except as noted)

C. Review of status of trust funds. 1. Board of Trustees--Amongthe duties of the Board of Trustees isNo change. the requirement that it must report to Con- gress in March of each year on the operation and status of the funds during the preceding fiscal year, and their expected operation and status during the next 5 fiscal years.The Board must also report immediately to Congress whenever it is of the opinion that the trust funds will exceed 3 times the highest annual expenditures anticipated, or if the amounts in the funds are unduly small. The annual report must include estimates of present and future expenditures and income and a statement of the actuarial status of the funds. 2. Advisory CounciL. -- -AnAdvisoryCouncil onSocialSecurity Financingwillperiodicallyreviewthe status of the Federal Old-Age and Sur- vivors Insurance Trust Fund and the Fed- eral Disability Insurance Trust Fund in relation to the long-term commitments of the programs. The first such Council will be appointed by the Secretary after February 1957 and before January 1958 and will consist of the Commissioner of Social Security, as Chair- man, and 12 other persons representing employers and employees, in equal numbers, self-employed persons and the public. The Council shall make its report, including recommendations for changes in the tax rate, to the Board of Trustees of the Trust Funds before Jan.1,1959.The Board shall submit the recommendations to Con- gress before Mar.1,1959, in its annual report. Other advisory councils with the same functions and constituted ui the same manner will be appointed by the Secretary not earlier than 3 years nor later than 2 years prior to Jan. 1 of the years in which the tax rates are scheduled to be increased.These advisory councils will report to the Board on Jan. 1 of the year before the tax increase will occur and the Board will report to Congress not later than Mar. 1 of the same year. 40

VIII.FINANCING—Continued

Under Social Security Act amendments in 85th Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, Item 1958, except as noted)

Percent Pe?cenS D. Maximum taxable amount_$4,200a year $4,800a year. Taxable years beginning after: Percent Taxable years beginning after: PerS E. Tax rate for se1I-employed - 3% 1956 3% 1958 434 1959 41/s 1959 1964 1962 5V4 6 1969 5% 1965 1974 6% 1968 6% Tax rate for employees andCalendar years: Calendar years: F. 234 1957—59 24 1959 employers. 3 1960—64 2% 1960—62 -:3 1965—69 3% 1963—65 1970—74 3% 1966—68 1975 and after 4% 1969 and after 4

IX. MISCELLANEOUS

A. Termination of benefitsBenefits will be terminated upon the deporta-No change. upon deportation. tion of the primary beneficiary under any 1 of 14 specified paragraphs of the Immigra- tion and Nationality Act.Benefits of dependents and survivors who are not citizens will not be paid if they are out of the country. B. Suspension of benefits forSuspends the payments to any individual notNo change but acIds 2 more exceptions to suspension of benefita provisions. certainaliens outside of a citizen or national of theUnited States the United States. who first becomes eligible for benefits after December 1956 if such an individual remains out of the country for 6 consecutive months.The payments would be resumed if he returns and remains in this country. However, payment of benefits to such an individual would not be suspended if either— 1. he is a citizen of a foreign country 1. No change. which has in effect a social insurance or pension system of general application which would permit benefit payments to United States citizens in the event they left such foreigncountry without regardtothe duration of their absence; or 2. the individual upon whose earnings2. No change. the benet is based has 40 quarters of coverage (10 years); or 3. the individual upon whose earnings3. No change. the benefitis based has resided in the United States for 10 years; or 4. he is serving outside the country in 4. No change. the Armed Forces of the United States; or 41

IX.MISCELLANEOUS—Continued

Under Social Security Act amendmenth in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

B. Suspension of benefits for certain aliens outside of the United States—Con. 5. application of the provision would5. No change. violate a treaty obligation of the United States. 6. Benefits of aliens who are survivors of certain deceased members of the Armed Forces of the United States will not be suspended. The individual upon whose earnings the benefit is based must have died (1) while On active duty or inactive duty training as a member of a uniformed service, or (2) as a result of a disease or injury which the Ad- ministrator of Veterans' Affairs determines was incurred or aggravated in line of duty while on active duty, or (3) as a result of an injury incurred or aggravated on inactive duty training, if the Administrator determines that such individual was released from such service under conditions other than dishonorable. EffectiveforJanuary1957 [Public Law 85—238]. (7) Benefits of certain aliens whose entitlement is based on service covered by the Railroad Retirement Act which, inasmuch as it was for less than 10 years, was credited under the Social Security Act.(Principally applicable to Canadian residents employed by American railroads conducting a minor portion of their operations in Canada, and Canadian railroads operating in the United States.)Effective January1957[Public Law 85—927]. C. Loss of benefits upon con-If an individualisconvicted oftreason,No change. viction of certain subver- espionage, or certain other offenses of a sub- sive crimes. versive nature including a number of offenses under the Internal Security Act and the offense was committed after the enactment date of this provision (Aug. 1, 1956), the court in its discretion may provide as an additional penalty th&t none of the individual's wages or self-employment income (or the earnings of any other individual upon which his benefit is based) credited before his conviction shall be used in computing his benefit.The provision applies only to the individual convicted of the offense and does not affect the rights of his dependents or survivors. 42

IX.MISCELLANEOUS—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

D. Criminal offeiises Any individual who— 1. For the purpose of receiving an un- 1. Clarifies provision so that it is clearly authorized benefit or having a benefit inapplicable to earnings for retirement test creased mokes (or causes to be made) a purposes which might not be wages or self- false statement or representation as to the employment income for coverage purposes. amount of any wages or self-employment income earned or paid, or for the period in which they are earned or paid, or 2. Makes (or causes to be made) any false 2. Extends this provision to an applica- statement or material fact in any application for a disability determination. tion, for any payment, or 3. Makes (Or causes to be made) any 3. Broadens provision so as to cover in- false statement, representation, affidavit, dividuals who at any time make (Or cause or document in connection with such appli- to be made) any false statement or represen- cation— tation of a material fact for use in determin- shall be guilty of a misdemeanor and upon ing rights to payments. conviction shall be fined not more than $1,000 or imprisoned for not more than a year, or both. 4. Makes it a crime for an individual having knowledge of the occurrence of any event affecting his initial or continued right to a payment (or the right of a person upon whose behalf he made application or is receiving a benefit) to conceal or fail to disclose such an event with intent to fraudulently receive an unauthorized payment or a greater amount than is due. 5. Makes it a crime for an individual to convert the benefit he has received on behalf of another person for other than the use and benefit of the other person. No change in severity of criminal penalty. E. Representation of Claim-An attorney in good standing who is admittedEliminates the requirement to file a certificate ants. to practice before the highest court of the with the Secretary. State, Territory, district, or insular possession of his residence or before the Supreme Court of the United States or the inferior Federal courts, shall he entitled to represent claimants before the Secretary of Health, Education, and Welfare upon filing with the Secretary a certificate of his right to practice from the presiding judge or clerk of any such court. 43

PUBLIC ASSISTANCE

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

I. Scope of program The term "State" under the public assistancePublic assistance titles extended to Guam. titles includes Alaska, Hawaii, the District Effective for October 1958. of Columbia, Puerto Rico, and the Virgin Islands. II. Matching formulas Temporary Federal matching share for old-ageEstablishes new monthly maximum of $65 A. Old-ageassistance, assistance, aid to the blind, and aid to the times the number of recipients on the rolls aid to the blind, and aid permanently and totally disabled is $24 of (an averaging basis) for a combined program to the permanently and the first 30 ( of the first $30) of the which includes both money payments and totally disabled. average monthly money payment per re- vendor expenditures for medical care. cipient plus of th balance up to a maxi- Retains matching feature paying $24 of mum for each individual payment of $60 the first $30 (%ths of the first $30) but above per month.Expires June 30, 1959. this amount pays 50 percent (up to the new maximum) for Alaska and Hawaii and for States whose per capita income is equal to or above the average per capita income for the United States ranging upward to 65 percent for States whose per capita incom'e is below the national average.No expiration date. Effective October, 1948. The Federal percentages as promulgated for the period Oct. 1, 1958, through June 30, 1961, are as follows: Federal State: percentage Alabama 65. 00 Arizona 63. 23 Arkansas 65. 00 California 50. 00 Colorado 53. 42 Connecticut 50. 00 Delaware 50. 00 District of Columbia 50. 00 Florida 59. 68 Georgia 65. 00 Idaho 65. 00 Illinois 50. 00 Indiana 50. 00 Iowa 63.23 Kansas 60. 78 Kentucky 65.00 Louisiana 65. 00 Maine 65. 00 Maryland 50. 00 Massachusetts 50. 00 Michigan 50. 00 Minnesota 58. 57 Mississippi 65. 00 Missouri 53. 42 Montana 54.07 Nebraska 63. 41 Nevada 50. 00 New Hampshire 57. 91 New Jersey 50. 00 New Mexico 65. 00 44

PUBLIC ASSISTANCE—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

The Federal percentages—Continued II. Matching formulas—Con. Federal A. Old-ageassistance, State: percentage aid to the blind, and aid NewYork 50. 00 to the permanently and North Carolina 65. 00 totally disabled—Con. North Dakota 65. 00 Ohio 50. 00 Oklahoma 65. 00 Oregon 52. 58 Pennsylvania 50. 00 Rhode Island 50. 00 South Carolina 65. 00 South Dakota 65. 00 Tennessee 65. 00 Texas 61. 36 Utah 65. 00 Vermont 65. 00 Virginia 65. 00 Washington 50. 00 West Virginia 65. 00 Wisconsin 54. 60 Wyoming 50. 92 Alaska 50. 00 Hawaii 50. 00 [23 F. R. 7150] B. AidtodependentTemporary Federal matching share for aid toEstablishes new Federal monthly maximum of children. dependent children program is $14 of the $30 times the number of recipients on the first $17 of the average monthly money payrolls (an averaging basis) for a combined ment per recipient plus of the balance up program which includes both money pay- to a maximum for each individual of $32 for ments and vendor expenditures for medical the adult and the first child and $23 for each care. additional child in the family. Retains matching feature paying $14 of Expires June 30, 1959. the first $17 (147ofthe first $17) but above this amount pays 50 percent (up to the new maximum) for AlMka and Hawaii and for States whose per capita income is equal to or above the average per capita income for the United States ranging upward to 65 percent for States whose per capita income is below the national average. See above for each State's percentage. No expiration date.Effective October 1958. III. Separate medical care fi-50—50 Federal sharing in matching State ex-Combined with money payment formula as nancing. penditures on vendor payments in behalf of noted above. recipients needing medical care in all 4 programs up to a maximum determined by multiplying $8 per month times the number of adults and $3 per month times the number of children on the rolls. 45

PUBLIC ASSISTANCE—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

IV. Special formula for Puerto Rico, Virgin Islands, and Guam: A. Matching formula.-Federal share on 50—50 basis for both moneyMoney payments and vendor medical pay- payments and vendor medical payments; ments combined with 50—50 Federal match- Maximum of $30 a month for each individ- ing continued; a new maximum of $35 times ual receiving money payments on old-age the number of recipients on old-age assist- assistance, aid to the blind, and aid to the ance, aid to the blind, and aid to the per- permanently and totally disabled, and $18 manently and totally disabled and $18 times for each adult caretaker and first child, and the number of recipients on aid to dependent $12 for additional children on aid to depend- children for the combined program.Made ent children.Maximum of $6 (for adults) applicabletoGuam.EffectiveOctober and $3 (for children) a month on averaging 1958. basis for vendor medical payments. B.Dollar limitation..--Not more than $5,312,500 in Puerto Rico andDollarlimitationraisedto$8,500,000for $200,000 in Virgin Islands in Federal money Puerto Rico and $300,000 for Virgin Islands. can be spent for public assistance in any Guam willhaveadollarlimitationof fiscal year. $400,000 a year.Effective for fiscal 1959. V.Administrative costs Separate dollar-for-dollar matching in costsNo change. for administration. VT.AdvisoryCouncil on Pub-No provision Provides for an Advisory Council on Public lic Assistance. Assistance for the purpose of reviewing the status of the public assistance program in relation to the old-age, survivors, and disa. bility insurance program, the fiscal capacities of the States and the Federal Govern- ment, and any other factors bearing on the amount and proportion of the Federal and States' shares in the program.The Council would be appointed by the Secretary of Health, Education, and Welfare and be composed of the Commissioner of Social Security, as Chairman, and 12 other members representing employers and employees (in equa' numbers) persons concerned with the administration and financing of State and Federal programs, and other persons with appro- pilate special knowledge or qualifications, and the public.The Council will report its findings and recommendations not later than January 1, 1960, to the Secretary and the Congress. 46

MATERNAL AND CHILD WELFARE SERVICES

I. CHILD WELFARE SERVICES

UnderSocial Secwity Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong.(Public Law 85—840 effective Aug. 28, 1958,except as noted)

A. Purpose To enable the States to establish, extend, andNo change, other than deleton of the words strengthen,especiallyinpredominantly "especially in predominantly rural areas." rural areas, child welfare services for the protection and care of homeless, dependent, and neglected children and children in danger of becoming delinquent. B. Scope of the program_The 48 States, the District of Columbia,Extends provisions of the act to Guam but Alaska, Hawaii, Puerto Rico, and the Vir- the Secretary may, in place of the uniform gin Islands. grant of $60,000 (see D below), allot such smaller amounts to Guam as he may deem appropriate.Effective fiscal 1960. C. Authorization ofAuthorizes $12,000,000 for fiscal 1958 andAuthorizes $17,000,000 forfiscal1959 and annual appropriation. thereafter. thereafter. D. Allotments to States..Flat allotment of $40,000 to each State andAllots to a State such portion of $60,000 as the the remainder allotted on the basi that amount appropriated bears to the amount the rural child population under 18 years of authorizedto be appropriated.The re- age of each State, bears to the total rural mainder of sums appropriated shall be al- population of the United States under such loted so that each State shall have an age. amount which bears the same ratio to the total remainder as the product of (1) the population of such State under the age of 21 and (2) the allotment percentage of such State bears to the sum of the corresponding products of all the States. The allotment percentage for a State is 100 percent less the State percentage. The State percentage is the amount that bears the same ratio to 50 percent as the State's per capita income bears to the per capita income of the continental United States (excluding Alaska) but in no case less than 30 percent nor more than 70 percent. For Alaska it is 50 percent and for Puerto Rico, the Virgin Islands, and Guam it is 70 percent. A State's base allotment for any fiscal year is the amount it would have received under former law applied to .an appropriation of $12,000,000.If the amount allotted under the new jaw isless than this base allotment itisincreased to that amount by proportionately reducing the allotments to other States, but never below their base allotments. E. Use of funds Shall be expended— 1. Local for payment of part of the cost of dis- Removes requirement for use inareas trict, county, or other local child-welfare predominantly rural. services in areas predominantly rural. 47

MATERNAL AND CHILD WELFARE SERVICES—Continued I. CHILD WELFARE SERVICES—Continued

UnderSocial Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong.(Public Law 85—840 effective Aug. 28, 1958,except as noted)

E. Use of funds—Con. 2. State for developing State services for the en- Removes requirement for use inareas couragement and assistance of adequate predominantly rural and otherareasof methods of community child-welfare organ- special need. ization in areas predominantly rural and other areas of special need. 3. Runaway chilth - for paying the cost of returning any For paying the cost of returning any runaway child under 16 to his community runaway child under 18 to his own corn- in another State in cases in which such re- munit.y in another State, and of maintaining turn is in the interest of the child and the such child until his return (for a period not cost cannot be otherwise met. exceeding 15 days), in cases in which such costs cannot be met by his parents, or by any person, agency, or institution legally responsible for his support. F.Matchingrequire-No provision, except that "part of the cost" ofEffective beginning in fiscal 1960 matching re. ment. local services in areas predominantly rural quired for Federal child-welfare funds in all (E—1) must be met from other than Federal of the above categories. funds. The Federal share for any State is 100 percentlessthe percentage which bears the same ratio to 50 percent as the per capita income of the State bears to the per capita income of the continental United States (excluding Alaska) except that in no case is it less than 33 percent or more than 66% percent.For Alaska it is 50 percent, for Puerto Rico, the Virgin Islands, and Guam, 6634 percent. G. Reallotment to otherNo provision Ifa State certifies that the amount of any of States. its allotment for any fiscal year will not be required to carry out the State plan, itis available for reallotment to other States from time to time on dates fixed by the Secretary if he determines that the other States (1) have need for sums in excess of those previously allotted to it and (2) will be able to use these amounts during the fiscal year.Such reallotments are made on the basis of State plans, after taking into consideration the population under 21 and the per capita income of each such State as compared with the population under the age of 21 and the per capita income of all such States with respect to which such a determination by the Secretary has been made. Any amount so reallotted to a State is deemed part of its annual allotment. 48

MATERNAL AND CHILD WELFARE SERVICES—Continued

I. CHILD WELFARE SERVICES—Continued

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 25, 1958, except as noted)

H. Advisory CotthctL --Noprovision Establishes an Advisory Council on Child Wel- fare Services, consisting of 12 persons representative of public, voluntary, civic, treli- gious, and professional welfare organizations and groups, or other persons with special knowledge, experience, or qualifications with respect to child welfare services, and the public, to be appointed by the Secretary of Health, Education, and Welfare before Jan- uary 1959.The Council is to make a report of its findings and recommendations in regard to the effectuation of the child welfare provisions of the Social Security Act to the Secretary and the Congress on or before Jan. 1, 1960, after which it will cease to exist.

II. MATERNAL AND CHILD HEALTH SERVICES

A. Scope of the program The 48 States, the District of Columbia,Extends the program to Guam but the Secre- Alaska,Hawaii,Puerto Rico,and the tary may in place of the uniform grant of Virgin Islands. $60,000 (see C below), allot such smaller amounts to Guam as he may deem appropriate.Effective for fiscal 1960. B. AuthorizationofannualAuthorizes $16,500,000 per year Authorizes $21,500,000 per year.Effective for appropriation, fiscal 1959. C. Allotment to States Out of the sums appropriated— Substitutes$10,750,000for$8,250,000in 1. $8,250,000 shall be allotted as follows: both 1 and 2 and also provides that the

. to each State $60,000 and the remainder in uniform grant of $60,000 to each State in the proportion of live births inthat State to 1 shall be made even though less than the the whole United States. full authorization is appropriated. 2. The other $8,250,000 is allotted according to the financial need of each State after taking into consideration the number of live births in that State.[Proportion- ate reduction in amounts if full authorized sum is not appropriated.] 49

MATERNAL AND CHILD WELFARE SERVICES—Continued

HI. CRIPPLED CHILDREN'S SERVICES

Under Social Security Act amendments in 85th Item Under Social Security Act prior to 85th Cong. Cong. (Public Law 85—840 effective Aug. 28, 1958, except as noted)

A. Scope of the program The 48 States, the District of Columbia,Extends the program to Guam but the Secre- Alaska, Hawaii,PuertoRico,and the tary may, in place of the uniform grant of Virgin Islands. $60,000 (see C below), allot such smaller amounts to Guam as he may deem appropriate.Effective for fiscal 1960. B. AuthorizationofannualAuthorizes $15,000,000 per year Authorizes $20,000,000 per year.Effective for appropriation, fiscal 1959. C. Allotments Out of the sum appropriated— Substitutes $10,000,000 for $7,500,000 in both 1. $7,500,000 shall be allotted as follows: 1 and 2 and also provides that the uniform to each State $60,000 and the remainder grant of $60,000 to each State in 1 shall be according to the need of each State after made even though less than the full authori- taking into consideration the number of zation is appropriated. crippled children in the State in need of the services, and the cost of furnishing such services. 2. The other $7,500,000 is allotted according to the financial need of each State after taking into consideration the number of crippled children in each State in need of the services and the cost of furnishing such services.[Proportionate reduction in amountsiffullauthorized sum isnot appropriated.]

GPO 861-830

ACTUARIAL COST ESTIMATES AND SUMMARY OF PROVISIONS OF THE OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE SYSTEM AS MODIFIED BY THE SOCIAL SECURITY AMENDMENTS OF 1958

(PUBLIC LAW 85-840, APPROVED AUGUST 28, 1958)

w SEPTEMBER2,1958

Prepared for the useof the Committee on Ways and Mean3 by Robert J. Myers, Actuary to the Committee

UNITED STATES GOVEENMENT PRINTING OFFICE WASHINGTON: 1958 COMMITTEE ON WAYS ANDMEANS WILBUR D. MILLS, Arkansas, flairman NOBLEJ. GREGORY, Kentucky DANIEL A. REED, New York AIME J. FORAND, Rhode Island THOMAS A. JENKINS, Ohio HERMAN P. EBERHARTER, Pennsylvania RIOHARD M. SIMPSON, Pennsylvania OEOIL R. KING, OaliIornia ROBERT W. KEAN, New Jersey THOMAS J. O'BRIEN, Illinois NOAH M. MASON, Illinois HALE BOGGS, Louisiana HAL HOLMES, Washington EUGENE J. KEOGH, New York JOHN W. BYRNES, Wisconsin BURR P. HARRISON, Virginia ANTON! N. SADLAK, Oonnecticut FRANK M. KARSTEN, Missouri HOWARD H. BAKER, Tonnpssce A. S. HERLONG, JR., Florida THOMAS B. OUItTIS, Missouri EUGENE J. MCOARTHY, Minnesota FRANK IKARD, Texas THADDEUS M. MAOHROWIOZ, Michigan JAMES B. FRAZIER, Ja., Tennessee LEO H. IRWIN, Clerk JomM. MAWFHT, Jr., A8sithznt Clerk THOMAS A. MARTIN, Minority Advi8er JAMES W. RIDDELL, Professional Staff GERARD M. BRANNON, PrOfeRsional Staff ACTUARIAL COST ESTIMATES AND SUMMARY OF PROVISIONS OF THE OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE SYSTEM AS MODIFIED BY THE SOCIAL SECURITY AMEND- MENTS OF 1958 (PUBLIC LAW85-840,APPROVED AUGUST 28, 1958)

A. INTRODUCTION This actuarial study presents, in sections B to F, the long-rangecost estimates for the old-age, survivors, and disability insurancepro- visions of H. R. 13549 (Social Security Amendments of 1958)as passed by the Congress.This bill was passed by the House of Rep-. resentatives on July 31, 1958, and a somewhat amended versionwas passed by' the Senate on August 16, 1958.The Senate amendments to the House-passed bill were accepted by the Houseon August 19, 1958.The President approved the bill on August 28, 1958, and it has been designated Public Law 85—840. The changes made by the Senate in the provisions applicable to the old-age, survivors, and dis-. ability insurance system were, for the most part, ofa technical nature (1Iie principal exception being the change of the effective date for the payment of the increased benefits—from the third month after the month of enactment to January 1959), and therefore did not haveany significant effect on the actuarial cost estimates made for the bifias it passed the House. A summary of the benefit, coverage, and financing provisions of the old-age, survivors, and disability insurance system following the 1958 amendments is contained in section G. From an actuarial cost standpoint, the main features of the 1958 amendments, as agreed to by the conference committee,are as follows (also see chart A):. (1) Benefits are increased by 7 percent, with a minimum increase of $3 for a retired, worker aged 65 or over (accompanied by increases in the minimum and maximum benefits). (2) Dependents benefits are provided in respect to disability beneficiaries, in the same manner as for old-age beneficiaries (retired workers). (3) The insured status provisions for monthly disability benefitsare liberalized by. eliminating the requirement of currently insured status. (4) The provision for offset of certain Federal disability benefits and workmen's compensation benefits against social security disability benefits is eliminated. (5) Parent's benefits are payable regardless of the existence of other survivors. 1 2 ACTUARIAL COS'TESTIMATESOF SOCIAL SECURITY CIART A.—Major change8 in old-age, survivors, and di.sability insurance sgsem made by 1958 amendments

Item Previous law 1958 amendments

Benefit formula 55 peréent of first $110 of average wage, 58.85 percent of first$110of plus 20 percent of next $240. average wage, plus 21.4 percent of next $290 (i.e., an lncreae of 7 percent). Minimum primary benefit $30 $33. Maximum family benefit $200 $2M. Ellgibllity for parent's benefits..Only when no surviving spouse oiRegardless of existence of other child who could receive benefits. survivors. Retirement test Benefits never withheld for a monthBenefits never withheld for a U wages are $80 or less, month if wages &e $100 or less. Dependents benefits for disabil-None provided Same as In the case of a retired ity beneficiaries, worker. Offset provisionfor disabilityBenefits reduced by other FederalProvision elImIn'ad. benefits, disability benefits (except Veterans' Administration compensation) or workmen's compensation benefits. Insured status provision for dis-Currently Insured, fully Insured, andFully Insured and 20 quarters ability benefits. 20 quarters of coverage out of last 40 of coverage, out of 'ast 40 quarters. quarters. Insured status provision for dis-Currently Insured and 20 quarters ofFully Insured and 20 quarters ability freeze, coverage out of last 40 qunrters. of coverage out of last 40 qu&ters. Maximum earnings base $4,200 $4,800. f1959, 43' percent 1959, 5 percent. Combinedemployer-employeej1960 to 1964, 5½ percent 1960 to 1962,6 percent. contributionschedule(sell- 195 to 1969, 6½ percent 1963 to 1965, 7 percent. emnloyed pay 75 percent of1970 to 1974 73' Dercent 1966 to 1968, 8 percent. such combined rate 1975 and after, 8 percent 1969 and after, 9 percent.

(6) The retirement test is liberalized by increasing from $80 to $100 the amount of wages an individual can have in amonthand still receive benefits regardless of his annual earnings. (7) The maximum earnings base for both benefits and contributions is increased from $4,200 to $4,800. (8) The contribution schedule is increased by one-half of 1 percent in the combined employer-employee rate (and by three-eighths of 1 percent for the self-employed) in 1959 and by accelerating future scheduled increases so that they occur at 3-year intervals instead of 5. year intervals.Accordingly, the combined employer-employee contribution rate is 5 percent for 959, increasing to 6 percent in 1960, and then rising at 3-year intervals until the ultimate rate of 9 percent is reached in 1969. Under the 1958 amendments, benefits are computed from a table set forth in the law.At first glance, it would appear that an entirely new principle had been adopted from that prevailing in the previous laws which specified a defiuiite benefit formula and minimum and maximum benefit provisions.Actually, however, this table is based on a definite formula and minimum and maximum benefit provisions, which are built into the table so that there is no change in the basic principle that has prevailed over the years.Certain approximations, however, have been made because of the necessary grouping involved in constructing a benefit table that, for facility of admmis- tration, is in terms of primary benefits rounded to the nearest dollar. The benefit formula for the primary insurance amount under the 1954 act was 55 percent of the first $110 of average monthly wage, plus 20 percent of the next $240 of such wage.The 1958 amendments, by increasing benefits by 7 percent and by raising the maximum earn- ACTUARIAL COST ESTIMATES OF SOCIAL SEC1JRITY 3 ings base to $4,800, thus changed this formula to 58.85 percent of the first $110 of average monthly wage, plus 21.40 percent of the next $290 of such wage (except that in some cases for average monthly wages under$85, a slightly higher amount is payable so as to fit in with the increased minimum benefit).The minimum primary insurance amount (and the minimum benefit for a survivor family consisting of only 1 beneficiary) of $30 a month established under the 1954 act is increased to $33 by the bill. The 1954 act also established certain maximum family benefits, namely the lesser of $200 or 80 percent of the average monthly wage, but with the exception that the latter maximum could not decrease the total family benefit below the larger of $50 or 1% times the primary insurance amount.Under the 1958 amendments, the family maximum benefit provision has been changedso that it is the lesser of $254 (which is twice the maximum possible primary insurance amount, namely that for an average monthly wage of $400) or 80 percent of average wage (as before), but with the exception that the latter maximum cannot reduce the total family benefit below the larger of 1 times the primary insurance amount (as before) or tfie primary insurance amount plus $20 (having the effect of setting this exception not lower than $53).In actual application, the 80 percent maximum will generally yield somewhat more than the mathematical result of taking 80 percent of the individual's average wage since the benefit table provides for maximum family benefits on the basis of 80 percent of the upper end of the range of average wages that produce the rounded primary insurance amount.As the 1958 amendments actually work out, the maximum family benefit would be as shown below for various average monthly wages and primary insurance amounts:

Average monthly wage Primary Insurance Maximum famfly benefit amount

$67 or under $33 to $40 Pthnary Insurance amount pIus $20. $67 to $127 $40 to $68 13 tlme3 primary Insurance amount. $128 to $319 $89 to $109 80 percent of average wage (approximately). $3) to $400 $110 to $127 $254.

NorE.—As shown above, in 1 Instance, either of 2 methods of determining the maximum famfly benefit can be used (of course, yielding the same result). The changes made by the 1958 amendments have various effective dates.The increase in the earnings base and in the contribution rates become effective in January 1959.The general 7 percent increase in th benefits also becomes effective in January 1959 (with the checks for such month being sent out early in February).The changes in the other benefit provisions have various effective dates.Thus, the dependents benefits in respect to disability beneficiaries and the liberalized provisions in regard to insured status requirements for disability benefits become effective for September 1958, while the elimination of the offset provision of other disability benefits against social-security disability benefits becomes etYective for August 1958.The changes in the retirement test generally become effective in January 1959, and the liberalization in regard to parent's benefits becomes effective for September 1958. 4 ACTUARIALCOsrrESTIMATESOF SOCIAL SECURITY

B. FINANCING POLICY The Congress has always carefully considered the cost aspects of the old-age, survivors, and disability insurance system when amendments to the program have been made.In connection with the 1950 amendments, the Congress was of the belief that the program should be completely self-supporting from.contributions of covered individuals and employers.Accordingly, in that legislation, the provision permitting appropriations to the system from general revenues of the Treasury was repealed.This policy has been continued in subsequent amendments.Thus, the Congress has always very strongly believed that the tax schedule in the law should make the system self-supporting as nearly as can be foreseen and therefore actuarially sound. The concept of actuarial soundness as it applies to the old-age, survivors, and disability insurance system differs considerably from this concept as applicable to private insurance although there are certain pomts of similarity—especially as concerns private pension plans.Thus, the concept of "unfunded accrued liability" does not by any means have the same significance for a social insurance system as it does for a plan established under private insurance principles.In a private insurance program, the insurance company or other administer- •ing institution must have sufficient funds on hand so that if operations are terminated, the plan will be in a position to pay off all the accrued liabilities.This, however, is not a necessary basis for a national compulsory social insurance system.It can reasonably be presumed that under Government auspices such a system will continue indefinitely into the future.. The test of finania1 soundness then is not a question of sufficient funds on hand to pay off all accrued liabilities. Rather the test is whether the expected future income from tax contributions and from interest on invested assets will be sufficient to meet anticipated expenditures for benefits and administrative costs. Thus, it is quite proper to count both on receiving contributions from new entrants to the system in the future and on paying benefits to this group.These additional assets and liabilities must be cwisideredto determine whether the system is estimated to be in actuarial balance. Accordingly, it may be said that the old-age, survivors, and disability insurance program is actuarially sound if it is in actuarial balance by reason of the fact that future income from coutributions and from interest earnings on the accumulated trust funds will over the long run support the disbursements for benefits and administrative expenses.Obviously, future experience may be expected to vary from the actuarial cost estimates made uow. Nonetheless, the intent that the system be self-supporting (or actuarially sound) can be expressed hi law by utiizig a contribution schedule that, according to theintermediate-costestimate, resuIts in the system being in balance or substantially close thereto. The actuarial balance under the 1952 act' was estimated, at the time of enactment, to be virtually the same as in the estimates made at the time the 1950 act was euacted.(See table 1.)This was the case because of the rise in earurngs levels in the 3 years preceding the enactment of the 1952 amendments being takeu intO consideration in the estimates for those amendments and this virtually offset the increased cost due to the benefit liberalizations made. New cost esti-

ITheterm' 1952 act" (and similar terms) Is used to designate tte system as it existed after the enactment of the amendments of that year. ACTUARIAL CoST ESTLIvIATES.OF SOCIAL SECURITY 5

matesmade 2 years after the enactment of the 192 amendments indicated that th level-premium cost (i. e, the average long-range. cost, based on discounting at interest, relative to payroll) of the benefit clisbursemen ts and administrative expenses were somewbat more than 0.5 percent of payroll higher than the level-premium e.quiva- lent of the scheduled taxes (including allowance for interest on the existing trust fund). The 1954 amendments as passed by the House of Representatives contained an adjusted contribution schedule that met not only the increased cost of the benefit changes in the bill, but also reduced the aforementioned lack of actuarial balance to the point where, for all practical purposes, it was sufficiently provided for.The bill as it passed the Senate, however, contained several additional liberalized benefit provisions without any offsetting increase in contribution income.Accordingly, although the increased cost of the new benefit provisions was met, the "actuarial insufficiency" as then estimated for the 1952 act was left substantially unchanged under the Senate- approved bill.The benefit costs for the 1954 act, as finally enacted, fell between thpsoI the House- and Senate-approved bills.Accord- ingly, it may be said that under the 1954 act, the increase m the. contribution schedule met all the additional cost of the benefit changes proposed and at the same time reduced substantially the "actuarial insufficiency" which the then current estimates had indicated in regard to the financing of the 1952 act. The estimates for the 1954 act were revised in 1956 to take into' account the rise in the earnings level that had occurred since 1951—52, which period had been used as the basis for the estimates made in 1954.Taking this factor into account reduced the lack of actuarial balance under the 1954 act to the point where, for all practical purposes, it was nonexistent; accordingly, the system was in approximate actuarial balance.The benefit changes made by the 1956 amendments were fully financed by the increased contribution income provided so that the actuarial balance of the system was unaffected, and the program thus remained actuarially sound; this same sit.uation also prevailed for the House-approved and Senate-approved bills. New cost estimates have been made for the old-age, survivors, and disability insurance program taking into account recent experience and modified assumptions as to anticipated future trends.In the past 2 years, there has been a very considerable number of retire- ments from among the groups newly covered by the 1954 and 1956 amendments so that benefit expenditures have run appreciably higher than had been previously estimated.Moreover, the analyzed experience for the recent years of operation indicate that retirement rates have risen or, in other words, that the average retirement age has dropped significantly.This may be due in large part to the liberalizations of the retirement test made in recent years, under which aged persons are better able to effect a smoother transition from full employment to full retirement.These new cost estimates indicate that the program as it was under the provisions of the 1956 act was out of actuarial balance by over 0.4 percent of payroll. In connection with the 1958 amendments, both the House Ways and Means Committee and the Senate Finance Committee stated their belief that not only should any liberalizations in benefit provisions be fully financed by appropriate changes in the tax schedule 6 ACTUARIALCOSrr ESTIMATES OF SOCIAL SECURITY or through other methods, but also that the actuarial status of the System should be improved in similar manner so that the actuarial insufficiency is reduced to the point where it is virtually eliminated, namely below one-fourth of 1 percent of payroll, as has been the case generally in the previous legislation.

C. BASIC AssUMPTIONs FOR COST STIMAT5 Estimates of the future cost of the old-age, survivors, and disability insurance program are affected by many factors that are difficult t determine.Accordingly, the assumptions used intheactuarial cost, estimates may differ widely and yet be reasonable.Benefit payments may be expected to increase continuously for at least the next 50 to 70 years because of factors such as the aging of the popula— tion of the country and the slow but steady growth of the benefit roll that is inherent in any retirement program, public or private, which has been in operation for a relatively short period. The cost estimates presented here for the 1958 amendments are oa a range basis so as to indicate the plausible variation in future costs depending 'upon the actual trend developing for the various cost factors.Both the low- and high-cost estimates are based on high economic assumptions, intended to represent close to full employment, with average annual earnings at about the level prevaiiag in 1956. In addition to the presentation of the cost estimates on a range basis, intermediate estimates developed directly from the low- and high-cost. estimates (by averaging them) are shown so as to indicate the basis for tile financing provisions. In general, the costs are shown as a percentage of covered payroll. This is the best measure of the financial cost of the program.Dollar figures taken alone are misleading.For example, a higher earnings level will increase not only the outgo but also, and to a greater extent, the income of the system.The result is that the cost relative to payroll will decrease. The cost estimates have been prepared on the basis of the same general assumptions and, methodology as those contamted m the Eighteenth Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Dis- ability Insurance Trust Fund (H. Doc. No. 401, 85th Cong.). It should be especially mentioned that the assumptions used in connection with the disability benefits are essentially the same as those used in the original cost estimates for these benefits when they were first incorporated in the law in 1956 (but with certam minor modifications of methodology that result m the cost being shown somewhat lower than originally estimated).The actual experience to date under the very strict definition of "disability" in the law has been significantly lower in cost than the intermediate-cost assumptions would indicate.Nevertheless, until somewhat more experience is available and can be analyzed, it is believed that these cost bases for the monthly disability benefits should be maintained.Disability incidence and termination rates can vary widely—much more so than mortality rates, which are a basic factor in the retirement and survivor beaefit cost calculations. The cost estimates are extended beyond the year 2000 since the aged population itself cannot mature by then.The reason for this is ACTUARIAL COS'T ESTIMATES OF SOCIAL SECURITY 7 thatthe number of births in the 1930's was very low as compared with subsequent experience.As a result, there will be a dip in the relative proportion of the aged from 1995 to about 2010, which would tend to yield low benefit costs for that period.Accordingly, the year 2000 is by no means a typical ultimate year. An important measure of long-range cost is the level-premium contribution rate required to support the system into perpetuity, based on discounting at interest.It is assumed that benefit payments and taxable payrolls remain level after the year 2050.If such a level rate were adopted, relatively large accumulations in the trust fund would result, and in consequence there would be sizable eventual income from interest.Even though such a method of financing is not followed, this concept may nevertheless be used as a convenient measure of long-range costs.This is a valuable cost concept, especially in comparing various possible alternative plans and provisions, since it takes into account the heavy deferred benefit costs. The estimates are based on level-earnings assumptions.This, however, does not mean that covered payrolls are assumed to be the same each year; rather, they rise steadily as the population at the working ages is estimated to increase. Thus, the total taxable payroll under the bill is estimated at about $210 billion in 1960 and is estimated to increase to about $240 billion in 1970, $275 billion in 1980, $365 billion in the year 2000, and then to almost $500 billion eventually.If in the future the earnings level should be considerably above that which now prevails, and if the benefits for those on the roll are at some time adjusted upward so that the annual costs relative to payroll will remain the same as now estimated for the present act, then the increased dollar outgo resulting will offset the increased dollar income.This is an important reason for considering costs relative to payroll rather than in dollars. The cost estimates have not taken into account the possibility of a rise in earnings levels, although such a rise has characterized the past history of this country.If such an assumption were used in the cost estimates, along with the unlikely assumption that the benefits, nevertheless, would not be changed, the cost relative to payroll would, of course, be lower.If benefits, are adjusted to keep pace with risin earnings trends, the year-by-year costs as a percentage of payro would be unaffected.In such case, however, this would not be true as to the level-premium cost—which would be higher, since under such circumstances, the relative importance of the interest receipts of the trust funds would gradually diminish with the passage of time. If earnings do consistently rise, thorough consideration will need to be given to the financing basis of.the system because then the interest receipts of the trust funds will not meet as large a proportion of the benefit costs as would be anticipated if the earnings level had not risen. An important element affecting old-age, survivors, and disability insurance costs arose through amendments made to the Railroad Retirement Act in 1951.These provide for a combination of railroad retirement compensation and social security covered earnings in determining benefits for those with less than 10 years of railroad service (and also for all survivor cases). Financial interchange provisions are established so that the old-age and survivors insurance trust fund and the disability insurance trust fund are to be placed in the same financial position in which they 3OO8O—8———2 8 ACTUARIALCOST ESTIMATES OF SOCIAL SECURITY would have been if there never had been a separate railroad retirement program.It is estimated that, over the long range, the net effect of these provisions will be a relatively small gain to the old-age, survivors, and disability insurance system since the reimbursements from the railroad retirement system will be somewhat larger than the net additional benefits paid on the basis of railroad earnings.

D. RESULTS OF INTERMEDIATE-COST ESTIMATE The intermediate-cost estimates are developed from the lowcost and high-cost estimates by averaging them (using the dollar estimates and developing therefrom th corresponding estimates relative to payroll).The intermediate-cost estimate does not represent the most probable estimate, since it is impossible to develop any such figures. Rather, it has been set down as a convenient and readily available single set of figures to use for comparative purposes. The Congress, in enacting the 1950 amendments and subsequent legislation, was of the belief that the oldage, survivors, and disability inswance program should be on a completely self-supporting basis or, in other words, actuarially sound.Therefore, a single estimate is necessary in the development of a tax schedule intended to make the system self-supporting.Any specific schedule will necessarily be somewhat different from what will actually be required to obtain exact balance between contributions and benefits.This procedure, however, does make the intention specific, even though in actual practice future changes in the tax schedule might be necessary.Likewise, exact self-support cannot be obtained from a specific set of integral or rounded fractionji tax rates increasing in orderly intervals, but rather this principle of self-support should be aimed at as closely as possible. The contribution schedules contained in the 1956 act and in the 1958 amendments are as follows (in each case, one-fourth percent of the employer rate and of the employee rate, and three-eighths percent of the self-employed rate is used for monthly disability benefits):

Employee rate Sell-employed rate (same for employer) Calendar year 1958 1958 1956 act amend- 1956 act amendments ments

Percent Percent Percent Percent 1958 2( 23 3/8 3 1959 2( 23' 3 3 1960 to 1962 2% 3 43 4 1963 to 1964 28% 3 4 534 1066 33 3 4 53j 1968 to 1968 33 4 4 6 1969 3( 43' 4 6 1970 to 1974 3% 43' 5 6 1975 and after 43, 4Y2 6 6%

To summarize the changes in the actuarial balance of the system, from the provisions of the 1956 act to the provisions under the 1958 amendments, the increased revenue to the program that results from the changes in the tax schedule and from the net effect of the increase of the maximum earnings base amounts to 0.91 percent of payroll on a level-premium basis insofar as the old-age and survivors insurance part of the program is concerned.Correspondingly, the total cost' ACTUARIAL COST ESTIMATES OF SOCIAL SECURITY 9 ofthe old-age and survivors insurance benefit changes in the bill amounts to 0.59 percent of payroll.Thus there is an excess of long- range income over outgo resulting from the provisions of the 1958 amendments of 0.32 percent of payroll on a level-premium basis. Since under the 1956 act it is estimated that the actuarial deficit in the program was0.57percent of payroll, the net result of the 1958 amendments is to place the program in a position where it has an estimated actuarial deficit of 0.25 percent of payroll.This very substantial improvement in the financial basis of the program brings the anticipated deficit well within the range that will permit the program to be considered "actuarially sound." Table 1 shows that the 1958 amendments reduce the lack of actuarial balance of the old-age and survivors insurance system from 0.57 percent of payroll to 0.25 percent of payroll, or about the same level as was the case for the 1956 amendments at the time they were enacted.At the same time, the disability insurance system has an actuarial surplus of 0.01 percent of payroll under the bill, as compared with 0.15 percent under the provisions of the 1956 act.The effect of the 1958 amendments on the combined old-age, survivors, and clis- ability insurance system is to reduce the actuarial deficit from 0.42 percent of payroll to 0.24 percent, which is well within the margin of variation posible in actuarial cost estimates, and which is about the same as has generally prevailed in the past when the system has been in substantial actuarial balance.If the cost estimates had been based on current earnings levels (instead of those for 1956), the lack of actuarial balance would have been shown as somewhat less than 0.24 percent of payroll. Table 2 traces through the change in the actuarial balance of the system from its situation under the 1956 act (according to the latest estimate) to that under the 1958 amendments, according to the major changes made. It should be emphasized that in 1950 and in subsequent amendments the Congress did not recommend that the system be financed by a high-level tax rate in the future, but rather recommended an increasing schedule, which, of necessity, ultimately rises higher than the level-premium rate.Nonetheless, this graded tax schedule will produce a considerable excess of income over outgo for many years •so that sizable trust funds will develop, although not as large as would arise under a level-premium tax rate.This fund will be m- vested in Government securities (just as is also the case for the trust funds of the civil-service retirement, railroad retirement, national service life insurance, and United States Government life-iiisurance systems).The resulting interest income wifi help to meet part of the higher benefit costs of the future. The revised contribution schedule in the 1958 amendments, has a twofold effect on the financing of the system.First, there is a uniform one-half of 1 percent increase in the combined employer-employee rate for all future years beginning with 1959.Second, the subsequent increases in the contribution rate, which are scheduled at 5-year intervals in the 1956 act, are advanced to 3-year intervals.As shown in table 2, the first of these changes quite naturally has the effect of producing additional income equivalent to 0.50 percent of payroll on a level-premium basis.The other change in the tax schedule, namely 10 ACTUARIALCOST ESTIMATES OF SOCIAL SECURITY accelerating the interval between increases has the level-premium effect of increasing income to the system by 0.19 percent of payroll. Another change made by the 1958 amendments also has the effect of increasing the income to the system, namely, raising the maximum taxable and creditable earnings base frotn $4,200 to $4,800 a year. This change has the effect of increasing income by a gross amount equivalent to 0.55 percent of payroll on a level-premium basis, but this is partially offset by the additional benefits that will be paid on the higher earnings credited (namely, 0.32 percent of payroll on a level-premium basis).Accordingly, the net effect is equivalent additional income of 0.23 percent of payroll on a level-premium basis. The level-premium cost of the old-age and survivors insurance benefits (without considering administrative expenses anti the effect of interest earnings on the existing trust fund) under the 1956 act, according to the latest intermediate-cost estimate, is about 8.0 percent of payroll, while the corresponding figure for the 1958 amendments is 8.4 percent.Similarly, the corresponding figures for the disability benefits are 0.35 pernt for the 1956 act and 0.49 percent for the 1958 amendments. Table 3 presents the benefit costs under the 1958 amendments for each of the various types of benefits. The level-premium contribution rates equivalent to the graded schedules in the 1956 act and in the 1958 amendments may be computed in the same manner as level-premium benefit costs.These are shown in table 1 for income and disbursements after 1957 (except for the original estimate for the 1956 act, which figures are based on operations after 1955).The figures for the net actuarial balance are also shown in table 1. Old-age and survivors insurance benefit disbursements for the calendar year 1958 are estimated to be increased by less than $1 million by the 1958 amendments, while there is, of course, no additional income to the fund during the year.In calendar year 1959, such benefit disbursements under the 1958 amendments total about $9.5 billion, or an increase of about $650 million over previous law. At the same time, contribution income for old-age and survivors insurance for 1959 amounts to about $8.6 billion under the 1958 amendments, or $1.1 billion more than under previous lawThus, the excess of benefit outgo over contribution income is reduced from $1.4 billion under previous law to $900 million under the 1958 amendments.The decreases in the old-age and survivors insurance trust fund are not as large as the figures just given because the interest receipts exceed outgo for administrative expenses and transfers to the railroad retirement accounts. In 1960, old-age and survivors insurance benefit disbursements under the 1958 amendments are, according to the intermediate cost estimate, $10.0 billion, or an increase of $700 million over the previous law.At the same time, contribution income for old-age and survivors insurance for 1960 is $10.6 billion under the 1958 amendments, or $1.5 billion more than under previous law.Accordingly, in 1960, there is an excess of contribution income over benefit outgo of about $600 million under the 1958 amendments, whereas under previous law there would be a deficit of about $300 million.Under the 1958 amendments, the excess of contribution income over benefit outgo is about $500 million in 1961, about $50 million in 1962, and about $1.5 billion ACTUARIAL COST ESTIMATES OF SOCIAL SECURITY 11 a year in 1963 and in 1964. On the other hand, under previous law, during each year of the period 1961—64, there would be deficits of contribution income as compared with benefit outgo, ranging up to as much as $1 billion. As to the disability insurance system, benefit disbursements for the calendar year 1958 are estimated to be increased by about $18 million by the 1958 amendments, while there is,of course, no additional income to the trust fund during the year.In calendar year 1959, such benefit disbursements under the 1958 amendments total about $430 million, or an increase of about $200 million over previous law.At the same time, contribution income for disability insurance for 1959 amounts to about $980 million, or only a small increase over previous law (solely because of raising the taxable earnings base, since there is no change made in the amount of contributions assignable to this program).Nonetheless, in 1959, there is an excess of contribution income over benefit outgo of about $500 million.Similarly, in 1960 and the years immediately following, contribution income is estimated to be well in excess of benefit outgo—by as much as $300 million in 1965 and, of course, somewhat larger amounts in the earlier years. Table 4 gives the estimated operation of the old-age and survivors insurance trust fund under the 1958 amendments for the long-range future, based on the intermediate-cost estimate.It will, of course, be recognized that the figures for the next two or three decades are the most reliable (under the assumption of level-earnings trends in the future) since the populations concerned—both covered workers and beneficiaries—are already born.As the estimates proceed further into the future, there is, of course, much more uncertainty—if for no reason other than the relative difficulty in predicting future birth trends, but it is desirable and necessary nonetheless to consider these long-range possibilities under a social-insurance program that is intended to operate in perpetuity. In every year after 1959, for almost the next 30 years, contribution income under the 1958 amendments, is estimated to exceed old-age and survivors insurance benefit disbursements.Even afterthe benefit outgo curve rises ahead of the contribution income curve in 1985, the trust fund will nonetheless continue to increase because of the effect of interest earnings (which more than meet the administrative expense disbursements and any financial interchanges with the railroad retirement program).As a result, this trust fund is estimated to grow steadily, reaching $50 billion in 1970, $99 billion in 1980, and $163 billion at the end of this century.In the very far distant future; namely, in about the year 2030, the trust fund is estimated to reach a maximum of about $295 billion, and then decrease slowly.Neverthe- less, even 90 years from now, this estimate would show a trust fund of about $200 billion.The fact that the trust fund would not become exhausted until somewhat more than a century hence, indicates that the proposed tax schedule is not quite self-supporting although it is, for all practical purposes, sufficiently close so that the system may be said to be actuarially sound.This general situation was also true for the 1950 act and for subsec[uent amendments, according to the estimates made when they were being considered. On the other hand, the disability insurance trust fund grows steadily under the 1958 amendments.(See table 5.)In 1970, it is 12 ACTUARIAL COST ESTIMATES OF SOCIAL SECURITY shown as being $5.7 biffion, while in 1980 and 2000, the corresponding figures are $6.8 billion and $132 billion, respectively.There is aa excess of contribution income over benefit disbursements for every year up to about 1975, and even thereafter the trust fund continues to grow because of its interest earnings.In fact, this trust fund is never shown to decline in any future year, which is to be expected since the level-premium cost of the disability benefits according to the intermediate-cost estimate is slightly lower than the level-premium income of one-half of 1 percent of payroll. E. RESULTS OF COST ESTII1ATES ON RANGE BASIS As indicated previously in connection with table 1, the excess of (1) the level-premium contribution rate equivalent to the graded schedule m the law over (2) the level-premium cost of benefit payments and administrative expenses (after appropriate adjustment for the effect of interest earnings on the existing trust fund) is used to indicate the actuarial balance of the system. A negative figure indicates the lack of actuarial balance; a positive figure indicates more than sufficient financing (according to the estimate) The following table shows these figures for the 1958 amendments according to the low-cost, high-cost, and intermediate-cost estimates for the old-age and survivors insurance program and for the disability insurance program (computed as of the beginning of 1958):

[Percent]

Item Low cost 111gb cost Intermediate cost

Old-age and survivors Insurance: Contributions 8.05 7.98 8.02 Benefitcost' 7.29 9.42 8.2 Net difference .76 —1.44 —.25 Disability Insurance: Contributions .50 .50 .50 Benefitcost' .33 .67 .49 Net difference .17 —.17 .01

1 IncludIngadjustments (a) to reflect tbe lower contribution rate for tbe self-employed as compared witb tbe combined employer-employee r$e, (b) for tbe hiterest earnings on tbe existing trust fund, and (c)for administrative expense costs. Table 6 shows the estinated operations of the old-age and survivors insurance trust fund for the low-cost and high-cost estimates under the 1958 amendments, while table 7 gives corresponding figures for the disability insurance trust fund.Under the low-cost estimate, the old-age and survivors insurance trust fund builds up quite rapidly and in the year 2000 is shown as being about $280 billion and is then growing at a rate of about $14 billion a year.Likewise, the disability insurance trust fund grows steadily under the low-cost estimate, reaching about $45 billion in the year 2000, at which time its annual rate of growth is about $2 billion.For both trust funds, after 1959, benefit disbursements do not exceed contribution income in any year in the foreseeable future. On the other hand, under the high-cost estimate, the old-age and survivors insurance trust fund builds up to a maximum of about $85 billion in about 25 years, but decreases thereafter until it is exhausted in the year 2010. Under this estimate, benefit disbursements ACTUARIAL COST ESTIMATES OF SOCIAL SECURITY 13 fromthe old-age and survivors insurance trust fund are smaller than contribution income during all years before 1980, except 1959 and 1962 (in the latter year a relatively small deficit would be shown). As to the disability insurance trust fund, in the early years of operation, contribution income materially exceeds outgo, and this is so until1965.Accordingly, the disability insurance trust fund, as shown by this estimate, would be about $3 billion in 1965 and would then slowly decrease until being exhausted in 1976. These results are consistent and reasonable, since the system on an intermediate-cost estimate basis is intended to be approximately self- supporting, as indicated previously.Accordingly, a low-cost estimate should show that the system is more than self-supporting, whereas a high-cost estimate should show that a deficiency would arise later on. In actual practice, under the philosophy in the 1950 and subsequent acts, as set forth in the committee reports therefor, the tax schedule would be adjusted in future years so that neither of the developments of the trust funds shown in tables 6 and 7 would ever eventuate. Thus, if experience followed the low-cost estimate, and if the benefit provisions were not changed, the contribution rates would probably be adjusted downward—or perhaps would not be increased in future years according to schedule.On the other hand, if the experience followed the high-cost estimate, the contribution rates would have to be raised above those scheduled.At any rate, the high-cost estimate does indicate that under the tax schedule adopted, there would be ample funds to meet benefit disbursements for several decades, even under relatively high-cost experience. Table 8 shows the estimated costs oi the oldage and survivors benefits and of monthly disability benefits under the bill as a percentage of payroll through the year 2050 and also the level-premium cost of the two programs for the low—cost, high-cost, and intermediate- cost estimates (as was previously shown in tables 1 and 3 for the intermediate-cost estimate).

F. SUMMARY OF ACTUARIAL COST ESTIMATES The old-age, survivors, and disability insurance system, as modified by the 1958 amendments, has a benefit cost that is very closely in balance with contribution income.This also was the case for the 1950 act and subsequent amendments at the time they were enacted.In fact, the system as modified by the 1958 amendments is significantly closer to actuarial balance, according to the intermediate-cost estimate, than is the previous law.The system as modified by the 1958 amendments, and the system as it was modified by the previous amendments, has been shown to be not quite self-supporting under the intermediate-cost estimate.There is very close to an exact balance, especially considering that a range of error is necessarily present in the long-range actuarial cost estimates and that rounded tax rates are used in actual practice.Accordingly, the old-age, survivors, and disability insurance program, as now amended, is actuarially sound.In fact, the actuarial status of the program is very much improved over that of previous law since the cost of the liberalized benefits provided by the 1958 amendments is more than met by tile increased contributions that are scheduled (with such rise going fully into effect almost immediately upon the inauguration of the new benefit provisions). 14 ACTUARIAL COST ESTIMATES OF SOCIAL SECURITY The disability insurance portion ofthe program—established under the 1956 act—when considered separately, shows a small favorable actuarial balance because the contribution rate allocated is slightly in excess of the cost for the disability benefits, based on the intermediate-cost estimate.Considering the variabihty of cost estimates for disability benefits, this small actuarial excess is not significant. TABLB 1.—Actuarial balance of old-age, survivors, and disability insurance program under various acts for various estimates on an intermediate-cost basis tPercent]

Level-premium equivalent I Date of

Legl1atiou estimate . Benefit Contribu-Actuarial costs2 tions balance $

Old.age,survivors, and disability Insurance'

19Oact. l9O 6.05 5.95 —0.10 1952 act 1952 5.85 5.75 —.10 1952 act 1954 6.62 6.05 —.57 1954 bill (House) 1954 7.34 7.i2 —.22 1954 act 1954 7. O 7.12 —.38 1954 act 1956 7.45 7.29 —.16 1956 act 1956 7.85 7.72 —.13 1950act 1958 8.25 7.83 —.42 1958act 1958 8.76 8.52 —.24

Old-age and survivors Insurance'

196 act 1956 7.43 7.23 —0.20 1956 act 1958 7.90 7.33 —.57 lgS8act 1958 8.27 8.02 —.26

Disability insurance'

j9S6act 1956 0.42 0.49 +0.07 1950 act 1958 .3 .50 +. 15 195B at 1958 .49 . O +. 01

I Expressed as a percentage of taxable payroll. 'Including adjustments (a) to reflect the lower contribution rate for the self-employed as compared with the combined employeremployee rate, (b) for the Interest earnings on the existing trust fund, and (c) for admInistrative expense costs. 3 A negative figure Indicates the extent of lack of actuarial balance. A Positive figure Indicates more than stimc!ent financing, according to the particular estimate. 'The disability insurance program was Inaugurated In the 1950 act so that all figures for previous legislation are for the old-age and survivors insurance program only. TABLB 2.—Changes in estimated level-premium cost of benefit payments as percentage of taxable payroll, by type of change, intermediate-cost estimate at 3 percent interest, 1956 and 1958 acts

Old-age and Disability Item survivors Insurance insurance

Percent Percent Lack of balance C—) or surplus (-f-) under 1956 act —0.57 +0.15 Increaseo(percentintaxschedu1e +50 Acceleration of tax schedule (3-year rises) +. 19 Increasedlncomefromhigherearnlflgsbase +52 +03 Additional henefit cost from higher earnings base —.30 —.02 Increase of benefit level by 7 percent (or $3, if more) —.57 —.03 Dependents benefits (or disability heneficiaries —.06 Elimination of disability henefit offset provision —.03 Modification of insured status requirements —.03 Liberalizing retirement test —.01 Paying parent's benefits in all cases —.01 Lack of balance (—)orsurplus (+) under 1958 act —.25 +. 01 ACTUARIAL COSTESTIMATESOF SOCIAL SECURITY 15

TABLE3.—Estimated level-premium cost of benefit payments, administrative expenses, and interest earnings on existing trust fund under 1958 amendments as percentage of taxable payroll,' by type of benefit, intermediate—cost estimate at 3 percent intere8t

Old-age and Disability Item survivors insurance Insurance

• Percent Percent Primary benefits 592 0.43 Wife's benefits .57 .03 Widows benefits 1.23 (2 Parent's benefits .02 (2 Child's benefits .43 .03 Mother's benefits .11 (2) Lump-sum death payments .12 (2) Total benefits 8.40 .49 Administrative expenses .09 .01 Interest onexistlngtrustfund3 —.22 —.01 Net total level-premium cost 8.27 .4

'Including adjustment to reflect the lower contribution rate for the self-employed as compared with the combined employer-employee rate. 2 This type of benefit not payable und this program. 3ThIsitem Is taken as an offset to the benefit and administrative expense costs. TABLE 4.—Progress of old-age and survivors insurance trust fund under 1958' amend ments,high-employmentassumptions,intermediate-costestimateat3 percent interest [In mililonsi

Railroad Contribu- Benefit Adminis-.retirementInterest onBalance in Calendar year tions payments trative financial fund 2 fund3 expenses Inter- change 1

Actualdata

1951 $3,367 $1,885 $81 $417 $15,540 1952 3,819 2, 194 88 365 17, 442 1953 3,945 3,006 88 414 18,707 1954 5,163 3,670 92 468 20,576 1955 5,713 4968 119 461 21,663 1956 6, 172 5,715 132 531 22, 519 1957 8,826 7,347 4162 557 22,393

Estimated data .

1958 $7,297 $8,318 $156 —$124 $565 $21,656 1959 8,632 9,504 161 —219 567 20, 971 1960 10,621 10,027 166 —196 590 21,794 1961 11,106 10618 169 —195 634 22,552 1962 11,256 11,207 172 —199 672 22,902 1963 13, 124 11,678 175 —156 704 24, 722 1964 13,652 12,016 178 —156 761 26, 784 1965 13,830 12,333 181 —160 820 28, 762 1970 19,404 15,030 201 —70 1,406 50,330 1975 20,880 17,766 222 —59 2,185 76,42 1980 22,301 20,874 246 12 2.856 98,678 2000 29,695 29,872 332 192 4, 762 163,448 2020 36,124 40,716 426 192 8,379 285,282

I A positive figure indicates payment to the trust fund from the railroad retirement account, and a negative figure Indicates the reverse. At 3 percent, except 2.6 percent in 1958, 2.7 percent in 1959, 2.8 percent in 1960, and 2.9 percent In 1961. 3 Not includIng amounts In the railroad retirement account to the credit of the old-age and survivors msurance trust fund.In millions of dollars; these amounted to $377 for 193, $284 for 1954, $163 for 1955, $60 for 1956, and nothing for 1957 and thereafter. 4 This figure is artificially high because reimbursements from the disability insurance trust fund, called for by the law, had not been made In calendar year 1957.These amounted to About $14 million. 16 ACTUARIALCOSIT ESTIMATES OP SOCIAL SECURITY TABLE 5.—Progress of disability insurance trust fund under 1958 amendments, high-employment assumptions, intermediate—cost estimate at 3 percent interest Rn millions]

Railroad Contribu- Benefit Adminis-retirement iInterestonBalance in Calendar year tions payments trative financial fund 2 fund expenses inter—

. change I

Actual data

1957 $702 $fi7 8$3 $7 $649

Estimated data

1958 $914 - $263 $19 $25 $1,306 1959 980 431 21 $10 42 1,887 1960 991 492 23 —20 59 2,402 1961 1,004 555 23 —23 76 2,881 1962 1,018 613 24 —26 92 3,327 1963 1,032 675 24 —28 104 3,737 1964 1,046 736 25 —31 116 4,107 1965 1,059 796 25 —34 128 4,437 1970 1,141 1,052 27 —34 165 5,686 1975 1,227 1, 249 30 —31 187 6,392 1980 1,311 1,380 30 —22 201 6,844 2000 1,745 1,649 40 —2 383 13,194 2020 2,125 2,330 51 1 521 17,764

A positive figure indicates payment to the trust fund from the railroad retirement account, and a negative figure indicates the reverse. 2At3 percent, except 2.6 percent in 1958 2.7 percent in 1959, 2.8 percent in 1960, and 2.9 percent in 1961. This figure is artificially low because reimbursements to the old-age and survivors Insurance trust fund, called for by the law, had not been made in calendar year 1957.These amounted to about $14 million. TABLE 6.—Estimated progress of old-age and survivors insurance trust fund under 1958 amendments, high-employment assumptions, low-cost and high-cost estimates at 3 percent interest [In millions]

Railroad Contribu- Benefit Adminis-retirementInterest onBalance in Calendar year tions payments trative financial lund 2 fund expenses interchange

Low-cost estimate

1965 $13,866 $12,055 $167 —$145 $883 $31, 076 1970 19, 458 14,663 186 —49 1, 54j 55,226 1975 21,072 17, 217 206 —32 2, 441 85,607 1980 22, 773 19,965 228 39 3 328 115, 570 2000 32, 137 26,835 310 218 8,071 279, 701

High-cost estimate

1965 $13,794 $12,609 $195 —$176 $758 $26, 447 1970 19, 351 15, 398 216 —91 1,270 45, 4.34 1975_.... 20,688 18,315 239 -85 1,929 67, 256 1980 21,829 21, 782 263 —14 2,385 81,786 2000 27,253 32, 511 354 167 1, 454 47, 194

'A positive figure indicates payment to the trust fund from the railroad retirement account, and a negative figure indicates the reverse. 2At3 percent, except 2.6 percent in 1958, 2.7 percent In 1959, 2.8 percent in 1960, and 2.9 percent in 1961. Fund exhausted In 2010. ACTUARIAL COST ESTIMATES OF SOCIAL SECURITY 17

TABLE 7.—Estimated progress of disability insurance trust fund under 1958 amendments, high-employment assumptions, low-cost and high-cost estimates at 3 percent interest [In millionsi

. Raflroad Contribu- Benefit Athninis-retirementInterest onBalance in Calendar year tions payments trative financial fund' fund

. expenses Inter- change 1

Low-cost estimate

1965 $1,063 $535 $22 —$32 $164 $5,876 1970 1,144 699 —32 259 9,099 1975 l,9 834 25 —29 360 12.527 1980 1,339 930 27 —20 474 j6449 2000 1,889 1,110 36 1,310 45,372

. High-costestimate

1955 $1,056 $1,059 $28 —$35 $88 $2,998 1970 1,138 1,407 30 —35 71 2,272 1975 1,216 1,660 33 —33 15 258 1980 1 283 1,828 35 —24 (3) (3) 2000__.... 1,602 2,189 44 —4 a) 8)

I Apositive figure Indicates payment to the trust fund from the railroad retirement account, and a negative figure Indicates the reversQ. 2At3 percent, except 2.6 percent In 1958, 2.7 percent In 1959, 2.8 percent In 1960, and 2.9 percent In 1961. Fund exhausted In 1976. TABLE 8.—Estimated cost of benefits of old-age, survivors, and disability insurance system as percent of payroll,1 under 1958 amendments (n percent)

Calendar year Low-cost ugh-cost Intermediate- estimate estimate cost estimate'

Old-age and survivors insurance benefits

1970 6.47 6.84 6.66 1980 7.46 &49 7.96 1990 7.83 9.91 8.82 7.06 10.06 8.44 25 7.96 13. 10.15 2050 10.08 15.09 12,02 Level-premium cost 3 7.29 9.42 8.27

Disabifity Insurance benefits

1970 0-32 0.63 0.48 1980 .36 .72 .63 1990_ .30 .64 .46 .30 .68 .47 onoc .37 .81 .56 2050 .43 .87 .60 Level-premium cost .33 .67 .49

I TakingInto account lower contribution rate for the self-employed, as compared with combIned employer-employee rate. 2Basedon the average of the dollar costs under the low-cost and high-cost estimates. Level-premium contribution rate, at 3-percent Interest rate, for benefits after 1957, takIng Into account Interest on the Dec. 31, 1957 trust fund, future administrative expenses, and the lower contribution rates payable by the sell-employed. 18 ACTUARIALCOST ESTIMATES OF SOCIAL SECURITY

G. SUMMARY OF OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE SYSTEM (FOLLOWING THE 1958 AMENDMENTS) I. Benefits payable to— (a) Retired Worker, aged 65 or over for men and aged 62 or over for women (but women retiring before age 65 have a lifetime reduction in their benefit of 6% percent for each year that they are less than 65 at time of retirement). (b) Totally and permanently disabled Worker aged 50 to 64—after a 6-month waiting period.(See item VI for definition of disability.) (c) Wife of a retired or disabled worker if she is aged 62 or over, or regardless of age if entitled child is present (but wives claiming benefits before age 65 Who do not have an eligible child present (see item I (e)) have a lifetime reduction on their wife's benefit of 8 percent for each yea.r that they are less than 65 at time of claiming benefits). Dependent 2husbandof retired or disabled worker if he is aged 65 or over. (d) WidoW aged 62 or over or dependent 2widoweraged 65 or over of deceased worker. (e) Children (under age 18, or regardless of age if totally and permanently disabled since before age 18) of a retired worker, of a disabled worker, or of a deceased worker, and the unrernarried mother of eligible children of a deceased worker (the worker's widow, or in some cases his divorced wife) regardless of her age. (J)Dependent2 parents (mother aged 62 or over and father aged 65 or over) of deceased Worker. (g) In addition, a lump-sum payment upon death of an insured worker. (h) In effect, no individual can receive more than one type of monthly benefit, but rather the largest for which lie is eligible. II. Insured stat (a) Based on "quarters of coverage."An individual paid $50 or more of nonfarm wages in a calendar quarter is credited with a quarter of coverage for that quarter (maximum creditable wages in a year— see item X—automatically give 4 quarters of coverage).An individual paid $100 or more of covered farm wages in a year is credited with 1 quarter of coverage for each full $100 of such wages ($400 or more of such wages automatically gives 4 quarters of coverage). An individual with creditable self-employment income in a year (in general, $400 or more) automatically receives 4 quarters of coverage. (b) "Full1 insured" status gives eligibility for all benefits except— (1) Disability benefits, which require fully insured status and 20 quarters of coverage out of the 40-quarter period ending with the quarter in which disability occurred. (2) Dependent husband's benefits and dependent widower's benefits which require both fully and currently insured status. (3) dhild's benefits based on the earnings record of a married woman living with her husband, which are generally payable only if she has currently insured status.

2Proofof dependency must, In gexera1 be filed within 2 years of worker's entit1emext in caseofa depend. t husband, and withIn 2 years of death in case of a dependent widower or dependent parent. ACTUARIAL COST ESTIMATES OF SOCIAL SECURITY. 19 A fully insured person is one who at or after attainment of retirement age (65for men and 62 for women) or at death, if earlier, fulfills any one of the following three alternative requirements: (1) He has 40 quarters of coverage; or (2) He has at least 6 quarters of coverage and at least 1 quarter of coverage (acquired at auy time after 1936) for every 2 quarters elapsing after 1950 (or age 21, if later) and before age 65 for men or age 62 for womeu (or death, if earlier)—see item V, for effect of &sabillty on elapsed period; or (3)(a) For person attaining retirement age or dying before July 1957, he has acquired 6 quarters of coverage in the 2%-year period, Janiary 1955 to June 1957. (b) For person attaining retirement age(or dying before attaining retirement age) in or after July 1957, he has acquired quarters of coverage in at least all but 4 of the quarters 'elapsing after 1954 and up to (but not including) the quarter in which he attains retirement age or dies, if earlier. Most persons who become fully insured will do so under the first or second alternatives.The second alternative enables a man who attained age 65 before July 1954 to become fully insured with just 6 qu&ters of coverage acquired. at any time.Elderly persons who are newly covered under tbe 1954 and 1956 amendments may meet the third alternative (even though not the second).Thus, a man who is newly covered under the 1956 amendments and who attains age 65 before Octcber 1957 will be fully insured if he has a quarter of coverage in each Of the 6 quarters beginning January 1, 1956, and ending June 30, 1957. The third alternative is not effective in any case for persons reaching retfrement age (65 for men and 62 for women) or dying after September 1960, since for them the second alternative is easier to meet. (c) "CwTently insured" status (eligible only or child's mother's, and lump-sum survivor benefits; necessary for husband's and widower's benefits) requires 6 quarters of coverage, within 13-quarter period ending with the quarter of death or entitlement to old-age benefits. (See item V, for effect of disability on 13-quarter period.) III. Worker's old-agebenefitanddisabilitybenefit (a) Worker's old-age benefit ishis primary insurance amount, except for women retiring before age 65.(See item I (a).) (b) Worker's disability benefit is his primary insurance amount. (c) Average monthly wage may be computed under two methods: (1) "1939 law" average (for those with at least 1 quarter of coverage before 1951): based on period from 1937 (or year of attaining age 22, if later) to age 65 for men and age 62 for women, or to subsequent retirement (or death, if earlier) regardless of whether in covered employment in all such years, with dropout of low years, as described in (4); where several periods are possible, the, one producing highest average is used. (2) "New start" average (for thOse with at least 6 quarters of coverage after 1950): same basis as (1), except beginning with 1951 rather than 1937,(N0TE.—Individuals aged 27 or over in 1958 who do not have a "disability freeze"—see item V—before 1959 cannot have an average wage of $400 since they must count 20 A(YrUARIALCOST ESTIMATES OF SOCIAL SECURiTY some years before .1959, when the maximum earnings base was less than $4,800 a year.) In computing the average wage, the 5 lowest years (years in which there were little or no earnings) may be dropped out.Further dropout for both methods is available for disabled persons (see item V) and for certain periods before. age 22. (d) Monthly benefit amount is computed from whichever of the average wages gives the larger benefit, as follows: (1) Using the "1939 law" average, the "original" monthly amount is 40% of first $50 of average wage under method (1), plus 10% of next $200, all increased by 1% for each calendar year before 1951 in which at least $200 of wages was paid.This "original" amount is then increased by a conversion table to give the primary insurance amount as indicated by the following table for certain ifiustrative cases: Ffmary insurance Original amount: aiflount $10 $33 $15 43 $20; $25_ 01 $30 71 $35 79 $40 8 $45 95 (2)Using the "new start" average method, the primary insurance amount is computed from a benefit table that is based approximately on the formula: 58.85% of first $110 of average wage under method (2) plus 2 1.4% of next' $290, rounded to nearest dollar and increase.slightlyin some cases for average wages of under $85. (e)Minimumprimary insurance amount is $33. (f)Thustrativeprimary insu.rance. amounts under "new start" method for various proportions of time in covered employment for wérker who reaches retirement age on January 1, 1991, and who does not have a "disability freeze."

Proportion of years after 1950Incovered

. empIoymen Averagemonthly wage while working All One-bait One-quarter sao $33 $33 $33 $100i 59 3 3* $150 73 O 33 $200 $250 95 72 43 $300 105 78 50 $350 116 84 59 $400' 126 90 66

'Average wage for benefit purposes Is reduced to $395 UemployedIn all years; see note In item III (C) ACTUARIAL COSrrESTIMATESOF SOCIAL SECURITY 21 IV. Benefit tmounts for dependents and survivors, relative to worker's primaryinsuranceamount. (a) Wife or dependent husband: One-half of primary, except for wife without eligible child claiming benefit before age 65.(See item (b) Widow or dependent widowr': Three-fourths of primary. (c) Child: One-half of primary, :exceptthat for deceased worker family, an additional one-fourth of primary is divided among the children. (d) Dependent parent: Three-fOurths of primary. (e) Lump-sum death payment: 3 times primary, with $255 maximum. (f)Maximumfamily benefit is the smaller of (1) $254 or (2) 80% of average wage (approximately), but the latter cannot reduce below the larger of 1% times the primary or the primary plus $20. (g) Minimum amount payable to any survivor beneficiary where ohly one is receiving benefits is $33. (h) Illustrative monthly benefits for retired workers under "New start" method:

Aged 65 or Married man with wife over at retire- claiming beneflt at— ment and Woman re- Average monthly wage nonmarriedtiring at age or married 62 man with Age 62 Age 65 or over wifenot entitled

$50 $33 $2& 40 $45.40 $49.50 100 — 9 47.20 81.20 88.50 I150: 13 58.40 100.40 109.50 *200 84 67.20 115.50 126.00 $250 95 76.00 130.70 142. 50 $3OO_ 105 84.00 144. 40 157.50 *3O 116 92.80 19.50 17t00 127 101.60 174.70 190.50

'Seanotelnitemm(c)(2). (i) Illustrative monthly benefits for survivors of insured workers under "New start" method (rounded to nearest dollar):

Widow Widow Widow Widow 1 child 2 children Average monthly wage aged 62 and 1 and 2 and 3 alone alone or over' cWld children children

$33 $5 $53 $53 $33 $41 $100 44 89 89 89 44 74 $150 55 110 120 120 55 91 63 126 162 162 63 105 $250 71 143 190 203 71 119 $300 79 158 210 240 79. 131 $3O 87 174 232 254 87 145 $4002 95 191 254 254 95 169

'AlSO applicable to aged widower or aged parent. 2 See note In item III (c) (2). 22 ACTUARIAL COSTI' ESTIMATES OF SOCIAL SECURITY V. Preservation of bend rightsfordi8abled ("diabiiy freeze") Periods of total and permanent disability (of at least 6 months' duration) are excluded m determining insured status and average monthly wage, provided the disabled worker is fully. isuredazid has at least 20 quarters of coverage in the 40 quartersendingwith the quarter in which he is disabled.Determinations of disability are, in general, made by State agencies in charge of vocational rehabilitation. VI. Definilion of "permanentand total disability" To be eligible for disability monthly benefits at ages 50—64, to preserve bene4t rights during a periodof disability, or to receive monthly benefits as a disabled child aged 18 or over, an individual must have a disability which is so severethat he is unable to engage in any substantial gainful activity.The impairment must be a medically determinable physical or mental condition that is expected to continue indefinitely or to result in death.In addition, blindness is counted as such a qualifying disability inconnection with the preservation of benefit rights provision (but not necessarily in connection with the monthly benefits). VII. Employment permitted tvithouts'u&pensionof benefits (retirement test) A beneficiary (other than a disability beneficiary, but including dependents and survivors) can earn up to $1,200 in a year in any employment, covered or noncovered, without loss of benefits.For each $80 (or fraction thereof) of covered or noncovered earnings in excess of $1,200, 1 month's benefit is lost.In no case, however, are benefits withheld for anymonth in which the beneficiary's remuneration as an employee was $100 or less and in which he rendered no substantial services in self-employment.For beneficiaries aged 72 or over, there is no limitation.If a retired worker's benefit is suspended, so also are the benefits of his dependents. VIII. Covered employment (a) All employment listed in item (b) that takes place in the 49 States,the District of Columbia, Hawaii, Puerto Rico, or the Virgin Islands, or that is performed outside the United States by American citizens employed by an American employer (or, by election of the employer, by an American citizen employed by a foreign subsidiary of an American employer)iscovered employment.Also covered, under certain conditious, is employment on American ships and aircraft outside the United States. (b) Individuals engaged in the following types of employment are covered, for such employment: (1) Virtually all employees in industry and commerce, other than long-service railroad workers (the railroad service of those who retire or die with less than 10 years of railroad service is counted as covered wages; for those who have 10 or more years of railroad servi€e, survjvor. benefits are based on the combination of railroad wages and covered earnings although generally payable by railroad retirement system). (2) Farm and nonfarm self-employed (other than doctors of medicine) with $400 or more of net earnings from covered self- employment. ACTUARIAL COSrI' ESTIMATES OF Social1scu1* 23 (3) State and local government employees not covered by a retirement system; those under a retirement system (excluding firemen and policemen, except in a few designated States) can be covered by a referendum in whichamajority of the eligibles vote in favor of coverage (in a few designated States, retirement sys— tems can be divided into two groups, those wishing coverage and those not wishing coverage, with all future entrants covered) -In any event, the State must elect such coverage. (4) Nonfarm domestic workers (based on having $50 in cash. wages from one employer in a quarter) - (5)Farmworkers, including farm domestic workers (based on having $150 or more in cash wages, or 20 or more days of employment remunerated on a time basis, from any one employer in a year). (6) Ministers and members of religious orders (other than those who have taken a vow of poverty), either employed by nonprofit iiistitutions (in positions which only a minister can fill) or self-employed, are covered on individual elective basis as self- employed.Other employees of nonpiofit institutions are covered on group elective basis; employer must elect coverage, and at least two-thirds of employees must concur in coverage (then, all employees concurring in coverage and all new employees are covered). (7) Federal civilian employees not covered by retirement systems established by law of the United States (other than a few specifically excluded small categories). (8) Members of the uniformed services (on basic pay). (9) Definition of "employee" is broadened from strict common-law rule to include following groups as "employees"; full- time wholesale saIesmen; full-time life-iiisurance salesmen; agent and commission drivers distributing meat, vegetable; or fruit products, bakery products, beverages (other than milk), or laun- dry or dry—cleaning services; and industrial homeworkers paid at least $50 in cash during a quarter and working under specifica- tions supplied by employer. IX. Wage credits for World War II and subseq'uent military service through 1956 World War II veterans and those in service thereafter (including those who died in service) are, with certain restrictions, given wage credits of $160 for each month of active military service in World War II and thereafter through December 1956; for those in service after 1956, credit is given for service after 1950 even if it is used for purposes of other retirement benefits paid by the uniformed services or by the Veterans' Administration, but in all other cases credit is not given if service is used for any other Federal retirement or survivor system (other than compensation or pension payable by the Veterans' Administration); additional cost of benefits arising from such wage credits is reimbursed to system. X. Maximum ann'uat earrth2gs for benefit and contribution. purposes $4,800 per year for 1959 and after ($4,200 in 1955—58; $3,600 in 1951—54;.and $3,000 in 1937—50).. 24 ACTUARIAL CO& ESTIMATES OF SOCIAL SECURITI'r XI. Tax (or contribution.) rates (a) 23%onemployer and 2% on employee for 1959; 3% for 1960—62; 33%for1963—65; 4% for 1966—68; and 43%thereafter; total tax rate subdivided so that %fromthe employee and %from the employer goes to disability insurance trust fund (for payment of monthly disability benefits) and remainder to old-age and survivors insurance trust fund (for payment of all other benefits). (b) For self-employed, therate is 13 times that for employees (with same relative subdivision between disability benefits and old-age and survivor benefits).Self-employment income taxed is, in general, net income from trade or business; special optional provisions based on two-thirds of gross income are available for farmers with gross income of $1,800 or less (for farmers with gross income of over $1,800 who have a net income of less than $1,200, optional reporting of $1,200 is permitted). (c) No provisions for authorizing appropriations from general revenues to assist in Iluancing the program. 0

Social Security Amendments of. 1958: A Summary and Legislative History

by Charles I. Schottland

Old-Age, Survivors, and Disability insurance: Financing Basis and Policy Under the 1958 Amendments

by Robert J. Myers

Reprinted from the Social Security Bulletin, October 1958 U. S. DEPARTMENT OF HEALTH, EDUCATION, ANDWELFARE•SocialSecurity Administration Social Security Amendments of1958: A Summary and Legislative History by CHARLES I. SCHOTTLAND*

IGNIFICANT andfar-reachingThe act. also makes desirable changeswill materially assist in the early de- changes in the programs of old-which will permit Federal supportvelopment of constructive recommen- Sage, survivors, and disability in-forchildwef areserviceswheredations." needed in urban areas and provides In addition to the many major and surance, public assistance, and mater-for State and local financial particl• nal and child health andwelfare were relatively minor changes made by the patton in the costs of this programamendments, two advisory councils made by Public Law 85-840, signedon an improved baSIs. by President Eisenhower on August were authorized—the one in the field 28, 1958. Increases in benefits under The changes in the public assist-of public assistance and another con- the old-age, survivors, and disabilityance program raised certain basiccerned with child welfare services. insurance program, together with In-questions. Most elements in the newThe law amends not only the Social creases in the amount of earningsformula for Federal sharing in theSecurity Act but corresponding sec• taxable and creditable under thatèosts were considered desirable-—these tions of the Internal Revenue Code. program and Improvements in its taxrelating Federal financial participa- The report of the Committee on structure, mark a milestone in the de-tioninassistance payments moreWays and Means of the House of velopment of the Nation's social in-closely to the fiscal capacities o the Representatives also requests the De- surance programs. At the time theStates; limiting Federal participationpartment of Health, Education, and President signed the bill, he issued aon the basis of the average expendi-Welfare to undertake three studies— statement that included these com-ture per recipient rather than on theone concerned with the problems of ments on the old-age, survivors, andbasis of the payment to the individual hospitalizationandnursing-home disability insurance changes: recipient;and allowing the States costsforbeneficiariesofold-age, greater flexibility in their arrange• survivors, and disability Insurance, Thisactis a significant forward stepments for payment of medical care one with certain aspects of the retire- In the old•age, survivors, and disabil-costs for public assistance recipients.ment test under old-age, survivors, ity insurance program of the socialUnder the new formula, however, ananddisabilityInsurance, and one security system.The Increasesin increased proportion of the total exwith the crediting of tips as wages benefits and in the tax base are de- under the old-age, survivors, and dis- sirable in the light of changes in thependitureismet by theFederal economy since these provisions were Government. The President, in hisability insurance program. last amended in 1954. The increasestatement, commented favorably on Most of the legislation enacted dur- In social security contribution ratessome aspects of the provisions buting the Eighty-fifth Congress that and the accelerated tax schedule inexpressed concern over others. Theaffects programs of the Social Secur- the bill will further strengthen thebill institutes, he said, "the desirableity AdministrationIs embodied in financial condition of this system In principle of varying Federal matchingPublic Law 85-840, the Social Security the years Immediately ahead and Amendments of 1958. In addition the It Is, ofof costs in accordance with the rela- over the long-term future. tive fiscal capacity of each State asEighty-fifthCongressenacted 12 course, essential that the old-age, sur- otherlaws thataffectthese pro vivors, and disability insurance pro-measured by per capita income. How gram, which Is so vital to the eco-ever, the effect of this change is verygrams.1 Their provisions are described noniic security of the American peo-limited because the formula used re-along with those of Public Law 85.840 ple, remain financially sound and self•sults only in increases in the Federalunder the appropriate subject head• supporting. share. In addition, the introductionings. of averaging of benefits o an overall In the field of maternal and childbasis provides increases in the Fe& Summary of Major Provisions health and welfare the new legisla-eral share, regardless of the fiscal The major changes made by this tioncarriesauthorizationforin- capacity of the State." Increases innew legislation in the old•age, survi- creased appropriations and incorpo-the Federal share, he said, "can leadvors, and disability Insurance pro. rates the long-recommended exten-only to a weakening of the respon-gram are listed below. sionof the child welfare servicessibility of the States and commun- 1.Benefit amounts are increased program to all areas instead of pre-ities," and their "financial responsi-by about 7 percent. Monthly benefits dominantly ruraloties.The Presi-bility in these programs should bepayable to retired and disabled work- dent took note of these changes instrengthened, not weakened." He ex- the following statement: 1PublicLaws 85-28.109,110.228,227. pressed the hope "that the work of 229.238, and 239 were enacted in 1957; Pub- the Advisory Council on Pub1c Assist- lic Laws 85-785.786,787, and 798 were *Commissionerof Social Security. ance which is established by this bill adopted in 1958.

(2) ers who are currently on the rollsadopted and disabled children andpublic assistance to Puerto ico will, under the amendments, general-to protect certain beneficiaries whothe Virgin Islands is inciaed. ly range from $33 to $116. For bene-marry. 5. Provision is made for an Advi- ficiaries coming on the rolls in the 10. The coverage provisions of thesory Council on Public Assistance to future, benefits on the basis of theprogram are changed to (a) facilitatereview the program and 'report its higher earnings base established bycoverage of certain State and localfindings and recommendations by the amendments will be as high asgovernment employees and of em-January 1, 1960. $127. The largest benefit payable toployees of certain nonprofit organiza. a family is increased from $200 totions, (b)extendcoverage to turpen- The following changes were made $254. The new benefit rates becometine workers, (c)credit the se1fem•in the maternal and child health and effective with benefits for Januaryployment earnings from a partner- child welfare programs: 1959. ship that an individual has during 1.The amount authorized for añ• 2. The maximum amount of annual the year of his death, (d)provide nual appropriation for grants for ma- earnings taxable and creditable to-wage credits of $160 a month forternal and child health servicesis ward benefits Is increased from $4,200 activeserviceperformedduring increased from $16.5 million to $21.5 to $4,800, effective January 1, 1959. World War U by American citlzen8million, that for crippled children's 3. The scheduled contribution ratesin the armed forces of certain coun-services from $15.0 million to $20.0 for employers and employees on cov-tries that fought agathst our enemiesmillion, and that for child welfare ered earnings are increased by 1/4of in that war, and (e)postpone theservices from $12.0 million to $17.0 1 percent from the rates previouslydeadline for certain ministers to electmillion, effective for the fiscal year scheduled, with a corresponding in. coverage as self-employed persons. 1958—59. crease for the self•employed. Increases 11. The retirement te8t provisions 2.Grants are made available to in the tax rates are scheduled atare amended to (a) raise from $80 toGuam, effective July 1, 1959. 3-year intervals, beginning in 1960, $100 the amount of monthly wages a 3. The previous provisions of the rather than at 6-year Intervals. beneficiary who has earnings of morelaw with respect to the use of Fed- 4.Benefits like those now beingthan $L200 in a year may have in aeral child welfare funds in predom. paid to the dependents of old-age in-month without losing benefits and (b) Inantly rural areas and areas of spe- surance beneficiaries are provided .forimprove adm1nltration of the test. cial need are removed, thereby ex the wives, dependent husbands, and 12. AdminIstrative changes includetending services under this program children of disability insurance bene.expansion and clarification of theto urban children on the same basis ficiaries. definition of fraud, authorization foras rural children. 5. The offset provision relating tothe Department of Healthg, Education, 4.The formula for allotment of benefits payable because of disabilityand Welfare to charge for servicesFederalchildwelfarefundsis is repealed, effective with benefits for provided to the public for nonpro-changed to make the formula con. August 1958. gram purposes, and other revisionssistent with changes under item 3. 6. To be eligible for the disabilityto improve administration. Briefly, after allotment of the uni- freeze or for disability insurance ben- form grant the remainder will, be efits, a disabled worker no longer is The major changes made in theallotted in direct proportion to the required to have 6 quarters of cover-public assistance program are as 101-total child population and in inverse age out of the 13 calendar quarters lows: proportion to the per capita income before disablement. Fully insured sta- 1.Federal financial participationof the State. If the amount so allot- tus Is added as a requirement for the•in State expenditures for assistanceted is less than the State's base allot- freeze; work requirements for bothto needy persons who are aged, blind,ment, the amount is to be increased freeze and cash benefits are nowor disabled and to needy dependentto the base allotment by reducing alike. childrenIsrelated in part to theproportionatelytheallotmentsto 7. Disability Insurance benefits mayfiscal capacity of each State, deter-àther States. The base allotment is be paid for as many as 12 monthsmined by the relationship of Statedefined as the amount that would be before the month in which the appli-per capita income to national perallotted to the State under the pro- cation isfiledifall other require.capita Income. vision in the previous law, as applied ments have been met for the earlier 2. The limitation on the amountto an appropriation of $12 million. months. of assistance expenditures to which 5. Matching of Federal child wel. 8. The deadline of June 30, 1958,the Federal Government will contrib-fare funds is required, effective for for filing fully retroactive disabilityute is related to a single average ex-the fiscalyear 1959—60.Matching freeze applications is postponed topenditure per recipient that includeswill be on a variable basis in relation June 30, 1961.Disability freeze ap-both money payments to and medicalto State per capita income. plications filed after June 30,1961, care payments on behalf of recipients. 6. The provisions with respect to may establish a freeze period begin. 3.The public assistance programthe use of Federal child welfare funds ning as early as 18 months beforeis extended to Guam,on a basis sim-for. the return of runaway children the month of filing. ilar to that in effect for Puerto Ricoare broadened by raising from 16 to 9. Provisions for dependents' bene-and the Virgin Islands. 18 the age limit for children who may fits are changed to increase the pro- 4.The dollar limitation on thebe returned under these provisions tection for dependent parents andtotalannual Federal payment forand by permitting the use of the

(3) funds for maintaining (for not morehad been Introduced in Conges 3Xd Chairman Mills noted that the last than 15 days) runaway children pend-otherswererecommendationsforgeneral amendmits to the Social ing their return greater equity and for prograrn m•Security Act were made in 1956 (the 7. ReallotmentofFederalchildprovcment made by the Department SocialSecurityAmendments of welfare funds is authorized. of Health, Education, and Wolf ar u1956) and that this was an appropri- 8. An Advisory Council on Childthe basis of its operatiug experience.ate time to review the operation of Welfare Serv1ce Isestablishedfor A large number of bi)1s to mexidthe major changes made then and the purpose o making recommendathe Social Security Act iriitro- to receive recommendations for fur- tions and advising the Secretary ofduced in the Eighty-fifth Cgres—ther changes. The Chairman stated Health, Education, and Welfare Inmany of them shortly after t cwi-that the hearings would afford an connection with the child welfare vened.Eightrelatively nonontro-opportunity to review, among other provisions of the amendments. versial bills became law in 15?, andsubjects, the actuarial status of the four that were passed by the Houseold-age and survivors insurance and Backgiound and Legislative of Representatives either n 1957 odiabfflty insurance trust funds and History early in 1958 were later enacted. anyAdministrationproposalsfor The many provisions of Public. Law In March1958the Ways aridchanges in the various titles of the 85-840 stem from a variety of sources.Means Committee o the HUc act, and also give an opportunity for The major changes in the old-age, Representativesscheduled heaingthe Committee to explore the possi- survivors, and disability insuranceon the subject of unemp1oyent lbifity of legislation and to afford a program-$ncreases in benefits andsurance. Although these hearimg dbasis for study. In the earnings base and in the taxthe legislation that subsequnt1y wa Mr. Mills further stated that among schedule—representareactionto reported were not eoncerrd withthe many bills pending before the changes in wages and prices sincepublic assistance programs,nuuiberCommittee were several major pro- these aspcct of the program were of proposals for a broader Lr1b1ic posals related to the old-age, survi- last examined In 1954 and a desiresistnce program were the subject fvors, and disability Insurance pro- on the. part o Congress to strengthentestimony at that time. The hearng gram, unemployment insurance, and the system In accordance with needsincludedconsiderationof Fedipublic assistance. Affecting the old- Indicated by the latest actuarial esti-participation ingeneral issIstaceage, survivors, and disability insur- mates. programs and the broadening of tI ance program, for example, were bills The prlnclple8 of providing Federalprogram of aid to dependent chlldreto increase the general level of bene- matching in payments made underto include unemployment a reasonfits,to provide hospitalization and Federal•State public assistance pro-for deprivation of parental uppcrtsurgl€al benefits for beneficiaries, to grams on a basis more nearly con•i the definition of a needy chi1d amend the disabifity insurance and sistent with the fiscal capacities ofThe proposed extensions weire not 1the disabilityfreezeprovisions, to the States and on the basis of thecluded, however; as late as he Se liberalize the retirement test, to raise average expenditureperrecipient, ate floor action on the bill an aen&the maximum earnings base, and to rather than a maximum of a fixedment to provide Federal participatioireduce the retirement age. A num- number of dollars for an individualIn general assistance was defeated. ber of bills relating to coverage and recipient, have had some considera During the Senate debate om thto specific limited, although very im- tion in earlier Congresses and havelegislation, an amendment by Sñatorportant, areas were also pending. been embodied in earlier recommen-Long, to increase the FedeaI Among the proposals on the sub- dation made by the Department ofin public assistance paymentsf©11w ject of public assistance were bills to Health, Education, and Welfare. ing somewhat the same patt increase Federal sharing in costs, to The elimination of the limitation the amendments of 1946, 1948, revise the matching formula for med- relating to child welfare services Inand 1956,wasoffered, Although thiical and other remedial care costs, predominantly rural areas has beenamendment was defeated on a 4O-4Oand to provide for disregarding need recommended for a number of years.tie voted it was indIcated during thein determining eligibility. This change has been supported bydebate that the House Ways ad many State governors, public welfareMean$ Committee wcuid give ©cnsdHouse Committee on agencies, the Commission on Inter-eation to needed increases n pub© Ways and Means governmentalRelations,mostna-assistance. Public hearings opened on June 16, tional organizations concerned with On May 29, 1958, Representative 1958, and continued through June 30. child welfare, and many individualsWilbur D. Mills, Chairman o theTestimony was heard from Members who have testified before congres- HouEeCommitteeon Ways aadof Congress, Secretary of Health, Ed- sionalcommittees on thesubjectMeans,announcedthat the Commitucation, and Welfare Folsom, and of Federa1-Stte relationships.Sim- eehadtentatively scheduled generalindividuals and groups interested in ilar provisions had been proposed by publichearings on all titles of the social security. the Administration. Social Security Act to begin on June In July extensive executive sessions The legislativechanges alsoin- 16, 1958. He stated that there werewere held, during which agreement cluded many that are of a relativelypresently pending before the Com-was reached on the provisions of a minor or technical nature. Some weremittee some 400 bills on various asbill. On July 28, 1958, identical bills the subjects of individual bills thatpects of the act. (H.R. 13549 and H.R. 13550) were

(4) introduced by Chairman Mills and byalso made, primarily to reflect Sen•child adopted within 2 yars after Representative Reed, ranking minor•ate action on four other bills that hadenactment of the amendments. ity member of the Committee. passed the Senate after House action 2. The Smith amendment to facil• on H.R. 13549 but before the Senateitate the extension of coverage to House Action on H.R. 13549 Finance Committee action on thecertain teachers in Maine. The bill H.R.13549was reported bill. 3. A change in numbering proposed to the House the same day. On July The publicassistanceprovisions by Senator Kerr. 29, the House Committee on Ruleswere modified by reducing the maxi• 4. The Kerr amendment to substi- granted a rule for consideration ofmum matchable payment forthetute for separate legislation enacted the bill that permitted 4 hours of aged,the blind, and the disabled earlier (Public Law 85—798) the pro• generaldebate,restrictedamend• from $66 to $65 a month and that visions relating to the eligibility of re• ments to those offered by the Com-for recipients of aid to dependent married widows for mother's benefits. mittee on Ways and Means, andchildren from $33 to $30. This change Four amendments affecting public waived points of order. was designed to effect an annual sav• assistance were adopted: The billwas considered by theing of $39 million in the cost of the 1.The Smathers amendment re- House on July 31.Several clericalpublic assistance provisions. The Com. ducing the range in the variable and technical amendments offered bymittee also moved the effective date matching provision from 50—70 per. Mr. Mills were adopted en bloc, andof the public assistance changes from cent to 50—65 percent. the bill was passed by a vote of 375October 1, 1958, to January 1, 1959. 2. The Smathers amendment elim- to 2 with 53 members not voting. Provision was made for the estab• inating an increase in the Federal lishment of an Advisory Council to share of the first $18 Of payments Senate Finance Committee review the status of the public assist. under aidtodependent children. Action ance program in relation to the old- (ThetwoSmathersamendments, The Senate Committee on Financeage, survivors, and disability insur•with those adopted by the Senate held hearings August 8—13.During ance program, the fiscal capacitiesCommittee on Finance, reduced the these hearings, Secretary of Health,of the States and of the Federal Gov-annual cost of the public assistance Education, and Welfare Flemmingernment, and any other factors bear. provisions of the bill from $288 mil and a number of other witnessesing on the amount and proportion of lion to $197 million.) were heard.The Secretary in histhe State and Federal shares in the 3. The Long amendment recogniz- testimony indicated that, while he be. publicassistanceprograms.Theing as a federally matchable assist- lieved the provisions of the bill deal•Council would be patterned after theance payment the amounts paid on ing with old-age, survivors, and dis•existing Advisory Council on Social behalf of an eligible Individual to any ability insurance were desirable andSecurity Financing and would report legalrepresentativejudiciallyap• constructive, the Department was op- not later than January 1, 1960. pointed under State law. posed to any change in the public The Committee also eliminated a 4. The Long amendment restoring assistance formula that would resultprovision of the House bill that wouldthe effective date of October 1, 1958, In the Federal Government's provid-have repealed the special matching for the public assistance provisions, ing a higher proportion of these pay-arrangements in public assistance foras passed by the House. ments than under existing law. HeNavajo and Hopi Indians. One amendment by Senator Purtell made it clear that the objection was The Committee reported the billin relation to child welfare services not to higher individual paymentsfavorably to the Senate that samewas adopted.It establishes an Ad- and that many payments could be day. visory Council on Child Welfare Serv. increased under existing law with ices concerned with the changes in matching Federal funds. A numberSenate Floor Action the child welfare services program of the amendments that were subse. The Senate began debate on H.R.authorized by the amendments. The quently adopted by the Committee on13549 late in the evening of Augustcouncil is to consist of persons repre- Finance and on the Senate floor were 15,continuedtodebatethebill sentative of public, voluntary, civic, frankly designed to make the publicthrough most of Saturday, August 16, religious,and professionalwelfare assistance provisions of the bill moreand passed it, with amendments, onorganizations and groups, specially acceptable to the Administration. that date by a vote of 79—0, with 17 qualified persons, and the general On August 14,1958, the Senatemembers of the Senate not voting. public. Finance Committee went into execu•Nineteen amendments were proposed Six amendments affecting old-age, tive session and adopted a numberfrom the floor; nine were adopted,survivors,and disabilityinsurance of amendments to the bill. eight rejected (all but one by voicewere rejected: The effective date of the benefit vote), and two withdrawn. 1.The Yarborough amendment to increase under old-age, survivors, and Four amendments affecting old-age, increase benefits by 10 percent. (Sen- disability insurance was moved fromsurvivors,anddisabilityInsurance ators Humphrey, Neuberger, Morse, the third month after enactment towere adopted: Johnston, and Long joined Senator January 195, in order to correspond 1. The Curtis amendment making Yarborough inintroducingthis with the date for increases in thetheprovisionrelatingtoachild amendment, which was rejected by tax rate and earnings base. Certainadopted within2years afterthea record vote of 32 to 53.) technical and clerical changes wereworker's death applicable also to a 2. The Revercomb amendment to

(5) provide full retirement benefitsattive with benefits for January 1059. Ings of about 56 percent of the regu- age 62 for men and women. For retired and disabled workerslarly employed men in 1954. In 1957 3. The KennedyCase amendmentnow on the benefit rolls, and for thoseonly 43 percent of such workers had to increase benefits by 8 percent. coming on the rolls next year, month-all their earnings credited; about 56 4.The Kennedy amendment toly benefits will generally range frompercent would have had alltheir eliminate the dollar ceiling on the$33 to $116, compared with $30 toearnings credited under a $4,800 base. lump-sum death payment. $103.50 under previous law, The av- 5. The Revercomb amendment toerage increase for these people willImprovements in Disability broaden the definition of disabilitybe about $4.75. For those coming on Provisions toincludeinstances where,asathe rolls in later years, the range of Beneftts for dependents. —Under practical matter, the worker is Un.benefit payments taking into accountthe amendments, monthly benefits able to obtain employment becausethe increased earnings base will be arepayable,beginnIngSeptember of his disability. $334127, although generally many1958, to the dependents of persons 6. The Morse amendment, In theyears will elapse before the maximumwho are receiving disability insurance nature of a substitutebill, whichamount will be payable, benefits.It is estimated that about would, among other things, increase The largest amount o monthly180,000 dependents can become im- benefits by 25 percent and providebenefits payable to a family on themediately eligible for monthly bene- hospital insurance. (This amendmentbasis of an insured worker's earnings fits- would also have provided increasedrecord Is increased from $201) to $25t The classes of dependents eligible Federal financial participation in the—twice the new maximum benelitfor these benefits are the same as public assistance programs.) provided for a retired worker. Thethose eligible for benefits as depend- Two amendments affecting publicminimum benefit payable when thereentsof old-age insurance benefici- assistance were rejected: Is only one survivor beneficiary isaries-that is, wives and dependent 1.The Kuchel amendment to in-increased from $30 to $33. husbands who have reached retire- crease from $65 to $70 the average The new primary insurance amountment age, unmarried dependent chil- maximum for Federal participation. andmaximumfamilypaymentdren(including sons or daughters 2. The Douglas amendment to ex-amounts are determined through thedisabled inchildhood), and wives empt earned income up to $20 ause of a consolidated benefit table in-who have entitled children in their month in determining need for old-cluded in the law. The benefit' table,care. The conditions for receipt of age assistance and aid to dependentwhich replaces the more complicatedthe new benefits are also, in general, children. benefit formula and conversion tablesthe same. Benefits will be suspended, The House of Representatives onpreviously in the law, provides r2-however, if the disabled worker re- August 19 concurred in the amend-mary insurance amounts only in mul-fuses, without good cause, to accept ments of the Senate. tiples of a dollar. (The primary in-vocational rehabilitation services. A The bill was signed by Presidentsurance amount is the amount paydependent's entitlement to benefits is Eisenhower on August 28, 1958, andable to a retired worker and theterminated if the disabled worker's became Public Law 85—840. amount from which all other benefitsentitlementtodisabilitybenefits are computed.) ceases before he becomes entitled to Old-Age, Survivors, and old-age insurance benefits or dies. DisabilityInsurance Higher Earnings Base The provision of benefits for de- Under the new law the maximumpendents of disability insurance bene- Increased Benefits amount of annual covered earningsficiaries fills a gap in the protection Since the last increase in old-age,on which benefits can be computulafforded by old-age, survivors, and survivors, and disabilityinsurance (andon which contributionsaredisabilityInsurance.Inproviding benefits was put Into effect in 1954,paid) is raised from $4,200 to $4,800,these new benefits, Congress recog- wages have increased by about 12 effective January 1, 1959. This change nised that the needs of the family percent and prices by almost 8 per-was made in recognition of the prin-of a disability insurance beneficiary cent. To bring the level of benefitsciple that benefit levels should reflectare as great as or greater than the more nearly Into line with the gen- varying levels of individual earnings.needs of the family of an old-age in- erally higher level of the economy,Practically all regular full-time work-surancebeneficiary.Itmay,of theamendmentsincreasebenefit ers may in time be earning more thancourse, be assumed that many per- amounts for beneficiaries—those now the current base, and their benelitssons receiving disability benefits have on the rolls as well as future bene-will consequently bear little relation-high medical expenses. ficiaries—by about 7 percent. Since,ship to their previous living standard Repeal of theoffset provision.— however, the minimum increase forunless the earnings base is adjustedUnder the 1956 amendments, disabil- the retired worker is $3, the averageif earnings rise. ity insurance benefits and childhood increase Is somewhat over 7 percent. The $4,800 maximum restores thedisability benefits payable under the The new benefit rates become effec-relationship between workers' cred-Social Security Act were reduced by (Slightly smaller increases will beitable earnings and total earningsthe amount of any periodic benefit received by women workers and wives that existed in 1954 when the 4,21)0payable to an individual under other who choose to begin receiving their earnings base was adopted. The $4,200Federal programs or State workmen's benefits before they reach age 65.> base would have covered all the earn-compensation laws because ofdis-

(6) ability. A modification enacted .n As a result of the mocThed work rement of month'y benefit th d- 1957 (Public Law No. 85—109) proS quirements, about 35OOO workers who pendent parent of a deea work. vided that the disability benefit would could not qualify for d.thabllity insur.er. This bar operated ex 0 the po. not be reduced because of compensa- ance benefits under the previous law tentially entitled wife or child never tion paid to a veteran by the Veteranscan, upon filing app1icat1on, becoie became entitled to benefits. The sit- Administration forhisservice-con- Inunediately eligible for benefits; nuation was aggravated by the fact nected dIsabiUty The 1958 amend•addition, about 15,000 persons can that a 1957 law (Public Law 85-238) ments repeai the offset provision en-qualify mniedIate1y for disability made it possible to pay benefits to a tirely, and beginning with benefits freeze. widow who was not living with her for August 1958 the full amount of Retroactive benefit8. Under thehusband at the time of his deaths an individual's disability benefitIs amendments, disability thsrance ben-Thus the existence of a widow who payable. efits(like old-age nd survvor in-was not living with the worker could In recommending repealofthesurance monthly beeth) ca beprevent payment of benefits to a provision, the congressional commit- paid retroactively or as many as 12parent who was living with and de. tees stated that disabilitybenefits months before the ioth n which anpendent on the worker at th time of payable under old-age, survivors, andapplication is filed. Before the iend-his death. disability Insurance should be looked ment, persons making application Dependency 0/adisabled chüd.—- upon as providing basic protectionafter December 1957 could not bUnder the amendments, disabled chil- against loss of income caused by dis•paidadisabilitybenefitfor aydren aged 18 or over are presumed abling illness and that it is undesir-month before the month o filing.dependent on their parents under the able, and incompatible with the pur-The provision for payment of retrosame rules that apply to younger poses of the program, to reduce theseactive benefits was proposed by thechildren. Under previous law, a dis. benefits on account of disability ben-Department ofHealth,Education, abled child who was aged 18 or over efits payable under other programs. and Welfare on the basis of studyat the time' he applied for child's As of June 30, 1958, about 36,000 of disability appJlcaUonsfiled early insurance benefits or at the time his disability Insurance benefits and al-in 1958. The study Indicated that parent died was required to show most 1000 "childhood disability" ben- large proportion of the applicantsthat he was receiving at least half efits were either reduced or withhelddid not file In the first month fohis support from his parentS A child under the offset provision. which they were otherwise eligibleunder age 18 when he applies for Work requirements. —Theamend-and so lost 1 or more months' benefits. benefits is generally presumed to have ments modify the requirements re- Disabilityfree2eperiod.—Thbeen dependent on his father (and on lating to the covered work that a dis-amendmentsextendfor3 yeamhis mother if she has had a signifi- abled worker must have had in order (through June'30, 1961)the tinecant amount of recent work). to become eligible for cash disabilitywithin which disabled workers can Benefits for an adopted child after benefits or the disability freeze. For-file an application on the basis ofthe worker'sdeath. —Theamend merly, to qualify for disability bene-which the beginning of a freeze peiments provide for payment of benefits fits, a disabled worker was required iod can be established as early as theto a child if, at the time of the work to be both fully and currently insuredactual onset of disablement, Ap1i-er's death, the child was a iember and to have at least 20 quarters ofcations filed after the new deadlineof the worker's household, was not coverage during the 40-quarter period date can establish a freeze periodbeing supported by any other person, that ends with the quarter in whichbeginning as early a th eighteenth and is adopted by the worker's spouse the disability began. To become elig-month before the month o within 2 years after th worker d1e iblefor thedisabilityfreeze,theUnder the1956 amendmeits, tIor wIthin 2 years after enactment of worker was required to be currentlydeadline for filing fully retroactivethe amendments. Insured and to have at least 20 quar- freeze applications was June 30, 1957; A child living as a member of a ters of coverage during the 40-quarter applicationsfiledafterthat dateworker's family and supported by period ending with the quarter Inwere accorded only 1 year of retro-him, after the worker's death needs which his disability began. activity.In 1957 the original datereplacement of the support he had The amendments remove the re-was postponed for 1 year (to Junereceived from the worker. If the sur. quirement of currently insured status 30, 1958) by Public Law 85—109. viving spouse adopts the child, the for eligibility for both disability bene- child will, for purposes of receiving fits and the freeze, and they add fully Changes in Eligibility child's insurance benefits, be treated Insured status as a requirement for Conditions as an adopted child of the deceased eligibility for the freeze. Thus, the Payment of parent's benefttwP&e worker. work requirements for cash disability awidow orchildsurvives.— The Removal of 3-year requirement for benefits and for the freeze are nowamendments provide that the deen1-a child adopted by a retired worker. the same; to qualify for either, theent parents of a deceased worker—Under the amendments, benefits worker must be fully insured andcan become eligible for benefits even are payable to an adopted child of must have at least 20 quarters of cov-though a widow, a dependent wici-a retired worker Immediately upon erage during the 4Oquarter periodower, or a dependent child urvivec,adoption. Former law required that that ends with the quarter In whichUnder previous law, the eistenc ofthe child must have' been adopted at his disability begins. such a survivor prevented th pa least 3 years before becoming eligible

(7) for child's insurance benefits.Thisordinarily neither could become en-bers of the Armed Forces te prov- provision was intended to protect thetitled to any new benefits. sions that prevent the payment of programagainstabusesthrough Reinstatment of rights to mother'sbenefits to aliens who are outside the adoptions undertaken to secure rightsinsurance beneflts.—The amendments United States. to benefiis. Since adoptions are 8ub-reinstate rights to mother's insurance Ject to approval by State courts, itbenefits that were terminated by re-Changes in Coverage Provisions does not seem desirable that benefitsmarriage if the new husband dies and State and local government employ- should be denied to all adopted chil-the wife cannot qualify for mother'sees.—The Eighty-fifth Congress en- dren in order to prevent a rare casebenefits on his earnings. acted a number of bills designed, in of abuse. Reinstatement of rights to widow'sgeneral, to facilitate coverage under •Eliminat!on of duration-of -marriageinsurance beneftts.—lJnder the 1956 the Social Security Act for employees requirement when a child has beenamendments the aged widow whoseof State and local governments. One adopted bj the deceased worker.—benefits were terminated by her re-of the provisions enacted in 1957 al- The amendments provide that, whenmarriage and whose second husband lowed a general extension of the time a child of a surviving spouse has beendied within the year could have her during which retroactive coverage for adopted by the deceased worker, therights to benefits, based on her firstearlier years may be arranged under survivingspousecanqualifyforhusband's earnings record, reinstated.the State and local coverage provi- mother's, widow's, or widower's bene-Since the 1958 amendments providesions. Other legislation applicable to fits even if married to the deceased• that the widow can immediately re-all States, passed in 1958, makes it worker for less than a year.Thisceive benefits based on her new hus-easier for persons who are In posi- provision eliminates the anomalousband's earnings record, they also pro-tions covered by more than one State situatiOn in which a child could quali.vide that she can become reentitledor local retirement system to obtain fy for benefits but his mother whoon her first husband's record only ifcoverage under the Federal program was caring for him could not. the second husband dies uninsuredand permits retroactive coverage for Elimination of duration-of-marriagewithin the year. those employees who die or whose requirements when a potential see- Lump-sum death payment. —The employment Is terminated after the ondarij beneficiary marries. —The amendments requirethat,for theproposed State coverage agreement is amendments remove the duration-of-lump-sum death payment to be madedispatched to the Federal Govern- marriage requirements for husband's,to the surviving spouse of a deceasedment but before it Is approved by the wife's, widow's, and widower's bene-worker, the spouse must have beenFederal Government. fits if, at the time of the marriage,living in the same household as the Legislation enacted by the Eighty- the person was or could have becomeworker. Under previous law, to re-fifth Congress extended to California, entitledtoa dependent'sbenefits ceive the payment, the widow mustConnecticut, Massachusetts, Minne- Under former law the benefit rightshave been "living with" the workersota, Rhode Island, Vermont, and all of a dependent or secondary benefi-at the time of his death. The re-interstate instrumentalities the pro- ciary were terminated if the depend-quirement was met if the spouse wasvision of the Federal law that per- ent remarried, and yet the dependentliving in the same household with themits specified States to bring under could not qualify for benefits on theworkerorreceivingcontributionsold-age, survivors, and disability innew spouse's earnings record until thefrom him or if the worker was undersurance, those members of a State or marriage had lasted for some time. a court order to contribute to thelocal retirement system who desire Provision that marriage will notspouse's support.Since the lump-such coverage, providedallfuture terminate benefits In certain sltua-sum payment is made primarily tomembers of the system are covered. tions,—The amendments provide thathelp with the funeral expenses,itWith these additions, the "divided remarriage will not terminate a benefitcanappropriatelybe madetoa tirement system" provision now ap- when a person receiving mother's,spouse who was living in the sameplies to 14 States, Hawaii, and all widower's,parent's,or"childhoodhousehold as the worker because suchinterstate instrumentalities. A pro- disability" benefits marries a persona spouse can be expected to take re-vision enacted in 1957 was designed receiving any of these benefits orspoisibility for the funeral expenses.to permit use of a simplified proce- when a person receiving mother's orWhen no such spouse survives, thedure in obtaining coverage under the childhood disability benefits marrieslump-sum death payment may be divlded-retirement.systemprovision. a person entitled to old-age or dis-made to the person or persons who One of the amendments made In that ability insurance benefits. The ear-paid the burial expenses (includingprovision in 1958 gives individuals lier law required that, when a sec-the spouse who was not living in thewho have an option to join a State ondary beneficiary married, his bene-same household with the deceasedor local retirement system, but who fit be terminated.If he married aworker), to the extent of—and in have not joined, the same opportunity person who was entitled to an old-proportion to—the total burial ex-as members of the system for secur- age insurance benefit, he could qual-penses of the deceased that the per-ing coverage under the Federal pro. Ify for a new benefit based on theson has paid. gram. Formerly, only persons who earnings of the new spouse. If, how- Dependents of members of armedwere actually members of the State ever, the new spouse was also receiv-services.—Legislation enacted in 1957or local system could obtain coverage ing a secondary benefit, the benefits (Public Law 85—238) made inappli-under the dlvlded.retirement.system of both persons were terminated, and cable to the survivors of certain mem-provision. Another change made in

(8) the provision by the 1958 amend-ployees wno concurred in the filingdomiciled in the United Statesonthe ments allows further opportunity forof the certificate and in the requestday he entered active service and coverage under old-age, survivors, and for retroactive coverage. In additionmust have residedin the United disability insurance for persons whoto these temporary provisions, theStates for at least 4 out of the pre- did not elect coverage when it waslaw provides for a 1-year period ofceding 5 years. originally provided for those mem-retroactive coverage (at the option Deceased partners. —TheamendS bers of the retirement system whoof the organization) for the normalments provide that an individual may desired it. long-run operation of the program. be credited,forold-age,survivors, Legislation enacted in 1957 added The amendments also provide thatanddisabilityinsurancepurposes, Alabama, Georgia, Maryland, Newa nonprofit organization employingwith earnings from his share of a York, Tennessee, and Hawaii to thepersons who are in positions coveredpartnership during the year of his States permitted to cover under old-by a State or local retirement systemdeath. The amount to be credited age, survivors, and disability insur-must, for the purposes of coveragefor that year is determined by aver- ance policemen and firemen alreadyunder the Federal program, treataging the partnership earnings over covered by a State or local retire- theseemployeesseparatelyfrom the entire taxable year of the partner- ment system. In 1958 Congress re-other employees. Each group is to beship and computing the deceased moved the bar to coverage of suchregarded as a separate entity. Waiverpartner's "distributive share" on the individuals in the State of Washing- certificates must be ified separatelybasis of the earnings thus allocated ton and all interstate instrumentali-for each group, and two-thirds of theto the months during which he was ties. With these additions, the Fed-employees in each group must concura member of the partnership.For eral law now permits coverage ofin the filing of its certificate. partners who die after August 28, policemen and firemen who are mem- Separate legislation(Public Law 1958, such earnings must be credited; bers of a State or local retirement 85—785) broadens slightly the provi-if the partner died on or before that system in 11 States, Hawaii, and allsions under which social security taxdate and after 1955, coverage is on interstate instrumentalities. returns filed by a nonprofit organiza- avoluntarybasisprovidedan A provision included in the 1958tion before it filed it waiver certifi-amended tax return is filed on or beamendments permits Maine to covercate may establish old-age, survivors,fore January 1, 1960. under old-age, survivors, and disabil-and disability insurance credits for Ministers. —Legislationaffecting ity insurance members of the Statewages reported on these returns; thethe coverage of ministers (Public Law retirement system who are in non-wages must, however, have been paid85—239) was enacted by the Eighty- teaching positions while continuing tofor services performed before the en-fifth Congress in 1957. As a result exclude those members who are inactment of the 1956 amendments. of 1954 legislation, old-age, survivors, teaching (or related) positions. This Turpentine workers.—CoverageIs and disability insurance coverage on provision is effective only with respect extended by the amendments to work-an individuai election basis is avail- to modifications of Maine's coverageers employed in the production ofableto clergymen under theself- agreement that are completed beforespirits of turpentine and to otheremployment provisions. Under the July 1, 1960. workers engaged in the processing of 1954 law, a minister could obtain cov- LegislationenacteddurIng1958 crude gum, beginning with serviceserage only if he indicated his desire (Public Law 85—786)permits mostperformed In 1959. Coverage is pro.to be covered as a self-employed per- sick-leavepaymentstoState andvided for these workers on the sameson by flung a certificate on or before local government employees tobe basis as other agricultural workers. the due date (April 15, 1957, in most counted as wages regardless of the Military service. —Theprovisions cases) of the tax return for the sec• age of the employee. Such paymentsunder which monthly wage creditsond taxable year after 1954 in which had generally been considered wagesof $160 are provided for certain ac-he had net earnings from self-employ- before the employee reached retire-tive service in the Armed Forces ofment of at least $400 that included ment age but not after he reachedthe United States are broadened byearnings he received as a minister. retirement age if he did no workthe amendments to allow such creditsUnless the certificate was filed by the during the pay period. for certain military service performeddue date of the return for the first Employees of nonprofit organiza-for a foreign country during Worldof these taxable years, coverage could tions.—The amendments modify inWar II.Military service credits arenot be obtained for that year. relatively minor respects the provi-provided for American citizens who, As a result of the 1957 legislation, sions for coverage of employees ofbefore December 9, 1941, entered theministers who had failed to ifie a cer- nonprofit organizations. A nonprofitmilitary service of a foreign countrytificate within the 2-year period were organization ffling a waiver certifi-that was, on September 16, 1940, atallowed an additional2years in cate after August 28, 1958, and beforewar with a nation that became anwhich to elect coverage—through the 1960 can choose to be covered as farenemy of the United States duringdue date of the tax return for the back as the beginning of 1956.InWorld War II.To qualify for thesecond taxable year ending after 1956. addition, any organization that filedwage credits,theindividual mustMinisters filing during the extended a certificate after 1955 and beforeeither have been a citizen throughoutperiod are covered retroactively for August 28, 1958, may request, at anyhis active service or have lost histaxable years ending after 1955. No time before 1960, retroactive cover-citizenship because of his ertrancechange was made in the original dead- age to the beginning of 1956 for em-into service. He must also have beenline for filing certificates when that

(9) deadline was later than the one pro-for other statutes_=sufficient protec- befullyfinancedby apcriai9 vided by the new law; however, min-tion against the practice of law bychanges in the tax schedule asvt fur- isters who elect coverage within the unqualified persons. ther decided that the actnzial status usual 2-year period are mandatorily Offenses constituting fraud.—Theof the program should be Improved. covered for the first year as well asamendments clarify and bring up to The congressional action also elimin- the second year if these years aredate the list of offenses that consti-ated the expected decline for all but consecutive. tute fraud under the old-age, survi-one of the next few years in the size Public Law 8-239 also provides forvors, and disability insurance pro-of the old-age and survivors Insur- including as part ofaminister's gram. The provisionsrelatingto ance trust fund and provided that creditable earnings the rental valuefraud under previous law did notthe present generation of contribu- of a parsonage (or rental allowancetake into account major amendmentstors bear a greater proportion of the for a parsonage) and the value ofadopted In 1954 and 1956—those, for true cost of the benefits than they certain meals and lodging furnishedexample, relating to disability andwould under the existing contribution a minister by his employer. This pro-the application of the earnings test schedule.2 vision became effective for taxableto noncovered work. Accordingly, the tax rate for the years ending on or after December Under the new legislation the pen-calendar year 1959 was increased by 31, 1957, except that for purposes ofalty provision is made applicable to 1/4of1 percent each for employers the retirement test the provision wasoffenses in connection with willful and employees and by % of 1 percent applicable only for taxable years be-failure to disclose information as wellfor the self-employed. The scheduled ginning after August 1957. as positive actions, in connection withincreases in the rates, starting in both noncovered and covered earn- 1960, will take place at 3-year inter- Other Changes ings; suspensions, terminations, andvals instead of at 5-year intervals. Retirement teet,—The amendmentsmisuse of benefits; disability deter-The ultimate rate, to be reached at change from $80 to $100 the amountminations; and applications for bene-the beginning of 1969, is 4% percent of wages a beneficiary may earn In afits. each for employees and employers month without losing his right to Authorieation to charge for certain and 63/4 percent for the self-employed. that months benefits when his total services. —Theamendments provide The increase from $4,200 to $4,300 An annual earnings are In excessof statutory authority for the Depart-the amount of annual earnings tax- $1,200.Previously, no benefits werement of Health, Education, and Wel-able and creditable under the pro- forfeited for a month during whichfare to charge for authorized servicesgram willyieldadditional income the individual did not have wages ofprovided to the public for certainthat is greater than the cost of the more than $80 and did not rendernonprogram purposes and to deposithigher benefits it makes possible. substantialservicesinself-employ- in the appropriate trust fund the As a result of these changes the ment. This $80 measure of "retire-funds collected. actuarial insufficiency of 0.57 percent ment" In a month was confusing to of payroll In the old-age and survivors many people, who Interpreted theFinancing Basis and Policy insurance aspects of the system Is $1,200annual. measureof"retire- Congress has repeatedly expressed reduced, according to the intermedi- ment" as permitting earnings of $100its belief that the old-age, survivors, ate-cost estimate, to 0.25 percent of a month without loss of benefits. NowanddisabilityInsuranceprogram payroll.Thedisabilityinsurance under the 1958 amendments, when ashould be completely self-supporting trust fund correspondingly shows a beneficiary has annual earnings Infrom contributions of covered indi- small favorable actuarial balance— excess of $1,200, no benefits will beviduals and employers and that lib- 0.01percent of payroll—after the withheld for a month during whicheralizations of the program should amendments. he neither earned wages of more thanbe fully financed. The financing provisions were thus $100 nor rendered substantial serv- In the fiscal year 1957—58, for the strengthened by the 1958 amend- ices in self-employment. first time since benefits were paid,ments, and the old-age,survivors, The amendments also make minorthe income to the old-age and survi-anddisabilityinsuranceprogram changes to improve administrationvors insurance trust fund was lesswill continue on an actuarially sound of the retirement test, These changesthan expenditures from the fund. basis. are effective for taxable years begin-Estimates prepared early In 1958 in.Studies Requested by Congress ning after August 1958. dicated that outgo of the fund would The Committeeon Ways and Representation of claimants beforeexceed income during most, If notMeans of the House of Representa- the Secretary of Health, Education,all, years until 1965. At the sametives, in connection with its consid- and Welfare -==-The amendments per- time,revisedlong-rangecostesti- eration of proposed changes in the mit attorneys to represent claimantsmates indicated that there was anSocial Security Act, asked the Depart- before the Secretary of Health, Edu-actuarial insufficiency of 0.57 percent cation, and Welfare without ffling aof payroll for the old-age and survi-ment of Health, Education, and Wel- certificate from a courtattestingvors insurance aspects of the pro-fare to make three special studies their right to practice before that gram. 2Formore complete details, see Robert court.It was considered that State Faced with this situation, Congress J. Myers, "Old-Age, Survivors, and Dts- abilityInsurance:Financing Basis and laws would provide—for old-age, sur-reaffirmed Its conviction that liberal- Policy Under the 1958 Amendments," pages vivors, and disability Insurance, asizations in benefit provisions should 15—21.

(10) and to report on the results.It Ispenditures for medical care. The pro.tablished at 50 percent, as it a'so is to study (1) proposals for creditingvisions described above for separatefor Alaska and Hawaii. Where a tips—specifically, methods of deter-financing of such expenditures wereState's per capita income is less than mining the amount oftipsto be enacted in 1956 and became effective the average for the Nation, the Fed- counted as wages under the programin July 1957. Under the formula ineral percentage will be more than 50 and of securingreports on theseeffect before that date, expenditurespercent but no higher than 65 per- amounts; (2) the provision of the re-for medical care had been included,cent. If, for example, the per capita tirement test that makes it possibletogether with money payments to re-income of a particular State for the for a beneficiary to receive benefitscipients, within an overall individualbase years is 90 percent of the corres- for some months in a year evenFederal matching maximum. Underponding figure for the country as a though he may have had high earn-the 1957 legislation, States that foundwhole, then the State percentage is ings during the year; and (3)al• it advantageous to continue under40.5 (.90 x .90 x .50) and the Federal ternative ways of providing Insurancethe earlier formula were allowed topercent is 59.5. The Federal percent- against the cost of hospital and nurs-do so. age will be promulgated each evening home care for old-age, survivors, The formula under the 1958 amend•numbered year by the Secretary of and disability insurance beneficiaries.ments provides for an average month.Health, Education, and Welfare. The Committee's purpose In request-ly limitation on the amount of State For Puerto Rico and the Virgin ing the third study was to obtainassistance expenditures that are sub-Islands, 50—50 matching is continued more in!ormation on the practicabil.ject to Federal financial participation.as at present, with a combined aver• ity and the costs of possible Ieglsla•This limitation is $65 per recipientage limitation of $35 on money pay- tive action In th1 field. in the programs for the aged, thements to and payments for medical blind, and the disabled and $30 percare in behalf of recipients in the Public Assistance recipient in the program oaid toprograms of old-age assistance, aid dependentchildren.Formerlytheto the blind, and aid to the perman- Formula for Federal Sharing Federal maximum on money pay•ently and totally disabled and $18 The Social Security Amendmentsments related to each individual as-per recipient inaidto dependent of 1958 amend the formula for de.sistance payment. Any amounts paidchildren. termining the Federal share in Stateto individuals in excess of the speci. One effect of these changes in the public assistance expenditures, effec-fled maximums were excluded fromformula isto increase the Federal tive October 1, 1958. Under the for-Federal financial participation. Undershare in State public assistance ex- mula in effect before that date thethe amendments, Federal financialpenditures. The amount of the In- Federal share in money payments toparticipation is not related to individ.creases, if any, that will go to indi- needy persons who are aged, blind,ual assistance payments but to totalvidual recipients depends upon State or disabled was four-fifths of the firstexpenditures,all ofwhicharedecisions on how the money is to be $30 of the average monthly paymentmatched within the specified averageused in the State programs. The new per recipient plus one•half of the re-payment per recipient. This averageformula will have significancefor mainder, up to an individual max!.amount includes both money pay.program development byallowing mum of $60. For dependent children,ments to recipients and medical care flexibilityin meetingthe unusual it was fourteen-seventeenths of thein their behalf. needs of recipients, such as medical first $17 of the average monthly pay. The Federal share Of these Statecare, and should minimize any tend• ment per recipient plus one-half ofexpenditures continues to be four-ency that has existed for States to the balance, up to individual max!-fifths of the first $30 of the averageconsider a maximum, established only mums Of $32 each for the first de-monthly payment per recipient in old•as a limit on Federal participation, pendent child and the relative withage assistance, aid to the blind, andas a limit on the monthly payment to whom the child lives and $23 for eachaid to the permanently and totallyan individual recipient. Furthermore, additional child.In addition, with disabled and fourteen-seventeenths ofadministrative and fiscal procedures respecttoassistanceexpendituresthe first $17 per recipient in aid toare simplified. The objective of the for medical care and any other typedependent children. For payments invariable portion of the new formula of remedial care in behalf of publicexcess of those amounts, but withinis to achieve a more nearly equitable assistancerecipients,theFederalthe specified average maximums, thedistribution of Federal funds In re• Government met one-half the costamendmentsprovideforvariable lation to the fiscal capacities of the up to an average monthly expenditurematching based on per capita income States than was possible under the of $6 per recipient in the programsfor the most recent 3-year period.previous formula. - for the aged, the blind, and the dis-The State percentage for this portion abled and $3 per dependent child and of the formula is derived by dividing Guam,Puerto Rico, and the $6 for the relative, caring for thethe square of the State's per capita Virgin Islands child in the program of aid to de-income by the square of the national The 1958 amendments extend the pendent children. per capita income and multiplyingpublic assistance provisions of the Public Law 85.110, approved Julythe result by 50 percent. For StatesSocial Security Act to Guam for the 17, 1957, gave States an option, how-with a per capita income equal to orfirst time. Federal financial partici- ever, with respect to the basis forgreater than national per capita in- pationinassistance to the needy claiming Federal participation in ex.come, the Federal percentage ises- aged, the blind, and the disabled and

(11) to dependent children will be avail- tam State plans for aid to the blindand services, the developmen 2new able to Guam, based on the samewere extended to June 30, 1961, bytechniques and measures for helping formula as that adopted for Puertothe amendments. Under Public Lawchildren, and the great inequality of Rico and the Virgin Islands.The 85-110, approved April 25, 1957, thisdistribution of the basic child-health Federal share is limited to one-half ofprovision was scheduled to expire onand child-welfare services are factors total expenditures not exceeding anJune 30, 1959. Only Pennsylvania andwhich combine to produce an urgent average expenditure of $35 per re-Missouri are affected by the provision, need for increased Federal funds for cipient in old-age assistance, aid towhich permits the approvalofa all three of these programs." the blind, and aid to the permanent-State plan for aid to the blind that The report made thefollowing ly and totally disabled and $18 perdoes not meet the act's requirementscomments on the three programs: recipient in aid to dependent chil-for the consideration of income and dren. For Guam as for Puerto Rico resourcesin the determinationof With respect to the maternal and and the Virgin Islands, there is a need.Federalparticipationunder child-healthprogram, manywell- Limitation on the total annual Feder- these plans is, however, limited tobaby clinics are overcrowded, only a al grant for public assistance pur-expenditures that meet all require-beginning has been made in provid- poses. The grant for Guam Is Ilni-ments. ing adequate health services for men ited to $400,000 a year. Atechnicalamendment makestally retarded children, and there Is The amendments also increase the a need for expansion of services in clear that a State o1dage assistancerural areas where resources are still limitations on total annual Federalplan shall include, with respect to theinadequate for promoting the health payments to Puerto Rico and theservices relating toself-care, a de-of mothers and children. Virgin Islands to $8.5 million andscription of the steps taken by theIn the crippled children's program, $300,000, respectively. Formerly, theseState agency to assure, in the provi-urgent need exists for expanding pro- payments were $5,312,000 for Puertosion of such services, maximum utili-grams for surgical treatment of chil- Rico and $200,000forthe' Virginzation of similar or related servicesdren with congenital heart lesions to Islands. provided by otheragencies.The1preventtheneedlesslossoflife The amendments will help theseamendment makes the language un-among children with this condition. Jurisdictions in a more nearly ade-der all of the public assistance titlesServices for children with speech and quate financing of their assistanceuniform in this respect. hearing disorders are grossly made- programs for needy persons. quate—only 1 child in 4 of the speech- Another provision relates to Fed-handicappedchildrenisreceiving Advisory Council eral financial participation in pay-necessary diagnostic or remedial as• ments made to legal representativessistance. Many other children with The new law provides for au Advi• ofrecipientsofpublicassistance.orthopedic and other types of handi- sory Council on Public Assistance toMoney payments to recipients undercaps are also helped through this review the status of the public assist.all programs may now include pay- program. ance program, particularly in its re-ments on behalf of the individual,Great need exists in the child wel- lation to the old-age, survivors, andmade to another person who has been fare program for expanding provi- disability insurance program and thejudicially appointed as his legal rep-sions for foster care so as to afford fiscal capacities of the States and theresentative, whether or not he is hisbetter care and protection for chil- Federal Government, as well as otherlegalrepresentative for other pur-dren who must be cared for away factors affecting the Federal-Stateas- poses. from their own homes and families. sistance program. Only half of the counties in the country have the servicesof a public The Commissioner of Social Secu- Maternal and Child Health child welfare worker in the face of rity is designated as the Chairman of and Welfare nationwide increase in juvenile de- the Council. Twelve other members linquency and increased neglect and will be appointed by the Secretary ofIncreases in Authorizations abuse of children.3 Health,Education,andWelfare. Theamendmentsincreasethe These members will represent, to theamounts authorized for annual appro-Other Changes in Child extent possible, employees and em-priation by $5 million for each of the Welfare Provisions ployers (in equal numbers), personsthreegrant programstoimprove The new law provides for removing concerned with the administrationhealthandwelfareservicesforthe previous provisions specifying the and financing of State and Federalmothers and children. use of special child welfare funds in programs, other persons with special In its report on the Social Securitypredominantly rural areas or other knowledge, experience, or qualifica-Amendments of 1958, the House Ways areas of special need. Through this tions regarding the program, and theand Means Committee stated that thechange servicesfor which Federal public. The Council is to be appointedCommittee had "received impressivechild welfare fundsare used are before January 1959 and will reporttestimony from representatives of a its made available on the same basis to findingsand recommendations widevarietyofpublic,voluntary,children in urban areas as to children not later than January 1, 1960. civic, and professional organizations,in rural areas. which clearly established the need for When the Social Security Act was Other Provisions expanding these three programs. The The temporary provisions of theunprecedented increase in the child 3H.Rept. 2288(85th Cong., 2d sess.), law relating to the approval ofcer• population, the rising costs of care page 43.

(12) passed in 1935, very few States hadallotment,withnecessaryadjust-Rico at 66% percent. For the fiscal local child welfare services in ruralments made by reducing the allot-year ending June 30, 1959, the Fed- areas. Voluntary agencies had devel-ments of other States. The base al-eral share is to be determined ac- oped largely In urban areas. Whenlotment is the amount that wouldcording to the provisions in effect the public programs were getting un-have been allotted to the State forbefore the 1958 law was enacted. der way in 1935, the provisions rethe particular year in which the ap- The amendment€ lessen the restric- lating to predominantly rural areaspropriation is made, under the pro-tions on the States In using Federal and areas of special need assuredvisions in effect before the enact-child welfare funds for the return that services would be built up in thement of the 1958 amendments, asof runaway children by raising from places where the greatest need forapplied to an appropriation of $1216 to 18 the age limit of runaway them existed at that time.Sincemillion.This was the full amountchildren for whom these funds may then, State welfare departments haveauthorized before the 1958 amend-be used and by giving express author- extended and strengthened their childments and the amount that had beenization for the use of these funds welfareprogramsInruralareas.appropriated for the fiscal year infor maintaining the children for not Presently, although services in ruralwhich the amendments were enacted.more than15 days pending their areas are not yet adequate, those in A provision has been added author-return. many urban areas are even furtherizing the Secretary of Health, Educa- Finally, there is established an Ad- from being adequate. One reason istion, and Welfare to reallot to States visoryCouncilonChildWelfare the shift in population from rural tothat have need for and will be ableServices to make recommendations urban or suburban areas where serv-to use amounts in excess of thoseand advise the Secretary of Health, ices have not expanded to keep pacepreviously allotted the funds certifiedEducation, and Welfare in connection with the increased needs. by other States as not being requiredwith carrying out the amended child Under the amendments the formulafor carrying on their plans.Thiswelfareprovisions.TheCouncil, for allotment of Federal child wel-reallotment is to be made on the basiswhich is to be appointed by the Sec- fare funds is changed to make it con.of State plans, after taking into ac-retary before January 1959, will consistent with the extension of thiscount the proportion of the child pop.sist of 12 persons representing pub- program to urban areas.Formerlyulation under age 21 and the perlic,voluntary,civic,religious, and the law provided for the allotmentcapita income of the States to whichprofessional welfare organizations and of funds primarily on the basis offunds are to be reallotted. groups or other persons with special the rural child population under age There isalso a new requirementknowledge, experience, orqualifica- 18 in each State. Under the new lawfor matching Federal child welfaretions with respect to child welfare the formula takes into account thefunds with State and local funds,services, and the public. The Coun- total child population under age 21effective for the fiscal year 1959—60.cil is to make a report of its findings in each State. After allotment of aEach State's allotment wil' be avail.and recommendations (including rec- uniform grant, the remainder of eachable for paying the Federal share ofommendations for changes in the year's appropriation will be allottedthe cost of expenditures under thechild welfare provisions of the law) in direct proportion to the total childState plan, with the balance beingto the Secretary and to Congress on population and in inverse proportionmade up from State and local funds.or before January 1, 1960. to the per capita income of the State.The Federal share will vary inversely In order to ensure that presentwith the State's relative per capita THE SOCIAL SECURITY Amendments of services to children in rural areasincome between a minimum of 33 1958 are extensive, making funda- arenotreducedbecauseofthispercent and a maximum of 66% per-mental changes in some of the pro- change, the amendments include acent; the share for a State with avisions for the well-being and eco- provision for a base allotment.Ifper capita income equal to that ofnomic security of the people of this the amount allotted under the newthe United States is 50 percent. Thecountry. They mark 1958 as another formula Is less than the State's baseFederal share for Alaska is specified important year in the development allotment, the law provides that thein the law at 50 percent, and for theand growth of the social security pro- amount shall be increased to the baseVirgin Islands, Guam, and Puertograms in the United States.

(13) Old-Age, Survivors, and Disability Insurance: Financing Basis and Policy Under the 1958

Amendments by ROBERT J. MYERS*

HENEVER the congressionalof new entrants as a result of its1952 amendments that the actuarial committees concerned withcompulsory character. It may there.balance under that legislation would Wold-age, survivors, -anddis.fore be said that the old-age, survi•be virtually the same as in the esti• abilityinsurancehaveconsideredvors, and disability insurance pro-mates made for the 1950 amendments amendments to the program, theygram is actuarially sound if the esti-(table 1). The rise in earnings levelz have thoroughly studied the cost as-mates show that future income fromin the 3 preceding years was believed pects of both the proposed benefitcontributions and from interest earn-to about offset the increased cost re- provisions and the current provisionsings on the accumulated trust fundssulting from the benefit liberaliza- from the point of view of maintain-will, in the long run, support the dis-tions being made. Cost estimates pre- ing its actuarial soundness. At thebursements for benefits and admlnls•pared 2 years later—in 1954—indl• timethe1950 amendments weretrative expenses. Future experiencecated that the level-premium cost adopted, Congress expressed its beliefmay be expected to vary from the(the average long-range cost, based that the program should be com•actuarial cost estimates made now,on discounting at interest, in relation pletely self-supporting from the con-but the intent that the program beto payroll)of the benefit dIsburse tributions of covered indivlduaIs andself-supporting, or actuarially sound,ments and dmintctrative expenses employers, and it repealed the pro-Is expressed in the law by using awas somewhat more than 0.5 percent vision permitting appropriations tocontribution schedule that, accordingof payroll higher than the level-pre the program from the general rev•to an intermediate-cost estimate, re•mium equivalent of the scheduled enues of the Treasury. In the amend-sults in the actuarial balance or ap•taxes (including allowance for interfl ments of 1952, 1954, and 1956, Con-proximate balance of the system. est on the existing trust fund). The gress again indicated its conviction It was estimated at the time of the1954 amendments contained an ad that the tax schedule in the law Table 1.—Actuarial balance of the old-age, survivors, and disability insurance should make the program as nearly program 1 selfsupporting as can be foreseen or, undervarious acts, based on intermediate-cost estimates in other words, actuarially sound. [Percent] In the Social Security Amendments Level-premium equivalent' of 1958,1 Congress strongly reaffirmed Legislation Date of this principle and acted to strengthen estimate Benefit Contribu-Actuarial the financial basis of the program2 costs S tions balance by providing, in balance, for contribution income higher in the long run Old-age,survivors, and disability insurance than the increased outgo due to the 1960 act 1960 6.05 5.95 —0.10 benefit changes. 1952 act 1952 5.85 5.75 —.10 192 act 1954 6.62 6.05 —.87 The concept of actuarial soundness 1954 act 1954 7.60 7.12 —.38 as it applies to old-age, survivors, and 1954 act 1956 7.45 7.29 —.16 1956 act 1956 7.85 7.72 —.13 disability insurance differs consider- 1956 act 1958 8.25 7.83 —.42 ably from its application to private 1958 act 1958 8.76 8.52 —.24 insurance, although there are certain points of similarity—especially Old-age and survivors Insurance In comparison with private pension 1956 act 1956 7.43 7.23 —0.20 plans. The principal difference stems 1986act 1958 7.90 7.33 —.57 from the fact that a social insurance 1958act 1958 8.27 8.02 —.25 system can be assumed to be perpet- Disability Insurance ual in nature, with a continuous flow 1956act 1956 0.42 0.49 +0.07 Chief Actuary, Social Security Admin- 1956 act 1958 .35 .60 +.15 istration. 1958 act 1958 .49 .50 +.01 1Fora summary of the amendments. seepages3—14. I Thedisability Insurance program was estab- with the combined employer-employee rate,(b) 2Oneof the stated purposes of the leg- lished by the 1956 act; data for earuer years are for Interest earnings on the existing trust funds, and islation, given in the title of the law, is the old-age and survivors insurance program only. (c) administrative expenses. 1Percentof taxable payroll. 4Anegative figure indicates the extent of lack of "to improve the actuarial status of the Includes adjustments to reflect (a) the loweractuarial balance; a positive figure indicates more Trust Funds." contribution rate for the self-employed, compared than sufficient financing (according to the estimate).

(14) justed contribution schedule that notTable 2.—Changes in estimated level-premium cost of benefit payrnenf as only met thecost of thebenefit percent of taxable payroll, by type of change, based on intermediate-cost changes but also reduced susbtantial- estimate at 3-percent interest, 1956 act and 1958 act ly the actuarial insufficiency that the [Percent] then current estimates had indicated in the financing of the 1952 provi- Old-age and Item survivors Disabilit sions. insurance Insu ronce The estimates for the 1954 act were revised in 1956 to take into account Lack of balance (—)orsurplus (+) under 1956 act —0.57 +0.15 the rise in the earnings level that Increase of 3/ percent In tax schedule +. 50 had occurred since 1951—52, the per. Acceleration of tax schedule (3-year rises) +.19 Increased Income from higher earnings base +.52 +.03 iod used as the basis for the 1954 Additional benefit cost from higher earnings base —.30 —.02 Increase of benefit level by 7 percent (or $3, if more) —.57 —.03 estimates. As the result, the lack o Dependents' benefits for disability beneficiaries —.06 actuarial balance under the 1954 act Elimtnation of disability benefit offset provision —.03 Modiflcation of Insured-status requirements —.03 was reduced to the point where, for Liberalizing retirement test —.oi allpractical purposes, it was non- Paying parent's benefits in all cases —.01 existent, and the system was In ap- Lack oi balance (—)orsurplus (+) under 1958 act —.25 +01 proximateactuarialbalance.The benefit changes made by the 1956 amendments were fully financed byis reduced to the point where it isprogram's financial cost. Dollar fig- theincreasedcontribution incomevirtuallyeliminated, namely belowures taken alone are misleading. A provided; the actuarial balance ofone-fourth of 1 percent of payroll, ashigher earnings level, for example, the system was thus unaffected, andhas been the case generally in thewill increase not only the outgo of the program remainedactuariallyprevious legislation." 8 the program but also, and to a greater sound. extent, its income. The result is that The new cost estimates made inBasic Assumptions for Cost the cost in relation to payroll will 1958 take into account recent ex- Estimates decline. perience and modified assumptions Estimates of the future cost of the The assumptions used in connec- concerning future trends. In the 2old-age, survivors, and disability insur- tion with the disability benefits are preceding years, there were many reance program are affected by manyessentially the same as those used in tirements among the groups newlyfactors that are dimcult to determine.the original cost estimates when these covered by the 1954 and 1956 amend-Accordingly, the assumptions used inbenefits were firstincorporated in ments, and as a result benefit expendi-the actuarial cost estimates may dif-the law in1956, although certain tures ran appreciably higher thanfer widely and yet be reasonable.minor modifications of methodology the amounts previouslyestimated.Benefit payments may be expected tohave been made that result in a Moreover, analysis of operating ex-increase continuously foratleastsomewhat lower cost than that origi- perience for recent years indicatesthe next 50—70 years because of such nally estimated. The actual cost to that retirement rates have risen or,factors as the aging of the populationdate, under the strict definition of in other words, that the average re-and the slow but steady growth of"disability"Inthelaw, has been tirement age has dropped significant-the benefit rolls—a growth inherentsignificantly less than the intermed- ly.This change may be the resultin any retirement program, publiciate-cost assumptions would indicate. in large part of the liberalizationsor private, that has been in opera.Nevertheless, it is believed that, until made in the retirement test, undertion for a relatively short period. somewhat more experience Isavail. which aged persons are better able The cost estimates are given withinable and can be analyzed, these cost than before to effect a smooth tran-a range to indicate likely variationsbases for the monthly disability ben- sition from full employment to fullin future costs, depending on the ac-efits should be maintained. Disability retirement. These new cost estimatestual trend developing for the variousincidence and termination rates can indicate that the program, as it opcost factors. Both the 1ow and high-vary widely—much more than mor- erated under the provisions of thecost estimates are based on high eco-tality rates, which are a basic factor 1956 act, was out of actuarialbalrn noniic assumptions, Intended to rep-in the cost calculations for retire- ance by more than 0.4 percent ofresent almost full employment, withment and survivor benefits. payro1. average annual earnings at about the The cost estimates are extended The Senate Committee on Finance,level prevailing in 1956. Irtermediatebeyond the year 2000 since the aged in its report on the 1958 amendments,estimates, developed by averaging thepopulation itself cannot mature by stated its belief that "not only shouldlow, and high-cost estimates, are alsothen. The reason Is that, since the any liberalizations In benefit provi-shown, to Indicate the basis for thenumber of births in the 1930's was sions be fully financed by appropriatefinancing provisions. very low compared with subsequent changesinthetaxscheduleor The costs are shown, In general,experience, there will be a dip In through other methods, but also thatas a percentage of covered payroll,the relative number of aged persons the actuarial status of the systemwhich Is the best measure of thefrom 1995 to about 2010 and benefit should be improved in similar man- costs for that period would tend 'to ner so that the actuarial insufficiency 3S.Rpt. No. 2388 (85th Cong., 2d sess.). below.The year 2000isby no (15) means, therefore, a typical ultimateTab'e 4.—Progress of old-age and survivors insurance trust fund under thc year. 1958 act, high-employment assumptions, based on intermediate-cost esti- An important measureoflong. mate at 3-percent interest range costs is the level.premluxn con. [In millionsi tribution rate required to support the system into perpetuity, based on dis. Railroad Admlnis-retirementInter€st onBalance In counting at interest.It is assumed ear Contribu- Benefit tions payments eens fund 2 fund 8 that benefit payments and taxable change 1 payrolls remain level after the year 2050.If a level rate based on these Actual data: 1951 $3,367 $1,885 $81 $417 $15,540 assumptions were adopted, relatively 1952 3,819 2,194 88 365 17,442 large accumulations in the trust fund 1953 3,945 3,006 88 414 18,707 1954 5,163 3,670 92 468 20,76 and eventually sizable income from 195 5,713 4,968 119 461 21,663 1956 6,172 5,715 132 531 22,i19 interest would result.Even though 1957 6,826 7,347 162 557 22,393 such a method of financing Is not Estimated data: .1958 $7,297 $8,318 $156 —$124 $565 $21,656 used, the concept has value as a 1959 8,62 9,04 161 —219 567 20,971 1960 10,621 10,027 166 —196 590 21;794 convenient measureoflong-range 1961 11106 10618 169 —195 634 22,552 costs—especially In comparing various 1962 11,256 11,207 172 —199 672 22,902 1963 13,124 11,678 175 —156 704 24,722 possible alternative plans and pro- 1964 13,652 12,016 178 —156 761 26,784 1965 13,830 12,333 181 —160 820 28,762 visions—since it takes into account 1970 19,404 15030 201 —70 1,406 0,330 the heavy deferred benefit costs. 1975 20,880 17,766 222 —59 2,185 76,432 1980 22,301 20,874 246 12 2856 8,678 The estimates are based on level- 2000 29,695 29,672 332 192 4,762 163,448 earnings assumptions. Covered pay- 2020 36,124 40,716 426 192 8,379 285,282 rolls are not assumed, however, to I Apositive figure Indicates payment to the trust account creditable to the old-age and survivors be the same each year but rather to fund from the railroad retirement account, and a Insurance trust fund—$377,000,000 for 1953, $284,- rise continuously with the estimated negative figure Indicates the reverse. 000,000 for 1954, $163,000,000 for 1955, and $60,000,- 3Assumedinterest rate was 2.6 percent 'In 1958, 000 for 1956. increase in the population of work- 2.7 percent In 1959, 2.8 percent in 1960, and 2.9 per- 4Figureis artificially high because reimburse- cent In 1961. ments of about $14 million from the disability ing age. Thus, the total taxable pay- Excludes amounts In the railroad retirement Insurance trust fund had not been made In 1957. roll under the 1958 amendments Is estimated at about $210 billion in 1960, about $240 billion in 1970, $275earnings level should be considerablyconsideration will need to be given billion in 1980, $365 billion in theabove that now prevailing, and ifto the financing basis of the program year 2000, and eventually at almostthe benefits for persons on the rollsbecause the interest receipts of the $500billion.If in the future theare adjusted upward so that the estitrust funds wifi then meet a smaller mated relation of annual costs toproportion of the benefit costs than Table 3.—Estimated level-premiumpayroll under the 1958 legislation re-would otherwise be anticipated. costofbenefitpayments,ad-mains unchanged, then the increased An important element in old-age, ministrative expenses, and interestdollar outgo resulting will offset thesurvivors, and disabilityinsurance earnings on existing trust funds under 1958 act as percent of tax-increased dollar income. This is ancosts has resulted from amendments able payroll,' by type of benefit,importantreasonforconsideringmade to the Railroad Retirement Act based on intermediate-cost esti-costs in relation to payroll ratherin 1951. These amendments provide mate at 3-percent interest than in dollars. for a combination of railroad ret1re [Percent] The cost estimates have not takenment compensation and earnings cov- into account the possibility of a riseered by the Social Security Act in Old- in earnings levels, although such adetermining benefits for workers with age andDisa- sur- bility rise has characterized the past historyless than 10 years of railroad service Item vivorsinsur- of this country. If such an assump- (and also for all survivor benefits). insurance ance tion were used in the cost estimates, Under thefinancial interchange along with the unlikely assumptionprovisions then established, the old- Old-age (primary) benefits 5.92 0.43 that the benefits would neverthelessage and survivors Insurancetrust Wife's benefits 57 .03 Widow's benefits 1.23 ( not be changed, the cost in relationfund and thedisabifityinsurance Parent's benefits .02 (' trust fund are to be maintained in Child's benefits 43 .03 to payroll would, of course, be lower. Mother's benefits .11 ( the same financial position in which (2 If benefits were to be adjusted to Lump-sum death payments 12 keep pace with rising earnings trends,they would have been if there never Total benefits 8.40 .49 Administrativo expenses 09 .01 the year-by-year costs as a percent-had been a separate railroad retire Interest on existing trust funds '..- —.22 —.01 age of payroll would be unaffected.ment program. It is estimated that, Nettotal level-premium cost_ -8. 27 .49 The level-premium cost would then,in the long run, the net effect of however, be higher, since under suchthese provisions will be a relatively I Includesadjustment to reflect the lower con- ciréumstances the relative importancesmall gain to the old-age, survivors, tribution rate for the self-employed, compared with disabilityInsuranceprogram, the combined exployer-employee rate. of the interest earned by the trustand 2Notpayable under this program. funds would gradually diminish.Ifsince the reimbursements from the 8Offsetscosts of benefits and administrative expenses. earnings do consistently rise, furtherrailroad retirement system will be

(16) somewhat larger than the net add!-necessary.Likewise, exactself-sup- benefit formula and minimum and tional ben€fits paid on the basis ofport cannot be obtained from anymaximum benefit provisions. Actual- railroad earnings. one set of integral or rounded frac-ly, however, this table is based on a tional tax rates, increasing in orderlydefinite formula and minimum and Results of Intermediate-Cost intervals, but the principle of self-maximum benefit provisions, which Estimates support is aimed at as closely as pos-are built into the table, and there is Theintermediate-costestimates sible. no change in the basic principle that are developed by averaging the low- The contribution schedules in thehas prevailed over the years. Certain cost and high-cost estimates (using 1956 and 1958 amendments are shownapproximations, however, have been thedollarestimates and derivingbelow. Under each law, ¼of1 per- made because of the necessary group- from them the correspondingesti- cent of the employer contributioning involved in constructing a bene- mates related to payroll). The Inter-and ¼of1 percent of the employeefit table that, for facility of adminis- mediate-cost estimate cannot be con-contribution are used for monthlytration, is in terms of primary (old- sidered the "most probable" estimatedisability benefits, and % of 1per- age) benefits rounded to the nearest —a figureimpossibletodevelop. cent of the self-employed person'sdollar. Rather, it is presented as a conven-contribution goes for this purpose. The benefit formula for the pri- ient and readily available single set mary insurance amount under the of figures to use for comparative pur- [Percent] 1954 act was 55 percent of the first poses. $110 of the average monthly wage, Employee Rate for the Congress,inenactingthe1950 rate' self-employed plus 20 percent of the next $240. The amendments and subsequent legisla- Year 1958 legislation, by increasing bene- tion, has indicated its belief that the 1956 1958 1956 1958 fits 7 percent and raising the maxi- old-age, survivors, and disability inact act act act mum earnings baseto$4,800,in surance program should be on a com- effect changed the formula to 58.85 1958 24 2( 33% 33% pletelyself-supportingbasisor,in 1959 2 234 39 33% percent of the first $110 of the aver- 1960—62 2% 3 434 434 other words, actuarially sound. A 1963—64 2% 334 44 5(age monthly wage, plus 21.40 percent single estimate is required in the de- 1965 3( 334 43 54 of the next $290. When the average 1966—OS 33j 4 4 6 velopment of a tax schedule intended 1969 34 434 4- 6% wage is less than $55, the primary 1970—74 3 434 5 6% to make the system selfsupporting. 1975and aften 43j 46 6% insurance amount is raised to $33— Any specific schedule will necessarily the new minimum and also the mini- be somewhat different from what will I Eihployee and employer pay the same rate. mum benefit for a survivor family actually be required to obtain an consisting of only one beneficiary. exact balance between contributions Benefits are computed from a table The maximum family benefit estab- and benefits.This procedure, how-set forth in the law. At first glance,lished by the 1954 act was also in- ever, does make the intention specific,it appears that an entirely new prin-creased in 1958. The maximum was even though in actual practice futureciple had been adopted, since theformerly the lesserof $200 or 80 changes in the tax schedule may bepreviouslawsspecifiedadefinite percent of the average monthly wage, although the percentage maximum Table 5.—Progress of disability insurance trust fund under the 1958 act, high-could not reduce thetotal family employment assumptions, based on intermediate-cost estimate at 3-per-benefit to less than the larger of $50 cent interest or 1½ times the primary Insurance [In millions] amount. Under the 1958 amendments, the maximum family benefit is the Railroad lesser of $254 (twice the highest pos- Adminis-retirementInterest on sible primary insurance amount, ap- Year Contribu- Benefit Balance in tions payments eetns fund2 fund plicable when the average monthly change wage is $400) or 80 percent of the Actual data: average wage, except that the per- 1957 $702 $57 8 $3 $7 $649 centage maximum cannot reduce the Estimateddata: 1958 $914 $263 $19 $25 $1,306 total family benefit to less than the 1959 980 431 21 $10 42 1,887 larger of 1½ times the primary in- 1960 991 492 23 —20 59 2,402 1961 1,004 555 23 —23 76 2,881 surance amount or the primary in- 1962 1,018 613 24 —26 92 3,327 1963 1,032 675 24 —28 104 3,737 surance amount plus $20 (in effect, 1964 1,046 736 25 —31 116 4,107 not less than $53). In actual applica- 1965 1,059 796 25 —34 126 4,437 1970 1,141 1,052 27 —34 165 5,686 tion, the 80-percent maximum will 1975 1,227 1,249 30 —31 187 6,392 1980 1,311 1,380 30 —22 201 6,844 generally yield somewhat more than 2000 1,745 1,649 40 —2 383 13,194 the mathematical result of taking 80 2020 2,125 2,330 51 1 521 17,764 percent of the individual's average wage, since the benefit table provides I A positive figure indicates payment to the trust cent in 1961. fund from the railroad retirement account, and a 8 Figure is artificially low because reimbursements for maximum family benefits on the negativefigure indicates the reverse. ofabout $14 million to the old-age and survivors basis of 80 percent of the upper end 2Assumedinterest rate at 2.6 percent in 1958, Insurancetrust fund had not been made in 1957. 2.7percent in 1959, 2.8 percent In 1960, and 2.9 perof the range of average wages that

(17) produce the rounded primary insur- The revised contributioi scheduleresult of the revi 1s to ane amount. The maximum familyhas a twofold effect on the financingprogram In a positi© we it benefits payable on the basis of var-of the program. First, the uniforman estimated actuarial dect of O.b bus average monthly wages and pri-increase of'/ of1 percent in thepercent of payroll. This stant1 mary insurance amounts are showncombined employer-employee rate, be-improvement in th financial basis below. ginning in 1959, naturally has theof the program bring8 the anticipated effect of producing additional incomedeficit well within the range that will equivalent to 0.50 percent ofpayroll permit the program to be considered Pri- on a level-premium basis (table 2).actuarially sound. Average mary monthly Insur- Maximum family benefit Second, the subsequent increases in Table 3 shows the costs for each wage ance the contribution rate, which are nowof the various types of benefits under amount scheduled to go into effect at inter-the1958amendments. Thelevel-

$67 or les - $33—40 Primary insurance amount vals of 3 years (formerly 5 years),premium contribution rates equiva plus $20. have the 1evelpremium effect of 1nlent to the graded schedule in the 8—127... 41—68 14 times the primary insurance amount. creasing income by 0.19 percent of1956 act and in the 158 amendments $128—319__. 69—109 80 percent of average wage (apprqxlmately). payroll. may be computed in the same man- $320—400. 110—127 $254. Another change also has the effectner as level-premium benefit costs, of increasing income The advanceas shown in table 1. from $4,200 a year to $48OO in the The amendments will increase dis- The new law reduces the lack ofmaximumtaxableandcreditablebursements for old-age ad survivors actuarial balance for old-age and sur-earnings base in effect Increases in-insurance benefits during the calen- vivors insurance from 0.57 percent ofcome by a gross amount equivalent to dar year 1958 by less than $1 million payroll to 0.25 percent, or about the0.55 percent of payroll on a level-and result in no addit1oa1 iicome to level under the 1956 amendments atpremium basis, but this rise is parthe trust fund.In 959 dsbure the time they were enacted. For dis-tially offset by the additional benefitsments for these benefits will total ability insurance there will be an ac-that will be paid on the higher earn about$9.5billion,or about$650 tuarial surplus of 0.01 percent of pay.ings credited (that Is,0.32 percentmillionmore than they would have roll, compared with 0.15 percent un-of payroll on a level-premium basis).under the 1956 act, and contribution der the provisions of the 1956 act.Accordingly, the net effect is equival-income will amount to about $86 bil The effect of the new law on the com-ent additional income of 0.23 percentlion, or $1.1 billion more thar under bined old-age, survivors, and disabilityof payroll on a level-premium basis. the 1956 law.Thus, the excess of insurance program Is to reduce the The level-premium cost of the old-benefit outgo over contribution in- actuarialdeficit from 0.42 percentage and survivors insurance benefitscome is reduced from $Ld billion to of payroll to 0.24 percent, which Is(without considering administrative$900 million. The decreases in the well within the margin of variationexpenses and the effect of interestold-age and survivors insurance trust possible in actuarial cost estimatesearnings on the existing trust fund) fund will not be so 'arge a those and about the same size as in theunder the 1956 act was about 8.0shown above because th interest re past when the program has been Inpercent of payroll; the correspondliigceipts will exceed outgo for adin1s substantial actuarial balance. If thefigure under the 1958 law is 84 per-trative expenses and transfers to th cost estimates had been based on cur-cent. The figures for the disabilityrailroad retirement account. rent earnings levels (instead of thosebenefits are 0.35 percent under the In 1960, old-age axd survivors ii- for 1956), the lack of actuarial bal-1956 act and 0.49 percent under thesurance benefit disbursementswill, ance would have been somewhat less1958 amendments. accordingtotheintermediate-cost than 0.24 percent of payroll. Table To summarize the changes in theestimate, be $10.0 billlo, or an in- 2 traces the change in the actuarialprogram's actuarial balance, the in-creaseof$700millionfrom th balance of the program from its sit-creased revenue that results from theamount under the 1956 law; contri uation under the 1956 act to thatchanges in the tax schedule and frombution Income will be $10.6 bilior, under the 1958 law. the net effect of the Increase in theor $1.5 billion more, Accordingly, in It should be emphasized that Inmaximum earnings base amounts to1960 there should be an excess of 1950 and in subsequent amendments0.91 percent of payroll on a level.contribution income over benefit out- Congress did not recommend that thepremium basis as far as the old-agego of about $600 milliom; a deficit of system be financed by a high-leveland survivors Insurance aspect of the about $300 million would have deve1 tax rate in the future but rather byprogram is concerned. The total cost oped under the 1956 law. The excess an Increasing schedule that, of neces-of the old-age and survivors insuranceof contribution Income will be about sity, ultimately rises higher than thebenefit changes amounts to 0.59 per- $500 million in 1961, about $50 million level-premium rate. Nevertheless, thiscent of payroll.Thus, there Is ann 1962, and about $1.5 billion a year graded tax schedule will produce aestimated excessof long-rangein- th 1963 and 1964. In contrast, under considerable excess of income overcome over outgo representing0.32 the 1956 law, during each of the 4 outgo for many years so that sizablepercent of payroll on a level-premiumyears 1961—64 there would have beem trust funds will develop, although notbasis. Since it is estimated that undeficits of contribution income rang so large as those that would ariseder the 1956actthe actuarial deficiting as high as $1 biuin, under a level-premium tax rate. was 0.57 percent of payroll, the net Disbursements for disability bene-

(18) fits for the Calendar year 1958 arethat. In the distant future—that is,schedule is not fully self-supporting, increased by the amendments byIn about the year 2030—the trustit Is for all practical purposes suffi- about $18 million, and there will befund will reach a maximum of aboutciently close to self-support that the no. additional income to the trust$295 billion and then decrease slowly.program may be said to be actuarially fund during the year. In 1959, dls•Nevertheless, even 90 years from now,sound. This was also the general sit. bursements for disability benefits willthe estimate shows a trust fund ofuation under the 1950 act and sub• be about $200 million higher thanabout $200 billion. The fact that ac-sequent amendments, accordIng to they would have been under the 1958cording to these estimates the trustthe estimates made when they were law and will total about $430 million.fund will not become exhausted untilbeing considered. Contribution income for disability insomewhat more than a century hence The estimates indicate that the dis- surance for 1959 will amount to aboutIndicatesthat,althoughthetaxability Insurance trust fund will show $980 million—a slight Increase, re- suiting solely from t}ierise in theTable 6.—Estimated progress of old-age and survivors insurance trust fund taxableearningsbase,sinceno under the 1958 act, high-employment assumptions, based on low-cost and change was made in the amount of high-costestimates at 3-percent interest contributions assignable to this part [In millions] of the program. Neverthiess, in 1959 contribution Income will exceed bene- Railroad Adminis-retirement fit outgo by about $550 million. Sim- Contribu. Benefit Intere8t onBalance in Year tions payments ilarly, in 1960 and the years Immedi- expenses inter- fmid fund I ately following, contribution income change I will be well in excess of benefit outgo Low-cost estimate —by as much as $250 million In 1965 and by somewhat larger amounts In 1966 $13,86 $12,055 $167 —$145 $883 $31,076 the earlier years. 1970 19,458 14,663 186 —49 1,542 55,220 1975 21,072 17,217 206 —32 2,441 85,607 Table 4 shows the estimated oper 1980 22,773 19,965 228 39 3,328 115,570 ation of the old-age and survivors in- 2000 32,137 26835 310 218 8,071 279,701 surance trust fund in the long-range future, based on the intermediate- High-cost estimate cost estimate.It wil be recognized 1966 $13,794 $12,609 $195 —$176 $758 $26,447 that the figures for the next 2 or 3 1970 19,351 15,398 216 —91 1,270 4,434 1975 20,688 18,315 239 —85 1,929 67,256 decades are the most reliable (under 1980 21,829 21,782 263 —14 2,385 81,786 theassumptionoflevel•earnlngs 2000 27,253 32,511 354 167 1,454 47,194 trends in the future) since the popu. I Apositive figure indicates payment to the trust 2.7 percent in 1959, 2.8 percent in 1960, and 2.9 per• lationsconcerned —bothcovered fund from the railroad retirement account, and a cent in 1961. workers and beneficiaries —areal- negative figure indicates the reverse. 3Fundexhausted in 2010. ready born. For later years, there is a Assumed interest rate at 2.6 percent in 1958, much more uncertainty—if for no reason other than the relative diffi-Table 7.—Estimated progress of the disability insurance trust fund under culty In predicting future birth trends the 1958 act, high-employment assumptions, based on low-cost and high- —but it is desirable and necessary to cost estimates at 3-percent interest consider these long-range possibilities [In mfflions] under a socialinsurance program that is intended to operate in per• Railroad Contribu- Adminis-retirement petuity. Year Benefit 8 Interest onBalance in tions payments fund fund For 1960 and for most of the next cs I change 30 years, contribution income is estimated to be greater than old-age and Low-costestimate survivors insurance benefit disbursements. Even after benefit outgo ex- 1965 $1,063 $535 $22 —$32 $164 $5,876 1970 1,144 699 23 —32 259 9,099 ceeds contribution income in1985, 1975 1,239 834 25 —29 360 12,527 1980 1,339 930 27 —20 474 16,449 the trust fund will continue to in- 2000 1,889 1,110 36 1,310 45,372 crease because of the effect of inter. est earnings, which more than meet High-costeltirnate the administrative expense dlsburse• ments and any financial interchanges 1966 $1,056 $1,059 $28 —$35 $88 $2,998 1970 1,138 1,407 30 —35 71 2,272 with the railroad retirement program. 1975 1,216 1,666 33 —33 15 258 1980 1,283 1,828 35 —24 () (3) It Is estimated that, as a result, thIs 2000 trust fund will grow continuously, 1,602 2,189 44 —4 () (I) reaching $50 billion in 1970, $99 bil- I Apositive figure indicates payment to the trust 2.7 percent in 1959, 2.8 percent in 1960, and 2.9 per- lion in 1980, and $163 billion at the fund from the railroad retirement account, arid a cent in 1961. negative figure indicates the reverse. Fund exhausted in 1976. end of the century. Estimates show a Assumed interest rate at 2.6 percent in 198,

(19) continuous growth and amount toand high-cost estimates, and tablevery close to an exact balance, es- $5.7 billion In 1970, $6.8 billion In7 gives corresponding figures for thepecially since a range of errorIs 1980, and $13.2 billion In the yeardisability insurance trust fund. tin-necessarily present in the long.range 2000 (table 5). There is an excess der the low-cost estimate, the old-age actuarial cost estimates and rounded of contribution Income over benefitand survivors insurance trust fund disbursements for every year up tobuilds up rapidly and in the yearTable 8.—Estimated cost of benefits about 1975, and even thereafter the2000, when it will amount to about of old-age, survivors, and disability trust fund continues to grow because$280 billion, is growing at a rate of insurance program as percent of of interest earnings. This trust fundabout $14 billion a year.Likewise, payroll,' under 1958 act shows no decline in any future yearthe disability Insurance trust fund [Percentj because the level-premium cost ofgrows steadily under the low-cost esti- the disability benefits—according tomate, reaching about $45 bilUon in Inter- Low- High- medi- theintermediate-costestimate—isthe year 2000, when its annual rate cost cost ate- of growth is about $2 bilUon. For both ear esti- esti- cost slightly lower than the level-premium mate mate esti- income of ½ of 1 percent of payroll.trust funds, after 1959, beneñt dis- mate' bursements do not exceed contribu• Cost Estimates on Range tion income in any year in the fore• Old-age and survivors Basis seeable future. insurance benefit8

As indicated earUer, the excess of tinder the high-cost estimate, the 1970 6.47 8.84 6.66 (1)the level-premium contributionold-age and survivors insurance trust 1980 7.48 8.49 7.98 1990 7.83 9.91 8.82 rate equivalent to the graded sched-fund builds up to a maximum of 2000 7.08 10.08 8.44 2025 7.96 13.23 10.15 ule in the law over (2) the level-pre-about $85 bilUon in about 25 years 2050 10.08 15.09 12.02 mium cost of benefit payments andbut decreases thereafter until itIs Level-premium cost3 7.29 9.42 8.27 administrative expenses (after appro•exhausted in the year 2010. Benefit Disability priate adjustment for the effect ofdisbursements are estimated 'tobe Insurance benefits interest earnings on the existing trustsmaller than contribution income dur- fund)is used to indicate the pro-ing all the years before 1980 except 1970 0.32 0.83 0.48 1980 36 .72 .3 gram's actuarial balance. The follow-1959 and 1962 (in the latter year a .30 .64 .46 ing tabulation shows these figures ac.relatively small deficit is shown). In 2000 30 .68 .47 2025 37 .81 .65 cording to the low.eost, high-cost, andthe disability insurance trust fund 2050 43 .87 .60 Intermediate-cost estimates forold- during the early years of operation, Level-premium cost 33 .87 .49 age and survivors Insurance and dis-contribution Income materiallyex- I Takesinto account the lower contribution rate ability insurance (computed as of theceeds outgo until 1965. Accordingly for the self-employed, compared with the combined beginning of 1958). the fund, as shown by this estimate, employer-employee rate. 2)3asedon the average of the dollar cost8 under would be about $3 billion in 1965 and the low-cost and high-cost estimates. 3Level-premiumcontribution rate, at 3.percent would then slowly decline until its interest,forbenefit8after1957,takinginto (Percent) exhaustion In 1976. account (a) Interest on the trust funds as of Dec. 31, 1957, (b) future administrative expenses, and (c) Table 8 shows the estimated costs the lower contribution rate payable by the eU- Inter- of the old•age and survivors insur- employed. Low-High-medi- T cost cost ate- ance benefits and of monthly dis- m esti- esti- cost matesmates esti- abiUty benefits as a percentage oftax rates are used in actual practice. mates payroll through the year 2050 andAccordingly, the old-age,survivors, Old-ageand survivors also the level-premium cost of theand disability insurance program, as insurance: amended in 1958, Is actuarially sound. Contributions 8.05 7.98 8.02 two programs for the low-cost, high- Benefit cost' 7.29 9.42 8.27 cost, and intermediate-cost estimates.The actuarial status of the program Net difference' 78 —1.44 —.25 is actually much improved because Disability insurance: Summary the cost of the liberalized benefits Is Contributions 0.50 0.50 0.50 Benefit cost' 33 .67 .49 The old.age, survivors, and disabil-more than met by• the increased con• Net difference 2 17 —.17 .01 ity insurance program, as amendedtributions that are scheduled. in 1958, has a benefit cost that is The disabiUty Insurance portion of I Includesadjustments to reflect (a) the lower contribution rate for the sell-employed, compared closely in balance with contributionthe program—established under the with the combined employer-employee rate, (b) interest earnings on the existing trust fund, and (c) income;itIs,in fact, significantly1956 act—shows a small favorable ac• administrative expenses. closer to actuarial balance, accordingtuarial balance because the contribu. 2Anegative figure indicates the extent of lack ot actuarial balanceS a positive figure Indicates more totheintermediate-costestimate,tion rate allocated is sUghtly in ex. than sufficient thmncing (according to the esti- cess of the cost for the disability ben. mates). than it was under the 1956 law. The program as amended in 1958 and alsoefits, based on the intermediate-cost as modified by the earlier amend•estimate. When the variabilityof Table 6 shows the estimated opera•ments has been shown to be not fullycost estimates for disability benefits tions of the old•age and survivors in-self -supporting under the intermed-is taken into consideration, thIs small surance trust fund for the low-cost iate-costestimate.Itis,however,actuarial excess Is not significant.

(20)

Old-Age, Survivors, and Dica6ilñy Insurance Provicions: Summary. of L eg:claf ion, 1935-58

byRobertJ. Myers

Reprinted from the Social Security Bulletin, January 1959 U. S. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE • Social Security Administration Old-Age, Survivors, and Disability Insurance Provisions: Summary of Legislation,1935-58 byROBERT J. MYERS* HE Social Security Act of 1935 efit formula was weighted in favor ofthat there waslessemphasis on established the first Federal so•the worker with short service or lowlength of contributions; the formula Tcialsecurity systemInthewages; yet at the same time signifi.was still weighted In favor of workera United States—a system that hascant consideration was given to thosewith lower earnings. The "money. been substantially revised by success. who would contribute for many years.back guarantee" provision was elimi. lye amendments since that year. The The program was financed comnated, and only a small lump-sum major features of the largest pro-pletely by contributions from emdeath payment was provided when no gram, now old-age, survivors, and dis-ployer and employee, each of whommonthly benefits were Immediately ability insurance, and the 'changes inpaid 1 percent of the worker's salarypayable. Coverage provisions were not coverage, benefit, and financing pro-up to $3,000 a year; the tax rate wasmaterially changed, except that the visions resulting from the amend-scheduled torise gradually in theprovision excluding workers aged 65 ments1 to the Act are summarized infuture. The covered group consistedand over was removed. the following pages. The detailed pro.essentially of all workers under age The proposed increase In the tax visions are given in the accompanying 65 in industry and commerce. Con-rate that was to have become effec. tables. tributions were first collected In 1937, tive in 1940 was eliminated by the The program established by theand the first monthly benefit pay-1939 amendments. The actual financ. Social Security Act of 1935 was a ments were to be made in 1942. ing basis of the program was left un. relatively simple one, designed to pay clear; under the 1935 Act it had been (1)old-age benefits to the worker1939 Amendments clear that the program was to be self- when he retired at or after age 65 and The programwassubstantiallysupporting from theemployer-em- (2) cash refunds to survivors whenchanged in 1939. Monthly benefitsployee contributions. Many individ- the wage earner died and to livingwere made payable in 1940, not onlyuals believed that the 1939 amend- workers aged 65 who had not been into the retired worker—the only bene-ments had changed the financing covered employment long enough to ficiaries under the 1935 Act—but alsobasis of the program from "full-re. qualify for monthly benefits. The ben-to the dependents of retired workersserve" to"payas-you-go," but this and the survivors of deceased workers feeling is not substantiated by the leg. 'Chief Actuary, Social Security Admin- (whether or not the worker had re•islative history and provisions; the istration. tired). Except for widowed mothersoriginal Act was not really on a full. 1Forfuller detail on the 1939 amend-and children under age 18, both de-reserve basis. ments and those that followed, see thependents and survivors had to have following SociaL Secu,ity Bufletin articles: (1)"Federal Old-Age and Survivors In- attained age 65 to be eligible for bene.Legislation, 1940—49 surance: A Summary of the 1939 Amend-fits. Durlngthe 1940's the legislative en- ments," December 1939;(2)Angela .1. The method of computing the bene.actments were relatively minor and Murray,"SocialSecurityAct Amend-fit amount was drastically revised so ments of 1946," September 1946;(3) Wil- related primarily to financing. Sever• bur J. Cohen and Robert J. Myers, 'So- al times during the 10 years, amend• cial Security Act Amendments o 1950: A Table 1.—Summary of effective con-ments postponed the scheduled in- Summary and Legislative History," Oc- crease in the contribution rates. In tober 1950; tribut ion rates and maximum earn- (4) Wilbur .1. Cohen, "Social ings bases under old-age, survivors,otherwords,thetaxratewao Security Act Amendments of 1952," Sep- and disability insurance tember 1952;(5) Wilbur .1. Cohen, Robert "frozen" at the initial level of 1 per. M.Ball,and Robert.1. Myers,"Socia' cent each from employer and employ Security Act Amendmentsof1954;A Contribution rate ee until 1950, when it went up to 1 (percent) Max!- Summary and Legislative History," Sep- mum percent each. tember 1954;(6)CharlesI.Schottland, Calendar year earn- One of the amendments made dur. Security Act Amendmentsof1954: A Em- Em. Self- Ings Summary and Legislative History," Sep. ployerployee base Ing the decade carried a provision tember 1956; and Robert .1. Myers, 'Old- ployed permitting a Government contribu. Age and Survivors Insurance:, Financing tion ta the system, but the authority Basis nndPolicy Under1956 Amend- 1937—49 1 1 $3,000 1960 14 14 8,000 was never put to use, and In 1950 the ments," September 1956; and (7) Charles 1951—83 11 23 8,600 I.Schottland,"Social Security Amend- 19M 2 2 8 8,600 provision was removed from the law. ments of 1958: A Summary and Legisla- 1955-6 2 2 8 4,200 1957-58 2Y 23/ 8 4,200 Legislation passed in 1946 provided tive History," October 1958; and Robert .1. 1959 24 2j. 8( 4,800 monthly benefits for survivors of cer. Myers, "Old-Age, Survivors. nnd Disabil- 1960—62 8 8 43 4,81X) 1963—6 83 83 5 4,800 tam World War fl veterans. Another ity Insurance: Financing Basis and Policy 1966-68 4 4 6 4,800 Under the1958 Amendments," October 1969 and 43 43 6 4,800 law adopted in 1946 provided for a de 1958. gree of coordination of the newly es- ilulletin, January 1959 3 Table 2.—Sui'nmaryof old-age,survivors, and disability insurance provisions

Item 1935 Act 1930 Act Legislation in tIme 1940's 1050 Act

A.Coverage

1. Compulsory All workers in commerceAge restriction removed Railroad workers, in offect,Rogimlarly employed farm and and industry (except roll- covered for survivor bene- domesticworkers,nonfartn roads) titider age (15 iii eon- fits.' self-employed (ereept profes- tinental U.S., Alaska, end sional groups), Federal civil- litiwall end on American ianemployeesnotunder vessels. rotirmncnt system, Americans employed outsideU.S. by American employer, antI mar- to Rico and Virgin Islands. 2. Eloctive: (a) By employer only No provision State and local governtno,4om- ployees not under retirement system. (b) By botl employer andNo provision Employees of nonproflt institu- empioyoo. tions (other than mnittisters).' (a) By individual only No provision. 8. Gratuitous,for members ofNo provision. Insured status and averageMilitary service wage credits of ArmedForces. monthly wage of $100 cred- $iOO for each month of service itedfor World War II during World War IL veteran, dying within 3 years after discharge.

13. Type of benefit

1. Monthly benefits:' (a) Retired worker (old-oge)_.Aged 05 and over

(b) 1)isnblod workdr No provision (e) DependentsofretiredNo provisIon. Wife aged 65 or over and childChild ageçl 16 or 17 no longerWife under 05 with eltible child worker. under 18. required to be attending present and dependent hus- school. band aged 65 or over. (d) SurvivorsofdeceasedNo provision Widow aged 05 or over, depend-Same as above Depondent widower aged 08 or worker. ent parent aged 65 or over,5 over, and dependent former child under 18, and widowed wife divorced (with eligible mother under 65 with eligible ehiid present). child present. (a) Dependents of disabledNo provision worker. 2. Lump-sum payments: (a) Deceased worker (inelud-For all death, For deaths when no one is eligi- For all deaths ing retired worker). ble for monthly survivor benefits for month of death. (b) Living worker At age 65, when not quali- Provision eliminated fied for monthly benefits.

C.Insured.status requirementss

1. Fully insured Cumulativo wage credits ofQuarters of coverage IS equal to Starting data advanced from $2,000, and somo employ- at least half the quartersaf tar 1930 to 1900 (but quarters of ment in cash of 5 years. 1030 (or after age 21) and up to coverage credited at any time retirement age(or deathif meet requirement). earlier); minimumof 0 quarters required and maximum

of 40 quarters. . 2. Currently insured No provision. 6 quarters of coverage in 12 quar- 6 quarters of coverage in 136 quarters of coverage in 13 la8t tarsprecedingquarterof lastquarters,including quarters, inciuding quarter of death, quarter of death, death or retirement. 8. Insuredfordisabilityde-No provision termination.

1).Computation ofprimary insurance amount

1. Average monthly wage Concept not used In general, eamputed for period Alternatively can be computed after 1930 or from age 22 up to for period alter 1950. retirement or death.

2. Formula % of first $3,000 of cumula-40% of first $50 of average wage 50% of first $iOO of average wage tive wage credits +1/12% +10% of next $200. all increased +15% of next $21J0.12 of next $42,000 +1/24% of by 1% for each year with $200 next $84,000. or more of wage credits. 8. Minimum $10 $20 4. Maximum $85 $00 (based on 50 years of cov- $80 erage).

See footnotes at end of table.

Social Security in the Social Secuthy Act and its amendments, 1935—38

1982 Act 1954 Act 1956 Act' 1958Act I J A. Coverage

Additional regularly employed farm andMembers of uniformed services and re-Minor coverage extensions. domestic workers, farm self-employed, of professional self-employed and professional self-employed except except doctors of medicine. lawyers and doctors, dentists, and other medical groups.

Americans employed outside U.S. for- elgu subsidiary of American employer.

State and local government employees Minor coverage extensions, mainly under retirement system.' for State and local government employees. Ministers - wage credits pro- specified period after

B. Type of benefit

Age for women lowered' to 82, but with permanently reduced benefits for retirement before 66. Aged 80-64, after 6-mouth waiting period.' WIfe aged 62-64 hut benefit permanently reduced.Child's benefits paid to disabled child after age 18 If disabled before Mlr1mum age for widow without child present and for female dependentpax-ent reduced froip 66 to 82.Child's benefit paid to disabled child after age 18 If disabled before 18. Seine as for dependents of retired worker.

. C.Insured-status .

Alternatively, If every quarter Altetivel$', It n but 4 of tbe quarters Is quarter of coverage (minimum of 6 after1964arequartersof coverage required). (minimum of 6 requIred).

8 Quarters of coverage in last 18 qt

Including quarter of death, retirement, . or disability. 90 quartersof coverage In last 4oquar- ters, including quarter of disability.

Lowest 4 yeats omitted In computingLoweat 8 years omitted in coinputing average (lowest 6 years If 20 or more average in all cases. quartersofcoverage). Under "disability freeze," periods of extended total disability also omitted. 56% of first $100 of average wage56% of first $110 of average wage +90% of +16% of next $200." next $240." 58.85% of flrt $110 of average wage +21.4% of next $290."

$25 $30 $33 $85 $108.50 $127

Bulletin, January 1959 5 Table 2.—Summaryofold-age, survivors,anddisability insurance provisions

Item 1935 Act 1980Act Legislation, in the1940'S 1960 Act

11. Benefit amounts

1. Old-age (retired worker) 100% of primary insurance amount. 2. Disability No provision 8. WIfe's (or husband's) No provlslon fl# 4. ChIld's(childofretiredNo provision Wi,,'. worker). 5. ChIld's(childofdeceasedNo provision. w',uipnmerymsuranuueiuuune In effect, 75% of primary Insur- worker). ance amount for first child and 60% for all others. 6. WIdow's (Or widower's)andNo provision 75%ofprlmaryinsuranceamount. widowed mother's. 7.Parent's No provision 60%ofprlmarylnsumnceamount. 75%ofprlmaryinsuranceamount. 8.Lump-sumdeath Amount equal to 8% of6 times primaryInsurance 8timesprimaryinsurance cumulative wage credits, amount. amount. less any monthly benefits received. 9.Lump-sum refund(to livingSame as above Eliminated - . - worker). 10.MinImum family benefiL....Not applicable $10 $15 11. MaxImum family benefitNot applicable Smaller of $85, 80% of average Smaller of $160 or 80' of average wage, or 2 times primary wage (but not less %han $40). Insurance amount.

F.Retirementtest'1

1. Type of earnings to which Covered earnings applicable. 2. Amount of earningsper-None from regular employ-$14.99 in a month $50 in a month 'I nutted. went.

5. Age at which no longer appli-No provision 75 cable.

0. FInancingprovisions

1. MaxImum earnings taxable $8,600 and creditable." 2. Contribution rates:" (a) Combined employer-em- 1937-39--23"; 1940-42—8%; Same, except 2% rate extended2%rateextendedthrough 1950—58—-3% 1954—59—4% 1960— ployee. 1943-4 %;1946-48—5%; through1942. 1949; 1960-M—-8%; 1952 64—5%; 165-69—6%; 170 on 1949 ofl—6%, on—4%. —6%. (b)Self-employed No provision. Self.cmployed pay ( of combinedemployer-employeerate. 8. ApproprIations from generalNo provision Authorized (but not made).Authorization repealed revenues.

'Includes other legislation affecting the program that was enacted In this year to Dec. 31, 1956. and in the preceding year. 'In effect, an individual can receive only one type of monthly benefit—the 'Railroad and other earnings are combined In determining eligibility for and largest for which he is eligible. amount of 8irvlvor benefit; provision extended in 1951 to place workers with less Benefits were reduced by amount of any other Federal disability benefit or than 10 years of railroad service under old-age, survivors, and disability Insurance any workmen's compensation benefitunder1956 Act, but this provision was for all benefits. eliminated by 1958 Act. $Employeeswho vote against coverage are not covered; all new employees are 'Benefit payable only if worker Is not survived by a widow or an eligible covered, child under 1980 Act, but this provision was eliminated by 1958 Act. 1Firemen and policemen not covered; 1956 Act permitted their Coverage in 'See table 8 for insured-status requirements for various types of benefitS. certain States. Under the "disability freere" provision (1954 Act), periods of extended total 'Provision first effective from July 26 1947, to Dec. 31, 1953.Legislation in disability are not counted in determining insured status. 1958 extended effective date to June 30, ióss; In 1956 to Mar. 81, 1956; and In 1956 'GIn general, $50 or more of wages paid in a quarter; based on annual earnings tablished survivor benefits under theployed (except members of specifiedIn wage levels and the cost of living railroad retirement system with those professions), regularly employed farmsince the 1939 amendments. The re- under old-age and survivors Insur-and domestic workers, employees oftirement test (the amount of earn- ance. nonprofit institutions(on a groupIngs permitted beneficiaries if they elective basis), and State and localare to receive benefits) was notably LegIslation,1950-52 government employees not coveredliberalized. Important changes were The1950 Act made manyImport- by a retirement system (at the optionmade In the financing basis. A revised ant changes. Coverage was consider- oftheemployer).Thebenefitlong-range contribution schedule was ably extended by the bringing In ofamounts were roughly doubled—a re-placed In the law, the principle of such groups as the nonfarm self-em-flection of the appreciable changesself-support was clearly established,

6 SocIalSecurity in the Social SecurityAct andits amendments, 1935—58—Continued

1952 Act 1954 Act 1956 Act' 1958 Act'

B.Benefit amounts

For women retiring before 65, permanent reduction of 6 h% for each year under 65. 100% of primary insurance amount." For wife ciaiming benefit before 65 (with no eligible child), permanent reduction of 834% for each year under 65.

Maximum of $255 introduced

$18.80 $30 $33 Smaller of $168.75 or 80% of averageSmaller of $200 or 80% of average wage Smaller of $254 or 80% of average wage (but not less than $45). (but not less then the larger of $50 or wage (but not less than the targ- 134 times primary Insurance amount). er of 134 times primary insuranco amount or $20 plus primary insurance amount).

F.Retirementtest '4

All earnings

$75 in a month ii $1,200 in a year.For each $80 (or fraction thereof) In excess of $1,200, 1 month's benefit is withheld.1' 72

0. Financing provisions

$8,200 $4,800 1

1984—59——4%; 1960—04—5'-19115-89—6%; 1957—59—-434%; l960—64—534'; 1985—69—1959—5%; 1960-62-—6%; 1953—65— 1970-74—7%; 1975 on—8L. 634%;1970-74—734%; 107 on—834% 7%; 19136—08—8%;1989 on—9% (increase of 34% is for disablilty bene- (In lI years, 34% Is for disabiilty fits), benefits).

for farm workers and self-employed persons. benefit under 1956 Act, but this provision was eliminated by 1958 Act. IITheterm "primary Insurance amount," introduced in the 1950 Act, denotes '4Employmentpermitted without suspension of benefits.Applies to ali types the amount payable to a retired worker and on which the benefits of his depend- of benefit except disability.If retired worker's benefit Is suspended, so are ents and survivors are based (also used as basis for beefits payable to survivors benefits of dependents. of worker who dies before retirement, computed as if deceased worker had at- I'Provisionappites only to wages; comparable provisions (but on an annual tained retirement age on date of death). basis) for self-employment income. IIAppliesto average computed from 1951 on, as indicated above; for average 10Benefitsnot withheld for any month with wages of $80 or less (changed to Computed from 1937 on the 1939 formula (somewhat modified) is used in con- $100 or less by 1958 Act), and with no substantial services in self-employment junction with a conversion table.Under the 1954 and 1956 Acts, an alternative rendered.Special provisions apply to earnings from noncovered employment computation based on the 1952 formula, plus $5, was possible. Ii outside the United States. Thisbenefit (and benefit for disabled child aged 18 or over) was reduced by 17Seetable 1 for actusi and scheduled contribution rates and maximum earn- amount of any other Federal disability benefit or any workmen's compensation ings base. and the maximum earnings base way about 15 percent and further- lib. slowly—becauseoftheweighted increased to $3,600 a year, ralizedtheretirementtest.No benefit formula. In1951the railroad retiremenhange in the financing provisions system wasamendedto provide furthas necessary because the risein 1954 Amendments er coordination with the old-age aniarnings levels in the preceding few The 1954 amendments extended survivors insurance program—. affectears was sufficient to pay for the coverage further to include virtually ing not only survivor and retiremenenefitliberalizations.Ascovered all types of employment. Brought in benefits but also the program's fiarningsrise,contribution income atthIstimewereself.employed nancing. isesproportionately;benefitdis- farmers, more domestic and farm The 1952 Act raised the benefit leveursements also increase, but more workers, State and local government

BulletIn, January 1959 7 employees under retirement systemscantly changed- by an increase in theannual earnings base for both bene- (at the option of the employer andlong-range contribution schedule offits and contributions was raised from the election of the group concerned), ½ of 1 percent for the combined em- $4,200 to $4,800. ministers, and many self-employedployer-employee rate and of % of 1 Disability insurance benefits were professionalgroups.Benefitswere percent for the self-employed rate.liberalized in several ways, in addi- again raised by about 15 percent, and The purpose of this increase is to fin-tion to the general increase in the the retirement test was considerablyance the monthly disability benefitsbenefit level and in the maximum liberalized and made more flexible. for disabled workers. earnings base, described above. Bene- The 1954 amendments also intro- fits were provided for the dependents duced the concept of disability into1958 Amendments of disability beneficiaries, paralleling the program through the "disability The1958 amendments providedthose for the dependents of old-age freeze" provision, which is essentiallyadditional coverage for groups in cer-beneficiaries (retired workers). The a "waiver of premium" clause detain limited areas —primarilyfor provision for offsetting certain Fed. signed to maintain both the insuredState and local government employ-eraldisabilitybenefitsandState statusof permanently and totallyees. Benefits both for those on the workmen'scompensation benefits disabled workers and their benefit against the disability benefits under amount.ThefinancialprovisionsTable 3.—Current requirements forthe Social Security Act was elimi insured status under old-age, sur-nated; an amendment n 1957 had werealsoaltered. The maximum vivors,and disabilityinsurance, earnings base was raised to $4,200, by beneficiary category eliminated the offset for service-con- and tax rates scheduled for 1970 and nected benefits paid by the Veterans thereafter were increased in order to Insrnec-tatusrquie- Administration. Finally, the insured finance the additional benefit costs. Beneficiary category status provisionsfor the monthly benefits payable to disabled workers 1956 Amendments Retired worker (old-age).....Fully. Disabled worker Fully and for disability were liberalized by eliminating the Additional coverage was provided determhmtion.9 requirementofcurrentlyinsured Dependents of retired bythe 1956amendments.They worker (for old-ago and status. disability): brought In members of the uniformed Wife Fully. The financing provisions, too, were Busband Fully and currently. services on a regularly contributory Child Fully.3 significantlyaltered.Theamend- basis and all the professional self-em- Survivors oI worker: ments not only raised the maximum Widow Fully. ployed except for doctors of medi- Widower Fully and Currently. taxable earnings base from $4,200 to cine, and they made somewhat broad. Widowed mother Fully orcurrently. Parent Fuljy. $4,800 but also revised the contribu- er the coverage requirements for self- Child Fully or currently.8 tion schedule by (1)increasing by Lump-sum payment employed farmers and State and local beneficiary Fully or currently. 1/2of1 percent the combined employ- governmentemployees.Otherim- "Disability freeze' beneficiary Fully and for disability er-employee rate and by % of 1 per. portant changes were the introduc- determination.' cent the rate for the self-employed tionof monthly disability benefits in all future years and (2) accelerat- for insured workers aged 50—64 and See table 2 for definItions of the different types ingfuture scheduled increasesso of insured status. the lowering of the minimum eligi- Currently insured Status also was required undcr that, beginning in 1960, they will oc the 1956 Act, but this provision was eliminated by bility age from 65 to 62 for women the 958 Act. cur at 3-year intervals instead of at workers, wivesofretiredworkers, In certain instances (for most married women 5-year intervals. The changes in the workers) currenuy Insured stitus Is required. and widows and dependent mothers 4Currentlyinsured status rather than fully in- financing provisions were designed sured status was required under the 954 Act, but of deceased insured workers.(For this provision was changed by the 1958 Act. both to meet the cost of the liberal- women workers and wives, however, ized benefi provisions and to place there is an actuarial reduction in therolls currently and for future bene-the system on a sounder actuarial amount of the benefit.) In addition,ficiaries were raised by about 7 per-basis. This purpose was achieved by the amendments provided that thecent, with somewhat larger increasessubstantially reducing the long-range child aged 18 or over of a retired orfor those with the lowest benefits and actuarial deficit previously present to deceased worker may receive bene- inthe maximum familybenefits. the point where it can be said to be fitsif he became permanently andParent's benefits were made payablewithin the range of variation inher- totallydisabled before he reachedregardless of the existence of otherent in the cost estimates. The financ-. age 18 and continues to be disabled.survivors, and the retirement test wasing of the system may therefore be The financing provisions were signifi-liberalizedslightly. The maximwnsaid to be "actuarially sound."

8 Social Security

GPO861-630

TAA PPM NO.64 SSA-OASI Office Memorandum•UNITEDSTATES GOVERNMENT

Administrative, Supervisory TO DATE: June16, 1956 andTechnicalEmployees

PROM Victor Christau, Director BureauofOld-Age andSurvivorsInsurance

SUBJECT: Director'sBulletin No. 280 SocialSecurity Hearings

Hearings on the general subject of changes in the variouB prograzns established under the Social Security Act began th;Ls morningbefore the Coxnxnlttee on Ways and Means of the House of Representatives with presentationoftestimony by Secretary Folsom. Enclosed is a copy of the Secretary's testimony.Also enclosed is the press release announcing the hearings that was Issued. by Congressman Wilbur D. Mills, Chairman of the Cômniittee. Plans have been made to keep employees currently informed of the legislative situation through the issuance of a weekly newsletter.

VictorCbristgau Enclosures (2) For Relea&e Upon Delivery

STATEMENT By ZrionB. Folsom Secretary of Health, Education, and Welfare Before the Ways and MeansCommitteeof the HouseofRepre8entatives Monday,June 16, 1958 10:00a.m.,EDT

Mr.Chairnian and Members of the Committee:

It is a pleasure once again to discuss the Social Security Act with this Committee. As you mayknow, Ihave had the privilege of participating in the establishment of this program in 1935 and in many of the changes since then. In the span of these year& I have been impressed many times with the value of careful and thorough study preceding important changes in this law--a law which means so much, ma personal way, to so many Aniericans.

Since the chairman, Mr. Mills, has invited me to discusa various aspects of the act, I will divide this statement into three sections corresponding to the three major social security programa administered within our Department--public assistance, child welfare, andold-age and survivors insurance •Iwill briefly review each program asit standstoday and discuss some of the current issues andthebroad principle8 the administrationseeks to apply.

PUBLIC ASSISTANCE

More than 5.6millionneedy persons are now receiving monthly

payments under the Federal-State program of public assistance.These

include 2..5 million older persons, 2.7 million dependent children and

their parents1 300,000 permanentlyand totally disabled persons, and

100,000 blind persons.The Federal fundsreque8tedfor public -2- assistance for fiscal 1959 amountto$1.3billion,or 61ipercentof the total budget of the Department of Health, Education, andWelfare.

Recent Trends

Theprincipal trendB in recentyearshavebeen in two directions.

First,there has been a steady decline in the number of persons receivingold-age assi8tance.While the population over 65hasin- creased by 20percent over the past 7years, the nwflber of persons receiving old-age aa8iatance has declined by 1]. percent.The decline has continued even in recent months when unemployment has been relatively high.This is a heartening reflection of the progress made through the Old-Age and Survivors Insurance program in providing greatereconomic security--as an earned benefit- -for more and moreof ourolder citizens.The average age of the persons receiving old-age assistance is nowover 75. Many of these people were not covered by 0ASI during their working years •Since about90 percent of.the persons now working are covered by OASI, it ia expectedthat a smaller and smaller proportion of older persons vii). need publicassistance in the future. The second principal trend, by contrast, is a steady and aubstantial increase in the number of personsneeding public a8si8tance atthe other end of the age scale--among our children.The number of persons receiving payments under the aid to dependentchildren program has increased 29 percent in the past Ii years.The economic recession undoubtedly has caused a more rapid increase in this program in recent months.The major factor over the long-term, however, has been an increa8ing numberof children who need help because of a breakdown in -3- thefamily unit.The great majority of these dependent children have been deprived of normal family life and normal supportasa result of divorce, desertion, or unwed motherhood.

Unemployment

Withthe relatively higherlevels of unemployment in recent months, concernhas been expressedby someas to 'whether the publicassistance programs make asufficient contribution in meeting needs arising from unemployment.While the assistance programs undoubtedly have been helpful to some people who are temporarily out of work, in nr judgment it is far sounder to rely primarily on the unemployment compensation programs to provide income during periods of unemployment. The Congress passed and the President has signed a law making available funds for the extension of unemployment compensation benefits to individuals who have exhausted their benefit rights.The extension of Unemployment insurance to employees in establishments ofone or more employees, in accordance with the recommendation of the President, would further serve to reduce the number of needy unemployed persona.I am convinced that action along these lines is the most desirable approach to the problem and I urge the Conunittee to support this important step in strengthening the economic security of American workers.The Secretary of labor undoubtedly will testify more fully on this point. A }re Constructive Approach The public assistance programs, developedlargelyin drs of acute depression, naturally and properly intheearly dare emphasized cash income for immediate needs• But overthe years it has becc,me increasingly clear that we have a deeper duty to those in need than the mere payment of dollars to relieve distress. Some of those receiving public assistance, although crushed by adversity for the time being, are capable of future independence.For these,the greate8t service we canrenderis to help thembuild toward independenceand. a more sati8fying life for theinBelves. Othersreceiv- ing public assistance have little hope of supporting thenwelves, because of disability or advanced age; but their lives can be made more comfort- ableand rewarding through services to help them domore thingsforthem- selvesin their own homes.

The need for greater emphasis onconstructive service8 wasrecog- nizedby Congress in the 1956 amendments.There have been aome excellent demonstrationprojects showing thatwhena concerted anddetermined effortis made--inproviding medical, care,counseling,jobtraining, andotherservice8--familiea which have received, public asBistance formany years canbehelped back on their ownfeet• ButthiB approach needs to be applied muthmore widely. The country as a whole needs to understand.much more clearly the exciting prospect of wlmt can be accomplished along these lines, and we need to provide many more people whoare professionRi-].y trained to do this constructive work. Federal-State Relations In recent years, a 8teadily increasing portion of total public aaei8tance costs baa been shif ted from the States to the Federal Government.In 1946, State and. local governmente provided 60percentof the costa o all public as8i8tance.In 1957, their —5.. aharehad decrea8ed to 50 percent.Counting only those prograia in which the Federal Government participatea...ald to the needy aged, blind, disabled, and dependent children-..the State andXocalshare ofthe cost has declined from 55percentin 19116to 115percentlaat year. Since 19116 the welfareappropriatioriaof State and local governments have dropped from 10.8 percent to 8.6percentof their total expenditurea. In thiBsameperiod the Federal Government's expenditureB for public assiatance have increasedby morethan$1 billion until they arenow three timee as laage as in 19116.

The shifting of public assistance costs to the Federal

Government has been most pronounced in the high per capita income

Statea which have eater ability to Bupport their ownproains.

Several middle and low per capita income Statea have actually increased their effort in relation to their fiscal ability.

Not only has there been an increaoe in the over-all Federal share, but the niethod by which thishasbeen accomplished raises some seriouB questions. Ae you know, the formulas have been modified in

19146, 1918, 1952, and. 1956, until today the Federal Government in the proama for aged, blind, and disabled persons, pays80percent of the first $30 of aasistance payments on theaverage,and 50 percent of the renainder of each individual payment up to $60. If the monthly paymentto an individual is $60, the Federal share is $39. But if the monthly payment Is $30,the Fédéral shareis $214 and the State orlocal shareis only $6. Thus, in the States where payments areloweat,the.

Federal share is h±gheot. In some of these State8, the Federal share in the federally aided proas is nowbetween 75 and 80 percent. -6- Itseemstoni this approach results in eome serious disparities andInequities. The proportion of Fedra1supportin any particular

State is not necessarily related to the fiscal ability of the Stateor theneed of persons forpublicassistance. The Federal share may be high sinxplybecausea State chooses to make only a limited effort for welfare purposes, and sets arelativelylow standard of payments to persons in need. Or the Federal share may be high because the State has a large number of persons on public aosistance who also are receiving OASI benefits and, thus, need. only small supplementary amounts from welfare funds. CertaInly there is no justification for providing the highest Federal share of public assistance payments in those very cases where the Federal OASI proam already has substantIally reduced the need..

We should bear in mind that from the outset oneof the fundamental concepts of thi8 program has been that the separate

States, not the Federal Government, should determine the scope of the program, set standards of need and eligibility, and actually operate the program directly or in cooperation with local agencies.

I believe that a further general expansion of' the Federal Government's financial share in these present prograne, and particularly any further expansion under the present formula for Federal matching, is undesirable. I believe a more eq.uitable and constructive approach, both from the standpoint of sound Federal-State relations and the humanitarian objectives of this prograii, would be to uet the Federal ahare of fund2 more in accord with the fiscal abilities and the needa of the States. This concept would tend to provide more adequate assistance in the low-income States where human needs are often eateat, -7- Other_Problems

Those adm.niBtering public a8eistanceinboth Federaland Stategovernmenta are concerned about the preaent requirenent for

Federal matchingbaaedon a computation in each individualcaae,

Involving some 5—1/2 mIllion persona.It baa been suggeated thata moreequitable andaimpler arangeinent would beto matchStateand

local.expendlture8onthe baaisofaveragea of all paymentø within a State, up to a specified maximum.Under the pre8ent approach,

some States limit total payments to any individual tothe $60 niaximmn

8etin the present matching rormula.Under the eugge8ted plan, States would have much more flexibility to provide payments more in

line with wide variations in individual need.If theFed2ral

participation were related to the average expen&iture,thematching

limitmigJat be more readilyrecognizedfor what it should be:a meana

of regulatingthetotal Federal 8hare, rather thana suggestionof what

8hould bethe ceiling for individual cases.

Another problem in public assi8tance is the rapid Increases

in recent years in payments or the costof medical care.A8 you

know,the 1956 amendrents, setting up a separate matchingformulafor

payments to auppliers of me&lcal care, have given a big impetus to the

total medical care available to persons receiving public assistance.

There are stillsubBtantial problems to be met. The Department expects

to suggest some improvenent8 in this field and In several other8 before

the expiration of the present public aaai8tance matching formulas on

June 30, 1959. CRILD WELFARE

Muchprogress haèbeenmadeduring thepast 22 years in child welfare&ervicesforneglectedchildren, childrenwith phicalor mental handicaps, runawaychildren, childrer born out of wed2.ock, and otherswith a wide variety ofproblems. Asof June 30,1957, about

330,000 children were receiving special chIld welfare servicea from publicagencie8. Thiswasan all-tiLle high. Slightly more than half of all counties in theUnitedStatea hadtheservices of one or more fu1l-tiiie child welfare worker8.

Federal funds have elicited Btrong State and local, financial support. In 1 9Z1.O,total expenditures amountedto $li.5 mi.llion. Federal funds accounted for $1.5 million of thetotal.In 1957, thetotal was

3-1/2 tire8 as high--$159 rillion—-of which $7.3millionwas from

Federalfunds.

Thereisaserious deficiency in this program under preaent law, however, the use of Federal fundsfor local workers ia limitedto predoralnantly rural areas.And yet there has been a major shift in population in recent years toward urbanandsuburban area8. Today, about 60percent of the children in the Nation are living in urban areasand.the shift to the8e areas ia continuing. In 191&6 the public welfare agencies In predominantlyruralStates were providing Bervices to 1O childrenper 10,000 under the age of21. In 1957, thia rate bad increaaed. to63. Duringthe8azxeperiod, the corresponding rates in predominantly urban State8 droppedfrom 62 to119. Itieimportant thatStates provide services to the childrenwho need help Ino8t, -9- whereverthey may live.We accordingly have proposed that Congress remove the existing restrictions which permit aupport for local services to children only in predominantly rural areas• Wehope that theCom- mitteewill act favorably on the proposal.

OLD-AGE AND SURVIVORS flSURANCE The Old-Age and Survivors Insurance system represents a trenien- dously successful investment by many mill ions of Americans in freedom from the fear of want.The develojmient of this program over the years has been very hearteng to the Department and especially, I am sure, to the members of this Conunittee, who have given careful and wise guidance to an undertaking of such great significance.Over many years, the system has remained sound and strong despite rapid economic changes, despite an unprecedentd and unpredicted growth in population, and despite theshocks of war andother strains and stresses. The growth of the system in recent yearshas beenlittle short of remarkable.The number of persons receiving benefits has increased almost ii. times in the past 8years. Thisyear about $8_i/li billion in benefits will be paid--as a matter of earned right--to an average of almost 12 million retired persons and theirdependents, andto widows, orphans, and disabled persons.The system has been a great benefit not only to these mill ions of individuals but--particularly in this period of economic recession--to our econonr and our society as a whole.Today, more than 9outof 10 workers and their families have a foundation for economic security through this program. - 10-

FtnancjalCondition ofthe Srstem

Members of theCoumiittee will be interested, I am sure,in the

recentreport of the OASI Board of iistees, which presents revised

short-term estimates and 1oxg-range projections on the operations of

thisprogram.Thenewfigures generallyrevise downward the previous

projectionsas to the growth of the QASItrust fund.

With benefits increasing more than had been expected, the trust

fund s expected to decJ.ine from about $23 billion at the beginning o

the current fiscal year to about $22-1/2 billion by the end of this month. This willbethe first fiscal year in ,hich the fund hasdeclined

since it wasestablishedin 1911.0. A further decline of about $1.1 billion

isexpected in the 1959 fiscalyear. By the end of fiscal 1962, the trist fund is expected to be within a range of from $19.2 billion to $21.5 billion.

Under the intermediate-cost estimates,the trust fundwould resumeanupward trend aster the scheduled tax increases take effect in1965 andcontinue to grow for many yearsthereafter. This pro- jection placesthe trustfundat about $211. billion in 1970, $32 billion in 1975, $11 bi.U.ion in 1980, $52 billion in 1990, and$55billion in the year 2000. The temporary decline in the trust fund over the next several yearsiscaused largely byagreater-than-expected increaBeinbenefit payments.This ±8duelargely to three short-term factors which have relatively little bearing on the financial condition of the system over thelong..range future. First, and, most important, more benefit claims than expected havebeen filed by people who were first brou€ht into the program by — 11 — theamendments of195I1and 1956,especiallyfarmers. ny of these peoplewerealready past65 and wereable to qualifyfor benefit8in a short period of time after they were first covered.

Second, morewomenthan expected have chosen to take a reduced benefit at age 62 instead, of a full benefit at age 6.Thishas no significant effect on the long-term cost of the system because on the avera€e these women will receive the same total amount of money in the long run regardless ot which choice they make.

Third.,in the current recession some workers find it more difficultto keep or find a job; thus more of them thanhad been expected retire andapply forsocial 8ecurity benefits. The recession alsotendsto reduce taxcontributionsto the system slightly below previous estimates.

For the long run, the new projections place the level-premium benefit cost of the old-age andsurvivorsinsuranceprogram,on an intermediatebasis, at 7.90 percent of payroll.The level-premium equivalent of the contribution schedule is 7.33percentof payroll. There is thus anestimatedactuarial insufficiency, computed into perpetuity, of 0.57 percent of payroll.In the last previous report onthe8tatus of the program it was estimated that the actuarial insutficiencywouldbe0.20 percentof payroll.

Thelong-term projections arebasedon current earnings anddo nottake into account the historical trend toward higher levels of earnings, which result in increased income to the system.This operates, in effect, as a probable "safety factor" in the long-term estimates.Inview of the very long-range nature of the projections, - 12

and the many variable factors involved, the trusteeshave concluded that

the old-age and survivors insuranceprogram may besaIdto be in

approximate balance on a long.term basis.

For the disability insuranceprorani, the short-range estimates

indicate that the trust fund will Increase steadilyeach year, reaching

almost $I. billion in 1962. The long—range estimates indicate that the

lntermedi.ate level-premium benefit. cost of thedisabilityproainis

0.35 percent of payroll and that the level-premiumequivalent of the

contribution rate for disability Insurance is 0.50percent of payroll.

Considering the po8sible range oferror in cost estimates for dieability

benefits, this program mayalsobe considered in approximate actuarial

balance, the small exceas of contributionsover benefit cost being no

more than a moderate 8a±ety factor.

Myown conclusion,on the basis of these figures, is that the

system is in essentIally sound financial conditionfor the foreseeable

futureand there is nocause for concern about the long-range financial conditionof the program.The czrrent unexpected downturn in the trust fund points up sharply, however, the need for carefuland thorough study before significant changesare niade in this program which ia so

far..reaching and complex.Certainly itisclear that there are no "surplus" funda availablenow, or in sight, to finance benefit

increases; andIt18therefore imperative, ifwe areto maintain the soundness and the integrityof the social Becurity system, that any benefit increases be financed fully and Immediatelyby increases in tax revenue.

We ehould bear in mind, also, thatadecline in the QASIfund over the next five years or ao, amounting In the agegate to several —13—

bIllIon dollars, had not been ant1c1pated—-certa.n1y nota decline of

such an extent at this relatively early periodin the development of

the sy8tem, While there will be, of courBe, amp.efundsto pay all

benefits by drawing on the trust fund, Iam concerned as to whether it

is fair to future contributors for the workers dur.ng thisperiod to be

paying into the system considerably less than the current amount of

benefits.

Thin question of whether, in the light of thenew estimates, we

will be contributing enough into the systemover the next five yeare or

eo ia one of the many iasuee now under study by the Advi8ory Council on

Social Security Financ±ng, eBtab].ished by Congress in the 1956aznendnients.

As you know, this Council, appoInted laat Octobei', Is makinga thorough

atudy of the financial condition of the system in relation tothe long..

term commitments of the prograzn. I have asked members of the Council

whether a preliminary report tiight be ready at thi8 time, but the

Council baa not found this to be possible. The report, as scheduled in

the law, will be submitted at the end of this year.

A number of questions are under consideration by the Council.

These include whether a tax-rate increase, beyond the schedule already

in the law, should be enacted...either now or later; whether the timing

of tax increasea already aet forth in the law..-in 1960, 1965, 1970, and

1975--ehould be revised, perhaps into shorter intervals between increases; whether the increase scheduled in 1965shouldbe advanced in order to eliminate or reduce the temporary deficit over the next five years or so; whether there should be an increaae in the maximum amount on which taxe8 - l1.- arelevied,which now stands at $1.,2OO a year.The Council also is examining the basic assuxnption8 and methods used in the long-range projections.

I believe the members of the Advisory Council are exceptionally able and distinguished men, and their findings will be very important in considering how best to assure that the financing of the system will continue to be equitable, sound, and on a self-suppoiting basis.

Consolidated Reporting

As you know, the Department of Health, Education, and Welfare and the Treasury Department have recommended legislation to provide for combining the wage reports that employers make to the Government for social security and for income tax withholding purposes. Wage reports for social security purposes are now filed on a quarterly basis; separate reports, on an annual basis, are filed for income tax withholding.

We favor legislation under which one system of annual reports would serve both purposes.Through the elimination of detailed quarterly wage reports, such a system would result in substantial savings for employers. Further- more, under a system of combined reporting it is possible for theBureau ofOld-Age andSurvivorBInsurance, as a part ofits electronic and mechanicalrecordkeeping operations, to balance out various wage and tax reportsmade by employers and to match the Forms W-2 filed by employers with theForms W-2 filed by employees as a .part of their income tax returns.

Retirement Test

Anothermatter that maybeof interestto the Committee is the retirementtest, whichdetermines the amount thatbeneficiariescan - 15 - earnand still receive benefits, As you know, sub8tantial improvements were made in the retirement test in the 19514. amendments, I consider the retirement test a very important partofthe social insurance program.

The program is intended to insure agaiit loss of earLlings caused by retirement or death. It ha never been gener].1ycon8idereda desirable objective to pay benefits to people who confine to have a large amount of earnings from employment. I&reover, any major increase in the level of earnings specified in the retirement test would be quite expenaive, requiring a substantial tax increase, and the extra cost would go largely to pay benefits to people who already have subatantia]. work income. The great majority of people on the benefit roliB either are not able to work or cannot find work, and so the bulk of beneficiarie8 would not be helped by a change in the retirement te5t. I think it would be highly undesirable to increase the coat of the program in order to pay benefits to people who are working and earning substantial income.

Benefit Levels and Wage Base

The social security system has been adjusted from time to time to keep abreast of changing coiditions and to reflect increasing experience and knowledge In this field.This flexibility and adaptability is one of the great strengths of the program.

As you know, the last general revision in the benefit structure and earnings base was made in the amendments of 19514, proposed by

President Eisenhower and strongly supported by this Committee and by a large bipartisan majority in Congress. With the adoption of these amendments, I believe, the 8ystem generally was in excellent condition1 - 16-

Since19511, prices have increased 7.7percentandwages on the average have increased 12 percent. As we examinethemeaningofthese change8 to the social aecurity syatea, itseems to me there are three items of pe.rticuLar interest.

The first of tb.eøe iGthe "wage base'-..that ia, the limitation on the amountof annual earnings that is taxable and creditable toward benefits under the program.Inthe l9511 amendments, the wage base was set at $11,200.in 19511, about 1111 percent ot all regular male workers would not have had all their earnings covered by a $Z,200 earnings base.

Because of the increase in earnings since then, in 1957about 57percent did not have all their earnings covered.An increa&e in the earnings baae to $Ii,800wouldrestore the samerelationship8 establisl2ed in the

19511 amendments. A second consideration is the situation of the 5millionpersona who were already receiving benefits whenthe amendments went into effect inSpetember 19511.These benefita, of course, were baaed on earnings in prior years; and so the general increase since 19511 in earnings,in productivity,and in the standard of living of our people has not been reflected in the benefits oT these 5 million persons.Further, while their benefit levels have remaigedconBtant,the consumer price index hasincreaaed by 7.7 percent since 6epteber 19511.

Third,let us look at the 8ituation of the persons who arenow justbeginning to receive their benefits or who will become beneficiarie8 in the near future. For many of these, the picture is quite different.

Youwill recall that the 1950 amendmenta provided for a "new start" in 1951 in computing average earnings on which benefits are based.This ' 17- moentthat earnings inprior years, whichenera1ly speaking would tend to be lower, would nothaveto be counted in coiputing benefits. irtber, later amendments have provided that the five years of lowest earnings, even since 1950, can now be dropped out in determining the benefits a person receives.also, the thnun earnings on which benefits are based wereincreasedfrom $3,000 t© $36oo in 1951 and to $11,200 in 1955.

Asa result of all. these provi8Lons r of the people retiring now find that their benefits are based only on their most recent, and generally higher, earnings,Because of these factors, there has been a sibatantial increase, on the average, in the level of benefits of persona recently coming onto the social security rolls The average benefit of men who came on the rolls prior to the amendment in951. is now$65.90, while the average for those com(ng on the rolls in the last six months of 1957 is $77.91.It is therefore clear that the average benefit for persona retiring now is much more in line with the current wage and price situation than for those who retired se time, ago.The same favorable factors which I have cited would also apply, of course, to persons retiring in the near future. It is a1was possible, of course, to raise the fundamental. question of whether the general level of economic security to be provided by this system should be adjusted by across-the-board increases for everyone becoming eligible for benefits in the future, or by extending the protection provided by this system into fields which are not covered now.Any significant mo'os in this direction, of course, would require a substantial increase in tax r8tes.It is extremely important that such major changes in the social security — 18— patterno our country have the benefit oZ the most thorough and see'cl4ri study from every standpoint.rad±ttona11y, major clmn€ea in the social secturity zoram have been adopted only after intensive 8tudy b' ropre8entative8 of employees, employer8, the eelf-eznployed, and the public generally, serving as an advisory council,if the

Conunitteeis intereGted in looking into some or these sini!icant

long-rangechenes,I believe it wouldbehiGhly desirable to establish

an adviBory council to review the benefit structureendothez' major

queations. Such a etudy nowal8o wou1 bavethe benefit of the findings b the Advisory Council on Social Security Financing.

In conclu8iorl, Ifr. Chairman, I would liketothmkyouaM the

Committeefor this oppoztunity to outline some of themore important facts, as I see them, about our social security progrwns.If, aster the Coittee has heard. the testimony of all the witnesses, you would like to con&ult with me and. urrstaffwe will be very glad to cooperate in every war we can. PRE33 RELEASE COMMITTEE ONWASAND MEANS FOR IMMEDIATE RELEASE U02 New House Office Building May 29, 1958 Capitol 4-3121, ext. 3625

CHAIRMAN'ILBUR D. MIlLS (D.-ARK.) OF THE COWMITTE1OL WAYS AND MEANS, ROUSE OF REPRESENTATIVES, AN1OUNES GENE[AL PUBLIC HEARINGS ON ALL. TITLESOF THE 30C!AL SEcURITY AcT

TheHonorable Wilbur D. Mills (D.-Ark.), Chairman, Committeeon Ways and I'Leans House of RepresentativeB, today announced that the Contuittee has tentatively scheduled general public hearings on all tttles of the Social Security Act to begin on June 16, 1958 and to conclude not later than June 27, 1958. Chairman Hilts stated there are presently ending before the Committee on i'ays and Means some 400 bills on various aspects of the Social Security Act and that, due to the interest which has been expressed in this subject the Committee had concluded that public hearings ahould be ôonducted so as to afford interested individuals, groups, and OrganizationG an opportunity to present their views.

Chairiuan Mills stated that the Secretary of Health) Edu- cation and ¶'elfare and the Secretary of Labor have been invited to appear and present any recommendations wtiich the Adwinistrá- tion may have for changes in the Social Security Act. It is anticipated that the Secretaries will be scheduled as the first witnesses.

The principal aubjects included in the various titles of the Social Security Act which are within the scope of the earings are: Grants to States for Old-Age AsSistance (Title I), various aspects of the Federal Old-Age and Survivors Insurance and Disability program (Title II), Unemployment Compensation (TitIe III and IX), Grants to States for Aid to Dependent Children (Title IV), Grants to States for Maternal and Child '!elfare (Title V), Grants to States for Aid to the l3lind (Title.X), and Grants to Stat for Aid to the Ptirmanently and Totally Disabled (Title XIV).

Chairman Mills recalled that the last general ameridmnt9 to the 3ocial Security Act occurred in 1956 (the Social Security Amendments of 1956), and that this is now an apporpiate time to review the operation of the major changes made at that time and to receive recotnmendations for further changes. The Chairman stated that the hearings wou1d afford an opportunity to review, among the other subjects, the actuariai. status of the OASI and Disability Trust Funds, such Administration proposals as may have been made for changes in the various titles of the Act, and an opportunity for the Committee to explore the possibility of legislation and afford a basis for study. The Chairman emphasized that, due to the short time available and the advanced status of this session, it might not be possible for the Committee to act on all the proposals on which testimony is presented but that the testimony would be qváilable for study and as a possible basis for action during the next Session. The last hearings conducted by the Committee on 1ays and Means on any aapect of the Social Security Act (with the exception o.f the recent emergency unempIoyuent extensi!ln hearings) occurred in the spring of 1956 when hearings were hel.d on the publtc assistance titles of the c t.

Chainnan Mills further stated that among the many billa pending before the Committee on the general aubject6 listed above are several major proposals relating to the oId-ge and -2- survivorsinsurance program, unemployment benefits and the public assistance titles. For example, under the Old-Age and Survivors Insurance Tit1e there are bills to increase the general level of old-age and survtvors ineurance benefits, bills to provide hospitalization and medical benefits, bills to amend the disability-tnsurance provisions of the Act and the disability freeze provisions) bills to liberalize the earnings lim'itation, bflla to reduce the retirement age under the Act, and a number of bills relating to coverage and to specific limited, although very important, areas,

Included among the pending proposals on the Bubject of old-ate assistance are bills to increase the Federal contribu. tion, bills to revise the matching formula medical and other remedial care costs) bills to provide for disregarding need in determining the eligibility of State plans, and various other bills.

Among the pending proposals on unemployuient compensation are those relating to the specifying of Federal. standards, redefiningthe term 'employer' to includepersons havingne or more employees, bills relating to supplementary payments and for such supplementary paymentsfordistressed areas, bills to provide for judicial review of decisions made by the Secretary of Labor) etc.

Chairman Mills emphasized that the Committee on Ways and ileans has an extremely heavy schedule and only avery limited time to devote to these hearings. With this in mind, he urged that witnesses limit their testimony to the key points which they wish to emphasize with permission to file their full and detailed statements in the record of the hearings with the assurance that they will receive the full and careful consideration of the Committee. tn view of the limited time availabj.e for thehearings,the Chairman expressed the hope that all persona and groups with similar interests will designate one spokesman to represent them. He stated that the time for each witness would be determined by the number of witnesses requestingto be heard. He pointed out that, due to the schedule of the Committee, it is possible that these hearings may be subject to interruption due to other urgent legislative work, suchas possible conferences, Floor consideration of other important matters, etc.

Persons desiring to appear and testify orally should notify theClerk,1102, New House Office Building) Washington 25, D. C., as early as possible and in any event no later than June 9, 1958. To the extent possible, interested persons areurged tosubmit writtenstatements in triplfrate in lieu of personal appearances.These statements should be subniitted no laterthan June 27, 1953.

Persons who request tobeheard are requested to submit 75copiesof their prepared statement 24 hours in advance of their scheduledappearance.If a witness desires to also make available copies of his statementfor the press and interestedpublic, an additional75copiesshould be submitted by the date of his appearance.tisasked that witnesses in their requests to be heardindicate theparticular bill or bills, or the pertinent provisior of the Social Security Act on which they desireto testify.The request should also specify thenameand address of the witness and the anount of time which is requested for Lda testimony. -3-

The Chairman has directed the Clerk, in conjunction with the Calendar Committee, to screen the requests to be heard so as to avoid where possible scheduling witnesses who will duplicate the testimony ofotherwitnesses or groups who have the same interests. Persons requesting to be heard will be notified of the tentative date of their appearance a soon as possible after the cut-off date of June 9, 1958.

-o-

STANDARD FDAM ND. 64

SS& -OASI OfficeMemorandum.UNITED STATES GOVERNMENT

TO Adinirl!Btratilre, Supervisory and Technical loyees DATE:August 8, l95

FROM : VIctorChristgau, Director Bureau of Old-Age and Survivors Insurance

SUBJECT: Director's &lletin No. 285 Senate Hearings on H.R. 13511.9

Hearings on H.R. 13511.9 began today beforetheSenate Committee on Finance. The new SecretaryofHealth, Education andWelfare, DrArthur S. fleinmlng, testified.Enclosed is a copy of the Secretary's testLinony.

The hearings are scheduled to closeon Monday and we will, of course, inform you of the outcome ofthe Conunittee's consideration of the bill.

Vietor Enclosure For Release ton Delivery Statent By Arthur S. F1enniing Secretaryof Health, Education, and Welfare Before the Senate Committee on Finance Friday, August 8,1958 10:00 A.M., EiYP

)fr. Chairman and Members of the Conmiittee: It is a pleasure to appear before this Committee to discuss socialsecurity programs of suchvitalimportance to the American people.

Iwill confine my om testimonyto twomajor policy issues presented by H.R. 135149. Assistant Secretary Richardson and Comanla- sioner Schottland are here with me and they will be glad to answer questions about other and more detailed issues.

Old-Age and Survivors Insuranàe

First of all, I would like to discuss the proposed chR.ngesin the Old-Age and Survivors Insurance Program. Themajor changescan be stnmnR.rized briefly as foflows:

1. The taxcontribution schedulenow in the law for old-age and survivors insurancewould beincreased, effective nextJanuary1, and the dates of future taxincreases alreadyscheduled in the law wouldbe substantially advanced;

2.Benefit amounts would beincreased by 7percent,witha minimtnnincrease of $3inthe benefit amount for a worker who retires at 65orlater;.

3. Themaximum limit on the amount of annual earnings that is taxed and credited toward benefits would be increased from $11,200 to $l,8oO. -2- Duringfiscal 1958theold-age and aurvivora insurance sy5te, for the firit time aince the proam beganin1937,paidout more in benefits than it received in tax revenue and. interest.The truat fuM is expected to continue to decline, under the current law, until'tbe tax increase now scheduledfor1965.Under the intermediate coet e8timate, the trust fund. wou]4 then resume an' upward trend aM continue to grow for many years thereafter.The latest projectiona indicate, on an intezitediate- coat basi8, a ].ong-rane actuarial 1naufficiency of 0.57 percent of payroll. The previous repoxt on the status of the truet tuM eetimated that the actuarial insufficiency would, be 0.20 percent of payroll. Aa members of the Coimnittee know, an able athd.tstinguiahe Advisory Coittee on Social. Security Financing, established by the Congress, is now studying the long-range financial condition of the program and. is considering many of the financial questiona dealt with in H.R. 135119.This Committee is required by law to make ita report by next January 1. The administration would have preferrett to await the report of this Misory Committee before recoending changea in the program of 8uch magnitude as those proposed in H.R. 135119.We believe that both the administration and the Congrea8 would have been in a better position to make major decisions after receiving the benefits of the atwIy by the Advisory Council. —3— Nevertheless,thie preference is based principally on questions of timing and procedure.From the information available to us now, we recognizethat the major provisions of H.R. l35i9 haveconsiderable meritaxtd do, in fact, meet certain real needsinthis Important program.

The proposed changesinthe contribution rate wouldeliminate,after

1959, the estimated annual deficits over the next few years andwould substantially strengthen the long-range financial condition ofthe program.

A12 percent increasein wagessince l95i, when the laet major changes were made in benefit amounts and the tax base, ju8tifiee the proposed increase in the earnings base.

An8percentincrease in pries since 195k justifiessomeincrease in benefits, particularly for the millions of persons who have been on the benefit rolls for several years or more and have had no adjustment to meet rising living costs since l95i. On the whole, therefore, I believe the major changes in old-age and survivors insurance, which I have just discussed, are reasonable and desirable and I recommend their adoption. Public Assiatance The second aajor issue which I would like to diBcuss deals with the proposed changes in the Federal ovrnm' a participation in public aesi stance.

Webelieve thatH.R. l35i9 incorporates some verydeeirable admini5trative principles.We concur in the view that the maximum ceiling on State expenditures in which the Feaera]. Government 'will participate should be coiputed on the basis of State-wide averages rather than on an individual payment basis.We aleo concur in the vieir - thatthe maxim amount on State expenditures in which the Federal

Government willehareshould conthine into one figure the separate maxitnne on money payments andmedicalcare.Likewise, we are couvinced that it Ia more equitable for the Federal share of aesistance payments tobe related, to the fiscal ability of a State.

On the whole, however,theadministration is stronglyoppOeed tothe public assistance title of H.R. 13514.9 beoauBe theee deeirsble principleewouldbeapplied in tuch a way astoeubBtantia.Uy increase theFederal Government '88harein the cost of this program and further reduce the relative role of the States.

In hi.s Budget Message last January, the President Btatedhie conviction that the States ahould have greater--not leeeer--responsi- bilityfor programs of thie nature. The President alsostatedthat:

"Propoialswill be sent to the Congrees formodernizingthe formulas for public asBietance with a view to gradually reducing Federal participation in its financing."Former Secretary FolBot, in his teetimony recently to the Cnnittee on W&ya and Means in the House of Representatives, recended that no action be taken on public assistance at this time and5tated that the administration would present recoamendations to

Congress early next yearin time to pern1t adequate consideration by theCongrees before the current financing tormu.luexpirenext June 30. I believe that the philoeopby expressedbythe President is souM and I concur in the recmendation of foxer Secretary Foli. In recent years, a steadily increasing portion of tatal.public aseistance costs hae been shiftedfromthe Statee to the Federal Govern- ment • In1946, State az1 local governmentsprovided60 perc.ut of —5— thecoets of allpublicaBaietsnce.In 1957,theirshare bad deoressed to50percent.Counting onlythoseprogramsinwhich the Peters].Govern-. sent participates--aid to the needy aged, blind, diBabled, aiddepeent children--theState andlocalshareofthe coat has declined from 55 percentin l96 to 5percentlaet year.While State expenditures tor public aesietance have doubled eince 19116, the Federal Government 'e erpenituree inthiBsame period have increased by more than $1 billion andare now three times as large as in l94.6.

In the face of this trend, the proposed bill would increaee the

Federalcontribution by an additional $288 millionIn the current fiscal year,and probably by more than $300 million in future, years.

These programsareState programs, initiated by the States az. administered by the Statee and cotmnunitiee.They are basedonthe sound concept that the Statea and local connnunitie8 can beetdeterminethe actual needsof individualø aadminister programs of assietance to them.In the nextsessionof Congress, I believe, it should.be possible for the Ececutive and Legislative Branches, working together, to develop a new formula which will have the effect of providing vigorous Federal support for the public assistance prograi without weakeningtherole of the States. The proposed bill would further weaken the role of the Btatei.

In the long run,tocontinue such a trend might well prove to be a disservice rather than a service to those who are dependent on the prograa.

It should be emphasized that the administration's opposition ie not directedagainst an increase in aseistance payuientsto individualebut is directedonly against an increase in the proportion of euc paymente that will be borne by the Federal Government •Iam impressed by thia fact:If the States find that increased payments to lndlvidual8 are needed, the -6- FederalGoverzent already ie in a position under the existing lay to atch, on a 50-50 baeie, State funds to increase pa3jment for 60 percent of all the persons now receiving old-age aseistance.In aany of the States vhere public aeei.tance payments are now the lowest, an even higher percentage of recipieiits could receive increased payments on a 50-50 matching baeie. It is also very important, to consider the fiscftl circ18tances under whichthie increase in the Federe.]. ehare of public assietanceexpenditures ie propo8ed.The aembere of this Committee, I know, arealready deeply concerned over the proepective $12 billion Federal deficit for this fiscal. year.The propoeed bill would, of course, increase the proepective deficit nov and in the 1iiediate years ahead.

In eary, Mr. Chairman, I believe that the proposal before your cittee in the field of old-age and survivors inBurance is sound both frc a program ftnd fiscal point of view and that it will make a major contribution to the strengthening of our econony and to the Becurity of the aged, the dieabled, and widows and orphans.I hope that the committee wili notcouplethusound proposal in the field of old-age and survivors insurance with what we believe for the reasons stated, is an unsound proposal in the field of public assistance.

[COMMITTEE PRINT]

THE RETIREMENT TEST UNDER OLD-AGE AND SURVIVORS INSURANCE

A REPORT BY THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE

A REPORT AND A SUPPLEMENTARY REPORT ON A STUDY CALLED FOR BY THE COMMITTEE ON WAYS AND MEANS OF THE HOUSE OF REPRE- SENTATIVES IN HOUSE REPORT NO. 2288, 85TH CONGRESS, 2D SESSION

SUBMITFED TO THE COMMITTEE ON WAYS AND MEANS BY THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE

Printed for the use of the Committee on Ways ad Means COMMInEE ON WAYS AND MEANS WILBUR D. MILLS, Arkansas, Chairman AIME J. FORAND, Rhode Island RICHARD M. SIMPSON,' Pennsylvania CECIL R. KING, California NOAH M. MASON, Illinois THOMAS J. O'BRIEN, Illinois JOHN W. BYRNES, Wisconsin HALE BOGGS, Louisiana HOWARD H. BAKER, Tennessee EUGENE J. KEOGH, New York THOMAS B. CURTIS, Missouri BURR P. HARRISON, Virginia VICTOR A. KNOX, Michigan FRANK M. KARSTEN, Missouri JAMES B. UTT, California A. S. HERLONG, JR., Florida JACKSON E. BETTS, Ohio FRANK IKARD, Texas BRUCE ALGER, Texas THADDEUS M. MACHROWICZ, Michigan ALBERT H. BOSCH, New York JAMES B. FRAZIER, JR., Tennessee JOHN A. LAFORE, JR.,2 Pennsylvania WILLIAM J. GREEN, JR., Pennsylvania JOHN C. WATTS, Kentucky LEE METCALF, Montana LEO H. IRWIN, ChiefCoun8el JOHNM. MARTIN, Jr., A8sistant Chief Coun8el THOMAS A. MARTIN, Minority Counsel GERARD M. BRANNON, PTofe88ional Staff RAYMOND F. CONKLING, PTofes8ional Staff

'Died January 7, 1960. 2AppointedJanuary 18, 1960. U LETTER OF TRANSMITTAL

MARCH 29, 1960. Hon. WILBUR D. MILLS, Uhairman, Comrnttee on Wajs and Means, House of Representatives, Washington, D.C. DEAR MR. CHAIRMAN: I have the honor to transmit to you a report on "The Retirement Test Under Old-Age and Survivors Insurance." This report was occasioned in part by the request of your committee in its report accompanying H.R. 13549, the Social Security Amend- ments of 1958 (85th Cong., 2d sess., H. Rept. 2288).You will recall that the report asked the Department to study certain aspects of the retirement test.This report presents the results of the De-. partment's study. Sincerely yours, ARTHUR FLEMMING, Secretary. El CONTENTS

THE RETIREMENT TEST UNDER OLD-AGE AND SURVIvoRS INSURANCE Pat, Introduction 1 Why there is a test of retirement in old-age and survivors insurance 1 The provisions of the retirement test 2 How the retirement test developed 3 The number of people affected by the test 4 The committee's request 6 Possible elimination of the monthly measure of retirement 6 A separate retirement test for people with relatively high earnings -- - 7 Conclusion 8 Summary of findings 8

ALTERNATIvE APPROACHES TO CHANGING THE RETIREMENT TEST UNDER OLD-AGE AND SURVIVORs INSURANCE A supplementary report 11 V THE RETIREMENT TEST UNDER OLD-AGE AND SURVIVORS INSURANCE A Report on a Study Called for by the Committee on Ways and Means of the House of Representatives, 85th Congress, 2d Session, in House Report 2288 on H.R. 13549, the Social Security Amendments of 1958

The report of the Committee on Ways and Means of the House of Representatives on the Social Security Amendments of 1958 (H. Rept. 2288) contains the following section calling for a study of the retirement test under the old-age and survivors insurance program: The committee has asked the Department of Health, Education, and Welfare to study certain aspects of the present test of retirement which seem to the committee to have questionable results.The present test is basically on an annual basis but under one of the provisions benefits are nevertheless paid for any month in which an individual earns $80 or less ($100 or less under the bill) and does not render substantial services in self-employment.Thus a person may have very high earnings in a single month and yet get benefits for the remaining 11 months in the year.We have asked the Department to consider possible changes in this provision. In response to this request, the Department of Health, Education, and Welfare has studied various changes in the retirement test designed to meet the problem the committee has expressed interest in. This report sets forth the findings of that study.

WHY THERE Is A TEST OF RETIREMENT IN OLD-AGE AND SURVIVORS INSURANCE The basic purpose of the old-age and survivors insurance program is to provide benefits for workers and their families when the worker's earnings can be presumed to have stopped or to have been substantially reduced as a result of his retirement, disability, or death. Since it is not reasonable to presume that all workers retire or suffer a significant reduction in earnings upon attainment of age 65, the program includes a "retirement test"—a provision intended to restrict the payment of benefits to those among the aged who can be presumed to have suffered such a loss. If the retirement test had been removed from the program in June 1959, about 1.4 million people age 65 and over (working people and their dependents) who had not been getting benefits up until then could have immediately started to get benefits.Many of these people are working full time and earning as much as they ever have in their lives; the payment of full benefits to them would serve no socially useful purpose.And the removal of the test would not help the vast majority of beneficiaries now on the rolls who are unable to work or to get jobs. 1 2 RETIREMENT TEST UNDER OLD-AGE AND SURVIVORS INSURANCE Payment of full benefits to all of the aged who are stifi working would be very costly, both in the immediate future and in the long run. Benefit costs in 1959 would have been increased by about $2 billion ftheretirement test had not been in effect for that year.In terms of long-range costs, the removal of the test would increase the level-. premiuni cost of old-age and survivors insurance by 1 percent of taxable earnings—an increase of 12 percent in the estimated level- premiuni cost of the old-age and survivors insurance provisions (8.38 percent of taxable earnings).' The Social Security Board, the Federal Security Agency (predecessor of the Department of Health, Education, and Welfare), and the Department have always recommended in the past, and the Depart- nient recommends now, that a test of retirement be retained in the old-age and survivors insurance program.

THE PROvISIONS OF THE PRESENT RETIREMENT TEST2 Under the present retirement test a beneficiary gets all of his benefits when his earnings are $1,200 or less in a year (this is the concept referred to in the report as the "exempt amount").Anyone making $1,200 or less is, in effect, presumed to be retired.Beneficiaries may get benefits, therefore, even though they have a significant amount of part-time work on a regular basis or have relatively high earnings for part of the year.(In fact, there undoubtedly are a few people at even this relatively low level of $1,200 a year who are working full time and earning as much as they did before age 65.) Ordinarily, a beneficiary has a check withheldfor each $80, or part of $80, in excess of $1,200 in earnings (the concept referred to throughout this report as the "unit of excess earnings" or the "excess unit").This means that a beneficiary gets at least one benefit if his earnings are $2,080 a year or less.4The reason why the number of benefit payments that can be made in a year varies as earnings vary between $1,200 and $2,080 is to avoid a sharp line below which all benefits would be payable for a year and above which none would be payable.If the test were not graduated, it would not be uncommon to have the payment of $2,000 or more in benefits depend on a few dollars of earnings.The law also provides that no matter what his annual earnings, a beneficiary gets a benefit for any month in which he neither earns wages of more than $100 nor renders substantial services in self-employment (this provision is referred to as the "monthly measure of retirement"). The retirement test does not apply to beneficiaries aged 72 or over; after that age, benefits are payable regardless of the beneficiary's earnmgs.(This provision was enacted in recognition of the fact that a few people—particularly the self-employed—continue working to a very advanced age.Without this provision these people might never get any benefits even though they had paid contributions longer than most other beneficiaries.)The test applies to the earnings of bene ficiaries in covered and noncovered work in the United States and

1Thedisability insurance part of the program is estimated to cost an additional 0.35 percent of taxable earnings. a The limitation on the amount of earnings a beneficiary may have and get benefits, although designed primarily as a test of retirement for the aged worker, a'so applies to beneficiaries receiving dependents' and survivors' benefits under the program. 8Wherethe dependents of a retired worker are getting benefits based on his earnings, those benefits are withheldfor any month for which his benefit is withheld. 4Thefigure $2,080Isthe result of adding to the $1,200 exempt amount 11 times $80.Thus at least 1 month's benefit is payable when earnings for a full year are $1,200 plus $880 ($80 for each of the 11 months). RETIREMENT TEST UNDER OLD-AGE AND SURvIVORS INSURANCE 3 coveredwork outside the United States.(A special provision applies to beneficiaries working in noncovered work outside the United States so that levels of earnings in foreign countries need not be equated with those in the United States.) How THE RETIREMENT TEST DEVELOPED The reasons why the test has taken its present quite complicated form will be easier to understand if the considerations that led to the various changes that have been made in it through the years are reviewed. From 1940 through 1950 the test of retirement applied only to earnings from covered employment.During those years work as an employee in commerce and industry was, generally speaking, the only employment covered by the program.The test was entirely on a monthly basis; the beneficiary got a benefit for any month in which eearnedless than $15 in covered employment. ffective in 1951, when the self-employed were brought under the program, the test of retirement for the self-employed was put, for the most part, on an annual basis.(This was necessary because it is practically impossible in most cases for a self-employed person to compute his earnings on a monthly basis.)Specifically, it was provided that a person with self-employment earnings of $600 or less for the year could get benefits for all months in the year no matter what his earnings were in any single month. One part of the test, however, was placed on a monthly basis even though the earnings were figured over the whole year.No matter how high his annual earnings, a self-employed beneficiary could get a benefit for any month in which he did not render substantial services in his business.This latter provision served three purposes: First, it placed the self-employed beneficiary on a par with the wage earner in that he could receive a benefit for any month in which he did not work or in which he worked very little.Second, it allowed the payment of benefits to a self-employed beneficiary for months in which he did no work in the year in which he retired, even though his total earnings for the year were above the exempt amount by reason of work done before retirement.And third, the provision allowed payment of benefits to a person whose self-employment income came, not from work in operating the business, but rather from the investment he had in the business. Two important criticisms of the test soon developed.First, there was criticism on the basis that the self-employed person could work, say, for 3 months, earn up to the annual exempt amount, and still get benefits for the whole year, while the wage earner who worked in 3 months and had the same total yearly earnings had 3 months' benefits withheld.(The 1950 amendments provided that a person could not get a benefit for any month in which he earned over $50 in covered wages.)Second, a beneficiary who had both self-employment income and wages was in an unwarrantedly favorable position because he could meet the two tests separately; that is, he could have earnings from self-employment for the year of as much as the annual exempt amount, and also have wages in every month amounting to as much as the monthly exempt amount, and still get all of his benefits.The 1954 amendments removed these two anomalies by providing that earnings from self-employment and wage employ- 4 RETIREMENTTEST UNDER OLD-AGE AND SURVIVORS INSURANCE ment would be combined for retirement test purposes and by providing a test with an annual exempt amount ($1,200) for both the sell- employed beneficiary and the wage-earner beneficiary. The 1954 imendments also provided that the wage earner could get a benefit for any month in which he earned not more than $80 (this amount was changed to $100 beginning with 1959) regardless of his earnings for the year.This provision was included partly to avoid situations where a worker would not be able to get benefits under the 1954 amendments although he could have gotten them before.The provision also solved the problem of finding a way to pay benefits for the rest of a year when a worker retired in the middle of the year after his earnings were over the exempt amount.(With- out the provision, a worker who retired in July, for example, after earning $2,500 in that year could not get benefits for any part of the yearS) THE NUMBER OF PEOPLE AFFECTED BY THE TEST At the end of June 1959, 11.1 million of the more than 15.5 million people age 65 and over in the United States were either getting old- age and survivors insurance benefits or could have gotten them if the breadwinner of the family had not been working.Of the 11.1 million, 4.9 million—44 percent—were age 72 or over and thus did not come under the operation of the retirement test.Of the remaining 6.2 million, an estimated 3.2 million did not have any earnings at all.Generally the retirement test does not affect the benefits these people get because most of them cannot work or cannot find work.5Another 1 million are expected to earn less than $900 in the year and also generally would not be affected by the test.6We have, then, a total of 9.1 million—about four-fifths——of the 11.1 mfflion eligible for benefits who in all likelihood are not directly or concretely affected by the retirement test. There are, then, about 2 million of the aged who are directly affected by the retirement test.The 2 million fall into3 groups. One group, numbering about 300,000, is the group of people who are getting full benefits and who are earning just under $1,200 a year (between $900 and $1,200). A sizable proportion of these can be assumed to be deliberately holding their earnings to $1,200 or just under that amount in order to get full benefits.For these people the test is clearly operating as a deterrent to work.The second group, also numbering about 300,000, is the group of people who are earning between $1,200 and $,2080 and under the present retirement test are getting some benefits for the year, the number of benefits being determined by the specific provisions of the retirement test.7 The third group, numbering about 1 4 million, is composed of people who are making over $2,080 iii a year and therefore are generally not getting benefits.Some of these people are working full time and earning about as they did before they attained age 65; others may have suffered significant reductions in earning power, although not enough to reduce their income below $2,080.In general, the existence of the retirement test in its present form prevents these people from getting any benefits for the year.

6Inthe last survey of beneficiaries conducted by the Bureau of Old-Age and Survivors Insurance, about 70 percent o( those not working said that they were not able to work. 6Thisgroup may include a few who are deterred by the provisions of the test from earning more than they do. - 7 Theseestimates exclude those who came on the rolls during the year and earned amounth falling In the indicated range, in most instances before "retirement." RETI1EMENT TEST TJNDER OLD-AGE AI'TD SURViVORS INSURAI'TCE 5

THE EFFECT OF THE RETIREMENT TEST

2 MILLION ARE AFFECTED BY THE TEST

3.2 MILLION

49 MILLION

11 .1 MILLION ELIGIBLE

JUNE 1959 6 RETIREMENT.TESTUNDER OLD4GE AND SURViVORS INSURANCE

THE COMMITTEE'S REQUEST The committee asked the Department to consider possible changes in the provision of law under which a person may have very high earnings in a single month and yet get benefits for the remaining 11 months of the year.The situation the committee is concerned about grows out of the provision in the law setting up a monthly measure of retirement.This is the provision under which benefits are not withheld for any month in which the beneficiary neither earns wages of more than $100 nor renders substantial services in self-employment, regardless of what his total earnings are within the year. Possible elimination of the monthly measure of retirement In seeking a solution for the problem raised by the committee the Department considered first whether the monthly measure of retirement should be eliminated, but came to the conclusion that it should not. A major function of the monthly measure is to make it possible to' pay benefits to a retired worker beginning with the first month of his retirement.Without a monthly measure of retirement, if a person retired from full-time work at the end of June, for example, after earning more than $2,080 in a year, he could not get benefits until the following January.It would not seem reasonable for the program to require that a beneficiary go through the first several months of retirement without getting benefits.The benefits should start as soon as possible after earnings cease, when the need for the benefits arises; the monthly measure of retirement is the provision in the present law that makes this possible. Moreover, since people move in and out of employment after reaching retirement age, the problem is not confined to the year of initial retirement for each beneficiary.For example, take a person who has been on the benefit rolls for a year, getting $100 a month, and now has a chance to take a job in January, and does so.He thinks he will be able to keep on working and lie spends most or all of this earnings for current living expenses.In June of the following year his employer goes out of business and lie is unable to get another job. Now, because in the first months of the year he has earned, say, $2,100, he cannot get benefits for the next 6 months, and will not have earnings either. And the problem exists not only for people who leave employment in the middle of a year, but also for those who return to work during the course of a year.Take for example a beneficiary who has been retired from a regular full-time job and has gotten benefits of $110 a month for a year or so.He is not satisfied to be idle and would like to work.An opportunity comes up for him in July of his second retirement year to take a full-time job paying $85 a week.If he takes it he will earn $2,210 and, therefore, will have to return the $660 in benefits that he has already gotten or have his benefits withheld at a point when he is no longer earning.This will seem quite unfair to him, since he was not working during the months when he got the benefits.Moreover, the need to repay the benefits will be a significant barrier to his taking the job. Removing the monthly measure of retirement would prevent the payment of benefits in cases where under present law some benefits are paid to the beneficiary in a year even though he may have had RETIREMENT TEST UNDER OLD-AGE AND SURVIVORS INSURANCE 7 highearnings for a few months of the year.But removal of the monthly measure would make it impossible to pay benefits promptly upon retirement, and therefore would prevent the program from carrying out a major one of its objectives.Accordingly, the Department recommends' that a monthly measure of retirement he retained in the program. A separate retirement test/or people with relatively high earnings The Department believes there is only one feasible proposal for preventing benefit payments where a person has relatively high earnings in a few months of the year.The Department is of the opinion, however, that the way in which the law operates at present is to be preferred, and it does not recommend adoption of this proposal.The proposal would add, on top of the present retirement test, a provision that no matter how little he worked, a person could not get full benefits if his earnings for the year were above some fairly high figure—for example, $4,800 (the present maximum on taxable and creditable earnings).One form such a proposal might take would be to withhold one monthly benefit for, say, every $400 of earnings above $4,800 in a year.To take account of the peculiar circumstances of self-employed people, it might be provided that the proposal would not apply to a self-employed person unless he actually had done some work during the year. Here are some examples illustrating how the proposal woWd operate: 1. A farmer moves into town after turning the operation of his farm over to a paid manager. He gets a profit of $6,000 from the operation of the farm.If he did absolutely no work in connection with operating the farm he would get benefits for the full year, just as he does under present law.If, however, he helped with the work during the spring planting, he could get benefits for only 9 months; three benefits would be withheld because of his income from the farm even though he worked in only 1 month. 2. A movie star works on a picture during 2 months of a year and earns $10,000.He does not work in the other months of the year.Under present law he could get benefits for the 10 months in which he did not work.Under the proposal he would get no benefits. 3. An operator of a mail-order business turns the management of the business over to his son and moves to Flotida; his business yields him $7,200 in earnings.Like the farmer in the first example, if he did not work at all he would get benefits for the whole year.If he did do any work at all in connection with the business he would get benefits for only 6 months; six benefits would be withheld. As the' examples show, a self-employed beneficiary with a business that produces a high income would, under the proposal, have to completely disassociate himself from the operation of his business in order to get full benefits.Under the proposal as much as a whole year's benefits would depend on whether the beneficiary did any work at all. When a self-employed beneficiary has high earnings and yet works in his business very little during the year, most of his earnings probably come from his investment in the business rather than from the work he performed.Thus the effect of the proposal in many cases would 8 RETIREMENTTEST UNDER OLD-AGE AND SURVIVORS INSURANCE be to withhold benefits on the basis of investment income.But the wage earner beneficiary can get his benefits even though his invested savings yield a large income.There is no good reason why the self- employed person should not be able to have income from his invest- inent in his business without losing his rights to benefits.8 More important than the undesirable effect just described is the fact that the proposal would add complexity to an already too complex provision in order to deny benefits to a very small group of beneficiaries.And the beneficiaries would be people who really are essentially retired.Generally speaking, any person who would be prevented from getting benefits solely by this provision is likely to be a person who has retired within the normal meaning of the word, and there is real justification for paying benefits to him for months in which he does not work.Because the proposal would deny benefits to only a very small group, it would not save any appreciable amount of money; there would be virtually no saving in the long run costs of the program. Because of the serious disadvantages associated with it, the Depart- inent does not favor the adoption of this proposal nor of any proposal that would have a similar effect. Conclusion.—The Department of Health, Education, and Welfare recommends that no action be taken to, remove the monthly measure of retirement, or to put an additional earnings limitation on top of the present retirement test.Acceptance by the Congress of this recommendation would mean that the situation that the committee has expressed interest in—the payment of benefits to a person even though he may have had very high earnings for a few months in a year—will not be changed.The Department believes that, for the very few retired people who come out of retirement for a short time and earn substantial amounts of income, the most appropriate action is to suspend their benefits for the months in which they actually worked.This is the approach taken in the present law, and in fact the approach that has always been taken under the law.Ever since the program started paying monthly benefits the retirement test has been so framed that a person could get a benefit for any month in which he did not work, regardless of how much he worked or earned in any other month; and generally, over the years, this approach has been accepted without disfavor.Moreover, it is the only approach that is consistent with the treatment that should be, and is, accorded to a person in the year in which he first retires (that is, it is consistent with the payment of benefits to a person for months after retirement even if he has earned large sums in that same year before he retired).

SUMMARY OF FINDINGS The findings and recommendations of the Department with respect to the retirement test under the old-age and survivors insurance program an be summarized as follows: I. The retifement test in the old-age and survivors insurance program is necessary in order to assure that the funds of the program will be employed for socially useful purposes.Ehmi-

BIncomefrom investments in real estate, stocks, bonds, and the like is not taxed for social security nor credited toward benefits, nor does it count for purposes of the retirement test.If benefits were withheld from people who have income from Investments and other forms of savings the program would discourage personal savings. RETIREMENT TEST UNDER OLD-AGE AND SURVIVORS nsurwc 9 nation of the retirement test would substantially increase the cost of the program, and the additional cost would be incurred chiefly as a result of paying full benefits to people who are fully employed at relatively high earnings.The Department there-. fore recommends that a test of retirement be retained in the program. IL The Department recommends that the monthly measure of retirement be retained in the test, since to remove it would prevent the program from attaining its objective of makin benefits available to people immediately upon retirement an durmg other periods when they do not have income from work. III. The Department has developed, but does not recommend, a proposal that would eliminate the payment of benefits in the sort of case the committee asked the Department to study— the case of a person who is retired throughout most of the year but comes back into employment for a month or two and has lugh earnmgs.Under present law, because of the monthly test, he gets benefits for the months in which he did not work.The Department believes that it is desirable to withhold benefits only for the months m which the person works, as is done under present law. ALTERNATIVE APPROACHES TO CHANGING THE RETIREMENT TEST UNDER OLD-AGE AND SURVIVORS INSURANCE

A SUPPLEMENTARY REPORT

11 LETTER OF TRANSMITTAL

MARCH 31, 1960. Hon. WILBUR D. MILLS, Chairman,Committee on Ways and Means, House of Representatwe8, Wa8hington, D. C. DEAR MR. CHAIRMAN: I am enclosing for the consideration of this committee a report entitled "Alternative Approaches to Changing the Retirement Test Under Old-Age and Survivors Insurance."This reportis a supplement to the report on the Department's study of the retirement test, requested by the committee in its report on the 1958 amendments, that was transmitted to the committee a few days ago. Sincerely, ARTHUR FLEMMING, Secretary. 18 ALTERNATIVE APPROACHES TO CHANGING THE RETIREMENT TEST UNDER OLD-AGE AND SUItVI- VORS INSURANCE A Supplementary Report Themost tellingcriticism of the retirement test that can be made is that it discourages older people from working as much as they can and would like to, and therefore keeps them from contributing what they can to production and the economy and from bettering their own situations and leading more satisfying lives. It is easy to exaggerate this effect of the retirement test.Powerful incentives to work for people ae 65 and over now exist.Generally, earnings from work make possible a higher standard of living than most people can manage to obtain for themselves in retirement, since earnings generally are much higher than benefits.And there are many intangible satisfactions in work—meaningful activity, social relationships connected with work, and the feeling that the man has a contribution to make to the economy.Actually,. most beneficiaries who are not working either are not well enough to work or cannot find jobs. Nevertheless, it is unquestionably true that many older people would do more work than they do if the provisions of the retirement test did not operate so as to reduce the net addition to their income as a result of working.This is particularly true of people who are retired from their regular jobs and who would like to find some part-time or less demanding work to do.To the extent possible, retired people should be encouraged to accept jobs, earn money to improve their economic situations, and make a contribution to production and the national economy.Under present law it frequently happens that a beneficiary finds himself in a situation where, while he will be better off if he does a given amount of work than if he does no work at all, he would be still better off if he could have managed to restrict his work to a point where he would have earned somewhat less than he did.Thus the retirement test causes beneficiaries to restrict their earnings to lesser amounts than they could and would like to earn in order not to suffer a loss in total income. An example or two may help to clarify the effect that the test has on incentives to work.Take the case of a beneficiary getting $1,200 a year in benefits and faced with a choice between a job paying $1,800 a year and one paying $1,200.If he takes the $1,800 job he will be only $1,000 better off than if he does not do any work; 1 but if he takes the $1,200 job his increase in income for the year will be $1,200. Obviously, he would do better financially to take the $1,200 job, although he might make more of a contribution to the economy, and feel better about his activities, if he could afford to, and did, take the $1,800 job.

IThe$600 of earnings in excess of $1,200 causes the withholding of eight benefits of $100 each—$800. Therefore, the worker has $1,800 in earnings and $400 in benefits, or a total of $2,200 for the year—$1,000 more than the $1,200 in benefits he could have gotten if he had not worked at all. 16 16 RETIREMENTTEST UNDER OLD-AGE AND SURVIVORS INSURANCE Or take the case where a beneficiary has occasion to earn just over the $1,200 exempt amount and lose a full month's benefit as a result. (Usually if he does earn just over $1,200 it is through inadvertence or as a result of demands made upon him by his employer.)Whether the beneficiary actually does do the extra work and loses a month's benefit, or refrains from doing the extra work in order to get full benefits, the test is operating in an undesirable manner, since it either discourages him from work or penalizes him for working.And this situation can occur not only at the $1,200 point, but at every one of the breaking points from $1,200 to S2,080.2 As a final example, take a man who with his wife has a benefit income of $180 a month (the maximum under present law) and is offered a job paying $3,000 a year.In this situation it is impossible for the family to lose in income as the result of the man's work; but the addition to his income if he takes the job and does $3,000 worth of work will be only $840.If he takes the job he will be somewhat better off financially than if he does not.And if he is chiefly interested in maximizing his income, or if the job is particularly interesting or not too demanding, he may take it in spite of its not being very profitable.On the other hand, he may well think that the extra $840 in income does not make it worth his while to take the job. This is a situation in which it might be highly desirable, for the economy, the beneficiary, and the old-age and survivors insurance program, for the man to take the job and make whatever contribution he can. Yet the present law greatly reduces his incentive to do so. It is generally agreed that provisions of law that operate to discourage people from working as much as they can and want to work are, in that respect, undesirable.Even when a person has attained an age that is generally regarded as the time when retirement from work is taken for granted, it is probably better for him to continue active, so far as his health wifi permit; both the individual himself and the economy as a whole will benefit by his continuing in productive activity. It would be desirable, then, to bring the provisions of the law into harmony with the general system of incentives; that is, to devise a retirement test that would result in a person's having increased income as a result of increased work that he does. On the other hand, a point that must be kept in mind in connection with any proposal that would eliminate or reduce the disincentive effect of the retirement test is that any such change that can be devised has the result of increasing the earnings level at which some benefits are payable. Generally speaking, at present no benefits can be paid to anyone who works throughout the year and makes more than $2,080.All of the proposals described in the following discussion would mcrease the level of earnings up to which some benefits can be paid. The fact must be faced that the retirement test is the center of an msoluble dilemma.There is, on the one hand, the need to conserve the funds of the program by not paying benefits to people who have substantial work income, and on the other hand, the need to avoid

2By"breaking point" is meant the point at which the beneficiary loses an additional month's benefit as a result of the operation of the $80 unit of excess earnings; that is, if he earns more than $1280heloses 2 months' benefits, if he earns more than $1360 he loses 3 months' benefits, and so on. The beneficiary loses benefit income of $2160—12 months' benefits at $180 a month.Since he would have had $2160 had he not worked and since he has $3,000 as a result of working, the net addition to his income is $840. RETIREMENT TEST UNDER OLD-AGE AND SURVIVORS INSURANCE 17

interferingwith incentives to work.Both of these objectives cnnot be fuiiy accomplished.The best that can be done is to accommodate the two, so that while the funds of the system are in large part directed to the most socially useful purposes, at the same time interference with incentives to work is kept at a reasonably low level.

PROPOSALS To IMPROvE INCENTIvES An increase in the exempt amount The proposal for changing the retirement test that is most frequently advanced is to increase the exempt amount above the present $1,200 level—for example, to $1,500.This proposal has a great deal of popular appeal.It is the kind of change in the retirement test that people usually think of first—in some cases, perhaps, because the $1,200 exempt amount is the only part of the retirement test that they are familiar with.And an increase in the exempt amount would result in increased income for many beneficiaries.People who are able to control their earnings and who now limit them to $1,200 in a year would be encouraged to increase their work to the point where they earned $1,500 (if that were the new exempt amount), and all those who earn between $1,200 and $2,380would get more benefits than they can under present law. Increasing the exempt amount would not, however, have much effect on the problem of improving incentives to work, except for amounts of earnings up to the new exempt amount, nor would it remove any of the problems and inequities of the present test; it would merely change the point at which they occur.If the new amount were $1,500, a man who had a choice between a job paying $1,800 and a job paying $1,500 would generally do better financially to take the lower paying job; and the person who planned to earn exactly $1,500 and inadvertently went just over that amount would have the same problem of losing more in benefits than his earnings above the exempt amount. If the exempt amount were raised an increase in the other elements of the test—the unit of excess earnings (now $80) and the monthly measure of retirement (now $100)—might seem to be called for. Setting the excess unit and the monthly measure at the same amount, and both at one-twelfth of the exempt amount, has the merit of simplicity, but it is not essential that all three elements correspond. It is quite important for the sake of public understanding that the monthly measure of retirement be one-twelfth of the exempt amount. People interpret $1,200 a year to mean $100 a month.Before the 1958 amendments, when the exempt amount was $1,200 and the monthly measure $80, many people did not understand that they could not get benefits for a month in which they made over $80 but less than $100, and many incurred losses on that account.If in addition to an increase in the exempt amount to $1,500 the monthly measure of retirement were increased to $125, the increase in the cost of the program would be 0.11 percent of payroll.If the exempt amount were increased to $1,800 and the monthly measure were set at $150, the increase in the cost of the program would be 0.24 percent of payroll.

'The $2,380 figure is $1,500plus$850 (i.e.. 11 times$80). 18 RETIREMENTTEST UNDER OLD-AGE AND SURVIVORS INSURANCE An increase in the unit of excess earnings Another way of reducing the effect of the retirement test as a deterrent to work at certain levels would be to increase the unit of excess earnings—the amount (now $80) by which earnings in excess of $1,200 are divided to determine the number of benefits that must be withheld because of earnings.Since a month's benefit is withheld for every $80 in excess earnings, anyone whose benefits amount to less than $80 has some incentive to work and earn more than $1,200 now, since in general he loses less in benefits than the amount of his excess earnings.Increasing the $80 unit would provide a positive incentive to earn above $1,200 for all those whose benefit amounts were less than the amount of the new excess unit, and for all other beneficiaries it would in general reduce the loss in total income because of earnings in excess of $1,200. In order to eliminate reductions in income as a result of work for the great majority of the beneficiaries, a substantial increase in the unit of excess earnings would be necessary.An increase to $125 would mean that a million retired worker beneficiary families—iS percent of all such families—would still be losing more in benefits than the unit of excess earnings that caused the loss.Actually an increase to $175 or $200 would be necessary to approach a complete solution to the problem.With an excess unit of $175 all but six- tenths of 1 percent of the retired worker beneficiary families would have benefits lower than the excess unit and hence would stand to lose less in benefits than the amount of their excess earnings.At $200 the figure would be four-tenths of 1 percent. Generally, the families that would still be at a disadvantage with a $175 or $200 excess unit would be those consisting of a retired worker, wife and child, or a retired worker with two or more children, getting benefits at the higher amounts.Families of this composition are, of course, rare. An example may be helpful to show how the proposal would work. Take the case of a beneficiary with a benefit of $100 a month and suppose he were to earn $1,760 in a year.Under present law, 7 months' benefits ($700) would be withheld for his $560 of excess earnings, so that in comparison with the situation in which he could earn exactly $1,200, he would lose $140 ($700 minus $560 of excess earnings) in total income for the year.lie therefore would not earn $1,760 if he understood the law and had any control over how much he could work and earn. Under a proposal to increase the unit of excess earnings to, say, $175, this same beneficiary, because of his $560 in excess earnings, would have 4 months' benefits ($400) withheld.He would thus have gained $160 in total income from his earnings of $560 above $1,200. A peculiarity of this proposal may be brought out by changing the benefit amount in the foregoing example.Suppose a man's benefit were $80 a month instead of $100.The beneficiary would still, have 4 months' benefits withheld, but the amount withheld would be only $320 instead of $400.Thus the second beneficiary would have gained $240 rather than $160 as a result of the same amount of work.The effect of this proposal on incentives to work, then, is quite capricious; the net addition to the beneficiary's income as a result of work is not related at all to the amount earned by doing the work. RETIREMENT TEST UNDER OLD-AGE AND SURVIVORS INSURANCE 19 Anincrease in the excess unit, moreover, does not completely solve the problem of benefit losses as a result of earnings, even for the beneficiary whose family benefit amount is smaller than the excess unit.In any situation where a beneficiary makes just over the exempt amount, or just over that amount plus one or more excess units, and consequently loses a month's benefit as a result of having excess earnings amounting to a fractional part of the unit, he can lose in total income.Thus if a beneficiary made the mistake of making $1,201 in a year, no matter what the amount of the excess unit, he would lose a whole month's benefit for the extra dollar in earnings. Still another example may be helpful at this point.Assume that the excess unit were increased to $175. A beneficiary who has benefits amounting to $100 a month has an opportunity to take a job at $1,900 a year.If he does, he will lose 4 months' benefits—one for each $175 in excess of $1,200. He expects, then, that his total income will be $1,900 in earnings and $800 in benefits, for a total of $2,700.His employer is caught with a rush job and asks him to do extra work. He does so, and is paid $25 extra for the work. For the $25 additional earnings he loses a whole month's benefit of $100, so that he is actually $75 worse off as a result of doing the extra work. It is clear, then, that an increase in the unit of excess earnings could not of itself solve the problem of benefit losses as a result of work even if the unit were increased as high as $175 or $200. An increase in the excess unit would, of course, increase the long- range cost of the program, the amount of the increase depending upon the size of the increase in the unit. An increase in the unit to $175 would cost 0.15 percEnt; to $200, 0.19 percent. Various proposals for reducing ben4jits in proportion to the amount of earnings The Department has also considered proposals to reduce benefit payments in some ratio to the amount of the beneficiary's earnings in excess of $1,200.The results of the Department's analysis are set forth below. 1. A dollar-for-dollar adjustment plan.—As one way of reducing the effect of the retirement test in deterring beneficiaries from working it has been suggested that instead of withholding a whole benefit amount for each $80 of excess earnings, as is done under present law, benefits should be reduced by the amount of excess earnings, Obviously, under such a proposal (except for the expenses that arise out of his work, such as taxes and carfare) the beneficiary would never have less in total income as a result of working. A change of this sort would undoubtedly make the retirement test easier to understand and more acceptable than it is now.The $80 excess unit is a completely arbitrary element in the retirement test, included to avoid the sharp borderline that would occur if there were not some graded reduction of benefits to take account of earnings over the exempt amount.(It would be unreasonable to withhold a year's benefits for a dollar of excess earnings, and the $80 provision was included in the law to prevent that result.)Since the amount of $80 is arbitrary it is difficult for beneficiaries to understand. On the other hand, a dollar-for-dollar-reduction provision really does very little to improve incentives for the aged to work.To tell a person that while he will be no worse off (except for the expenses 20 RETIREMENTTEST UNDER OLD-AGE AND SURViVORS INSURANCE connected with work) as a result of working, he will be no better off either, does not constitute providing an incentive for him to work. All the proposal really does in this area is to reduce the disincentive that operates under present law. A dollar-for-dollar reduction provision, by. itself, would increase program costs by 0.04 percent of payroll.It is quite unlikely, though, that a dollar-for-dollar provision unaccompanied by any other change would be acceptable, because it would mean that a significant number of beneficiaries would be worse off than they are under the present law. They would be those beneficiaries who get less than $80 in benefits and earn in excess of $1,200 a year.Under present law, as a result of the $80 excess unit, a beneficiary getting benefits of, say, $60 loses only that $60 for every $80 of excess earnings, whereas under the proposal he would lose $80.The only way to reduce this deliberalization to an acceptable amount with a dollar-for-dollar reduction and at the same time avoid adding complexity to the law would be to accompany the proposal with a substantial increase in the exempt amount—perhaps to as much as $1,800.This would mean a very substantial increase in cost—as much as 0.4 percent of payroll.5 2. A proposal to withhold $1 in benefits for each $2 of excess earnings.— A way to avoid the significant deliberalization that would arise in connection with a dollar-for-dollar-reduction provision, and at the same time to go farther in the direction of improving incentives for older people to work, would be to withhold $1 in benefits for each $2 of excess earnings.Obviously, if this were done, the beneficiary who worked would always be better off financially as a result of working.And there would be a deliberalization from present law only for beneficiaries with benefits amounting to less than $40 who nevertheless are able to earn more than $1,200.Cases in which people getting benefits as low as $40 would earn significantly above $1,200 a year would be rare, so that as a practical matter thedeliberalization would not be significant. Under this proposal there would no longer be any reason for beneficiaries to seek out jobs at $1,200 or less or to otherwise limit their work activity.The effect of the proposal would be to support rather than interfere with the desire of older people to continue to work to the extent that they are able to do so.The proposal would furnish a significant incentive to work throughout the entire range of benefits and would avoid the anomalies that arise at the various breaking points in the present test. The proposal would result in the payment of some benefits to people earning at relatively high levels.A man wnd wife getting the present maximum benefits of $180, for example, would get $100

5Anotherway to avoid deliberalization with a dollar-for-dollar-reduction provision would be to add such a provision on top of the present law—as an addition to the present retirement test rather than as a substitute for part of it.But to do that would be to make the retirement test almost impossibly complicated.Moreover, it would not actually guarantee the beneficiary against loss as a result of doing some additional amount of work over what he might have done.The anomaly of losing in total income as a result of additional eain1ngs would continue to occur at breaking points throughout the range affected by the test for all those beneficiaries getting less than $80 a month. RETIREMENT TEST UNDER OLD-AGE AND SURVIVORS INSURANCE 21 inbenefits for a year if the man's earnings amounted to $5,320.The cost of the proposal would be 0.11 percent of payroll.6 3. A combinatiov proposal: Withhold $1 in benefits for each $2 of earnings in excess of $1,200 and 'upto$2,400, and withhold $1 in benefits for each $1 in earnings in excess of $2,400.—The chief disadvantages of the 1-for-2 proposal are the increases in cost and the fact that some benefits would be paid to people at relatively high earnings levels.A way to reduce these disadvantages would be to modify the proposal by a provision that .earnings above $2,400 a year would reduce benefits dollar for dollar.With this modification the man and wife getting the present maximum of $180 would get no benefits for the year at the point when the man's earnings reached $3,960, and the cost would be 0.08 percent of payroll rather than 0.11 percent.The proposal would furnish an incentive to work at all ranges of benefits, and for all earnings levels up to $2,400, and would guarantee against loss as a result of earning above that amount.And while it does not have the simplicity that is so attractive about the straight 1-for-2 proposal, it nevertheless, like the straight 1-for-2 proposal, would remove the incentive for the beneficiary to seek out jobs paying less than $1,200 and to restrict his work activity so as not to go above that amount. CoNcLusIoN Analysis of these various proposals for changing the retirement test shows that there are advantages and disadvantages to all.Any of the proposals considered would involve significant additional cost to the system and would require additional financing.

6Otherratios than 1 for 2 are possible, of course.Consideration was given, for example, to a 1-for-4 plan; that is, a plan for reducing benefits by 75 cents for each dollar of earnings. A 1-for-4 plan would of course be cheaper than a1-for-2 plai, and would mean that theearnings level at which no benefits would be payable for the year would be lower.But a 1-for-4 plan would mean a deliberalization for all beneficiaries with benefit amounts of $60 or less—a significant group; and the incentive effect of permitting a person to keep 25 cents out of each dollar of earnings (out of which 25 cents he must pay taxes and the expenses that arise n connection with his work) is not very great, though considerably greater, of course, than that of the present law. 0

LISTING OF REFERENCE MATERIALS

U.S. Congress. House. Committee on Ways and Means. Hearings on All Titles of the Social Security Act, 85th Congress, 2d session.

U.S. Congress. Senate. Committee on Finance. Hearings on H.R. 13549, the Social Security Amendments of 1958, 85th Congress, 2d session.